SHAYNA v. Smt. Vidyabai

: Mr. Animesh Pathak, Advocate appearing on behalf of Mr. K. Rohan, Advocate For Resp. No. 1 : Mr. Pravesh Sahu, Advocate appearing on behalf of Mr. P. R. Patankar, Advocate 2 Hon’ble Mr. Justice Amitendra Kishore Prasad Order on Board 06/11/2025

1. This appeal has been filed under Section 173 of the Motor Vehicle Act, 1988, being aggrieved by the Award dated 01.03.2018 passed by the learned First Additional Tribunal of First Additional Motor Accident Claims Tribunal, Durg (C.G.) in Claim Case No. 202/2014 in the matter of Smt. Vidyabai & Others vs. Vikas John & Others.

2. The averment in this appeal, in brief, is that the instant appeal has been preferred by the appellant–Insurance Company, being aggrieved and dissatisfied with the award dated 01.03.2018 passed by the learned Motor Accident Claims Tribunal, in a claim case instituted by respondent Nos. 1 to 3 (the original claimants) against the present appellant and respondent Nos. 4 and 5, seeking compensation on account of the untimely and tragic death of one Shri Lochiram in a motor vehicular accident that occurred on 12.01.2013. The claim petition was filed under the provisions of Section 166 of the Motor Vehicles Act, 1988, alleging rash and negligent use of the insured vehicle, and claiming that the death of the deceased had resulted in pecuniary as well as non-pecuniary losses to the family members who were dependent upon him. on the date of the incident, i.e., 12.01.2013, the deceased Shri Lochiram, a healthy middle-aged man and the sole earning member of his family, was travelling in the dala (open loading portion) of the vehicle bearing registration number C.G.-15-A-3566, which was insured with the appellant–Insurance Company and owned by respondent No. 4, while being driven by respondent No. 5. It is stated that the said vehicle was being driven on a public road when, all 3 of a sudden, the driver applied a sudden brake or abrupt stoppage, causing the deceased, who was sitting in the rear open portion of the vehicle, to lose balance and fall off the vehicle. As a result of the fall, Shri Lochiram sustained severe bodily injuries, including head trauma and multiple fractures. He was immediately taken to a nearby hospital for treatment; however, despite all efforts, he succumbed to his injuries, resulting in his death. The claimants, who are respondent Nos. 1 to 3 herein, being the widow, minor children, and dependent parents of the deceased, filed a claim case before the learned Tribunal, asserting that the accident occurred due to rash and negligent act on the part of the driver of the vehicle, and that the owner and insurer of the said vehicle were jointly and severally liable to compensate them for the death of the deceased. It was pleaded that the deceased was hale and hearty, earning his livelihood by working as a labourer/agricultural worker, and used to contribute substantially to the family income. His premature death had caused mental agony, loss of consortium, loss of dependency, and loss of future prospects to the claimants, thereby entitling them to just and fair compensation under law. The appellant– Insurance Company filed its written statement before the Tribunal, denying the averments made in the claim petition. It was contended that the deceased was unauthorizedly travelling in the goods vehicle, which was not meant for carrying passengers, and hence there was a clear breach of policy conditions. The appellant further contended that as per the terms and limitations of the insurance policy, the coverage did not extend to gratuitous passengers or unauthorized occupants sitting in the dala of the goods vehicle. Therefore, it was pleaded that the insurer was not liable to indemnify the insured for such breach. The 4 Insurance Company also disputed the quantum of compensation claimed, asserting that the amount sought by the claimants was excessive, inflated, and without legal basis. The owner and driver of the vehicle, i.e., respondent Nos. 4 and 5, filed their separate replies, denying negligence on their part and asserting that the vehicle was being driven carefully and at a moderate speed at the time of the incident. They further contended that the accident was a pure accident without fault, and that the deceased himself was negligent in sitting in the open portion of the vehicle. However, they also contended that the vehicle was duly insured at the time of the accident and that any liability arising therefrom, if found, should be indemnified by the insurer.

3. Upon consideration of the pleadings, oral and documentary evidence, and the materials available on record, the learned Tribunal framed the necessary issues for determination, including whether the accident occurred due to rash and negligent driving of the offending vehicle; whether the deceased was a gratuitous passenger or an authorized occupant; whether there was any breach of policy conditions; and whether the claimants were entitled to compensation, and if so, to what amount and from whom.

4. After evaluating the evidence adduced by both parties, including the First Information Report (FIR), post-mortem report, and testimonies of witnesses, the learned Tribunal recorded a categorical finding that the accident in question had indeed occurred on 12.01.2013, and that the same had resulted in the death of Shri Lochiram. It was further held that the appellant–Insurance Company had failed to establish any willful breach of the terms and conditions of the policy by the insured. The Tribunal observed that the mere fact that the deceased was 5 travelling in the dala of the vehicle would not by itself absolve the insurer from liability, especially when the owner had not violated the fundamental terms of the policy or allowed unauthorized use of the vehicle in a manner excluded by the contract. Consequently, by the impugned award dated 01.03.2018, the learned Tribunal allowed the claim petition filed by respondent Nos. 1 to 3, holding inter alia that the accident had occurred due to the sudden stoppage of the insured vehicle, resulting in the fall and death of Shri Lochiram. The appellant– Insurance Company had not succeeded in proving any breach of the policy terms sufficient to absolve it of liability and the appellant– Insurance Company, being the insurer of the offending vehicle, was liable to pay compensation to the claimants.

5. On the basis of these findings, the Tribunal awarded a total compensation of Rs. 5,14,000/- to the claimants towards loss of dependency, funeral expenses, loss of consortium, and other heads, together with interest at the applicable rate, directing the appellant– Insurance Company to satisfy the award. Aggrieved by the said award, the appellant–Insurance Company has preferred the instant appeal before this Court, contending that the Tribunal erred in law and on facts in fastening liability upon the insurer despite clear breach of policy conditions.

6. Learned counsel for the appellant submits that the impugned award dated 01.03.2018 is contrary to law, perverse on facts, and unsustainable in the eyes of law. The learned Tribunal has committed gross error in directing the appellant to make payment of the compensation amount to the claimants, without properly appreciating the evidence, the terms of the policy, and the statutory provisions 6 governing the liability of the insurer. The entire approach of the Tribunal in fastening liability upon the appellant is erroneous, arbitrary, and contrary. The learned counsel for the appellant submits that the learned Tribunal has failed to appreciate the material facts and documentary evidence placed on record, which clearly established that the deceased was not a person covered under the policy of insurance. The deceased, at the time of the accident, was unauthorizedly sitting in the dala (loading compartment) of the insured goods vehicle, which is not meant for carriage of passengers. The learned Tribunal, while passing the impugned award, has completely overlooked the fact that the Motor Vehicles Act, 1988, as well as the terms and conditions of the policy, restrict the use of a goods vehicle exclusively for the carriage of goods and for the transport of persons engaged in loading and unloading operations, within the permissible limits. It is further contended that the learned Tribunal has erroneously directed the appellant–Insurance Company to pay compensation, though there existed a clear breach of the fundamental terms and limitations of the insurance policy. The Tribunal failed to appreciate that the risk of a gratuitous passenger or unauthorized occupant travelling in the open body of the goods vehicle is not covered under the policy, nor does the insurer bear any contractual or statutory liability in respect thereof. The deceased, admittedly, was sitting in the rear dala of the vehicle at the time of the accident, and thus, his act amounted to a violation of the policy conditions as well as the statutory provisions contained in Section 147 of the Motor Vehicles Act, which delineate the scope of compulsory insurance coverage.

7. The learned counsel for the appellant further submits that the Tribunal 7 has committed serious irregularities and illegalities in passing the impugned award. The findings recorded are not based on evidence and are perverse in nature, resulting in a manifest miscarriage of justice. The Tribunal failed to appreciate that the deceased was not travelling in connection with any loading or unloading activity, nor was he a person employed by the owner for the operation or maintenance of the insured vehicle. Hence, the deceased was not a covered person under the risk clause of the insurance policy. The learned counsel for the appellant further contends that the computation of compensation by the Tribunal is legally unsound, mechanically assessed, and without any supporting basis. The Tribunal erred in awarding an excessive amount of Rs. 5,14,000/- to the claimants, without verifying the income of the deceased or the dependency claimed. The learned Tribunal ought to have considered that there was no cogent evidence on record to establish the exact income, occupation, or dependency of the claimants, and in absence of such proof, the computation made is wholly arbitrary and contrary to the settled principles of law as laid down by the Hon’ble Supreme Court in the matter of Sarla Verma v. DTC, reported in (2009) 6 SCC 121 and National Insurance Co. Ltd. v. Pranay Sethi, reported in (2017) 16 SCC 680. The Tribunal has, therefore, erred both on the question of liability and on the question of quantum. The learned counsel for the appellant submits that the finding of the Tribunal fastening liability upon the insurer is bad in law and contrary to the peculiarity of the facts and the legal framework governing such cases. The Tribunal has mechanically observed that the Insurance Company failed to prove breach of the terms of the policy, without appreciating that the deceased was travelling in a 8 portion of the vehicle that is statutorily prohibited for human carriage. The very presence of the deceased in the open dala constituted a fundamental breach of the terms of insurance, thereby exonerating the insurer from any liability. It is further submitted that the learned Tribunal failed to consider that the dala of a goods vehicle is not designed or authorized for sitting of any person. The purpose of the dala is exclusively for the transportation of goods, and any person sitting therein does so at his own risk and in violation of law. The Tribunal overlooked this fundamental fact and proceeded to hold the insurer liable as if the deceased was a permitted occupant, which is wholly impermissible in law. It is a well-settled principle that when the use of the vehicle is not in conformity with the permit or the terms of the policy, the insurer cannot be saddled with liability. The failure of learned Tribunal to consider this aspect renders the impugned award unsustainable. The learned counsel further submits that the premium taken under IMT 39 (as per the India Motor Tariff) specifically deals with “Legal liability to persons employed in connection with the operation and/or maintenance and/or loading and/or unloading of motor vehicles.” The Tribunal failed to appreciate that the coverage under IMT 39 is limited to persons who are engaged in the loading or unloading process at the time of the accident, and not to persons who are travelling in the vehicle as passengers. The deceased in the present case was neither engaged in any such loading or unloading activity nor was he an employee within the meaning of the policy clause. Therefore, the insurer cannot be held liable under the said endorsement. It is further submitted that the risk of a coolie or helper, if covered under the policy, extends only to accidents occurring during 9 the performance of duties related to loading or unloading, and not to accidents occurring while the person is travelling in the goods vehicle contrary to the purpose of insurance coverage. The interpretation of Tribunal of the policy in holding the appellant liable has resulted in misapplication of the terms and expansion of liability beyond the contractual scope, which is impermissible in law. The learned counsel emphasizes that the Hon’ble Supreme Court in several authoritative pronouncements, including New India Assurance Co. Ltd. v. Asha Rani, reported in (2003) 2 SCC 223, National Insurance Co. Ltd. v. Baljit Kaur, reported in (2004) 2 SCC 1, and Oriental Insurance Co. Ltd. v. Brij Mohan, reported in (2007) 7 SCC 56, has categorically held that an insurance policy covering a goods vehicle does not cover passengers or unauthorized persons travelling in the vehicle, unless an additional premium is specifically paid to cover such risk. The Tribunal, by ignoring this settled position of law, has committed a serious error apparent on the face of record.

8. Learned counsel for the respondent No. 1 submits that the present appeal is wholly devoid of merit and deserves to be dismissed in limine. The learned Tribunal, after due appreciation of oral and documentary evidence, has rightly held the appellant–Insurance Company liable to pay compensation. The findings recorded by the Tribunal are well-reasoned, based on evidence, and in conformity with settled principles of law. It is submitted that the deceased was travelling in the insured vehicle with the knowledge and consent of the owner for purposes connected with the use and operation of vehicle, and therefore, the insurer cannot now evade liability by taking a hyper- technical plea regarding his position in the dala. The plea of policy 10 breach is neither substantiated by evidence nor supported by the terms of the contract of insurance. The Tribunal has rightly found that the appellant failed to discharge its burden of proving willful breach of the policy conditions as required under Section 149(2) of the Motor Vehicles Act. The respondent further submits that the presence of deceased in the vehicle was not unauthorized; he was performing duties in connection with the transportation of goods and thus covered under the risk clause of the policy. The reliance placed by the appellant on the IMT 39 endorsement is misconceived and misapplied, as the liability of insurer extends to all persons engaged in the operation and maintenance of vehicle, which includes persons accompanying the vehicle in the course of employment. Therefore, the impugned award passed by the learned Tribunal does not suffer from any illegality or perversity and has been rightly passed in accordance with law. The compensation awarded is just, reasonable, and commensurate with the loss suffered by the claimants. The appeal, being without substance, deserves outright dismissal.

9. I have heard learned counsel for the parties and perused the record of the claim case carefully.

10. The issue that arises for determination in this appeal is whether the deceased, who was travelling in the dala of the insured goods vehicle at the time of the accident, was covered under the terms of the insurance policy, and whether the insurer can be held liable for payment of compensation. It is not disputed that the vehicle in question was insured with the appellant–Insurance Company at the time of the accident and that the policy was in force. It is also not in dispute that the deceased, Shri Lochiram, fell from the dala of the said 11 vehicle due to sudden stoppage and succumbed to injuries sustained in the accident. The factual occurrence of the accident and the resultant death have been proved by the claimants before the learned Tribunal and have not been seriously contested in appeal.

11. The principal ground raised by the appellant is that since the deceased was sitting in the dala and not inside the cabin, he was not travelling with the goods, and therefore, his risk was not covered under the insurance policy. This contention was specifically dealt with by the learned Tribunal in paragraph 19 of the impugned award.

12. A perusal of paragraph 19 of the judgment passed by Tribunal makes it evident that the learned Tribunal, after detailed scrutiny of the insurance policy (Exhibit D-1) and the provisions of the Indian Motor Tariff (IMT), has recorded a clear and categorical finding that the insurance premium under the policy had been paid for the driver, cleaner, owner-driver, and four coolies (loaders). The Tribunal has further relied upon Section 10-A of the Indian Motor Tariff, which specifies that additional premium can be charged for persons such as the driver, cleaner, conductor, or those engaged in loading and unloading operations, and the same is governed by IMT 39. Importantly, the Tribunal has observed that nowhere in the Indian Motor Tariff or IMT 39 is it stated that the insurance coverage of coolies (loaders) is restricted only to the time of loading or unloading the goods and that their travel in the vehicle would amount to a violation of the policy conditions. On the contrary, once premium has been accepted for such persons, the insurer cannot subsequently take the defence that the coverage was limited only to the moments of loading or unloading. The Tribunal has rightly held that after collecting premium 12 for four coolies, the insurer cannot be permitted to deny coverage on the technical plea that the deceased was sitting in the dala at the time of the accident. The Tribunal has further dealt with the contention based on Rule 28 of the Central Motor Vehicle Rules, 1989, which restricts the number of passengers permitted in the cabin of driver of a goods vehicle. The Tribunal has correctly concluded that such a statutory restriction is not a fundamental condition of the contract of insurance, and a breach thereof cannot automatically exonerate the insurer from its liability unless a willful and fundamental violation of the policy terms is established.

13. Upon a careful perusal, it becomes apparent that the Tribunal has given a well-reasoned and legally sound finding that the insurer has failed to prove any fundamental breach of the policy. The Tribunal has categorically held that merely because the deceased was sitting in the dala of the vehicle, it cannot be said that there was any breach of the fundamental terms of insurance. The vehicle was duly insured on the date of the accident, and the insurer did not produce any cogent evidence to show that the insured or the deceased had acted in violation of the essential conditions of the policy. This Court finds itself in complete agreement with the reasoning adopted by the learned Tribunal.

14. The issue of whether a labourer or coolie, covered by premium under IMT 39, ceases to be covered merely because he was seated in the loading portion of the vehicle at the time of accident, has been squarely dealt with by the Tribunal. The conclusion drawn therein, that coverage extends to coolies for the duration of their employment in connection with the vehicle and not merely during loading or unloading, is 13 consistent with settled legal principles and supported by the evidentiary record.

15. It is well settled that unless the insurer proves willful and fundamental breach of the terms of policy as contemplated under Section 149(2) of the Motor Vehicles Act, the liability to indemnify the insured cannot be avoided. In the present case, no such breach has been proved. Therefore, this Court finds no reason to interfere with the findings recorded by the Tribunal in the impugned award.

16. In view of the foregoing discussion, it is held that the only ground raised by the appellant, that the deceased was sitting in the dala and not accompanying any goods, and therefore not covered under the policy, is without merit. The learned Claims Tribunal has correctly decided this issue in its judgment, and its finding is neither perverse nor contrary to law. No interference by this Court is warranted.

17. Accordingly, the appeal filed by the appellant–Insurance Company fails and is hereby dismissed. The award dated 01.03.2018 passed by the learned First Additional Motor Accident Claims Tribunal, Durg (C.G.) in Claim Case No. 202/2014 is affirmed in its entirety. No order as to costs. Shayna Sd/- (Amitendra Kishore Prasad) Judge