The Hindu : Apex court pulls up insurance companies

Online edition of India's National Newspaper
Saturday, Mar 15, 2003

National

National

Apex court pulls up insurance companies

NEW DELHI March 14. The Supreme Court has come down heavily on insurance companies for avoiding liability to third parties involved in accidents citing that the driver of the vehicle had a fake licence.

A Bench comprising Justice S.N. Variava and Justice B.N. Agrawal pointed out that in spite of the fact that the apex court had clearly laid down the law on this aspect, several insurance companies were still seeking to get out of the liability in a large number of cases stating that the licence was fake. The Bench noted that when an owner was hiring a driver he would have to check whether the driver had a driving licence. If he produced a driving licence which on the face of it looked genuine, the owner was not expected to find out whether the licence had been issued by a competent authority.

The Bench said the injured or relatives of the person killed in an accident would then find that the decree awarded by the motor accident claims tribunal was only on paper as the owner was a man of straw and the owner himself an innocent sufferer.

The Bench was of the view that in all businesses there was an element of risk and it was equitable that the business which was run for making profits should also bear the risk associated with it.

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