B.V. Nagaraju vs M/S. Oriental Insurance Co. ... on 20 May, 1996
Admittedly, in this case, appellant truck owner
was carrying more than six persons at the time
of the accident. However, according to our
opinion, the said breach of the condition is not
such by which the contract of insurance will be
vitiated, as the said term of not carrying more
than six labourers in the truck is not so
fundamental to offer ground to insurance
company to absolve itself from the liability. The
terms of the policy of insurance have not to be
construed strictly and to be read down to
advance the main purpose of the contract. The
main purpose of the policy is to indemnify the
damage caused to the vehicle and the inmates,
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who are injured. It is plain from the terms of the
insurance policy that insured vehicle was
entitled to carrying six workmen excluding
driver. If six persons 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. Admittedly, all the 11 persons in
the truck were working as labourers on the
quarry of the appellant, who is also owner of the
truck. Merely because 4/5 labourers more than
the agreed six labourers were taken in the truck,
it cannot be said to be such fundamental breach
that the owner should in all events be denied the
indemnification. The breach of the insurance
policy or the misuse of the vehicle may
somewhat be irregular, but not illegal as it is not
so fundamental in the nature so as to put an end
to the contract. The aforesaid view of ours is
also supported by the ratio of the Supreme Court
cases more particularly, decided in B.V.Nagaraju
v. Oriental Insurance Co.Ltd., 1996 ACJ 1178
(SC).