LI Network
Published on: November 26, 2023 at 17:51 IST
The Gauhati High Court has set aside an order of the Motor Accident Claim Tribunal (MACT) involving the death of a car occupant due to rash and negligent driving. The MACT had directed the Oriental Insurance Company (“appellant”) to pay compensation and recover the same from the owner of the offending vehicle.
The High Court, through a single bench of Justice Mitali Thakuria, reversed the order, emphasizing that the Private Car Act Policy did not cover the risk of occupants, making the Insurance Company not liable for compensation to the deceased occupant.
The Court highlighted:
“…the Insurance Company cannot be made liable to satisfy the award of compensation for the death of any occupant when it is an admitted position that the policy under which the vehicle was insured was a Private Car Act Policy.“
The case involved an accident on January 23, 2013, resulting in the death of the claimant’s husband. The Tribunal, despite the appellant’s argument that the private car policy did not cover occupants, awarded compensation and directed the Insurance Company to pay.
Aggrieved by the Tribunal’s decision, the Insurance Company appealed to the High Court. The appellant contended that they were not liable for compensation to occupants, while the claimant argued that the Tribunal rightly applied the pay-and-recovery doctrine.
After hearing both sides, the Court acknowledged that the policy didn’t cover the risk of occupants but noted the Insurance Company’s obligation due to a valid policy at the time of the incident and the vehicle being duly insured.
Referring to the Supreme Court’s decision in National Insurance Company Ltd. v. Balakrishnan & Anr. (2013) 1 SCC 731, the Court highlighted the distinction between an ‘Act policy’ and a ‘comprehensive/package policy,’ the latter covering liability for compensation to car occupants.
“…it is an admitted position that the policy under which the vehicle was insured was a Private Car Act Policy,” the Court stated.
The High Court set aside the portion of the Tribunal’s order directing the Insurance Company to pay and recover costs. Instead, it directed the owner/insurer to satisfy the Tribunal’s award and deposit the compensation amount before the Tribunal within three months.
Case Name: Oriental Insurance Company Ltd. v. Smti. Lakhimai Teronpi & 7 Ors.