MADURAI: The Madurai Bench of the Madras High Court, in a case pertaining to an insurance claim, has said a delay in remitting the insurance amount by the firm’s agent does not affect the insurance coverage of an insurer. The court added that the Motor Accident Claims Tribunal in Thanjavur had erred in asking the agent to pay the amount by exonerating the insurance company. Justice R Vijayakumar passed the order in a petition filed by an authorized agent of New India Assurance Co. Ltd challenging the tribunal’s order to pay compensation to the agent.
The petitioner said a man, Gladstone, on January 31, 2016, had dashed his vehicle into another person, who succumbed to injuries on February 6, 2016. Gladstone had paid an amount to the agent for insuring his vehicle. During the arguments at the tribunal, the agent contended that the company issued the insurance certificate a day after the accident.
However, the tribunal concluded that Gladstone had paid the insurance premium to the agent much before, on January 19, 2016. The tribunal further said the accident happened due to his negligence and rash driving. It found that the agent was entitled to file an appropriate suit against the insurance company to get the amount and mulcted the entire liability upon the insurance agent.
Hearing the case, Justice R Vijayakumar said the insurance company had accepted the renewal premium, received and credited by their agent. The contention of the company that their agent was not authorised to receive a renewal premium is not legally sustainable. Certainly, there is a fault on the part of the agent in remitting the insurance amount to the company. The insurance company cannot get exonerated for the fault committed by its own agent, it said, adding that if the company finds its agent was negligent in belatedly remitting the amount, it is for the insurance company to initiate independent proceedings.
The court said the insurance company does not have any power whatsoever to postpone the date of commencement of the policy after receipt of the premium either directly or through their agent.
“The only fault on the part of the agent is that having received the premium, he has not remitted it to the company in time. The insurance agent does not fall under any one of the categories of section 168 of the Motor Vehicles Act, which says either the driver, owner or the insurance company could be charged with liability to pay compensation. The insurance agent cannot be treated insurer for passing an award,” the court said.