Tag: Insurance Dispute

Insurance Must Pay Victims First: Supreme Court Upholds ‘Pay and Recover’ in Route Deviation Case
13Jan By The Legal ChamberNo Comments
Supreme Court

Insurance Must Pay Victims First: Supreme Court Upholds ‘Pay and Recover’ in Route Deviation Case

This Supreme Court judgment affirms the application of the "pay and recover" principle where an insured vehicle deviates from its permitted route. While the insurer remains statutorily liable to compensate accident victims, it is entitled to subsequently recover the paid amount from the policyholder for breaching the contract's geographical terms. Facts Of The Case: On October 7, 2014, the deceased Srinivasa (alias Murthy) died on the spot after his motorcycle was hit by a rashly and negligently driven bus (KA-52-9099). His dependents filed a claim petition before the Motor Accidents Claims Tribunal (MACT) seeking compensation. The Tribunal awarded ₹18,86,000. Dissatisfied, the claimants appealed to the High Court for enhanced compensation, while the insurance company also appealed...
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Merely Producing a Licence is Not Collusion, Rules Supreme Court, Protecting Owners from Insurer’s Recovery
24Dec By The Legal ChamberNo Comments
Supreme Court

Merely Producing a Licence is Not Collusion, Rules Supreme Court, Protecting Owners from Insurer’s Recovery

The Supreme Court held that merely proving a driver’s licence is fake does not absolve the insurer unless it is established that the vehicle owner knowingly breached the duty of due diligence in employing the driver. Absent proof of such breach, the insurer remains liable to third parties and cannot recover from the owner under a “pay and recover” order. Facts Of The Case: The accident occurred on January 26, 1993, at 2:00 AM at an intersection, involving a collision between a truck and a Matador van. The Matador van was carrying ten passengers, including the driver. Tragically, nine persons lost their lives in the accident, while two sustained injuries. Claims were filed before the Motor Accident Claims Tribunal by the injured and the legal heirs of the deceased passengers, as wel...
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Fraud in Insurance Policy: Supreme Court’s Balanced Approach in Accident Compensation Case
25Nov By The Legal ChamberNo Comments
Supreme Court

Fraud in Insurance Policy: Supreme Court’s Balanced Approach in Accident Compensation Case

The Supreme Court upheld the liability of the Insurance Company to pay compensation to the accident claimants. However, upon finding the insurance policy was fraudulently manipulated and not valid on the accident date, the Court granted the insurer the right to recover 50% of the compensation amount from the vehicle owner and driver. Facts Of The Case: The case arose from a fatal road accident on June 21, 2006, which resulted in the death of a 21-year-old security guard, Hem Singh Mehta. The accident occurred when a truck, driven rashly and negligently, hit the deceased while he was waiting for a bus. The legal heirs of the deceased filed a claim before the Motor Accident Claims Tribunal in Haldwani. The Tribunal, after establishing that the accident was caused by the truck driver's negl...
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Supreme Court Boosts Accident Compensation, Rejects “Minimum Wage” for Student
22Nov By The Legal ChamberNo Comments
Supreme Court

Supreme Court Boosts Accident Compensation, Rejects “Minimum Wage” for Student

The Supreme Court enhanced compensation by revising the income assessment from minimum wages to a prospective income of an accountant, factoring in future prospects as per Pranay Sethi. It also awarded additional future medical expenses, upholding the insurer's liability for verified costs incurred due to the victim's paraplegia. Facts Of The Case: On 24th October 2001, a 20-year-old man, Sharad Singh, was travelling pillion on a motorcycle when it was hit from behind by a rashly and negligently driven car. The impact caused him to fall onto the road, and he was subsequently run over by the same car. The accident resulted in a C4-5 fracture, rendering him a paraplegic with 100% disability, as certified by AIIMS, and confined him to a bed-ridden state until his death in 2021. The offendin...
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Supreme Court: Insurance Can’t Deny Claim Based on Policy Clause When Vehicle Was Properly Registered & Permitted
11Oct By The Legal ChamberNo Comments
Supreme Court

Supreme Court: Insurance Can’t Deny Claim Based on Policy Clause When Vehicle Was Properly Registered & Permitted

Supreme Court Judgment Based on the policy's "Limitation as to Use" clause, the Supreme Court ruled that an insurance company cannot deny liability for a utility vehicle registered and permitted as a "contract carriage" to carry passengers. The clause applies only to goods carriages, and the insurer, having issued the policy with full knowledge of the vehicle's registration and permit, is bound to indemnify the owner for third-party claims. The "pay and recover" order was set aside. Facts Of The Case: The case originated from a tragic accident involving a utility vehicle, which led to the filing of five separate claim petitions before the Motor Accidents Claims Tribunal (MACT) by the legal representatives of the deceased. The owner of the vehicle, Shyam Lal, was the appellant b...
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Proximity Not Proof: Supreme Court on Accident Injury and Death Five Months Later
11Oct By The Legal ChamberNo Comments
Supreme Court

Proximity Not Proof: Supreme Court on Accident Injury and Death Five Months Later

The Supreme Court dismissed the appeal, upholding the High Court's finding that the death was not a direct consequence of the motor accident injuries. The legal requirement of establishing a direct causal nexus between the accident and the death was not satisfied, as the medical evidence indicated the fatality was a possible after-effect of the surgery and the victim's pre-existing conditions, not the injuries themselves. Facts Of The Case: On April 29, 2006, an Excise Guard died following injuries sustained in a motorcycle accident. The accident occurred when the motorcycle he was riding collided with another motorcycle. He was initially hospitalized from April 29 to May 3, 2006, for injuries including a compound fracture of multiple metatarsals in his right foot and a fracture in his l...
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Supreme Court Decides: Who Pays When a Car Insurance Policy is Cancelled?
9Sep By The Legal ChamberNo Comments
Supreme Court

Supreme Court Decides: Who Pays When a Car Insurance Policy is Cancelled?

This Supreme Court case reaffirms the principle that an insurance policy stands rescinded upon dishonour of the premium cheque and intimation to the concerned parties, absolving the insurer from statutory liability. However, applying the "pay and recover" doctrine, the insurer was directed to pay the awarded compensation to the third-party claimants and was permitted to recover the same from the vehicle owner. Facts Of The Case: On August 22, 2005, Dheeraj Singh died when his motorcycle was hit from behind by a speeding truck (HR 46 A 1020). The deceased, a 36-year-old computer engineer, was found to be earning ₹3,364 per month. His dependents filed a claim before the Motor Accident Claims Tribunal. The appellant, National Insurance Company Ltd., disowned liability by contending that the...
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Supreme Court Clarifies Compensation Rules for Loss of Dependency in Fatal Accident
5Aug By The Legal ChamberNo Comments
Supreme Court

Supreme Court Clarifies Compensation Rules for Loss of Dependency in Fatal Accident

The Supreme Court upheld the High Court’s decision, affirming the Motor Accident Claims Tribunal’s award of ₹76.63 lakhs with 9% interest. It rejected the insurer’s plea to reduce the multiplier, holding that remarriage of the widow did not negate dependency claims of minor children. The Court also clarified that future prospects and interest apply from the claim filing date, emphasizing timely compensation. Delay in adjudication was not solely attributable to claimants, justifying the interest rate. The judgment reinforces precedent-based compensation principles in fatal accident cases. Facts Of The Case: The case involved a fatal motor accident that occurred on 18 November 1995, when a car collided with a truck due to the alleged rash and negligent driving of the truck driver. The dece...
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Supreme Court Rejects Salary Cut: Widow, Kids, and Parents Get Full Compensation in Fatal Truck Accident Case”
21May By The Legal ChamberNo Comments
Supreme Court

Supreme Court Rejects Salary Cut: Widow, Kids, and Parents Get Full Compensation in Fatal Truck Accident Case”

The Supreme Court restored the Tribunal’s compensation award for the family of a deceased truck driver, rejecting the High Court’s reduction of income from ₹10,000 to ₹4,076 per month. Citing Ramachandrappa v. Royal Sundaram Alliance, it upheld ₹10,000 as justified wages for 2014. The Court also affirmed loss of consortium for children and parents under Somwati v. New India Assurance, stressing equitable apportionment. The judgment reinforces fair compensation principles in motor accident claims, emphasizing statutory and precedential rights of dependents. Facts Of The Case: The case involved a fatal motor accident where a truck driver, aged 28, was hit and killed by another negligently driven truck while he was boarding his parked vehicle. The deceased’s legal representatives—his wido...
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