Summary: In a recent decision by the Madras High Court, Liberty General Insurance Ltd. must pay money to the family of a person who died in an accident, but they can get the money back from the car owner later.
On July 29, 2019, M. Vijayakumar was in a terrible car accident near ECR Road, Salavankuppam, Chennai. The car hit a divider, flipped over, and caught fire, leading to his death on August 3, 2019. His family asked for Rs. 49,00,000, and the Motor Accidents Claims Tribunal decided to give them Rs. 29,17,500 on January 21, 2025.
Liberty General Insurance Ltd. disagreed with the decision, saying that the car driver didn't have a valid driver's license, which went against the policy rules. They said they sent notices to the owner and driver, but these came back undelivered.
"The return of notice cannot be seen as Liberty General Insurance Ltd. failing to prove that the policy rules were broken."
The court, with Justices C.V. Karthikeyan and K. Kumaresh Babu, agreed with the compensation decision. They mentioned a Supreme Court decision that says insurance companies must pay claims to third parties even if there's a policy rule break, and they can get the money back from the insured person later.
On December 5, 2025, both sides agreed on a payment of Rs. 37,50,000. Liberty General Insurance Ltd. had already put in Rs. 42,11,680, and the court let them take back the extra money.
"The money should be given to V. Priya and respondents 1 to 5 as agreed in the joint memo."
The appeal was settled with instructions for Liberty General Insurance Ltd. to pay the claimants first and then get the money back from the car owner and their legal representatives later. The process should be finished within eight weeks from January 22, 2026.
