The Madurai Bench of the Madras High Court has exonerated an insurance company from liability and varied an order issued by a motor vehicle accident claims tribunal after taking into account that the claimant was a non-passenger authorized who was traveling in a goods transport vehicle which encountered an accident.
The court was hearing an appeal filed by Oriental Insurance Company challenging the ₹1.37 lakh compensation awarded by the Tiruchi court to a woman in Karur district who was injured after the vehicle she was traveling in was overturned in 2010.
The insurance company said the woman had falsely claimed to be a loader. She, along with 40 other people, were being transported in a freight vehicle and they were unauthorized passengers. The policy was an “action only policy”, whereby there was no liability of the insurance company to the occupants of the private vehicle.
It was only in the case of “multi-risk” or “package” that the occupants of a private vehicle were covered. A passenger traveling in a vehicle was not a third party. The court failed to note that the vehicle was only a freight vehicle. No passengers other than the driver could travel in the vehicle and no premium to cover the risk of any occupant of the vehicle other than its driver was paid by the owner, the insurance company argued.
On the plaintiff’s side, it was argued that the plaintiff was not a tortfeasor. As a shipper, she was entitled to compensation. In the event of a breach of the policy terms, the insurance company could pay the claimant and recover compensation from the vehicle owner, it was submitted.
Judge R. Tharani took note of the FIR which had mentioned that 40 people were traveling in the cargo carrier. The court observed that it was clear that the plaintiff and others had only traveled as free passengers in the freight carrier. By taking unauthorized passengers into the cargo vehicle, the policy conditions were violated.
The judge took into account that the policy was an “action only policy” and only covered a third party and not the passengers of the vehicle. The court exempts the insurance company from liability. The court varied the court order to the effect that the owner of the vehicle was liable to pay compensation to the plaintiff.