Pranav B Prem

The Jharkhand High Court has ruled that the legal heirs of a deceased driver are entitled to compensation under the personal accident (PA) cover of an insurance policy, even if the driver himself was at fault for the accident. The court observed that in such a situation, the driver "enters into the shoes of the owner" and is eligible for compensation under the PA coverage of the insurance policy.

Court's Observation on PA Cover

Justice Sanjay Kumar Dwivedi, while presiding over the case, examined the terms of the insurance policy and stated: "The insurance policy is available on record, wherein PA cover under Section-III for owner-driver (CSI) is said to be Rs. 2 lakhs, meaning thereby that insurance is there. It is not clear from that if only the owner is driving the vehicle, then only that clause will apply. It is in the form of owner-driver, meaning thereby, whoever is driving the vehicle, is entitled for and PA cover is there of Rs. 2 lakhs and if such a situation is there, certainly the deceased entered into the shoes of the owner." The court clarified that PA cover is not restricted solely to the owner but also extends to any driver operating the insured vehicle at the time of the accident.

Case Background

The case arose from an appeal filed by the legal heirs of Asmuddin Ansari, a truck driver who died in an accident while driving the insured vehicle. On February 11, 2019, Ansari lost control of the truck and crashed into a tree, resulting in his death. Following the accident, an FIR was registered under Sections 279, 304(A), and 427 of the Indian Penal Code, and a charge sheet was filed against him, indicating that he was at fault. The claim for compensation was initially dismissed by the Motor Accident Claims Tribunal, Palamau, on the ground that negligence was on the part of the deceased. The insurance company argued that since the claim was filed under Section 163-A of the Motor Vehicles Act, and the deceased was found to be at fault, the Tribunal had rightly rejected the claim.

High Court's Analysis and Decision

The High Court found that the Tribunal had not conclusively established whether the deceased was driving negligently or rashly. It observed: "In the order of the learned Tribunal, it has not come how the vehicle was being driven rashly and negligently by the deceased. It is an admitted position that the legal heirs and successors of the deceased have claimed the compensation under Section 163-A of the Motor Vehicle Act and they have only stated that the deceased lost the control over the vehicle. Loss may occur due to failure of break or any break down in the vehicle, thus it cannot be said that the deceased was driving the vehicle negligently and rashly."

Relying on the Supreme Court's decision in Ramkhiladi & Anr. v. United India Insurance Company & Anr. [(2020) 2 SCC 550], the court noted that a driver who is covered under the PA policy is entitled to compensation, as he steps into the shoes of the owner. The judgment held: "Even as per the contract of insurance, in case of personal accident the owner-driver is entitled to a sum of Rs.1 lakh. Therefore, the deceased, as observed hereinabove, who would be in the shoes of the owner shall be entitled to a sum of Rs.1 lakh, even as per the contract of insurance." Based on this principle, the High Court ruled that the appellants were entitled to compensation.

Compensation Awarded

The court modified the Tribunal's order and directed the insurance company to pay Rs. 2 lakhs to the appellants, along with 7.5% interest per annum from the date of application. The court ordered: "In view of the above judgment, the appellants are entitled for a sum of Rs. 2 lakhs with the statutory interest @ 7.5 percent per annum from the date of application. As such, the insurance company is directed to pay Rs. 2 lakhs along with interest @ 7.5 percent per annum to the appellants from the date of application within eight weeks from today." The court also left it open for the insurance company to recover the amount from the owner of the vehicle if they deemed it necessary.

Cause Title:  Kuraisa Bibi V/S Pushpa Devi Gupta

Case No: M.A. No. 04 of 2024

Date: January-22-2025

Bench: Justice Sanjay Kumar Dwivedi

[Read/Download order]