B.V. Nagaraju vs M/S. Oriental Insurance Co. ... on 20 May, 1996
16. Yet another citation which will be of much use is (B.V.Nagaraju v. Oriental Insurance Co. Ltd.). That was a case where according to the terms of Insurance policy, insured vehicle was authorised to take six workmen excluding the driver. But, at the time of accident, it carried nine persons. The Insurance Company raised a similar contention viz., that it is not liable to indemnify. Rejecting the said contention, the Supreme Court observed as under,
"It is plain from the terms of the Insurance Policy that the insured vehicle was entitled to carry 6 workmen, excluding the driver. If those 6 workmen when travelling in the vehicle, are assumed not to have increased any risk from the point of view of the Insurance Company on occurring of an accident, how could those added persons be said to have contributed to the causing of it is the poser, keeping apart the load it was carrying. Here, it is nobody's case that the driver of the insured vehicle was responsible for the accident. ....... Merely by lifting a person or two, or even three, by the driver or the cleaner of the vehicle, without the knowledge of the owner, cannot be said to be such a fundamental breach that the owner should, in all events, be denied indemnification. The misuse of the vehicle was somewhat irregular though, but not so fundamental in nature so as to put an end to the contract, unless some factors existed which, by themselves, had gone to contribute to the causing of the accident. ...."