Mere prior commercial use does not absolve the insurer when the tractor was empty at accident.

On 21 December 2013, Suresh was standing near I.C.P.L. Sugar Factory when a tractor-trailer bearing registration Nos. KA-23/TB-3287, KA-23/TB-4137 and KA-23/TB-4138, driven negligently, struck him, causing fractures to the left humerus, dislocation of the left elbow, a Colles fracture and fracture of the fifth rib.

The tractor had reportedly transported sugarcane to the factory but was empty when the accident occurred.

Suresh filed MVC No.195/2014 before the MACT, Gokak.

The Tribunal awarded ₹1,43,500 under various heads and fastened liability jointly and severally on the owner and National Insurance Company.

Suresh appealed for enhancement, while the insurer challenged its liability on the ground of breach of the policy condition restricting use of the tractor to agricultural purposes.

Whether the insurer proved breach of the policy conditions sufficient to avoid liability for payment of compensation?

Whether the claimant was entitled to enhancement of the compensation awarded by the Tribunal?

The appeal was preferred under Section 173(1) of the Motor Vehicles Act, 1988.

The insurer bears the burden of proving a breach of the policy condition relied upon to avoid liability.

The relevant use of the vehicle must be assessed with reference to the circumstances existing at the time of the accident; where the tractor was empty and the injured claimant was a passer-by, the insurer could not establish that the accident resulted from the alleged commercial carriage of goods.

The Court distinguished National Insurance Co. Ltd. v. Chinnamma, AIR 2004 SC 4334, where the tractor was carrying vegetables for hire.

The Court referred to United India Insurance Co. Ltd. v. Laxmibai Kom Manjappa Amboji, MFA No.20885/2012, concerning recovery from the owner where a tractor was carrying loaded crops.

For computation of loss of future earning capacity, the Court applied the multiplier method under Sarla Verma v. Delhi Transport Corporation, 2009 ACJ 1298, adopting multiplier 15 for a 40-year-old claimant.

The Court accepted the police records, including the FIR, spot mahazar, sketch, IMV report and charge-sheet, as supporting the finding that the accident resulted from the tractor driver’s negligence.

Although the insurer produced documents indicating that the owner had agreed to transport sugarcane for the factory, the tractor was empty when it struck the claimant. Therefore, the alleged commercial use could not, on the facts of the accident, constitute a proved breach disentitling the claimant from recovery against the insurer; Chinnamma was distinguishable because the vehicle in that case was carrying vegetables on hire.

On quantum, the Court enhanced pain and suffering from ₹30,000 to ₹50,000, food and attendant charges from ₹5,800 to ₹21,000, and loss of income during the laid-up period from ₹5,000 to ₹21,000, considering the claimant’s fractures, surgery and 29-day hospitalization.

Although the Tribunal had denied compensation for future loss of income, the Court held that the doctor’s assessment of 45% physical disability, reasonably reduced to 15% functional disability, affected the claimant’s occupation despite his having applied for renewal of his canteen licence.

Using a notional income of ₹7,000 per month, 15% disability and multiplier 15, the Court calculated future loss of earning capacity at ₹1,89,000.

The compensation was enhanced from ₹1,43,500 to ₹3,83,700, comprising pain and suffering, medical expenses, food and attendant charges, loss of income during the laid-up period, future medical expenses and loss of future earning capacity.

The owner and insurer were held jointly and severally liable to pay the enhanced amount with interest at 6% per annum from the date of the petition until realization, with the insurer directed to deposit the amount within four weeks.