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of <h1>Supreme Court Rules on Insurance Company Liability for Passenger Compensation</h1> <h3>United India Insurance Co. Ltd. Versus K.M. Poonam & Ors.</h3> The Supreme Court held that the Insurance Company was liable to pay compensation to passengers in breach of permit conditions, limited to the number of ... - Issues Involved:1. Liability of the Insurance Company for compensation to passengers in breach of permit conditions.2. Assessment of compensation amount.3. Apportionment of compensation among claimants.4. Recovery of excess compensation paid by the Insurance Company from the vehicle owner.Detailed Analysis of the Judgment:1. Liability of the Insurance Company for Compensation to Passengers in Breach of Permit Conditions:The core issue was whether an Insurance Company could be held liable for compensation to passengers traveling in a public transport vehicle in breach of the permit conditions. The Supreme Court examined the liability under the Motor Vehicles Act, 1988, particularly Sections 147 and 149. The Act mandates insurance coverage for third-party risks, and Section 149(1) obligates the insurer to pay compensation even if the policy is voidable or canceled, provided the insurer can recover the excess amount from the vehicle owner. The Court concluded that the insurer's liability is confined to the number of persons covered by the insurance policy, which in this case was six, including the driver. However, the insurer must initially pay compensation to all claimants and then recover the excess from the vehicle owner.2. Assessment of Compensation Amount:The Motor Accident Claims Tribunal initially awarded Rs. 1,86,200/- as compensation, which was later reassessed to Rs. 2,47,000/- by the High Court. The Tribunal used the deceased's income, age, and the multiplier method prescribed under Section 163A of the Motor Vehicles Act, 1980. Despite the absence of an income certificate, the Tribunal considered the claimants' testimony and other evidence to determine the compensation amount. The Supreme Court upheld the reassessment by the High Court and directed the Insurance Company to pay the total amount.3. Apportionment of Compensation Among Claimants:Given the excess number of passengers, the Court faced the challenge of apportioning the compensation. Following the precedent in Baljit Kaur's case, the Court directed the Insurance Company to deposit the total compensation amount awarded to all claimants. The deposited amount would be disbursed to all claimants proportionately. This method ensures equitable distribution without selectively identifying the passengers covered by the policy.4. Recovery of Excess Compensation Paid by the Insurance Company from the Vehicle Owner:The Court allowed the Insurance Company to recover the excess compensation paid beyond its liability from the vehicle owner. The recovery would be executed directly through the Tribunal without necessitating a separate suit. This approach aligns with the beneficial objectives of the Motor Vehicles Act and provides a streamlined process for the insurer to reclaim the excess amount.Conclusion:The Supreme Court's judgment delineates the insurer's liability under the Motor Vehicles Act, emphasizing the insurer's obligation to pay initial compensation and subsequently recover excess amounts from the vehicle owner. The decision balances the interests of claimants, the insurer, and the vehicle owner, ensuring just compensation while adhering to statutory provisions. The appeals were disposed of with no order as to costs.
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