New Delhi, September 01: Reversing a number of its own decisions, the Supreme Court today ruled even courts cannot compel insurance companies to pay compensation to a claimant if the insurer has no liability to pay.
“If the insurance company has no liability to pay at all, then, in our opinion, it cannot be compelled by order of the Court in exercise of its jurisdiction under Article 142 of the Constitution of India to pay the compensation amount and later on recover it from the owner of the vehicle, a bench of Justices Markandeya Katju and Asok Kumar Ganguly said in a judgement.
The judgement assumes significance as the bench while disagreeing with the number of earlier decisions requested the Chief Justice of India to constitute a larger bench to decide the issue.
In a number of earlier rulings as part of judicial activisim, the apex court had ruled that insurance companies were liable to first pay compensation to the victim/dependents of an accident claim and later recover the amount from the vehicle owners responsible for the accidents.
Such directions were passed as the insurance companies refused to pay compensation on the ground that the vehicle drivers/owners did not have not valid driving licenses.
The earlier decisions were passed by the apex court under Article 142 which gave absolute power to it to pass any order/judgement to ensure justice to the people.
However, today’s judgement has sought to reverse the earlier rulings on the ground that the Constitution does not give any such powers to the apex court.
“In our view, Article 142 of the Constitution of India does not cover such type of cases. When a person has no liability to pay at all, how can he be compelled to pay?
It may take years for the insurance company to recover the amount from the owner of the vehicle and it is also possible that for some reason the recovery may not be possible at all,” the bench said.
The bench passed the fresh ruling while dealing with an appeal filed by the National Insurance Company challenging the directions given by a high court asking it to pay compensation to a person and then recover the same from the owner of the accident vehicle.
–Agencies