Sale of Vehicle and Liability of Insurance Company under MV Act, 1988 : Supreme Court Answers the Issue

 Sale of Vehicle and Liability of Insurance Company under MV Act, 1988 : Supreme Court Answers the Issue

In a recent case of Brij Bihari Gupta v. Manmet [2025] GCtR 1410 (SC), despite insurance company arguing that it has no liability, it was held that no reduction in compensation amount nor reduction in interest liability amount can be done and insurance company would also not be granted recovery rights/exoneration.

In this case, A was owner whose vehicle was insured with insurance company and there was agreement to sell vehicle by A to B. Insurance Company argued that since A has sold the vehicle to B so insurance company has no liability. Ultimately, relying on S.50 of MV Act, 1988, insurance company was directed to pay the amount with 12% interest from the date of filing of claim petition.