Insurance companies cannot evade liability under standard policies for accidents even when the driver breaches policy conditions unless it is proven that the breach substantially contributed to the accident's cause.

JUDGMENT

Gaurang Kanth, J. The present appeal has been preferred by the Appellant under Section 173 of the Motor Vehicles Act, 1988 ("M.V. Act") against the Award dated 24.01.2008 passed by the Court of learned Presiding Officer, Motor Accident Claims Tribunal, Patiala House Courts, Delhi ("impugned Award").

2. By way of the impugned Award dated 24.01.2008, the learned Tribunal awarded a compensation of Rs.1,18,810/- alongwith simple interest @ 9% per annum from the date of filing of the claim petition i.e. 05.02.2005 till its realization and further directed that the respondents were jointly and severally liable to pay the compensation amount. It was further directed that the Insurance Company shall deposit the entire awarded amount within a period of one month.

3. At the outset, it is pertinent to mention here that vide order dated 24.11.2016 and 08.11.2019, respondent nos. 1, 2 and 3 have been proceeded ex-parte and the matter was taken up for final hearing today.

SUBMISSION OF THE APPELLANT

4. Mr. Amit Gaur learned counsel for the Appellant/Insurance Company limited his argument and contended that the learned Tribunal erred in placing the liability of payment of compensation amount on the appellant. He further contended that it has been proved on record that the Driver of the offending vehicle was not holding a valid driving licence at the time of incident and as such it would tantamount to breach of terms and conditions of Insurance Policy, accordingly, no liability can be fastened upon the appellant/Insurance Company for payment of the compensation amount.

COURT'S REASONING

5. Brief facts noted by the learned Claims Tribunal are as under:

"...On 20.10.2004 at about 9.55/10 AM the petitioner was coming from Geeta Bhawan Temple to his residence at Malviya Nagar, New Delhi and she was struck from behind by R-1 who was coming from Shivalik A Block on motor cycle no DL 3SZ 3798 and it is stated that petitioner was dragged alongwith motorcycle for a distance because of which she received dislocation/fracture on her pelvis, head injury and injury on other parts of her body...."

6. Mr. Amit Gaur learned counsel for the Appellant/Insurance Company contended that the learned Claims Tribunal erred in placing the liability of payment of compensation amount onto the appellant as admittedly the driver of the offending vehicle was not holding a valid driving licence at the time of the incident.

7. In relation to liability of the Insurance company, the learned Claims Tribunal held as under:

"As regard the liability of R-3 Insurance company in the WS filed stand taken on behalf of R-3 Insurance company was that since R-1 was not having a valid driving license and hence it was not responsible for any claim of the petitioner but no evidence in evidence of the R-3 Insurance company has been adduced and it has not been proved by R-3 insurance company that there had been any violation of terms and conditions of insurance company by R-2, the insure. Accordingly, I hold that R-3 Insurance company is liable to indemnify R-2 for the liability, he may have to face with because of the claim of the petitioner.

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An award for a sum of Rs.1,18,810/- alongwith simple interest @ 9% per annum from the date of filing of the petition i.e. 05.02.2005 till realization is passed in favour of the petitioner and against respondents, who are jointly and severally liable to pay the compensation amount. 75% per cent of the award amount shall be kept in fixed deposit in a nationalized bank for a period of five years.