Insurance Company Can’t Recover Award Amount From RC Owner On Ground That Driver Had No Badge: Kerala High Court
The Kerala High Court was considering an appeal preferred by the insurance company against the order of the Motor Accidents Claims Tribunal.
Justice M.B. Snehalatha, Kerala High Court
While dismissing an appeal of an insurance company in a motor accident case, the Kerala High Court has held that the company is not entitled to recover the award amount from the registered owner of the vehicle on the ground that the driver of the autorickshaw had no badge (transport vehicle endorsement).
The High Court was considering an appeal preferred by the insurance company against the order of the Motor Accidents Claims Tribunal on the ground that the driver of the autorickshaw had no badge to drive the autorickshaw and thus, there was a violation of policy conditions. The company claimed that it had the right to recover the award amount from the registered owner of the vehicle.
The Single Bench of Justice M.B. Snehalatha held, “In view of the above settled legal position, there is no merit in the contention put forward by the Insurance Company that, since the driver of the autorickshaw had no badge, the insurance company is entitled to recover the award amount from the RC owner of the vehicle. The Tribunal was, therefore, fully justified in not granting any such right.”
Advocate John Joseph Vettikad represented the Petitioner, while Advocate Sheji P. Abraham represented the Respondent.
Factual Background
The claimants had filed a petition seeking compensation under Section 166 of the Motor Vehicles Act in respect of the death of one Bhargavi, who died in a motor vehicle accident in 2011. According to the claimants, while the victim was travelling in an autorickshaw driven by the first respondent, the autorickshaw fell into a dip, and the victim succumbed to the injuries. It was claimed that the accident occurred due to the rash and negligent driving of the autorickshaw by the driver. The claimants sought compensation from the driver of the vehicle, the owner and the insurer.
The Insurance company filed a written statement stating that, though the autorickshaw involved in the accident had valid insurance coverage, the driver of the said autorickshaw had no badge to drive the vehicle and therefore, there was a violation of policy conditions. As per the insurance company, it was not liable to indemnify the owner. The Tribunal passed an award for Rs 1,55,000 with interest.
Reasoning
The Bench referred to the judgment of the Apex Court in Mukund Dewangan v. Oriental Insurance Company Limited (2017) wherein it has been clarified that if a driver is holding a licence to drive a light motor vehicle, he can drive a transport vehicle of such class without any endorsement to that effect. Hence, the requirement of a “badge” or “transport vehicle endorsement” is not a mandatory condition for driving a light transport vehicle like an autorickshaw. The absence of a badge, therefore, does not amount to a fundamental breach of policy conditions.
The Bench further stated, “The correctness of the said judgment was subsequently referred to a Constitution Bench in Bajaj Alliance General Insurance Co. Ltd. v. Rambha Devi (2024) KHC OnLine 6607], which unanimously upheld the decision in Mukund Dewangan (supra). The Constitution Bench held that a driver holding a licence for the Light Motor Vehicle (LMV) class for vehicles with a gross vehicle weight under 7,500 kg is permitted to operate a 'Transport Vehicle' without the need of additional authorisation under Section 10(2)(e) of the Motor Vehicles Act.”
Thus, holding that the insurance company was not entitled to recover the award amount from the registered owner of the vehicle, the Bench dismissed the appeal.
Cause Title: United India Insurance Company Limited v. E.G. Sahadevan (Neutral Citation: 2026:KER:25402)