Transporting construction materials in an insured tractor does not establish a policy breach absent proof of commercial use.

The deceased was travelling in a tractor carrying Nilgiri wood logs when the tractor went into a roadside ditch and he was fatally trapped beneath the logs.

The claimants sought compensation under Section 166 of the Motor Vehicles Act, 1988. The Tribunal awarded Rs. 9,85,328 with interest at 9% per annum and fastened liability on the relevant opponents.

The insurer appealed under Section 173, contending that use of the tractor and attached trailer to carry logs breached the policy conditions.

The policy was a Miscellaneous and Special Type of Vehicle Package Policy; its premium included third-party cover, trailer cover, and Workmen’s Compensation risk for five employees.

Whether carrying wooden logs in the insured tractor and trailer established a breach of the policy conditions that relieved the insurer of liability to satisfy the award.

Whether the Tribunal erred in fastening liability on the opponents despite the insurer’s asserted breach of policy conditions.

Section 149(2)(a)(i)(a) of the Motor Vehicles Act permits an insurer to rely on specified policy breaches, including unauthorised use of a vehicle, but the breach must be pleaded and proved; it cannot be presumed merely from the nature of the goods carried.

Relying on Fahim Ahmad v. United India Insurance Co. Ltd., (2014) 14 SCC 148, the Court applied the rule that the insurer must substantiate an alleged breach with positive evidence, and that carrying goods does not by itself establish commercial use or use for a purpose other than agriculture.

The cited decision also refers to National Insurance Co. Ltd. v. V. Chinnamma, JT 2004 (7) SC 167, concerning the distinction between agricultural carriage and commercial use.

The insurer argued that carrying logs for house construction amounted to use outside the policy’s permitted purpose.

Applying Fahim Ahmad, the Court held that the nature of the load alone did not establish commercial or otherwise unauthorised use.

The policy particulars, including the premiums for third-party cover, the trailer, and Workmen’s Compensation risk, did not support the insurer’s contention that liability could be avoided.

The Court therefore found no basis to displace the Tribunal’s liability finding.

It dismissed the appeal and confirmed the Tribunal’s judgment and award; any interim relief was vacated, and any amount deposited with the Registry or Tribunal was to be disbursed to the claimants in accordance with law.