In FAO No.50 of 2019-BOM HC- Onus is always upon Insurance Company to prove that driver had no valid driving license and there was breach of policy conditions: Bombay HC
Justice Abhay Ahuja [22-12-2022]

Read Order: IFFCO TOKIO GENERAL INSURANCE COMPANY LTD v. SMT.NAMRATA NAMDEO VISHE AND ORS 

Mansimran Kaur

Mumbai, December 24, 2022: While dismissing the appeal of the Insurance company against the order granting compensation to the family of the deceased in a motor accident case, the Bombay High Court has opined that when the driver does not possess a valid driving license and there are breach of policy conditions, pay and recover can be ordered in case of third party risks.

A Single-Judge Bench of Justice Abhay Ahuja dismissed the appeal preferred by the Iffco Tokio General Insurance Company Ltd. against the judgment passed by the Motor Accidents Claims Tribunal (MACT), in the Motor Accident Claim Application.

The Bench was of the view that the onus is always upon the Insurance Company to prove that the driver had no valid driving license and that there was a breach of the policy conditions. When the driver does not possess a valid driving license and there is a breach of policy conditions, pay and recovery can be ordered in case of third party risks. 

The brief facts were such that in the intervening night of  October 24,  2008 to  October  25, 2008, one Namdeo Yashwant Vishe was traveling as a pillion rider on motorcycle  and one Mahesh Choudhary was riding the said motorcycle, when the motorcycle having reached opposite Bunty dhaba at Borpada village situated  on Bhiwandi Wada road being driven at high and excessive speed by the rider, suddenly applied brakes, as a result of which the motorcycle skidded and Namdeo, the pillion rider, fell down on the road.

In the said accident he sustained injuries all over his body, he was taken to IGM Hospital at Bhiwandi for medical treatment, however, he succumbed to the injuries. The subject motorcycle was owned by one Mangesh Yashwant Shelar and the motorcycle was fully insured by the appellant-Insurance company. An offence of rash and negligent driving was registered against the rider of the motorcycle with the Bhiwandi Taluka Police Station.

 The widow, minor son and the mother of the deceased filed an application for getting compensation under Section 166 of the Motor Vehicles Act, 1988 on account of the vehicular accidental death of Namdeo, the pillion rider of the subject motorcycle. The claim was made against the owner of the vehicle Mangesh Yeshwant Shelar and the appellant-Insurance company. The M.A.C.T. granted compensation to the claimants holding that the appellant was liable to pay an amount of around Rs 7.25 lakh under the provisions of Section 166. The same was the impugned order. 

After considering the submissions, the Court referred to the judgment in National Insurance Company Ltd. vs. Swaran Singh and Others wherein it was held that in case of third party risks, the insurer has to indemnify the compensation amount to the third party and the Insurance company may recover the same from the insured.

In view of the same, the Court reiterated that an insurer is entitled to raise a defence in a claim petition filed under Section 163-A or Section 166 of the M. V. Act, as in this case in terms of Section 149(2) (a)(ii). Section 149(2)(a)(ii) refers to the disqualification of the driver on account of invalid driving license being a breach of the insurance policy conditions.

As it appears, the onus is always upon the Insurance Company to prove that the driver had no valid driving license and that there was a breach of the policy conditions. When the driver does not possess a valid driving license and there is a breach of policy conditions, pay and recovery can be ordered in case of third party risks, the Court noted. 

Thus, dismissing the appeal, the Bench also referred to the judgment in Shamanna and Another vs. The Divisional Manager,  which re-emphasizes that in the case of third party risks the insurer has to indemnify the amount and if so advised, to recover the same from the insured.