Indian Kanoon - Search engine for Indian Law

The question is in view of the terms of the insurance policy, whether the Insurance Company was liable to cover the risk of the injured. In this context, twin aspects of the insured himself being the driver, but not a paid driver of the owner would become relevant. With this background, we may peruse the terms of the insurance policy more closely.

The certificate of insurance shows payment of additional premium of Rs.25/- for covering the liability of a paid driver as per IMT 28. It also shows payment of premium of Rs.400/- to cover the personal accident benefits of unnamed passengers as per IMT 16. The private car package policy containing the schedule accompanying the certificate of insurance had certain terms which need to be interpreted. Section II pertained to the liability to third parties. Clause 3 thereof reads as under:

IMT 28 which is the relevant section for our purpose reads as under:

IMT 28. Legal liability to paid Driver employed in connection with the operation of insured private car:

In consideration of an additional premium as stated in the Schedule notwithstanding anything to the contrary contained in the policy it is hereby understood and agreed that the insurer shall indemnify the insured against the insureds legal liability under the Workmens Compensation Act, 1923, the Fatal Accidents Act 1855 or at Common Law and subsequent amendments of these Acts prior to the date of this Endorsement in respect of personal injury to any Paid Driver whilst engaged in the service of the insured in such occupation in connection with the Private Car insured herein and will in addition be responsible for all costs and expenses incurred with its written consent.

Lastly, IMT 28 pertains to legal liability to paid driver employed in connection with the operation of insured private car and it indemnified on consideration of additional premium paid by the insured against the liability under the Workmens Compensation Act, Fatal Accidents Act, or at common law towards personal injury to a paid driver while engaged in service of the insured.

It can thus be seen that the clauses mentioned above though extended the terms of the policy beyond the statutory requirements did not cover the risk of an unpaid driver. Rather unfortunately in the present case, the injured was neither the owner nor a paid driver. In other words, he was an unpaid driver other than the owner. We do not find any clause under which his risk was covered under the insurance policy. The Tribunal misread IMT 28 which confined to the legal liability of the Insurance Company to cover the risk of the owner with respect to bodily injury suffered by the paid driver which risk would arise when the liability of the owner would arise under the Workmens Compensation Act, Fatal Accidents Act or other relevant law.