SC: Carrying passenger in a vehicle insured for agricultural purpose is breach of policy terms

In CIVIL APPEAL NOS.8278-8279 OF 2018, Shivaraj vs Rajendra & Anr., the appellant while travelling as a coolie on a tractor insured only for agricultural purpose, met with an accident severely injuring the appellant. On application by the appellant, the Motor tribunal held that the appellant was travelling as a loader in the tractor and not as a gratuitous passenger and awarded compensation which as assailed before the High Court by the insurer. The High Court while agreeing with most of the conclusion of the tribunal decided that the evidence, however, is unambiguous that the appellant travelled in the tractor which was insured only for agriculture purposes and not for carrying goods. No additional insurance was taken in respect of the trailer rather presence of trailer is not shown or demonstrated in any of the documents and there was no evidence to demonstrate that the tractor was attached to a trailer. The tractor could accommodate only one person namely the driver of the tractor and none else.On that finding, the High Court concluded that the appellant travelled in the tractor in breach of policy terms and conditions and therefore, the Insurance Company cannot be made liable to compensate the owner or the claimant. Accordingly, the appeal preferred by the respondent No.2 was allowed by the High Court and the insurer came to be absolved from the liability to pay compensation.

The Supreme Court on appeal agreeing with the High Court held that the evidence on record unambiguously pointed out that neither was any trailer insured nor was any trailer attached to the tractor. Thus, it would follow that the appellant travelled in the tractor as a passenger, even though the tractor could accommodate only one person namely the driver. As a result, the Insurance Company was not liable for the loss or injuries suffered by the appellant or to indemnify the owner of the tractor.