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Insurance - Mere overloading no bar to claim damages

The Supreme Court has held that the mere fact of carrying more passengers than the permitted seating capacity in a goods vehicle by the insured person did not amount to a fundamental breach of the terms of the policy and the insurance company would still be liable to pay damages. In this case, Lakshmi Chand vs Reliance General Insurance, six passengers were travelling in a goods vehicle whereas only one along with the driver was allowed. It met with an accident caused by the rash driving of another vehicle. The owner of the first vehicle demanded money to repair the vehicle. The insurer denied it on the ground that the vehicle had violated the policy conditions. The Haryana and National Consumer Commissions accepted the view of the insurance company. Reversing their rulings, the Supreme Court stated that the burden to prove breach of condition was on the insurance company and in this case, it had not proved that the accident occurred due to overloading.

 Article referred:http://www.business-standard.com/article/opinion/bling-on-display-in-night-has-no-insurance-cover-116011700708_1.html

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