LI Network
Published on: December 18, 2023 at 13:43 IST
The Delhi High Court has clarified that insurance companies bear no contractual or other obligation with the transferee of a vehicle involved in a road accident.
Justice Navin Chawla emphasized that the registered owner cannot evade liability by transferring the vehicle to a third party before the accident occurs.
Justice Chawla stated, “The registered owner cannot absolve himself of the liability by contending that he had transferred the offending vehicle to a third person prior to the date of the accident.”
The court highlighted that insurance companies act solely as indemnifiers, compensating the registered owner—the primary liable party—for payments owed to the victims of a road accident.
The Court emphasized that neither the victims nor the insurance company is obliged to pursue individuals to whom the registered owner claims to have transferred the offending vehicle.
The Court further asserted that if the registered owner seeks the benefits of the insurance contract to indemnify against liability, they must also reimburse the compensation paid by the insurance company to the victims, provided the company is entitled to such reimbursement.
These observations were made in the context of two appeals filed by the registered owner of a motorcycle and a minor who was driving it. The motorcycle had collided with a woman who later succumbed to her injuries.
The Motor Accident Claims Tribunal had awarded compensation, directing the insurance company to pay the claimants and allowing the company to recover the compensation amount from the registered owner and the minor driver.
Justice Chawla, noting that the motorcycle was being driven by a minor at the time of the accident, emphasized that the registered owner cannot absolve responsibility by claiming to have sold the bike prior to the incident, especially if no steps were taken to register the sale with the authorities or inform the insurance company.
The court, therefore, dismissed the appeal filed by the registered owner, overturning the tribunal’s decision to allow the insurance company to seek reimbursement from the minor. The court directed the release of the statutory amount deposited by the appellant in favor of the appellant.
