The insurer remains liable where the policy covered the accident and the driver held a valid licence.

The Motor Accident Claims Tribunal, Cuttack, awarded the claimants ₹8,37,650 with interest at 6% per annum from 27 December 2008 and directed the insurer to pay the award.

The insurer appealed under Section 173 of the Motor Vehicles Act, 1988, challenging the quantum.

The policy and driver’s licence, exhibited by the insurer, showed that the vehicle was insured on the accident date and that the driver was licensed to drive a commercial three-wheeler.

During the appeal, the Court proposed compensation of ₹5,50,000 with interest at 6%; the claimants accepted the proposal, while the insurer left the matter to the Court’s discretion.

1. Whether the compensation awarded by the Tribunal should be modified to the negotiated amount of ₹5,50,000 with interest at 6% per annum

2. Whether the insurer could be directed to satisfy the modified award, given the insurance policy and the driver’s licence

Section 173 of the Motor Vehicles Act, 1988, provides for an appeal against an award of a Motor Accident Claims Tribunal.

The Court also relied on Taslim Parvin & Another v. (Smt.) Usha Devi & Another, 2018(2) TAC 22 (SC), in considering the agreed proposal for modified compensation.

The Court’s reasoning proceeded on the basis that an insurer cannot avoid indemnifying the vehicle owner where the vehicle was insured on the accident date and the driver held a valid licence for the relevant class of vehicle.

The insurer’s challenge concerned quantum.

The Court found that the policy covered the accident date and that the driver’s licence authorised him to drive a commercial three-wheeler, matching the offending trolley auto; accordingly, the insurer could not escape liability to indemnify the owner.

In light of the parties’ positions on the proposed settlement—the claimants’ acceptance and the insurer’s submission to the Court’s discretion—the Court considered it just to reduce the compensation to ₹5,50,000, applying the precedent it cited.

The insurer was directed to pay the modified amount within eight weeks.

Any amount deposited before the Tribunal is to be disbursed to the claimants in accordance with the award, and the statutory deposit with accrued interest is to be refunded upon proof of deposit of the modified compensation.