National Insurance Company Limited vs Chandro and Others

K. Kannan, J.—The Insurance Company is in appeal denying liability on the ground that the deceased was travelling on the mudguard of the tractor and the accident occurred when the tractor turned turtle. The contention was that he was not authorized to travel on the mudguard of the tractor and there was no insurance cover for a person who is a passenger in a tractor which is not designed to carry passengers. This Court has held in the decisions in ''The New India Assurance Co. Limited v. Surinder Kaur'', (FAO No. 635 of 2005, decided on 01.09.2010); ''United India Insurance Co. Limited v. Sunita Devi and Ors.'', (FAO No. 2656 of 2007, decided on 12.08.2010) and in ''Oriental Insurance Co. v. Gurmel Kaur and Ors.'', (FAO No. 5063 of 2006) that the insurer shall not be liable in such a situation. The liability case on the insurer therefore is set aside.

However, in a recent judgment delivered by the Hon''ble Supreme Court in Eshwarappa @ Maheshwarappa and Anr. v. C.S. Gurushanthappa and Anr. (2014)164 P.L.R. 399 in Civil Appeal No. 7049 of 2002, dated 18.08.2010 that even in a case where the liability to a particular person is not covered and if there was an insurance policy for the vehicle, that itself would make the insurer liable u/s 140 of the Motor Vehicles Act. The liability in such a case would be on no fault basis and it shall stand restricted to Rs. 50,000/-. The award of the Tribunal, under the circumstances, shall stand modified and the liability of the insurer will be restricted to be Rs. 50,000/- in the manner provided as above. It should also attract interest at the rate awarded by the Tribunal at Rs. 50,000/- only.

The appeal is allowed but such to such restriction as mentioned above.