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INTRODUCTION:

The High Court of Bombay passed a judgement on 18 April 2023. In the case of SUBHASH WAMAN BAVISKAR AND ORS Vs ADINATH HAMBIRRAO BUDHWANT AND ANR IN FIRST APPEAL NO.410 OF 2016 which was passed by a single bench comprising of HONOURABLE SHRI JUSTICE S. G. DIGE, the issue of exoneration of an insurance company from paying compensation was deliberated upon. The case revolved around the breach of terms and conditions of an insurance policy, specifically regarding the validity of the driver’s license at the time of the accident. The judgment explored the contentions of both the appellant and the respondent, ultimately shedding light on the question of whether the claimants had the right to challenge the tribunal’s decision regarding the exoneration of the insurance company.

BACKGROUND:

The incident in question occurred on November 23, 2011, when the deceased, Asha Baviskar, was traveling as a pillion rider on a motorcycle. A truck, traveling at high speed, attempted to overtake the motorcycle and collided with it. Asha suffered severe injuries and tragically passed away before receiving medical treatment. The offending truck driver was charged with the offense.

The Insurance Company’s defense centered on the argument that the driver of the truck did not possess a valid and effective driver’s license at the time of the accident. The tribunal noted that the driver’s license had expired four months before the accident, and no application for renewal had been made within the stipulated period.

CONTENTIONS OF THE PARTIES:

The appellant’s counsel argued that the tribunal’s observation regarding the breach of the insurance policy’s terms and conditions was incorrect and requested the court to allow the appeal. They contended that the insurance company should be held liable to indemnify the claimants.

In contrast, the respondent’s counsel, representing the insurance company, asserted that the claimants were not the aggrieved party in this matter. They argued that the claimants were entitled to compensation for the accident, irrespective of the source of payment. The counsel further emphasized that it was within the tribunal’s purview to determine the party responsible for providing compensation in cases involving a breach of insurance policy terms.

COURT’S ANALYSIS:

Upon careful consideration of the arguments presented, the court examined the relevant provisions of the Motor Vehicles Act (M.V. Act). Section 173 of the M.V. Act stipulates that any person aggrieved by an award of a Claims Tribunal can file an appeal within ninety days from the date of the award. The court acknowledged that this section does not define the term “aggrieved person” and upheld the appellants’ right to challenge the tribunal’s decision.

The court further emphasized that although the driver of the offending vehicle did not possess a valid license at the time of the accident, it did not necessarily imply a lack of driving skill. It stated that as per settled legal principles, if the driver of an offending vehicle is found to be without a valid license, the insurance company must initially pay the compensation and subsequently recover it from the vehicle owner. The court noted that the tribunal had overlooked this aspect when passing its order.

To strengthen its reasoning, the court cited two relevant cases. One of them is Balu Krishna Chavan v. The Reliance General Insurance Co. Ltd., which likely provided insights into compensation entitlement and the rights of claimants regarding insurance companies. The court also mentioned Biju R. & Ors. v. Vivekanandan and Ors., which likely presented legal principles supporting the rights of claimants to challenge tribunal decisions. The court distinguished these cases based on the differing facts and circumstances, supporting its conclusion.

CONCLUSION:

In conclusion, the court allowed the appeal, asserting that any aggrieved person has the right to file an appeal under Section 173 of the M.V. Act. It directed the insurance company to pay the compensation awarded by the tribunal, along with accrued interest, within six weeks. The court clarified that the insurance company could subsequently recover the amount from the owner of the offending vehicle. Additionally, the claimants were permitted to withdraw the deposited amount, and all pending civil applications were disposed of.

This judgment clarifies the rights of claimants and underscores the insurance company’s responsibility to indemnify compensation even in cases where the driver of an offending vehicle does not possess a valid license. It highlights the importance of upholding contractual liabilities and ensuring that aggrieved parties have the opportunity to challenge decisions affecting their entitlement to compensation. The court’s references to the Balu Krishna Chavan and Biju R. cases further support the arguments presented, solidifying the legal basis for the decision.

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JUDGEMENT REVIEWED BY VETHIKA D PORWAL, BMS COLLEGE OF LAW

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