Page 56 - The Insurance Times September 2024

insurance companies are generally not liable under Section insurance provider was not required to reimburse the
163A or Section 166 of the Motor Vehicles Act, 1988, for claimant under the terms of the "Act Policy."
the death or physical harm sustained by the borrower, Additionally, the insurance company argued that since the
owner, or driver of the covered vehicle. However, the
driver was hired expressly to drive the insured vehicle, he
insurance company must be liable to meet such a
was in actual possession of it and controlled it as the owner,
contractual liability unless the vehicle is covered under the so it is impossible to say that he is a third party with regard
"Comprehensive Policy" or the insurance company
to the insured or borrowed vehicle.However, the claimant
undertakes by contract to meet any liability to pay
contended that the insurer was responsible for paying the
compensation on account of the death or bodily injury compensation if the driver's insurance premium was properly
suffered by the owner, the borrower, or the driver of the
paid by the vehicle's owner, regardless of whether the
insured vehicle. The court ruled that the claimant would employee was driving the vehicle or it was borrowed. In this
receive the full amount of the deposited funds, along with instance, the insurance policy only covered liability up to Rs.
any interest, and that the insurance company would receive 1 lakh.
the excess amount, also with interest, from the final
Judge Chawla explained that Section 147(1) of the Motor
judgment. The case involved a claimant who lost both eyes
Vehicles Act, 1988 states that an insurance policy need not
in a motorcycle accident and was permanently disabled.
cover a liability for death or bodily injury resulting from an
About the case employee of a person insured's employment, with the
According to observations made by the Delhi High Court, exception of a liability arising under the Workmen's
an insurance company that agrees to compensate the owner Compensation Act, 1923, for death or bodily injury to an
of an insured vehicle for death or injury must fulfill its employee while driving the vehicle. In this instance,
contractual obligations. According to Justice Navin Chawla, respondent no. 2, who works for the motorcycle's owner,
the Insurance Company is generally not liable under Section was operating the vehicle. The "Act Policy" would only
163A or Section 166 of the Motor Vehicles Act, 1988, for provide coverage for liabilities resulting from the 1923
the death or physical harm sustained by the borrower, Workmen's Compensation Act. Therefore, the appellant was
owner, or driver of the covered vehicle."However, the not obliged to pay compensation for the injuries experienced
Insurance Company shall be liable to meet such a by respondent no. 1 beyond the liability arising under the
contractual liability," the court continued, "unless the Workmen's Compensation Act, the court concluded, unless
vehicle is covered under the "Comprehensive Policy" or the covered by the contractual liability under the insurance
insurance company undertakes by contract to meet any policy.
liability to pay compensation on account of the death or The insurance company's obligation to compensate the
bodily injury suffered by the owner, the borrower, or the claimant was further limited to Rs. 1 lakh. "Accordingly, the
driver of the insured vehicle." Impugned Award is modified to the extent that the
While addressing an appeal filed by National Insurance appellant is required to pay the respondent no. 1 an amount
Company Limited contesting a decision reached by the of Rs. 1 lakh plus interest at the rate of 9% per annum from
Motor Accident Claims Tribunal in favor of the claimant, the date of the Claim petition filing, which is March 15, 2010,
Justice Chawla made the remark.According to the claimant's until the date of the appellant's deposit of the compensation
story, in 2006, he was riding a motorbike for some office with the learned Tribunal in accordance with this Court's
work when he had an accident. He claimed that poor vision order dated July 3, 2018," the court ruled.2018 saw the
and thick fog caused him to crash into a divider. He lost both passing of an interim order requiring the insurance company
of his eyes in the aforementioned accident, along with a to deposit the full amount awarded, plus interest, with the
Tribunal.
deformed jaw and facial hair. The claimant was 100%
permanently disabled, according to the hospital's Disability The court ruled that the claimant would receive the full
Certificate.The insurance company contended that since the amount of the deposited funds, along with any interest, and
claimant was operating the motorcycle-which belonged to that the insurance company would receive the excess
the business he was employed by-he had assumed the amount, also with interest, from the final judgement.Sanjay
owner's role. Additionally, it was argued that since the Rawat, an attorney, represented the insurance provider.
claimant could not be regarded as a "third party," the Attorney Gaurav Gupta represented the plaintiff in court.

50 September 2024 The Insurance Times