New Delhi, Jan 13: The Supreme Court has held that
an insurance company, which has done third party insurance of
a vehicle, is not liable to pay compensation to the owner or
driver of the vehicle if they get killed or injured in an
accident.
The insurance company would be liable to pay compensation
only if the insured has entered into a separate contract for
such indemnity along with the compulsory third party
insurance, the apex court said.
Interpreting the Motor Vehicle Act which mandates
compulsory third party insurance policy for motor vehicles, a
bench of Justices S B Sinha and Cyriac Joseph said the
coverage of the policy is restricted only to third parties who
get killed or injured by the insured vehicle.
The apex court passed the ruling while upholding an
appeal filed by the New India Assurance Company challenging
the directions of the Jharkhand High Court and the Motor
Vehicles Accident Tribunal which had both earlier ordered the
insurance company to pay third party claims to the owner of a
vehicle whose son died in a mishap.
The deceased Tasu Mukhi son of the motorcycle owner
Sadanand Mukhi died on September 8, 200 while riding a motor
cycle, upon which the claim petition was filed.
However, the apex court rejected the direction and
agreed with the insurance company that Section 165 M V clearly
postulated that the insurance company is liable to indemnify
the risk of the third party only, and if additional premium is
paid under a different contract, the owner or his
representatives would be eligible for compensation.
Buerau Report
First Published: Tuesday, January 13, 2009, 00:00