The Supreme Court has rejected an appeal by an insurer against an order of compensation in a case involving a fatal road accident, but partially altered the direction to enable the insurer to recover half of the amount of compensation from the owner and driver of the offending party.
The case originated from a road accident in Haldwani, Uttarakhand in 2006 when 21-year-old Hem Singh Mehta, who was working as a security guard with a monthly salary of Rs. 4,000, was killed after being struck by a rashly driven truck. In 2007, the Motor Accident Claims Tribunal (MACT), Nainital ordered compensation for Rs. 3,87,000 with 7% interest, which was to be paid by the insurance company.
Dispute Over Insurance Policy:
At the hearing, the owner of the vehicle had presented an insurance policy that was allegedly valid between June 17, 2006 to June 16, 2007, of the date of the accident on June 21, 2006. During subsequent checks, however, it turned out that the policy was only valid from June 28, 2006 to June 27, 2007. The insurance company claimed that the owner of the vehicle had tampered with the dates of coverage.
The insurer had raised this point in a review petition before the Tribunal, which was rejected on the ground that the Tribunal had no jurisdiction to review its orders under the Motor Vehicles Act. The review rejection was not prosecuted before the High Court.
High Court's Decision:
The insurance company and the family of the victim went to the Uttarakhand High Court through appeals. Though the insurer opposed liability, the claimants had demanded an improvement in compensation. The court, however, deemed the Tribunal's evaluation reasonable, computing the income per annum at Rs. 36,000, dependency at Rs. 24,000, and using a multiplier of 15. It rejected both the appeals in April 2019, highlighting that since the review order given in 2007 had gone unchallenged, the arguments of the insurer could not be heard.
Supreme Court's Ruling:
On hearing the insurer's second appeal, the Supreme Court pointed out that during the initial claim proceedings, allegations of fraud had not been established and that the dismissal order of the review was never challenged by the insurer. Nevertheless, considering the verification outcome of the insurance coverage, the Court enabled the insurer to recover 50% of the compensation from the owner and driver of the vehicle.
The Court instructed that if the insurer had not deposited the amount awarded, it must do so within six weeks, after which recovery proceedings may be instituted against the owner and driver for half of the amount.
Finally, affirming the compensation granted to the dependents of the deceased, the Court attempted to balance the protection of the victim's dependents and relief to the grievance of the insurer towards the dubious insurance policy.
