Insurers Can’t Deny Accident Compensation Over Route Permit Violation
New Delhi: The Supreme Court said that insurance companies cannot refuse to pay compensation to accident victims merely because there was a deviation in the route of the vehicle concerned and a permit violation. A bench comprising Justices Sanjay Karol and Prashant Kumar Mishra said that the purpose of an insurance policy in the present context is to protect the owner/operator from direct liability when such an unforeseen/unfortunate event occurs.
The court panel said, “It would be against the sense of justice to refuse compensation to the victim/victim’s dependents because the accident occurred outside the authorized limits and therefore is outside the scope of the insurance policy, because the accident itself is not his fault. Therefore, the insurance company must definitely pay.”
The high court made this observation while dismissing the objections filed by the vehicle owner and the insurance company, The New India Insurance Company Limited. On October 7, 2014, a motorcyclist was killed at the scene when his vehicle, driven rashly and negligently, hit a motorcyclist. The Motor Accident Claims Tribunal awarded an award of Rs 18.86 lakh as compensation along with interest.
Aggrieved by the amount of compensation allocated, the petitioner filed an appeal in the Karnataka High Court on the ground that the compensation was not calculated properly by the Court.
The insurance company also objected to the Court’s decision on the grounds that the conditions listed in the policy were violated by the insurer. The high court directed the insurance company as per the order given by the court and gave it the right to recover the amount from the bus owner.
While the insurer objected to the high court’s order to first pay compensation and then recover it from the owner, the owner also objected to the high court’s decision allowing compensation to be collected from him.
