Reliance General Insurance Co. Ltd. vs Satpal and Others

Vijender Singh Malik, J.—This is an appeal brought by Reliance General Insurance Co. Ltd., the insurer against the award dated

08.11.2011 passed by learned Motor Accidents Claims Tribunal, Yamuna Nagar at Jagadhri (for short ''the Tribunal''). The insurer has challenged

the award in so far as learned Tribunal has held in the same, the insurer as liable to pay compensation and has been given only right to recover the

amount paid by it from the owner and driver of the vehicle. The grouse is that the insurance company should have been exonerated from liability.

The driver and owner has also filed cross-objections and besides challenging the finding on the question as to whether the insured committed

breach of policy by plying the vehicle for hire and reward though it was a private car, has also challenged the finding of the Tribunal about the

responsibility of causing the accident having been fastened on the cross-objectors.

On 25.12.2009 Satpal, the claimant took a Maxi cab bearing registration No. HR-20-G-8326 from Sadhaura for Hadoli. It was driven by

respondent no. 1. Some other passengers were also travelling in the vehicle in question. Respondent No. 1 was driving the Maxi cab in a rash,

negligent and zig zag manner. The claimants and other passengers asked him to drive properly but he did not pay any heed to their request. When

Maxi cab was in the area of village Bheel Chhappar, respondent no. 1 lost control over his vehicle and the same struck into a tanker, which was

going ahead of it.

Respondent No. 1 has denied any negligence on his part in driving the vehicle. The other respondents have also controverted the averments.

Under issue no. 1, learned Tribunal came to the conclusion that the accident is an outcome of rash and negligent driving of Maxi cab No. HR-

20-G-8326 by respondent no. 1. Under issues No. 2, 3 and 3-A, taken up together, learned Tribunal came to the conclusion that the vehicle in

question was being plied for hire and reward and this use of the vehicle was in violation of the terms and conditions of the insurance policy. In these

circumstances, though initially holding respondent no. 3 to be liable to pay compensation, the Tribunal gave liberty to it to recover the same from

the driver and owner of the vehicle.

Learned counsel for the appellant has contended that the vehicle was a private car and it was admittedly being used for hire and reward.

According to him, this being violation of the terms and conditions of the insurance policy, the insurance company would not be liable to pay

compensation even in the first instance.

It is a clear case where the vehicle bearing registration No. HR-20G-8326 is claimed to be driven in a rash and negligent manner. The evidence

has also come on the record and there is no rebuttal thereto. Even the driver of Maxi cab did not step into the witness box to say that he was not

rash or negligent in driving his vehicle. Moreover, no submission was made on behalf of the cross-objectors on this point. So the finding of learned

Tribunal on issue no. 1 is affirmed.

Now the question remains as to whether the vehicle was being plied for hire or reward. It is a case of the owner that he did not know that his

vehicle was being plied for hire or reward by his driver. This is such a plea which at the very outset appears to be wrong. The owner has not stated

anywhere that he had given the vehicle for some other purpose to the driver. There is enough evidence on the record to prove the fact that the

vehicle was carrying passengers and they were to pay fare to the driver while getting down the same. It is, thus, a clear case where a private

vehicle was being used for hire or reward and thus the use of the vehicle was contrary to the terms and conditions of the insurance policy. The

question that arises now is as to whether the insurance company is entitled to be exonerated from liability to pay compensation. It is not a case

where the claimant is the insured, who himself may be seeking compensation from the insurance company after violating the terms and conditions of

the insurance policy. The insurance policy has been violated by the owner and the claimant here is a 3rd party, who may not know about such fine

aspects of the insurance policy. Therefore, the 3rd party is entitled to be compensated by the insurance company. The Tribunal has, therefore,

been right in holding the insurance company as liable to pay compensation in the first instance to the claimant and then a right has been given to the

insurance company to recover the amount paid by it to the claimant from the owner of the vehicle. In these circumstances, the appeal and the cross

objections fail and are dismissed.