Dismissed

New India Assurance Co. Ltd. v. Parmod Kumar and Ors.

Punjab & Haryana HC24 Aug 2010FAO/3542/2009

Case brief

AI extract

What is this about?

The High Court dismissed the appeal by the insurance company. The court held that under the package policy terms, the insured's son driving with permission was covered as a 'driver' under the Act, and the insurer's liability was established provided the driver held a valid license.

What did the court decide?

The appeal was dismissed. The insurance company's liability under the package policy was upheld.

New India Assurance Co. Ltd. Vs Parmod Kumar and Ors. — Insurance | Punjab & Haryana HC (2010)

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F.A.O.NO. 3542 OF 2009

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

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F.A.O.NO. 3542 OF 2009 Date of decision:24^th August, 2010

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New India Assurance Company Ltd.

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.......Appellant

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Versus

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Parmod Kumar and another

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........Respondents

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BEFORE: HON'BLE MR. JUSTICE K.KANNAN

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Present: Mr. Vinod Gupta, Advocate, for the appellant.

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Mr. Ashit Malik, Advocate, for respondent No. 1.

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None for respondent No. 2.

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1. Whether Reporters of local papers may be allowed to see the judgment? Yes

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2. To be referred to the Reporters or not?Yes

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3. Whether the judgment should be reported in the Digest? Yes

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K.Kannan, J.(Oral)

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1. The Insurance Company is in appeal challenging the award on the ground that the claim petition had been filed under Section 163 (A) of the Motor Vehicles Act(hereinafter referred to as “Act”) and the accident resulting in death was by the driver of

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the two wheeler hitting manhole lid and falling from the vehicle and succumbing to injuries. Learned Counsel would rely on the decision of the Hon'ble Supreme Court in Ningamma and

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F.A.O.NO. 3542 OF 2009

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another Versus United India Insurance Company Ltd.

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(2009) ACJ 2020 that says that a borrower of a motor cycle from the Owner shall not be a person who could obtain an insurance cover. The Hon'ble Supreme Court was referring to a law of insurance in the context of compulsory insurance under Section 147 of the Act. The judgment itself provided for remand of the case for consideration of the tenability of the claim under any other policy condition.

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2. In this case, the Insurance Policy was a package policy and the standard form of the two wheeler package policy as approved by the Tariff Committee is reproduced in the following words:-

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“3. In terms of and subject to the limitations of the indemnity granted by this section to the insured, the Company will indemnify any driver who is driving the vehicle on the insured's order or with insured's permission provided that such driver shall as though he/she was the insured observe fulfill and be subject to the terms exceptions and conditions of this Policy in so far as they apply.

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In the event of the death of any person entitled to indemnity under this policy the Company will in respect of the liability incurred by such person indemnify his/her personal representative in terms of and subject to the

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F.A.O.NO. 3542 OF 2009 3

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limitations of this Policy provided that such personal representative shall as though such representative was the insured observe fulfill and be subject to the terms exceptions and conditions of this Policy in so far as they apply.”

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3. In this case the person who was driving the vehicle was the son of the owner who was the insured. There could be a situation under these terms when the driver did not have a valid driving licence and hence the insurance cover may not be available. It is not the insured's case that the driver of the vehicle did not have a valid driving licence. With reference to the judgment of the Hon'ble Supreme Court in New India

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Assurance Company Limited verus Sadanand Mukhi and

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others(2009) 2 SCC 417 that dealt with the cases of an accident resulting in death of a son of the owner and a claim being made under Section 163(A) of the Act, this judgment also does not apply since the Hon'ble Supreme Court was considering a policy cover to a third party under Section 147 of the Act. In this case we are considering a different term of policy namely a Package Policy that specifically provides an indemnity to the insured's driver who had a valid driving licence. The “Driver” is defined under Section 2(9) of the Act which “includes, in relation to a motor vehicle which is drawn by another motor vehicle, the person who acts as a steersman of the drawn vehicle”. The expression is wide enough to admit even a person who is not a paid employee. It is immaterial, that the driver happened to be

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F.A.O.NO. 3542 OF 2009

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insured's own son, so long as the driver had a driving licence,

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the liability of the insurer cannot be doubted under the terms of the policy. The appeal is dismissed.

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[K.KANNAN] JUDGE

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23^rd August, 2010

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