Motor Accident Compensation Claims - Ordinarily There Shall Be No Direction To 'Pay & Recover' If Insurance Company Is Not Liable: Supreme Court

The Supreme Court observed that ordinarily there shall be no direction to "pay and recover" if the Insurance Company is not liable.

The bench of Justices AS Bopanna and PS Narasimha observed thus while considering an appeal filed by a claimant against the Bombay High Court which held that the Insurance Company was not liable to reimburse the compensation. 

The issue raised in this appeal was whether the Insurance Company should be directed to "pay and recover" in the facts arising in the case.

"The law is well settled that if the liability of the Insurance Company is decided and they are held not to be liable, ordinarily, there shall be no direction to "pay and recover". However, in the facts and circumstances arising in each case, appropriate orders are required to be made by this Court to meet the ends of justice... it is clear that in all cases such order of "pay and recover" would not arise when the Insurance Company is not liable but would, in the facts and circumstances, be considered by this Court to meet the ends of justice.", the bench observed.

However, the court noted that if the claimant is not able to realise the amount of compensation awarded in his favour at this stage from the owner of the vehicle, he would be prejudiced.

"However, the Insurance Company, if ordered to pay to the appellant and recover it from the owner of  the vehicle, it would not be prejudiced to that extent.. Therefore, keeping all aspects in view, and not making this case as a precedent, but, only to serve the ends of justice in the facts of this case, we direct that respondent no.1 (Insurance Company) to deposit the compensation amount before the MACT within eight weeks from the date of the receipt of a copy of this judgment, whereupon, the MACT shall disburse the amount of compensation to the appellant.", the bench observed in the order while disposing the appeal.

Case details

Balu Krishna Chavan vs Reliance General Insurance Company Limited | 2022 LiveLaw (SC) 932 | SLP(C) No. 33638/2017 | 3 Nov 2022 | Justices AS Bopanna and PS Narasimha

For Petitioner(s) Mr. Amol Nirmalkumar Suryawanshi, AOR Mr. Ninad Lande, Adv.

For Respondent(s) Mr. Abhishek Gola, Adv. Mr. Sudhir Naagar, AOR Mr. Rajeev Maheshwaranand Roy, AOR

Headnotes

Motor Accident Compensation Claims -  if the liability of the Insurance Company is decided and they are held not to be liable, ordinarily, there shall be no direction to "pay and recover" - In all cases such order of "pay and recover" would not arise when the Insurance Company is not liable but would, in the facts and circumstances, be considered by this Court to meet the ends of justice.

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