Insurance companies are required to pay third party (third party) compensation in the event of accidental loss of life or damage, even if the car or any vehicle is rented. Supreme Court Has ruled. And that insurance companies cannot shirk their liability Supreme Court Reported.
In 1998, a bus was rented on behalf of the Uttar Pradesh Transport Corporation and crashed. The family of the deceased in the accident has filed an appeal with the Motor Accident Tribunal seeking compensation. The tribunal ordered the Transport Corporation to pay Rs 1.82 lakh as compensation to the person who died in the accident.
However, the insurance company appealed to the Allahabad High Court. In it, U.P. The Transport Corporation has rented the bus. At the time of the accident, the bus was under the control of the Transport Corporation. It argued that it did not enter into a contract with the rental transport company, except to have a contract with the actual, registered owner of the bus and the insurance company to pay compensation in the event of an accident.
Accepting this argument, the Allahabad High Court exempted the insurance company from awarding compensation. However, the Uttar Pradesh Transport Corporation appealed to the Supreme Court against the verdict, quashing the High Court’s judgment and seeking enforcement of the tribunal’s judgment.
The petition was heard by Supreme Court Justices S. Abdul Nasir and Krishna Murari and adjudicated on the 14th.
The judges ruled, “Even if the owner leases the vehicle, the tenant is the owner for that period.” The insurance license also applies to him.
Therefore, the insurance company cannot deny that the registered owner of the vehicle can only pay compensation to the 3rd party in the event of an accident and the tenant will not be able to pay compensation in the event of an accident. There is no escaping insurance.
From the time the vehicle is rented until the time it is returned, the vehicle and the insurance belong to the tenant, who owns it. Therefore, even if the tenant causes an accident, the insurance company must pay compensation to the 3rd party. The judgment of the tribunal must be enforced. ”