Case Note & Summary
These six first appeals arose from a common motor accident claim judgment of the Motor Accident Claims Tribunal, Chandrapur. The appellant, owner of a goods truck, challenged the direction that he alone pay compensation, while the insurer was exonerated on the ground of fundamental breach of policy. On the date of the incident, the truck was returning after loading coal when it turned turtle, resulting in the death of four persons and injuries to four others. Approximately eleven to twelve coolies were travelling in the truck. The appellant admitted ownership, the accident, and that the truck was driven by Laxman and insured with the second respondent insurance company. The insurer resisted the claim, contending that the policy covered only driver, cleaner, and six coolies (2+6) and that carrying more persons constituted a fundamental breach, absolving it from liability. The tribunal found that the insured had committed a fundamental breach by carrying excess coolies and accordingly exonerated the insurer, directing the owner alone to pay compensation. On appeal, the owner argued that the vehicle was admittedly insured, the policy covered six persons, and that the insurer could not escape liability for those covered even if more were carried; he also contended that the breach was not fundamental. The insurer countered that carrying twelve persons was a clear breach of policy and permit conditions, defeating the very purpose of restricting travel in goods vehicles. The High Court noted that the vehicle was a goods vehicle, the cover note disclosed insurance for 2+6, and the claim petitioners were coolies, not unauthorized or fare-paying passengers. Carrying more coolies than permitted under the Motor Vehicles Act might be a breach of that Act, but carrying more coolies than insured was not a breach of the policy unless the condition expressly so stated, which was not placed on record. Relying on Shivraj Vasant Bhagwat v. Shevanta Dattaram Indulkar (1997 ACJ 1014) and United India Insurance Co. Ltd. v. Vimal Narayanrao Nandanwar (2008 ACJ 2274), the Court held that such breach is not fundamental to vitiate the contract; the insurer remains liable for the number of persons covered. Since only six claimants were before the Court, the insurer had to meet the liability for them. Accordingly, the appeals were allowed, the tribunal's order exonerating the insurer was set aside, and the insurer was held jointly and severally liable to pay the compensation awarded to the six claimants.
Headnote
A) Motor Vehicles - Insurance - Liability - Goods Vehicle - Breach of Policy Condition - Carrying More Coolies Than Insured Number (2+6) - Motor Vehicles Act, 1988 (implied), Workmen's Compensation Act, 1923 - The claim petitions arose from an accident where a goods vehicle carrying coal turned turtle, causing deaths and injuries to coolies; the insurance policy covered driver, cleaner, and six coolies (2+6); the insurer contended that carrying more coolies (12) was a fundamental breach; the High Court, following precedent, held that the breach is not fundamental as it does not vitiate the contract and the insurer remains liable for the number of persons covered; since only six claimants were before the court, the insurer must satisfy the awards. Held: Carrying excess coolies does not absolve the insurer for covered persons. (Paras 9-13)
Issue of Consideration
Whether carrying more coolies than the number insured under a goods vehicle policy constitutes a fundamental breach absolving the insurer of liability.
Final Decision
Appeals allowed. The tribunal's order exonerating the insurer set aside; the insurer jointly and severally liable to pay compensation awarded to the six claimants; excess award if any to be borne by owner.
Law Points
- carrying more coolies than insured not fundamental breach
- insurer liable for number covered
- policy condition not fundamental
