Insurance Company Liable To Pay Compensation Even If Driver Was Intoxicated At Time Of Accident: Madras High Court

The Madras High Court has recently observed that the Insurance company would be liable to pay compensation to the family of the deceased even if the driver of the vehicle that was involved in the accident was under the influence of alcohol at the time. Justice M Dhandapani followed a decision of the Kerala High Court in Muhammed Rashid @ Rashid vs. Girivasan E.K and held that even if the policy document had a condition that driving of vehicle in an intoxicated condition is violation of terms and conditions of the policy, the Insurance company would still be liable to pay the compensation. “Following the dictum laid down in the decision of the High Court of Kerala at Ernakulam reported in 2023 LiveLaw (Ker) 52 [Muhammed Rashid @ Rashid vs. Girivasan E.K.], this Court holds that the second respondent Insurance Company is liable to pay the compensation to the claimants. The second respondent Insurance Company shall deposit the award amount before the Tribunal and thereafter recover the same from the first respondent in the manner known to law,” the court said. The court was hearing an appeal filed by Bhuvaneswari and others, family of Rajasekaran, who died in a road accident. The appellants had approached the court to enhance the compensation awarded by the Motor Accident Claims Tribunal. Rajasekaran died on December 30, 2017 when he was walking in the left side of Thiruneermalai Main Road, near Solid Waste Management Office, Chennai. During this time, a van, which was being driven in a rash and negligent manner, hit him from behind, killing him at the spot. The claim petition was filed by the family for Rs. 65 Lakhs, and after adjudication, the tribunal awarded a sum of Rs. 27,65,300 as compensation along with 7.5% interest. The MACT had also exonerated the insurance company, noting that the driver was intoxicated at the time of the accident. On appeal, the family, relying on the decision of the Kerala High Court, argued that the MACT's finding was perverse and not sustainable. It was also submitted that the deceased was 37 years old at the time of the accident, doing central work and earning a sum of Rs. 700 per day, but the tribunal had fixed a notional monthly income at Rs. 13,700/- and awarded meager compensation. The court agreed with the claimants and, relying upon the decision of the Kerala High Court and the other decisions of the Supreme Court, noted that the Insurance Company was liable to compensate even if the driver was intoxicated. The court also noted that the tribunal had fixed a lesser notional income as the deceased could have easily earned Rs. 15,000 per month at the time of the accident. The court also opined that the amount awarded under loss of estate was low and enhanced the same. Thus, the total compensation was enhanced to Rs. 30,25,000, along with interest at 7.5%. The court directed the Insurance company to deposit the enhanced amount within 6 weeks, which could then be recovered from the respondents. Counsel for the Appellant: Mr. K. Balaji Counsel for the Respondents: Mr. K. Vinod Case Title: Bhuvaneswari and others v. M/s. Bvm Storage Solutions Pvt Ltd and Another. Citation: 2025 LiveLaw (Mad) 82 Case No: C.M.A.No.3392 of 2024Click Here To Read/Download The Judgment

Insurance Company Liable To Pay Compensation Even If Driver Was Intoxicated At Time Of Accident: Madras High Court

Upasana Sajeev

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