Insurance company liable to initially compensate third party even if car was driven by drunk driver: Kerala High Court

The Kerala High Court on Monday held that an insurance company is liable to compensate the victim of an accident/third party initially, whether or not the insurance policy enforces payment of compensation if the driver was drunk [Muhammad Rashaid @Rashid v Girivasan EK & Ors.]..Justice Sophy Thomas held that even if the insurance policy excludes compensation when the accident is a result of drunk driving, the insurer must pay the third party at the first instance and can then get the money reimbursed from the driver and owner who are ultimately liable."Even if, there is a condition in the Policy Certificate that driving a vehicle in an intoxicated condition is a violation of the terms and conditions of the Policy, still the Insurance Company is liable for payment of compensation. Undoubtedly, when the driver is in an inebriated state, certainly, his consciousness and senses will be impaired so as to render him unfit to drive a vehicle. But the liability under the Policy is statutory in nature and so the Company is not liable to be exonerated from payment of compensation to the victim.. Since the offending vehicle was validly insured with the 3 rd respondent-Insurance Company and the appellant/claimant is a third party, the company is liable to compensate him initially; but the company is eligible to recover the same from respondents 1 and 2 (driver and owner),” the Court said..The Court was considering an appeal that challenged the compensation awarded by the Motor Accident Claim Tribunal (MACT) on the ground that it was inadequate.The facts of the case are that in 2013, when the appellant was traveling in an autorickshaw, he met with an accident when a car driven by the first respondent hit the autorickshaw. The appellant was thrown out onto the road and he sustained serious injuries. He was admitted and treated for seven days at a hospital and he claimed that even after discharge, he had to take rest for six months. He was a driver by profession earning a monthly income of ₹12,000. Even though he approached the MACT claiming compensation of ₹4 lakh, the tribunal awarded only ₹2.4 lakh. This prompted him to approach the High Court with the present appeal. The Court noted that the petty case chargesheet filed against the driver of the car showed that he was driving the car in a drunken state and this fact was not disputed by the driver or owner.The insurance company said that it is not liable to indemnify the insured as the driver was driving the vehicle under the influence of alcohol.However, the Court said that even if there is a condition in the policy certificate that driving a vehicle in an intoxicated condition is a violation of the terms and conditions of the policy, the insurance company is still liable for payment of compensation to the third party.However, since the driver and owner have the ultimate liability in this case, they have to reimburse the compensation sum paid by the insurance company back to them, the court added.Therefore, the Court directed the insurance company to deposit the original compensation and an extra amount of ₹39,000 towards loss of earning, pain and suffering, bystander expenses in the bank account of the appellant with interest at the rate of 7% per annum. It also directed the company to recover this deposited sum from the driver and owner of the car..The appellant was represented by advocates TG Rajendran, Ann Susan George, TR Tarin and VA Vinod.The respondents were represented by advocates Abhijett Lessli and MA George..[Read Judgment].Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.