Overloading Of One Extra Person In Car Not Fundamental Breach Of Policy Terms: Himachal Pradesh High Court Directs Insurance Company To Pay Motor Accident Compensation
The Himachal Pradesh High Court was hearing Appeals arising out of a Claim Petition related to one and the same accident.
Justice Vivek Singh Thakur, Himachal Pradesh High Court
The Himachal Pradesh High Court has directed the Insurance Company to pay compensation in a motor accident case, saying that overloading of one extra person in a car is not a fundamental breach of insurance policy terms.
The Court was hearing Appeals arising out of a Claim Petition related to one and the same accident.
A Single Bench of Justice Vivek Singh Thakur held, “Though it has been alleged by the Insurance Company that there was fundamental breach of the policy, but accept the fact that 6 persons were sitting in the car, no other breach, much less fundamental breach, of the terms of the policy has been established on record. So far as overloading of one extra person is concerned, it is not a violation or fundamental breach of the terms of the policy having consequences of absolving Insurance Company from indemnifying the owner to pay the compensation in an accident, particularly when overloading of one person is not related to cause of the accident.”
Senior Advocate Ashwani K. Sharma represented the Appellant while Advocate Pankaj Sawant represented the Respondents.
Case Background
In this case, motor accident had occurred in 2012 when Tata Indigo Car owned by the Respondent No. 3 being driven by driver engaged by owner, in rash and negligent manner, met with an accident leading to death of driver and sons of the Respondent Nos. 1 and 2 (parents) in respective Appeals. The said parents preferred Claim Petitions before the Motor Accident Claims Tribunal (MACT), which were decided by separate awards. The Appellant (United India Insurance Company) was the insurer company of the said vehicle. As per Claimants-Respondents (parents), their sons were working as Mechanic and Painter respectively and were getting salary of Rs. 5,000/- per month plus Rs. 100/- as over time.
Taking into consideration material on record, the MACT assessed the compensation payable to claimants amounting to Rs. 9,72,000/- in each case. Additionally, Rs. 1,00,000/- and Rs. 25,000/- were held payable to the claimants in each case for loss of consortium and funeral expenses, respectively and in total compensation was determined as Rs. 10,97,000/- plus interest thereon @7.5% per annum. Being aggrieved by the impugned awards, the Insurance Company was before the High Court.
Reasoning
The High Court in the above context of the case, observed, “… on the basis of material on record, I am of the considered opinion that payment of salary of ₹4,500/- per month by the employer to each decreased can be taken into consideration for determination of compensation.”
The Court reiterated that deposition made in examination-in-chief, not specifically disputed, questioned or put to the witness in cross-examination, amounts to admission of the said fact.
“In present case vehicle involved, though a Transport vehicle, but admittedly was a light motor vehicle, having unladen weight of 1115 Kgs and Laden weight of 1515, but gross weight of the vehicle does not exceed 7500 Kgs”, it further noted.
The Court referred to the recent Judgment of the Supreme Court in the case of Bajaj Alliance General Insurance Company Limited v. Rambha Devi and others (2024), wherein it was held that driver holding a license for light motor vehicle (LMV) class, permitted to operate a “transport vehicle” with a gross vehicle weight under 7500 kg, without requirement of additional authorization under Section 10(2)(e) of MV Act, specifically for the “transport vehicle” class, with observation that licensing purposes, LMVs and transport vehicles are not entirely separate classes and an overlap exists between the two.
“Therefore, plea of Insurance Company in this case is not sustainable and rejected accordingly. … plea of the Insurance Company to absolve it from paying the compensation on account of overloading of one person in the Car is also not sustainable”, it added.
Conclusion
Keeping in view that income of deceased was not attracting levy of income tax, the Court said that no deduction towards income tax is required to be made. However, it reduced the rate of interest from 7.5% to 6% per annum.
“Amount of compensation is modified in aforesaid terms. Accordingly, claimants in each appeal are entitled for a sum of ₹ 7,90,400/- along with interest at the rate of 6% per annum from the date of filing of claim petition till realization of whole amount with interest from appellant/Insurance Company as held by MACT. This amount of compensation is inclusive of any amount paid under Section 140 of MV Act”, it concluded.
Accordingly, the High Court disposed of the Appeal and directed the Insurance Company to pay Rs. 4,90,400/- to mother and Rs. 3,00,000/- to father in each Appeal.
Cause Title- United India Insurance Company v. Sita Devi & Others (Neutral Citation: 2025:HHC:23988)
Appearance:
Appellant: Senior Advocate Ashwani K. Sharma, Advocates Nisha Nalot, Advocate, and Ishan Sharma.
Respondents: Advocates Pankaj Sawant, Sunil Kumar, and Raju Ram Rahi.
