[Motor Accident] Insurance Company Not Exempted From Third Party Liability For Breach Of Policy, May Recover From Insured: Karnataka HC Reiterates

A single judge bench of Justice HP Sandesh allowed an appeal filed by claimant Basavaraja Beerappa Kambali in part and modified the order of the Tribunal by directing Cholamandalam MS General Insurance Company (respondent No.1) to pay the compensation amount with interest within six weeks and recover the same from the insured.

The tribunal had fastened the liability on the insured instead of insurer. Reversing the same the bench said, "The Insurance Company has to indemnify the claimant and recover the same from the insured."

The claimant had met with an accident in 2013 and sustained injuries on account of rash and negligent driving of the motor vehicle insured with respondent No.1. The Motor Accident Claims Tribunal had awarded compensation of Rs.2,88,000, with interest at the rate of 7% per annum.

In its judgment and award dated 20.04.2013, the Tribunal had exonerated the liability of the Insurance Company and had directed the private respondents (owner and driver of offending vehicle) to pay the compensation. The direction was made upon concluding that the offending vehicle was not registered and its temporary registration had also expired on the date of the accident.

The bench observed that admittedly, the claimant is a third party and Tata Ace driver drove the vehicle in a rash and negligent manner and dashed against the claimant. It relied on the case of Raja Lingaiah v. Sri Manju @ Manja & Anr., where it was held that Insurance Company having received the premium for one year cannot contend that it is not liable to pay the compensation, more particularly when the claim is made by a third party.

It also referred to Oriental Insurance Company Limited v. Smt. Savithri Hudge & Anr., where it was held that the Insurance Company has to indemnify the claimant and recover the same from the insured.

Following which it held, "The Insurance Company has to indemnify the claimant and recover the same from the insured."

Case Title: BASAVARAJA BEERAPPA KAMBALI v. THE CHOLAMANDALAM MS GENERAL INSURANCE COMPANY LTD & others

Case No: M.F.A. NO.9207/2013

Citation: 2022 LiveLaw (Kar) 501

Date of Order: 02-12-2022

Appearance: V.B. SIDDARAMAIAH, ADVOCATE for appellant; O. MAHESH, ADVOCATE FOR R1.

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