Supreme Court: Liability Of Tractor & Its Insurer Extends To A Passenger's Death Resulting From Motor Accident Caused By Tractor Via Trailer

The Court dismissed an Appeal filed by The Royal Sundaram Alliance Insurance Company Limited (Appellant), thereby upholding the enhanced compensation awarded by the Karnataka High Court to the legal heirs (Respondents) of the deceased, who died in a motor vehicle accident.

A Bench of Justice Sudhanshu Dhulia and Justice Ahsanuddin Amanullah held, “Thus, the liability of the tractor/its insurer extended to the accident caused by the tractor resulting in the death of the deceased, through the trailer. This being the position in the present case, the principles emanating from the decisions where the Courts have held that the trailer has to be separately registered with the insurance company to make it liable, would not be applicable. To that extent, the facts in the present case are clearly distinguishable from the ones cited by learned counsel for the appellant. The legislation i.e., the MV Act, being beneficial and welfare-oriented in nature.”

AOR G Balaji represented the Appellant.

Brief Facts

The Respondents had challenged the compensation granted by the Motor Accident Claims Tribunal (MACT) before the High Court.

Court’s Reasoning

The Supreme Court noted, “In the present case, the admitted fact is that the incident occurred while a tractor which was insured with the Appellant was attached to a trailer and on the trailer a person was present who due to an unfortunate accident, fell off the trailer which was being pulled by/driven by/attached to the tractor, resulting in the death of such person.”

“Therefore, the undisputed position is that the trailer was being pulled by/attached to the tractor and then the trailer on which the deceased was present, turned turtle/upturned, resulting in his death. From the above, it is clear that the tractor which was insured was the reason for the accident. It is not the case that only because of some fault on the part of the trailer stand-alone, the accident happened,” the Bench further stated.

The Court explained, “For further clarification, we might illustrate: if an insured vehicle hits another vehicle which in turn hits a third vehicle, then for the entire chain of accidents, the liability would pass on to the vehicle which was the root cause of the accident because it is the result of the action in the same chain of events which cannot be segregated or compartmentalized. Moreover, this Court is duty-bound to be mindful of the ground realities of our nation and cannot let practicality be overshadowed by technicality.”

The Bench held, “What emerges is that the Appellant ought not to be saddled with payment of compensation exceeding what the insurance policy provides for or the limit, if any, set under any law for the time being in force, whichever be the higher amount of the two, in the underlying factual scenario.”

Consequently, the Court ordered, “For the reasons aforesaid, we do not find any infirmity in the Impugned Order, either with regard to the quantum of compensation awarded or fixation of liability on the insurer-Appellant for the accident. The same shall be paid within two months from today after adjusting whatever has been paid earlier, in terms of Order dated 06.02.2023 passed in the present case. However, liberty is granted to the Appellant to recover the differential amount (if any), in terms of Paragraph 18 supra i.e., total compensation awarded less the maximum amount payable, contractually or as per law (whichever be the higher amount), by the Appellant, from the Respondent No.4- owner.”

Accordingly, the Supreme Court dismissed the Appeal.

Cause Title: The Royal Sundaram Alliance Insurance Company Limited v. Honnamma & Ors. (Neutral Citation: 2025 INSC 625)

Appearance:

Appellant: AOR G. Balaji; Advocates Neeleshwar Pavani, Arzu Paul, Shiv Kumar and Vaishnavi

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