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Willful breach of condition can relieve insurer from paying compensation to accident victims: Bombay high court

The case pertained to an accident at Kamargaon in Washim district on December 11, 2013

mumbai Updated: Jul 23, 2017 01:20 IST
HT Correspondent
HT Correspondent
Hindustan Times
Mumbai,Bombay high court,life insurance
The judge said the owner can be held liable if he is found negligent in appointing a person not holding a valid licence(HT)

The Bombay high court said that an insurer can be relieved of paying compensation to accident victims only if the owner of the vehicle deliberately breached an essential condition of the insurance policy.

Justice SB Shukre said the responsibility of paying compensation to victims cannot be placed on the vehicle owner if he has taken reasonable care.

The case pertained to an accident at Kamargaon in Washim district on December 11, 2013. While overtaking a luxury bus, the driver of a truck lost control and hit a tree, resulting in the death of a number of labourers on the truck along with its driver.

The family members of the labourers then approached the local accident claims tribunal and on November 15, 2016, the tribunal ordered the truck’s insurer – Oriental Insurance Company Limited — to pay compensation to the families.

The company moved the high court, challenging the tribunal order primarily on the ground that the driver did not possess a valid driving licence on the day of the accident.

According to the insurance company, the licence of the driver had expired more than a year prior to the accident and thus there being breach of an essential condition of the insurance policy, the insurance company could not have been ordered to pay compensation to the families of the deceased labourers.

Justice Shukre, however, turned down the argument. The judge noted from evidence on record that the owner of the truck had taken reasonable care before appointing the driver and ensured not only that he possesses valid driving licence, but had requisite driving skills, and therefore the breach of the condition cannot be said to be wilful.

The judge said the owner can be held liable if he is found negligent in appointing a person not holding a valid licence, but cannot be made liable if he has taken reasonable care at the time of appointing the driver and when during the driver’s service, his licence expires and he fails to get it renewed.

“Therefore, the breach of the insurance policy in the instant case cannot be termed as a wilful breach as rightly found by the tribunal,” said Shukre, while rejecting the insurance company’s appeal.

First Published: Jul 23, 2017 01:20 IST