A tractor insurer remains liable when the tractor itself, rather than its attachment, causes the accident.

On 9 February 2015, Mithun V., then aged 21, was riding a motorcycle when it collided with a tractor attached to a water tanker.

He sustained serious injuries, including fractures to the skull and loss of motor, sensory and prehensile function in his left upper limb.

He claimed compensation under Section 166 of the Motor Vehicles Act, 1988.

The Motor Accident Claims Tribunal awarded Rs.15,38,000 with interest at 9% per annum and held the insurer liable.

The insurer appealed the liability finding, contending that the tractor was being used with a water-tanker attachment for commercial purposes in breach of policy conditions; Mithun appealed seeking enhanced compensation.

The Tribunal had assessed his monthly income at Rs.7,500, functional disability at 30%, and compensation on that basis.

Under Section 166 of the Motor Vehicles Act, a claimant may seek compensation for injury caused by actionable negligence; an appeal from the Tribunal’s award lies under Section 173(1).

Relying on Royal Sundaram Alliance Insurance Co. Ltd. v. Honnamma, 2025 INSC 625, the Court stated that, where a tractor is used with an attachment, the material factual question is whether the tractor or the attachment was the root cause of the accident; if the tractor was the cause, its insurer cannot avoid liability.

The Court considered the Full Bench decision in Gadi Lingappa @ Gadhilinga v. K. Guleppa, 2021 ACJ 2588, concerning insurance coverage where a tractor is used with an attachment.

For personal-injury compensation, it applied Erudhaya Priya v. State Express Transport Corporation Ltd., 2020 SCC OnLine SC 601, under which future prospects are to be added to income; for a self-employed claimant below 40, the addition applied here was 40%.

The Court found that the pillion rider’s account and the prosecution material described a collision between the motorcycle and the tractor-water tanker, while the insurer’s own witness was confronted with—and admitted—suggestions that the collision was between the tractor engine and motorcycle.

On that record, the Court treated the tractor as the cause of the accident and held that the alleged commercial use and policy breach did not relieve the insurer of liability.

On quantum, it adopted the 2015 notional monthly income of Rs.9,000, assessed functional disability at 50% in light of the claimant’s loss of use of his left arm and occupation as a weaver, and applied 40% future prospects and a multiplier of 18, resulting in Rs.13,60,800 for future loss of income.

It increased loss-of-income compensation during the laid-up period to Rs.54,000 for six months and awarded Rs.1,50,000 for loss of amenities and marriage prospects, while leaving the other specified heads unchanged; total compensation was recalculated at Rs.23,13,800.

It partly allowed the claimant’s appeal and enhanced the award from Rs.15,38,000 to Rs.23,13,800.

The insurer’s appeal was allowed only to the extent that the interest rate was reduced from 9% to 8% per annum.

The insurer was directed to deposit the enhanced compensation within six weeks, and the enhanced amount with interest was ordered released to the claimant through electronic means.