National Insurance Co vs Prembai Patel And Others

The Supreme Court held that under Section 166 of the Motor Vehicles Act, 1988, the insurance company is liable to pay compensation for the death of an employee due to an accident involving an insured vehicle. The Court affirmed the High Court's finding that the accident was caused by a mechanical failure (the arm bolt breaking) and not by the driver's negligence. The insurance company's argument that its liability was limited to the provisions of the Workmen's Compensation Act, 1923, was rejected, and it was held liable to pay the full compensation awarded to the claimants, amounting to Rs. 2,10,000 with interest.