Mr. Rajiv Shukla residing in Delhi purchased on 9th May, 2016 a Honda Car for ₹ 8,00,000. The vehicle was registered as DL 2CJ 8745. He, thereafter, applied for a comprehensive insurance policy with Pioneer General Insur

CS Professional · Insurance - Law and Practice · PYQS · June 2017
Mr. Rajiv Shukla residing in Delhi purchased on 9th May, 2016 a Honda Car for ₹ 8,00,000. The vehicle was registered as DL 2CJ 8745. He, thereafter, applied for a comprehensive insurance policy with Pioneer General Insurance Co. Ltd. and after ascertaining the annual premium, issued a cheque in favour of the insurance company for ₹ 19,000 as premium for a comprehensive coverage of the vehicle for a period of twelve months commencing from 11th May, 2016. The insurance company accordingly issued Mr. Shukla with a comprehensive motor policy for the period from 11th May, 2016 to 10th May, 2017. On presentation of the cheque issued by Mr. Shukla by the insurance company, it was dishonoured on 14th May, 2016 on the ground "insufficiency of funds" and an intimation was sent to Mr. Shukla by the insurance company on 16th May, 2016. Meanwhile, while returning from his office on 15th May, 2016, the vehicle that was driven by Mr. Sukla met with an accident and suffered damages. A third-party walking on the road also sustained injuries and had to be hospitalised. The accident was reported by Mr. Shukla to the police and a FIR was also lodged. On the basis of the above facts, answer the following questions : Does the person walking on the road who sustained injuries and had to be hospitalised, have a right as third party to claim for injury under the policy?

Answer & Explanation:

It is a rule specified in Motor Vehicle Act, 1988 that no person should use a motor vehicle in a public place, unless there is an Insurance Policy in force in relation to the use of the vehicle. The main object of the provision is that third parties who suffer injuries due to use of the vehicle, may be able to get damages from the owners. The rights of third party to get indemnified can be exercised only against the insurer of the vehicle. The fact that there was a Policy issued in the vehicle involved in the accident is enough for injured third party to maintain a claim against the insurer. The Third Party is not concerned whether the premium was paid or not as long as the policy has been issued. Where a judgement or an award has been given against a insured person in respect of a third party liability covered under the insurance policy, then, notwithstanding the rights or the insurer to avoid or cancel the insurance policy, the insurer shall be liable to pay to the person entitled to the benefit of decree (third party), as if the insurer were the judgement debtor, together with any amount payable in respect of costs and any sum payable alongwith interest. Hence the person who sustained injuries while walking on the road can file a claim for injuries with the insurer and be indemnified as per provisions of law.

Topics: Motor Insurance

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