The Patna High Court has ruled that an insurance company must cover the liability of a paid driver and cleaner under the Motor Vehicles Act, 1988, when the owner of the vehicle pays an additional premium for its cover.

The court emphasized that once the insurance company accepts the additional premium, it extends its responsibility to cover the risks associated with the paid driver and the cleaner, transferring the risk from the owner to the insurer.

Justice Sunil Datta, who presides over the case, stated, “Where the owner of a vehicle pays an additional premium and the insurance company accepts the same, the liability of the insurance company is extended under the Motor Vehicles Act, 1988. Section 147 of the act clearly states that the Legal liability covers the risk of the paid driver. and cleaner under the insurance policy, which is a matter of contract. By paying such additional premium by the owner, the responsibility of the owner passes to the insurance company. Therefore, the risk of the paid driver and the cleaner would be covered by the insurance policy. Only when the additional premium is not paid, the liability would be under the Employees Compensation Act of 1923.”

“In my opinion, by accepting an additional premium, the insurance company compensates the owner for the driver and/or cleaner paid and the risk of the driver/cleaner is covered by it.” Justice Dutta clarified further.

In this case, a tractor-trailer overturned due to rash and negligent driving of the driver, resulting in the death of the cleaner, Premshankar Modi, on the spot. A police case was registered under sections 279 and 304A of the Indian Penal Code and after investigation, a case was filed against the tractor driver, Phantoosh Kumar. The Court subsequently awarded compensation to the plaintiffs after hearing both sides.

The appellant’s counsel argued that the Court erred in not identifying that the deceased was not a cleaner, considering that the tractor only had capacity for a single person, which made the deceased a free passenger. Accordingly, he held that no liability could be imposed on the Insurance Company. He further noted that the tractor was insured solely for agricultural use but was being used for commercial purposes as it had iron bars on the trailer.

In response, counsel for the defendant asserted that the deceased was indeed the cleaner, not a free rider, and that witness testimony and documentary evidence supported this claim. The Court noted that these objections – relating to the role of the deceased and the use of tractor insurance – were raised only on appeal and contradicted the case record.

The Court noted that the occurrence of the incident was indisputable, so that only two issues remained to be resolved: whether the appellant was obliged to pay compensation and whether the amount awarded was adequate, in particular with regard to the deceased’s monthly income. and the future prospects raised by the appellant. .

The Court reiterated that, “It is well established that the evaluation of compensation cannot be done with mathematical precision. The Motor Vehicles Act 1988 provides for the assessment of fair and equitable compensation.”

Taking this principle into account, the Court decided not to interfere with the assessment of the deceased’s income at this stage.

The Court further observed that the appellant had not raised any objection before the Court that the insurance of the tractor was for agricultural purposes only or that the deceased was a free rider. These objections, raised for the first time on appeal, were unfounded and inconsistent with the case record.

The Court clarified that the previous cases cited by the appellant, which involved deceased persons as free passengers, were inapplicable in this case. It remained, “The rulings of this Court sent by the appellant’s lawyer where the deceased was traveling as a free passenger are not applicable in this case. “The cleaner employed by the owner of the vehicle cannot be classified as a free passenger in the facts and circumstances of the case.”

For these reasons, the Court declared the appeal inadmissible and dismissed it, confirming the Court’s ruling.

The Court ordered the appellant, the insurance company, to deposit the awarded amount, together with the accrued interest as specified in the Court’s decision, after deducting any previous payments made to the plaintiffs.

Case Title: Shri Ram General Insurance Co. Ltd. v. Radha Devi and Ors

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