Partly allowed

The New India Assurance Company Ltd. v. Bhaiya Lal and Another

Allahabad HC6 Aug 2019FAFO/17/1998

Case brief

AI extract

What is this about?

In a first appeal arising from a motor accident claim, the Supreme Court allowed the appeal in part. Relying on Apex Court precedents, the Court held that when a vehicle is driven without a valid license and the insurable interest holder is unaware, the insurance company is granted limited recovery rights against the owner rather than being entirely exempt from indemnity.

What did the court decide?

The Tribunal's judgment and decree are modified to grant the Insurance Company limited recovery rights against the owner.

The New India Assurance Company Ltd. Vs Bhaiya Lal… — Motor Accident Claims | Allahabad HC (2019)

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Court No. - 33

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Case :- FIRST APPEAL FROM ORDER No. - 17 of 1998

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Appellant :- The New India Assurance Company Ltd. Respondent :- Bhaiya Lal And Another Counsel for Appellant :- Poonam Srivastava Counsel for Respondent :- R.S.Pandey

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Hon'ble Dr. Kaushal Jayendra Thaker,J.

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Heard Sri A.K. Shukla, learned counsel for the Insurance company. Sri R.S. Pandey, learned counsel for the respondent has absented himself.

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This appeal, at the behest of the New India Assurance Co. Ltd., challenges the judgment and award dated 30.8.1997 passed by Motor Accident Claims Tribunal/Special Judge, Allahabad (hereinafter referred to as 'Tribunal') in M.A.C.P. No. 705 of 1995 awarding a sum of Rs.86,000/- with interest at the rate of 12% from the date of filing of the claim petition.

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Facts are not necessary as quantum, accident and involvement of vehicle and policy being in vogue are not in dispute. The accident caused the death is also not in dispute.

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The sole dispute raised before this Court in this appeal is that in the absence of a valid driving licence, the Insurance Company cannot be held liable to indemnify the liability of the owner of the vehicle in view of the driver had not got his licence renewed and, thus, the driver had not valid licence at the time of accident. The compensation awarded was payable by the owner and not the Insurance Company.

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In the present case, neither the owner nor the driver of the insured stepped into to the witness box nor the Insurance Company proved that the owner was aware that the license of the driver was not a valid driving license. Thus, the appeal requires to be allowed on one ground that in the judgment of the Apex Court in Singh Ram Vs. Nirmala and Others, (2018) 3 SCC 800 thereafter reiterated in Ram Chandra Singh Vs. Raja Ram and others, AIR 2018 Sc 3789 it has been held that if it is proved that the vehicle was driven by a person not having proper driving license, the Insurance Company should be given recovery rights. In that view of the matter, the limited recovery rights are given to the Insurance Company.

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In view of the above, this appeal is partly allowed. Judgment and decree passed by the Tribunal shall stand modified to the aforesaid extent.

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This Court is thankful to Sri Shukla for getting the appeal of 1998 disposed of.

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Order Date :- 6.8.2019 Ram Murti

The New India Assurance Company Ltd. v. Bhaiya Lal and Another

Case brief

What is this about?

What did the court decide?

The New India Assurance Company Ltd. v. Bhaiya Lal and Another

Case brief

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