Insurance Company Liable Despite Alleged Typographical Error in Policy, Court Affirms
In a significant ruling, the Allahabad High Court dismissed an appeal by Oriental Insurance Co. Ltd., affirming the Motor Accident Claims Tribunal's decision to award Rs. 4,84,000 in compensation to the family of Sadhuram Paswan, who died in a tractor accident. The Insurance Company had contested its liability, arguing that the insurance policy's mention of a "1+1" seating capacity was a typographical error, asserting the tractor’s registration certificate allowed only one occupant, the driver.
Justice Prashant Kumar ruled that once the insurance policy was issued specifying coverage for the driver and one additional person, the Insurance Company could not deny liability. The court underscored that the premium was accepted based on this capacity, and the alleged error could not be used to negate the policy's terms. The court also found that the use of the tractor at the time of the accident was within the scope of agricultural activities, countering the insurer's claim of policy breach.
The judgment emphasizes the binding nature of the insurance policy terms and the insurer's responsibility once a policy is issued, despite subsequent claims of typographical errors. The court's decision ensures the family's compensation for their loss, highlighting the insurer's obligation to honor the policy as issued.
Bottom Line :
Motor Vehicles Act - Insurance policy for tractor mentioned seating capacity as 1+1 - Insurance Company, after issuing policy and receiving premium, cannot deny liability by alleging typographical error or by relying upon registration certificate showing seating capacity of one person only - Deceased travelling on tractor was covered under policy and award of compensation was rightly upheld.
Statutory provision(s): Motor Vehicles Act, 1988 Section 147
Oriental Insurance Co.Ltd. v. Smt. Vijay Kumari, (Allahabad)(Lucknow) : Law Finder Doc id # 2989236
