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The insurance company is responsible for paying the total compensation awarded by the Tribunal. The owner and the Insurance Company have an absolute duty to pay the compensation under Section 149(1) of the Motor Vehicles Act, 1988. However, the responsibility mentioned above is subject to the Insurance Company’s defenses under Section 149(2) of the Act. The High Court Of Gauhati upheld this through a single Learned bench MR. JUSTICE PARTHIVJYOTI SAIKIA in BIPUL BHUYAN V. LAKHI GOSWAMI AND ANR. (Case No. : MACApp./264/2014).

Facts of the case – An unmarried individual was killed in an accident. The mother filed a compensation claim case with the Tribunal. The Insurance Company filed a written declaration claiming that because the related insurance policy was a package policy, the Insurance Company’s liability was limited to Rs. 2,00,000/-.

In the end, the Tribunal granted compensation in the sum of Rs. 3,40,500/-. The Insurance Company was ordered to pay Rs. 2,00,000/-, while the vehicle owner was ordered to pay the remainder Rs. 1,40,500/-.

The only issue in this appeal is whether the Tribunal was correct in demanding that the owner pay Rs. 1,40,500/- in compensation.

In National Insurance Ltd. V. Balakrishna & Anr., reported in 2013 (1) SCC 731, the Hon’ble Supreme Court decided that comprehensive and package policies are the same and that the Insurance Company is liable to pay the compensation.

The Learned Judge of this court states that he learned Tribunal erred by requiring the vehicle’s owner to pay Rs. 1,40,500/- out of a total compensation sum of Rs. 3,40,500/-. As a result, the contested judgment has been changed. The respondent Insurance Company is ordered to pay a total of Rs. 3,40,500/- plus interest at the rate of 7.5 percent per year from the date of filing the claim application till complete recovery. As a result, the appeal is granted with the change mentioned above.

Click here to view the Judgement

Reviewed by Rangasree.