The Supreme Court last week dismissed a batch of appeals by general insurance companies and ruled that they could not challenge the amount of compensation awarded by the motor vehicles tribunals when the insured had not chosen to appeal. If the insured is satisfied with the compensation, that is the end of the matter unless there is collusion between the insured and claimants, or there is some serious lapse in procedure.
Two Benches of the Supreme Court had taken contradictory views on this question. In a typical case, a person was seriously injured in a road accident and the tribunal awarded him Rs 1.5 lakh as damages. The insurance company was directed to pay the compensation. The insured did not move the high court, apparently being satisfied with the amount. The insurance company moved the high court. It reduced the amount to Rs 84,000. The injured person moved the apex court.
In other cases, the high court held that the insurance company could not move an appeal against the quantum when the victim had not done so. Several high courts ruled in their favour. The high courts went by the differing judgments of the Supreme Court.
Therefore, a larger Bench was constituted by the Supreme Court to clarify the law and it has done so now in the National Insurance Co vs Nicolletta Rohtagi case.
The Bench headed by Justice V N Khare stated that it was compulsory to insure the vehicle. Therefore, the insurance company comes into the picture because of its liability under the Motor Vehicles Act. Parliament has ensured under Section 149 of the Act that the accident victims are fully compensated and protected.
