Insurer (Company) Is Bounded To Indemnify The Owner Of The Vehicle Who Has The Vicarious Liability

This case arose out of a claim petition presented by the mother and wife of a deceased motorbike rider who died due to fatal injuries caused in a collision with a truck insured by the petitioner Company, namely Reliance General Insurance Company Limited.

The Motor Accidents Claims Tribunal had first held contributory negligence on the part of the deceased and allocated 50% of the liability to the insurance company. Disatisfied with this, both the insurer and the claimants approached the High Court in appeal. The High Court then reversed the Tribunal's decision, holding the truck driver alone guilty of the accident and increased the compensation granted to the claimants, aggrieved by which the insurance company to approach the Supreme Court with the current special leave petition.

Supreme Court examined whether or not the High Court had rightly overturned the Tribunal's conclusion of contributory negligence and held the truck driver solely responsible for the accident, and while rejecting the appeal, made a number of significant remarks relying upon the facts of the case.

The Apex Court held the statement of the truck driver (RW1) unreliable. The statement of the Investigating Officer (RW3), who had tentatively indicated contributory negligence from the locus standi of the accident, was also found to be problematic in that it conflicted with the charge sheet presented by him against the truck driver. The reason provided by the Investigating Officer for such a divergence – that the charge sheet had been presented since the motorbike rider had perished – was expressly dismissed by the Court.

On the other hand, the Apex Court held that the testimony of the eyewitness (PW3), who was riding on another bicycle in the company of the deceased and had spoken of the rash and negligent driving of the truck driver, to be believable. The Apex Court categorically expressed its inability to place faith in the "interested testimony" of the truck driver as well as the conflicting statements of the Investigating Officer.

Thus, Supreme Court, based on the cumulative evidence, agreed with the High Court in its conclusion that the negligence was solely with the driver of the offending truck and upheld the High Court's reversal of the finding of contributory negligence as observed by the Motor Accidents Claims Tribunal, and the subsequent increase of the award amount. The Apex Court ordered payment of deposited amounts with interest to claimants and payment of any remaining balance within a month.

**The Apex Court also held that the insurance company, being the insurer, was under an obligation to indemnify the owner of the vehicle for the vicarious liability due to the negligence of their employee, the driver. **

Coram: Justice Sudhanshu Dhulia & Justice K. Vinod Chandran