Insurance Company Liable to Compensate Accident Victim’s Kin, Even if Driver’s License Expired: Bombay High Court

• In a significant ruling, the Bombay High Court has stated that an insurance company is obligated to pay compensation to the family of an accident victim, irrespective of whether the driver of the offending vehicle had an expired and unrenewed driving license.
• The court’s decision came in response to a petition filed by the family members of a woman who lost her life in a tragic accident back in November 2011.

Here are the key points of the court’s ruling:-

1. Compensation Order: The single bench of Justice S G Dige, in an order passed in April and made available on Thursday, directed ICICI Lombard General Insurance Co Ltd to pay compensation to the deceased woman’s family. The woman, Asha Baviskar, was riding pillion on a motorcycle when a truck collided with them at high speed, resulting in her untimely death.
2. Insurance Company’s Liability: The court emphasized that the insurance company had a contractual liability to indemnify the compensation, as the truck involved in the accident was insured with them at the time of the incident. The court clarified that the expired driving license of the truck driver did not automatically make him an unskilled driver.
3. Recovery of Compensation: The court stated that the insurance company could later recover the compensation amount from the owner of the offending vehicle. This means that the insurance company is initially responsible for paying the compensation, but they have the right to seek reimbursement from the vehicle owner.
4. Motor Accidents Claims Tribunal Decision: The family had challenged an order passed by the Motor Accidents Claims Tribunal that had exonerated the insurance company from paying compensation due to the expired driving license of the truck driver. Instead, the tribunal had directed the truck owner to bear the compensation liability.
5. Faulty Tribunal Order: The high court noted that the tribunal had not taken into account the well-settled principle of law that requires the insurance company to pay compensation first, even if the driver does not possess a valid driving license, and then recover it from the vehicle owner. The court criticized the tribunal for mechanically rejecting the claim without considering this principle.
6. Compensation Payment: The court directed the insurance company to pay the compensation to the deceased woman’s family within six weeks. The insurance company was instructed to later recover the amount from the vehicle owner.
7. Insurance Company’s Opposition: The insurance company had opposed the plea, arguing that the claimants were entitled to compensation regardless of the source from which it was obtained.

This ruling establishes an important precedent regarding the liability of insurance companies in accidents involving vehicles driven by individuals with expired licenses. The court’s decision ensures that accident victims and their families can receive timely compensation, while the responsibility of recovering the amount is placed on the appropriate parties.