Widow to get Rs 13.7L from insurer after 13 yr fight

The Supreme Court has ordered IFFCO Tokio General Insurance Co. Ltd to pay a compensation of Rs 13.7 lakh with interest to the family of an individual who died in a road accident in May 2010. The compensation was part of a third-party insurance cover taken by the owner of the tempo vehicle that had hit the deceased individual.

The accident victim was riding his motorcycle when a Haryana-registered vehicle hit him from behind. The deceased individual’s widow, parents and children approached the Motor Accident Claims Tribunal (MACT), Delhi and claimed that the hired driver of the tempo vehicle ‘Ujay Pal’ was driving in a rash and negligent manner. While investigating the case, it was found out that the hired driver of the tempo vehicle had given a fake driving licence to the vehicle owner. However, the vehicle owner’s family always asserted in various courts that they did not know their hired driver had a fake driving licence. During the legal proceedings, the owner of the tempo vehicle died, and the case was then pursued by the family of the deceased tempo vehicle owner.

Also read: Husband fights for 13 years for life insurance claim against SBI Life Insurance and wins

Fight starts in Delhi Motor Accident Claims Tribunal (MACT)

Delhi MCAT heard arguments made by the deceased victim’s family and the deceased vehicle owner’s family. It was concluded that the hired vehicle driver (Ujay Pal) had a fake driving licence, and the family of the deceased vehicle owner must pay the family of the accident victim. In an order dated July 6, 2018, MCAT directed the vehicle owner’s family to pay Rs 13.7 lakh with interest to the family of the deceased victim. Moreover, MCAT opined that IFFCO Tokio General Insurance Co. Ltd would not be liable to pay the compensation but directed the insurance company to deposit the compensation money with the Tribunal with the liberty to recover the same from the vehicle owner.

After losing the case the deceased vehicle owner’s family took the fight to Delhi High Court.

Fight continues in Delhi High Court

The Delhi High Court found that the driving licence of Ujay Pal, who was the driver of the vehicle on the day of the incident, was issued at Mathura, Uttar Pradesh. “It was only after the accident that it came to light that the said licence was not a genuine one. The Record Clerk from the ARTO, Mathura, testified that, as per their record, the licence produced by Ujay Pal was fake as that licence number was related to some other person,” said the Delhi High Court.

The widow of the vehicle owner contested that her husband had told her he had taken a driving skill test only after seeing the driving licence produced by Ujay Pal, and this was done before employing him as their driver. Therefore, it was not their fault.

The Delhi High Court after hearing the argument(s) opined that “The Insurance company had neither pleaded nor proved that the deceased vehicle owner did not take adequate steps to verify the genuineness of the driving licence and in the absence of such a plea on its part, the Tribunal (MCAT) could not have concluded that there was a breach of the terms and conditions of the insurance policy.” The High Court held that the insurance company did not have the right to recover the compensation from the vehicle owners.

The liability to pay Rs 13,70,000 was shifted to the insurance company by the Delhi High Court.

Fight drags on in Supreme Court

The insurance company escalated the case to the Supreme Court and argued that since the vehicle was being driven by a person who did not have a valid driving licence, they were not liable to pay the accident victim’s family.

The insurance company cited a specific legal clause titled ‘Driving Clause’ written in the motor insurance contract. The clause reads as follows: “Any person including insured: provided that the person driving holds an effective driving licence at the time of the accident and is not disqualified from holding or obtaining such a licence.”

On the matter related to the responsibility of the vehicle owner, the Supreme Court said, “As regards the contention that the driver of the vehicle was not duly licensed as he possessed a fake licence, it may be noted that neither Section 149(2)(a)(ii) of the Motor Vehicle Act of 1988 nor the ‘Driver Clause’ in the subject 5 insurance policy provide that the owner of the insured vehicle must, as a rule, get the driving licence of the person employed as a driver for the said vehicle verified and checked with the concerned transport authorities.”

The Supreme Court opined that the insurance company cannot claim that the vehicle owner did not conduct due diligence while employing Ujay Pal as their driver. Further, the insurance company cannot also insist upon an unrealistic condition that every person employing a driver must get the driving licence of such driver verified and confirmed by the RTO concerned, irrespective of the actual necessity to do so.

“The claim of the petitioner-insurance company that it has the right to recover the compensation from the owners of the vehicle, owing to a wilful breach of the condition of the insurance policy, viz., to ensure that the vehicle was driven by a licensed driver, is without pleading and proof,” said the Supreme Court.

The Supreme Court passed an order dated October 30, 2023, directing the insurance company to pay the compensation to the victim’s family and not to recover such compensation from the owner’s family.

The Supreme Court order read, “The burden is upon the insurance company to prove that there was a failure on the part of the vehicle owner in carrying out due diligence apropos such driving licence before employing that person to drive the vehicle. Presently, no evidence has been placed on record whereby an inference could be drawn that the deceased vehicle owner ought to have verified Ujay Pal’s driving licence. Therefore, it was for the petitioner-insurance company to prove wilful breach on the part of the said vehicle owner. As no such exercise was undertaken, the petitioner-insurance company would have no right to recover the compensation amount from the present owners of the vehicle.”

Harry Byrne

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