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Madras High Court Orders Insurance Company to recover Compensation from Insurer.

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TITLE: TATA AIG General Insurance Co Ltd  Vs. Saravanan.

Decided On: August 30, 2023.

Civil Miscellaneous Appeal No.626  and C.M.P. No. 4479 of 2022.

CORAM:  Hon’ble Mr. Justice Sunder Mohan.

Facts:

The deceased Subasakthi was a driver by profession and was driving TATA Ace Vehicle. While he was driving since the cows ran across the road, to avoid hit against them, he turned the vehicle towards left side, the vehicle turned turtle and resulted in the accident. He was initially admitted at Nagapattinam Government Hospital. Subsequently, he was referred to Thiruvarur Medical College Hospital, where he was declared as brought dead. Hence the respondents 1 and 2 filed claim petition claiming compensation against the appellant and the 3rd respondent the appellant/Insurance Company filed counter statement denying all the averments made by the respondents 1 and 2 in the claim petition and stated that the accident had not occurred due to the rash and negligent driving of the 3rd respondent’s vehicle.

Legal Analysis and Decision:

The deceased was the tort-feaser. The evidence adduced before the Tribunal and the fact that the respondents 1 and 2 filed a claim petition under Section 163-A of Motor Vehicles Act confirms the said fact. The Tribunal however, strangely fixed 20% contributory negligence on the deceased after holding that he was the tort-feaser and held that the 3rd respondent and the appellant were liable pay to 80 % of the compensation amount. This finding is without any basis and logic. As stated earlier, as seen from the evidence, the deceased had driven the offending vehicle (TATA Ace Van) in a rash and negligent manner and two persons who travelled in a two wheeler belonging to a third party involved in the accident died.

The fact is that the respondents 1 and 2 were unable to produce driving license of the deceased. The 3rd respondent/employer also could not produce the driving license. On the other hand, the 3rd respondent in his counter statement before the Tribunal had stated that the deceased had misled him and stated that he had valid driving license. Therefore, the finding of the Tribunal that the deceased did not have valid driving license cannot be faulted.

This Court is of the view that the Civil Miscellaneous Appeal deserves to be partly allowed and the compensation awarded by the Tribunal is reduced from 10,57,261/- to Rs.9,01,000/- together with interest rate at 7.5 per annum (excluding the default period if any) from the date of petition till the date the deposit. The appellant is directed to deposit the compensation amount, now determined by this Court within a period of four (4) weeks from the date of receipt of a copy of this Judgment, at the first instance and recover the same from the third respondent.

Conclusion:

The Court Concluded that Since the Deceased died in an accident and the respondents are entitle to claim the compensation from the appellant insurance company and recover the same from the insurer 3rd respondent.

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JUDGEMENT REVIEWED BY JANGAM SHASHIDHAR.

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Bombay HC: Occupant rather than an owner of the insured car entitled to compensation

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Bombay HC: Occupant rather than an owner of the insured car entitled to compensation

Title: Bharti W/o Sunil Dhat and Ors. v. Navnath Dagdu Dhat and Ors.

Decided on: 28th AUGUST, 2023.

+ FIRST APPEAL NO.749 OF 2020

CORAM: S. G. CHAPALGAONKAR, J

Facts of the Case:

The appellants, original claimants, were aggrieved by the judgment and award issued on 19.09.2019 by the Motor Accident Claims Tribunal, Beed. They had filed a claim seeking compensation under Section 166 of the Motor Vehicle Act for the accidental death of Sunil Navnath Dhat. The accident occurred when the deceased was a passenger in a car driven by respondent no. 2, which collided with a roadside tree. The claimants contended that the accident was due to the negligence of the driver. They further claimed that the deceased was an engineering graduate and a government contractor with substantial income.

Issues:

Whether the deceased, as a passenger in the car owned by his father, can be considered an owner for the purpose of claiming compensation?

Whether the insurer is liable to pay compensation for the death of the deceased?

Contentions:

The appellants asserted that the car involved in the accident was insured under a private car package policy. This type of policy covers not only liability to third parties but also extends coverage to occupants of the insured vehicle. According to the claimants, the Tribunal wrongly concluded that the deceased, being a passenger in the car owned by his father, should be considered an owner for the purpose of compensation claims.

 The appellants emphasized that the deceased was an engineering graduate and a government contractor with multiple construction projects. They argued that he had a significant income and was the primary breadwinner for the family. This supported their claim for compensation. The claimants contended that the deceased’s status as an occupant of the insured car should entitle them to claim compensation, regardless of his family relationship with the car owner.

The respondent no.3-insurer, represented by Mr. Kadethankar, argued that since the car was owned by the father of the deceased, the deceased should be treated as having stepped into the shoes of the owner. This meant that the deceased was not a third party and could not claim compensation under Section 166 of the Motor Vehicle Act. The insurer emphasized that the private car package policy had specific terms and conditions, including a premium that covered occupants’ risks up to a certain limit (Rs. 1,00,000 each). They maintained that their liability was confined to the terms of the contract, and any expansion of this liability would be contrary to the agreement.

Decision:

The Bombay High Court deliberated on the matter and made the following key points:

  • Circulars issued by Tariff Advisory Committee (TAC) and Insurance Regulatory and Development Authority (IRDA) mandating insurance coverage for occupants of private cars under package policies.
  • The car in question was insured under a package policy, and thus the insurer was liable for the occupant’s death.
  • The deceased’s status as an occupant rather than an owner of the insured car, despite being a family member, entitles the claimants to compensation.

The Bombay High Court allowed the appeal, quashed the previous judgment and award, and ruled that the respondents were jointly and severally liable to pay compensation to the claimants for the accidental death of the deceased. The compensation amount was determined based on various factors, including income, future prospects, and deductions, and the court ordered the insurer to pay the specified compensation along with interest.

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Written by- Aparna Gupta, University Law College & Dept. of Studies in Law

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