Insurers remain liable for compensation to third parties despite violations of policy terms and may recover payments from vehicle owners.

JUDGMENT :

UMESH M ADIGA, J.

1. Both the appeals arise out of common judgment and award dated 18.03.2021 passed by the Motor Accidents Claims Tribunal & XV Additional Judge, Court of Small Causes, Mayo Hall Unit, (SCCH-19), Bengaluru (for short `Tribunal'), in MVC No.-4457/2019, therefore they are taken up together for disposal. MFA.No.4362/2021 is filed by Insurer and MFA.No.6687/2022 is filed by the claimants.

2. For the sake of convenience, the parties are referred to as per their ranking before the Tribunal.

3. Though appeals are slated for admission, with consent of learned advocates appearing for both the sides, they are taken up for final disposal.

4. The brief facts of the case are that, on 07.04.2019, at about 5.30 p.m., the petitioner was traveling in a car bearing registration No.KA-53/MA-9533 and when they reached near Nakkanahalli village, Nandagudi Hobli, Hosakote Taluk, Bangalore Rural District, the driver of the said car drove the same in a rash and negligent manner. At that time, one buffalo suddenly entered the road and as a result, the driver dashed the road side stones. Due to the impact, the petitioner fell down and sustained grievous injuries. He has spent substantial amount towards medical expenses. Due to the injuries sustained in the accident, he has suffered from permanent disability and loss of his earning capacity. With these reasons, the claimant has prayed for awarding of compensation.

5. The respondent No.2 was the owner and respondent No.1 was the insurer of the offending motorcycle. Respondent No.2 remained ex parte before the Tribunal. Respondent No.1 filed its written statement denying the contentions of the claim of the petitioner and also denied its liability to pay the compensation due to breach of terms and conditions of the policy of insurance. With these reasons, it prayed to dismiss the claim petition.

6. From the rival contentions of the parties, the Tribunal framed necessary issues. The Tribunal recorded the evidence of the parties. The claimant to prove his case, examined 4 witnesses as PW-1 to PW-4 and marked 18 documents, as per Exs.P-1 to P-18. The respondent- Insurance Company has examined 2 witnesses as RW-1 and RW-2 and marked Exs.R-1 and R-2.

7. After hearing the arguments, appreciating the pleadings and evidence on record, Tribunal by its impugned judgment and award held that accident occurred due to rash and negligent driving of the car by its driver and Tribunal has awarded the following compensation:

8. The insurer challenges the said judgment on the ground that it was not liable to pay the compensation since there was violation of terms and conditions of policy. Claimant challenges on the ground of inadequate compensation awarded by the Tribunal.

9. Heard the arguments of the learned counsel appearing for the claimant as well as the insurer.

10. The main contention of the insurer is that it was a private vehicle and in the cross examination of PW-1, he has admitted that he had paid and hired the said vehicle. Therefore, it is a violation of terms and conditions of policy condition.

11. The learned counsel for the appellant contends that such a stray admission cannot be considered for denying the rights of the claimant. In the alternative, he also contends that admittedly the said vehicle was insured with respondent No.1 and it was a package policy. Even if there is a violation of the terms and conditions of the policy, the insurer remains liable to pay compensation to third parties. It may, however, be at liberty to recover the amount from the owner of the vehicle, but it cannot be exonerated from its obligation to pay compensation to the third party.

12. PW-1 - claimant in his cross examination has stated that said vehicle belongs to one Vasanth Kumar and the inmates of the said car had taken the said car on hire. The hire charge was paid by one Shivaraj, who was the inmate of the vehicle. The evidence given by the claimant supports the respondent’s contention that the vehicle was t