Insurance companies are liable for paid drivers and cleaners under the Motor Vehicles Act if additional premium is accepted: Patna High Court

The Patna High Court has ruled that an insurance company must cover the liability of a salaried driver and cleaner under the Motor Vehicles Act, 1988, where the vehicle owner pays an additional premium to insure them.

The court emphasized that once the insurance company accepts the additional premium, it expands its liability to cover the risks associated with the paid driver and cleaner, shifting the owner’s risk to the insurer.

Judge Sunil Dutta, The presiding judge in the case stated, “When a vehicle owner pays an additional premium and it is accepted by the insurance company, the liability of the insurance company is extended under the Motor Vehicles Act 1988. Section 147 of the Act clearly prescribes the statutory liability to cover the risk of the paid driver. and a cleaner according to the insurance policy, which is the subject of the contract. Upon payment of such additional premium by the owner, the owner’s liability becomes the responsibility of the insurance company. Thus, the risk of the paid driver and cleaner will be covered by the insurance policy. Only in the event of failure to pay the additional premium will liability be consistent with the Workers’ Compensation Act of 1923.”

“In my opinion, by accepting the additional premium, the insurance company reimburses the owner for the costs of the driver and/or cleaner, and the risk of the driver/cleaner is covered by it,” Justice Datta provided further clarification.

In this case, due to the rash and careless driving of the driver, a tractor-trailer overturned, resulting in the death of cleaner Premshankar Modi on the spot. The police registered a case under Sections 279 and 304A of the Indian Penal Code and based on the investigation, a criminal case was registered against the tractor driver Fantoosh Kumar. The Tribunal later awarded compensation to the plaintiffs after hearing both sides.

Counsel for the plaintiff argued that the Tribunal erred in not holding that the deceased was not a cleaner, given that the tractor was designed to carry only one person, making the deceased an unpaid passenger. As a result, he argued that liability could not be attributed to the insurance company. He further noted that the tractor was insured solely for agricultural use but was used for commercial purposes as it was carrying iron rods in the trailer.

In response, the defendant’s lawyer argued that the deceased was indeed a janitor and not a free passenger, and that witness statements and documentary evidence supported this. The court noted that these objections – regarding the role of the deceased and the use of the tractor in insurance – were raised only on appeal and were contrary to the materials of the case.

The court noted that the occurrence of the incident was not in dispute and the only two issues remaining to be decided were whether the plaintiff should pay compensation and whether the amount awarded was adequate, especially in relation to the monthly income of the deceased and the future prospects alleged by the plaintiff. .

The court repeated that, “It is obvious that compensation cannot be assessed with mathematical precision. The Motor Vehicles Act, 1988 provides for the determination of just and equitable compensation.”

Having regard to this principle, the court decided not to interfere with the assessment of the deceased’s income at this stage.

The Court further noted that the plaintiff had not raised any objection before the Tribunal that the tractor was insured solely for agricultural purposes or that the deceased was an unpaid passenger. These objections, first raised on appeal, are unfounded and contradict the materials of the case.

The court explained that previous cases cited by the applicant involving deceased persons as free passengers are not applicable here. It held on “The judgment rendered by the learned counsel for the appellant, in which the deceased was traveling as a free passenger, is not applicable in this case. The cleaner hired by the owner of the vehicle cannot be called an unpaid passenger based on the facts and circumstances of the case.”

For these reasons, the Court found the appeal to be unfounded and dismissed it, upholding the Tribunal’s decision.

The Tribunal ordered the plaintiff, the insurance company, to deposit the awarded amount together with accrued interest as stated in the Tribunal’s award, after deducting any previous payments made to the plaintiffs.

Case Name: Shri Ram General Insurance Co. Ltd. vs Radha Devi and Ors

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