Insurer bears no liability where a trade-plate policy excludes claims by an injured non-employee driver.

On 1 January 2014, the claimant, P. Sivakumar, was driving a Bolero vehicle bearing Trade Plate No. TN 06 TC 18 from Bengaluru towards Chennai. Near Abdullapuram, an unidentified Volvo bus allegedly came close to the Bolero in a rash manner. While attempting to avoid the bus, the Bolero struck the central barricade, causing the claimant grievous injuries.

The insurer denied liability, disputed the manner of accident, alleged contributory negligence, questioned the claimant’s driving licence, and contended that the vehicle was covered only under a trade-plate policy and that the claimant was not an employee of the insured, India Garage. The Tribunal accepted the claimant’s version, found that the unidentified Volvo bus was rash and negligent, and awarded ₹2,84,700 under various heads, including ₹90,000 for 30% disability. The insurer appealed against the award.

1. Whether the insurer could be held liable under the policy issued in respect of Trade Plate No. TN 06 TC 18 when the accident involved a Bolero vehicle and the claimant was not shown to be an employee of the insured, India Garage?

2. Whether, in view of the Tribunal’s finding that an unidentified Volvo bus caused the accident, the claim was maintainable against the insurer under Section 166 of the Motor Vehicles Act, or whether the claimant ought to have proceeded under the hit-and-run provisions of Section 161?

3. Whether the Tribunal was justified in fastening liability on the insurer despite the alleged use of the trade plate contrary to the policy conditions?

The Court considered Sections 159, 161, 166 and 166(4) of the Motor Vehicles Act, 1988. Section 166 governs claims based on fault liability, while Section 161 concerns compensation in hit-and-run cases involving unidentified motor vehicles; Section 166(4) permits an accident report under Section 159 to be treated as a claim application.

The Court also applied Rule 41 of the Central Motor Vehicles Rules, 1989, concerning the permitted use of trade plates.

Under the contractual terms of the insurance policy, the insurer’s liability was limited to the risks covered by the schedule and applicable policy conditions; use of the vehicle otherwise than in accordance with the schedule excluded indemnification.

The policy did not provide personal-accident cover for the owner-driver or named persons, and the claimant, not being an employee of the insured, could not claim the benefit of coverage as the insured’s driver.

The Court noted material inconsistencies in the claimant’s case. The FIR was lodged by Srinivasan, who claimed to have travelled with the claimant, but the claim petition did not mention his presence or role. The FIR itself alleged rash and negligent driving by the claimant, whereas the Tribunal accepted the later version that the unidentified Volvo bus was negligent.

More importantly, the insurance policy covered Trade Plate No. TN 06 TC 18, while the trade certificate described the covered vehicle as a light motor goods vehicle and the vehicle involved was stated to be a Bolero. The policy covered own damage and third-party liability but contained no additional premium for personal-accident cover for the owner-driver or named persons.

The evidence further showed that the claimant worked as a driver for TVS and was not an employee of India Garage. Consequently, the Court held that the Tribunal had incorrectly treated the claimant as a driver covered under the policy and had failed to give effect to the policy limitations and the alleged misuse of the trade plate. The Court also observed that the identity of the allegedly negligent Volvo bus had not been established.

The appeal was allowed without costs, and the connected miscellaneous petition was closed.