Insurer cannot avoid liability for a driver's self-negligence if an additional premium covers such risk.

On July 26, 2004, the appellant, a truck driver, sustained grievous injuries including fractures of the tibia and fibula when an oncoming truck collided with his vehicle

The Motor Accident Claims Tribunal (MACT), Mehsana, awarded Rs. 59,040/- but deducted 70% of the amount, attributing "self-negligence" to the appellant

The appellant challenged this award on the grounds of inadequate quantum and the illegal 70% deduction for negligence, noting that his employer had paid additional premiums to cover the driver's risk

1. Whether the Tribunal erred in its assessment of the appellant's monthly income and functional disability for calculating the quantum of compensation

2. Whether the Insurance Company can avoid liability or deduct compensation based on the "self-negligence" of a driver when an additional premium was paid to cover the driver’s risk

The Court applied the multiplier method for compensation as per Sarla Verma v. Delhi Transport Corporation.

To determine future prospects, it relied on National Insurance Company Ltd. v. Pranay Sethi, which mandates a 40% addition to income for victims aged 30

Regarding the liability of the insurer for a negligent driver, the Court applied the Full Bench judgment of the Gujarat High Court in Valiben Laxmanbhai Thakore (Koli) v. Kandla Dock Labour Board, which established that if an additional premium is paid under Section 147 of the Motor Vehicles Act or IMT 28, the insurer cannot raise the plea of self-negligence to avoid or reduce its liability

The Court found the Tribunal’s assessment flawed on two fronts: First, it incorrectly categorized the appellant as a "cleaner" instead of a "skilled driver," leading to an undervalued monthly income; based on the appellant's valid HGV license [Exh. 50], the Court revised the income to Rs. 2,500 and increased functional disability from 8% to 15% due to the impact of leg fractures on a professional driver

Second, the Court analyzed the insurance policy [Exh. 37] and found that the owner had paid specific premiums (Rs. 100 for "PA to Owner cum Driver" and Rs. 200 for "WC to employee")

Following Valiben Laxmanbhai Thakore, the Court reasoned that by accepting this additional premium, the insurer expanded its contractual liability to cover the driver regardless of fault; thus, the 70% deduction for self-negligence was legally unsustainable

The Court held that when an insurer accepts an additional premium to cover a paid driver, it indemnifies the owner against all risks to the driver, and the insurer has no legal right to deduct any amount on account of the driver's own negligence

The respondents were directed to deposit the enhanced amount within six weeks