United India Insurance Co.Ltd vs K.M.Poonam & Ors on 18 February, 2011
12. The legal position with regard to liability of insurer to
satisfy award in a case where the insured vehicle was carrying
passengers beyond its permissible capacity has been settled by
the Supreme Court in the case of United India Insurance Co.
Ltd. Vs. K.M Poonam & ors; (2015) 15 SCC 297. In the said
case, the Supreme Court, while dealing with the question
regarding the liability of insurance company to pay compensation
to the victims of a motor vehicular accident travelling in the
insured vehicle which is found to be carrying passengers beyond
its permissible capacity has held that the insurer has to first
deposit with the Tribunal the total amount of the amounts
awarded in favour of the awardees whereafter, the insurer shall
be entitled to recover the amount from the owner of the vehicle in
respect of the awards which are beyond the permissible capacity
of the insured vehicle. The relevant observations of the Supreme
Court in the said case are reproduced as under:-