Date:04/04/2007 URL: http://www.thehindu.com/2007/04/04/stories/2007040405271400.htm

National

No compensation sans specific contract: court

New Delhi: Unless there is a specific contract, an insurance company will not be obliged to pay compensation to a person/employee who dies in a road accident while driving the vehicle of his employer, the Supreme Court has held.

Such a liability would also arise only if the claim was made under Section 163A and not under Section 166 of the Motor Vehicles Act (MVA), a Bench consisting of Justices C.K. Thakker and P.K. Balasubramanyan said upholding an Oriental Insurance Company appeal.

The company challenged a Uttarakhand High Court order, which directed the insurer to pay compensation to the claimants of an employee who died while driving the car of his employer.

According to the insurance firm, Chandra Variyal, regional manager of a company, was driving the car of his employer when he died in the accident.

However, the family claimed that Variyal was just seated in the car when the company's driver Mahmood Hasan was behind the wheel. The family filed a claim under Section 166 of the Act and sought compensation on the ground that Variyal's death occurred because of rash and negligent driving by Hasan.

However, the Motor Accidents Tribunal held that it was Variyal who drove the vehicle and hence the insurance company was not liable to pay compensation. — PTI