The Allahabad High Court has held that an insurance company which issued a policy recording the seating capacity of a tractor as “1+1” and received premium on that basis cannot afterwards deny liability for the death of a passenger by relying on the registration certificate, which showed the seating capacity as one person.

Justice Prashant Kumar held,

“The Insurance Company cannot now turn around and contend that the insurance policy issued by it was incorrect and the coverage ought to have been restricted to the driver alone. Having received the premium and issued the insurance policy specifically mentioning the seating capacity as “1+1”, the Insurance Company cannot take a contrary stand to deny the coverage on that ground”

On 10.05.2015, Sadhuram Paswan, aged about 35 years, was travelling on a tractor being driven rashly and negligently at high speed. Brakes were suddenly applied, he fell from the tractor and came under its wheel, and died on the spot. His family claimed Rs.55,50,000/- before the Motor Accident Claims Tribunal at Faizabad, pleading that he was engaged in the business of selling and purchasing wheat straw.

The Tribunal found that the driver held a valid licence and the tractor was insured with the appellant, and awarded Rs.4,84,000/- with simple interest at 7% per annum.

In appeal, counsel for the insurer confined her challenge to the finding that there was no breach of the policy. Relying on National Insurance Company Ltd. vs. Smt. Leela @ Vimla, she argued that the registration certificate put the seating capacity at one person including the driver, so the deceased was an unauthorised rider. She accepted that the policy recorded the capacity as “1+1”, but said this was a typographical error, that no premium had been charged for an unauthorised person, and that the proposal form named only the driver. The tractor, insured for agricultural purposes, was also being put to other use.

For the claimants, it was submitted that “1+1” meant the driver and one other person, so there was no breach, and that the matter was covered by Section 147 of the Motor Vehicle Act.

The accident itself being undisputed, the Court took up the sole question of breach and found none. The deceased was on the tractor for the purpose of buying and selling wheat straw, which the Court held fell within agricultural activity, so the tractor could not be said to have been used for any commercial purpose.

It held that nothing on record showed that the proposal form had been filled in by the owner and it appeared to be an internal document of the Insurance Company and could not be relied upon.

It held that the policy, issued on 29.12.2014 and valid until 28.12.2015, insured the vehicle as 1+1, and that endorsement could not be said to be contrary to its own terms. The Court held,

“Hence the insurance company now cannot say that they are not liable for payment of compensation for the death of the passenger. Therefore, the appellant having insured the vehicle as (1+1) cannot wriggle out of its liability”

Finding no illegality or irregularity in the award dated 25.01.2016, the Court dismissed the appeal.

Counsel for Appellant :- Pooja Arora

Counsel for Respondent :- Mukesh Singh, Anil Kumar Tiwari