Case Note & Summary
The case arises from a motor accident claim where the claimants, respondents 1 to 3, sought compensation for injuries/death caused by a tractor owned by the appellant. The Motor Accident Claims Tribunal, Washim, in M.A.C.P. No.226/2005, passed an award dated 25.04.2008 exonerating the Insurance Company (respondent No.4) and fastening the entire liability on the appellant-owner. The appellant challenged this award to the extent it exonerated the Insurance Company. The only plea raised by the Insurance Company in its written statement was that the driver of the tractor did not have a valid and effective driving license, which amounted to a fundamental breach of policy terms. No other plea, such as commercial use of the tractor or attachment of trolleys, was pleaded. The appellant's counsel argued that the issue of a tractor driver's license is settled by the Supreme Court's three-Judge Bench decision in Mukund Dewangan vs. Oriental Insurance Company Limited, which holds that a license to drive a light motor vehicle (LMV) is valid to drive a tractor. The Insurance Company's counsel conceded that the only issue was the validity of the driving license and that the law is settled by Mukund Dewangan. The court found that the Tribunal erred in considering unpleaded grounds and that the Insurance Company failed to prove any breach of policy terms. Consequently, the court set aside the award to the extent it exonerated the Insurance Company and held the Insurance Company liable to pay the compensation to the claimants, with the owner not required to pay. The appeal was allowed, and the Insurance Company was directed to pay the awarded amount with interest within six weeks.
Headnote
A) Motor Vehicles Act - Insurance - Liability of Insurer - Breach of Policy Terms - Insurance Company must specifically plead and prove the breach of terms and conditions of the insurance policy - In the absence of such pleading, the insurer cannot be exonerated from liability - The Tribunal erred in taking into consideration unpleaded grounds such as commercial use of tractor or attachment of trolley (Paras 3-5). B) Motor Vehicles Act - Driving License - Tractor Driver - License to drive Light Motor Vehicle (LMV) is valid to drive a tractor - The issue is settled by the three-Judge Bench of the Supreme Court in Mukund Dewangan vs. Oriental Insurance Company Limited - A tractor is a light motor vehicle under Section 10(2)(d) of the Motor Vehicles Act, 1988 - The driver holding a license for LMV is competent to drive a tractor (Paras 3, 5). C) Motor Vehicles Act - Compensation - Pay and Recover - Even if there is a breach of policy terms, the Insurance Company may be directed to pay compensation to the claimants and then recover from the owner - However, in this case, since the Insurance Company failed to prove any breach, the entire liability is on the Insurance Company (Paras 5-6).
Issue of Consideration
Whether the Insurance Company can be exonerated from liability on the ground that the driver of the tractor did not have a valid driving license, and whether the tractor was used for commercial purpose without proper pleading and proof.
Final Decision
The appeal is allowed. The impugned judgment and award dated 25.04.2008 is set aside to the extent it exonerates the Insurance Company and fastens liability on the appellant-owner. The Insurance Company is directed to pay the compensation amount with interest as awarded by the Tribunal to the claimants within six weeks. The owner is not required to pay any amount.
Law Points
- Insurance company must plead and prove breach of policy terms
- License to drive light motor vehicle includes tractor
- Tractor is a light motor vehicle
- Owner cannot be held liable if insurance company fails to establish fundamental breach
