Truck carrying passengers is in no grounds to deny insurance claim: SC

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Is the insurer liable to pay compensation for damages to a goods vehicle caused in an accident even if it was carrying passengers at the time of mishap? The answer is yes if carrying more passengers has not contributed to the accident, according to an apex court order.

The Supreme Court has recently directed the New India Assurance Co. to pay Rs. 3.25 lakh to the man as compensation for the damages to his truck in an accident.

Earlier, the National Consumer Disputes Redressal Commission (NCRDC)  had repudiated the claim for damage to his truck which met with an accident last year.

The apex court while setting aside the NCDRC order said the commission’s view was clearly erroneous and noted that carrying more passengers has not contributed to the accident.

The Economic Times quoted the bench of Justices Hemant Gupta and V Ramasubramanian as saying: “We find that there is a clear distinction between a third-party claim on account of the compensation payable to the passenger in the goods vehicle on account of negligent driving of the vehicle whereas the present case is a case of own damage, which is an independent action not dependent upon the number of passengers carried in a goods vehicle.

“In view thereof, we find that the order passed by the National Commission is not sustainable in law. The same is set aside and the order of the State Commission is restored. The appeal is, accordingly, allowed.”

The apex court order came on an appeal filed by one Annappa challenging an order of the NCDRC.

New India Assurance Co had rejected the claim on grounds that the vehicle was a goods vehicle and passengers were not permitted to be carried. The insurance company said the vehicle was thus being used contrary to the terms and conditions of the policy at the time of the accident as the vehicle was carrying 25 passengers.

The District Consumer Disputes Redressal Forum and the State Consumer Disputes Redressal Commission had earlier directed the insurer to pay Rs 3.25 lakh with 12% interest. They relied on earlier Supreme Court order that said, “Merely by lifting a person or two, or even three, by the driver or the cleaner of the vehicle, without the knowledge of the owner, cannot be said to be such a fundamental breach that the owner should, in all events, be denied indemnification.”