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2023 Supreme(All) 2634

IN THE HIGH COURT OF ALLAHABAD
SARAL SRIVASTAVA, J.
New India Assurance Co.Ltd. - Appellant
Versus
Smt. Sarojani and ors. - Respondents
FIRST APPEAL FROM ORDER NO. 1084 OF 2002.
Decided On : 25-07-2023

Advocates appeared:
For the Appellant : Vipul Kumar
For the Respondents: Rakesh Kumar Porwal and Madhusudan Dikshit

Headnote:(A) Motor Vehicles Act, 1988 - The law is settled that the insurance company should satisfy the award first in cases of policy breach by the owner, who then can seek recovery - Tribunal awarded Rs.1,99,000/- with 12% interest, concluding the appeal lacks merit. (Paras 4, 5, 6, 9)

Facts of the case:
The appeal arises from an award by the Tribunal related to a motor accident, where the owner was found to have breached the insurance policy when the driver lacked a valid license.

Findings of Court:
The Tribunal's grant of right of recovery to the insurance company was upheld. The decision followed established legal principles, emphasizing the proper allocation of liability between the owner and the insurer.

Issues: The core issue was whether the insurance company should be absolved of liability due to the owner's breach of policy involving an unlicensed driver.

Ratio Decidendi: The court confirmed that policy breaches by the vehicle owner do not bar the claimants from recovery, thereby allowing the insurance company to recover from the owner post-payment. The Tribunal's order was viewed as just under prevailing law.

Result: Appeal dismissed.

Table of Content
1. background of the appeal regarding compensation (Para 1 , 2 , 3 , 4)
2. argument on insurance policy breach responsibility (Para 5 , 6)
3. court's analysis on policy breach and recovery rights (Para 7 , 8 , 9)
4. conclusion on the merit of the appeal (Para 10)

JUDGMENT

Saral Srivastava, J.

List has been revised. Learned counsel for the appellant and learned counsel for the claimants/respondents are present.

2. Learned counsel for the owner-respondent no.6 is not present.

3. Heard learned counsel for the appellant and learned counsel for the claimants/respondents.

4. The present appeal has been filed by the appellant against the award dated 14.03.2002 passed by Motor Accident Claims Tribunal/Additional District Judge, Court No.2, Etawah in MACT No.332 of 1994, by which the Tribunal has awarded Rs.1,99,000/- along with 12% interest to the claimants/respondents.

5. Challenging the said award, learned counsel for the appellant has contended that once the Tribunal has recorded a finding that the owner has committed breach of Insurance policy as the driver of the offending vehicle, i.e., Tractor No.U.P. 75A/0020 was not holding a valid driving licence, the Tribunal should have absolved the appellant Insurance Company from its liability to pay compensation.

6. Per contra, learned counsel for the claimants/respondents would contend that the breach of policy is an issue between the owner and the insurer and claimants/respondents should not suffer on account of breach of insurance policy. It is submitted that the law is well settled that if the owner has committed breach of policy, the Insurance Company should first satisfy the award and thereafter recover it from the owner. It is further contended that in the instant case, the Tribunal has granted right of recovery to the Insurance Company and thus, the award has been passed on the sound principle of law and is not liable to be interfered with by this Court in appellate jurisdiction.

7. I have considered the rival submissions advanced by learned counsel for the parties and perused the record.

8. The Tribunal has recorded a finding that the driver of the offending tractor was not holding a valid driving licence and thus, the owner of the offending tractor has committed breach of policy. The Tribunal accordingly granted right of recovery to the appellant.

9. The law on the point is settled that in case of breach of insurance policy by the owner of offending vehicle, the Insurance Company shall first satisfy the award and thereafter recover it from the owner. In the instant case, the Tribunal has already given right of recovery to the appellant, therefore, in such view of the fact, the order passed by the Tribunal is just and in accordance with law and is not liable to be interfered with by this Court in appeal.

10. Thus, for the reasons given above, the appeal lacks merit and is, accordingly, dismissed with no order as to costs.

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