Back
: Insurer Must Prove Goods Were Hazardous Before Denying Liability
The has ruled that an insurance company cannot escape its liability to pay compensation merely because the driver of the offending vehicle lacked a , unless the insurer also proves that the substance being carried actually falls within the list of under the .
Justice Prashant Kumar, presiding over a single-judge bench at the , dismissed an appeal filed by , which had challenged a ₹19.04 lakh granted by the , to the family of a man killed in a road accident.
Fatal Collision and Tribunal Award
On , Mahendra Kumar, a 28-year-old Class IV employee at Janjiradas Shambhunath Singh Intermediate College in Sultanpur, was returning home on his motorcycle with pillion rider Uttam Kumar Upadhaya. Near Kamta Market, a tanker bearing registration HR 55 L-2461, driven rashly and negligently, collided with the motorcycle. Kumar died on the spot, and the pillion rider sustained grievous injuries.
The deceased's legal heirs filed a claim petition, and the Tribunal, after evaluating evidence, held that the accident occurred solely due to the tanker driver's . The offending vehicle was validly registered and insured. The Tribunal awarded ₹19,04,000 with 7% annual interest, noting the driver held a .
Insurer's Argument: Missing Endorsement for
Aggrieved, National Insurance Company appealed under . Its counsel, , argued that while the driver had a licence to drive a heavy goods vehicle, it lacked the mandatory endorsement under , authorising the carriage of dangerous or . The tanker was carrying spirit (ethanol), which the insurer claimed is listed as hazardous at serial numbers 851 to 853 in Table III of the Rules.
The insurer relied on a response from the under the , dated , confirming that the driver's licence contained no such endorsement. This, the insurer argued, constituted a , absolving it of liability.
Claimants' Rebuttal
Counsel for the claimants, , countered that not all types of spirit are hazardous. Only specific blends of ethanol listed in Table III are classified as hazardous, and the insurer had produced no evidence that the tanker's cargo fell within those categories. The plea, he submitted, was an afterthought to evade payment.
Burden on Insurer to Establish Hazardous Nature
The High Court closely examined Rule 9(3) and Table III of the Central Motor Vehicles Rules. Justice Kumar noted that Table III enumerates only certain specified categories of ethanol at serial numbers 851 to 853—such as "Ethanol 1-2 Dichloracetate" and "Ethanolamine or Ethanolamine Solution"—as hazardous. A plain reading does not classify every variety of spirit or ethanol as hazardous.
The Court observed that the RTO's communication confirmed the driver held a valid heavy goods vehicle licence, valid at the time of the accident. The absence of a endorsement alone was insufficient to shift the burden to the insurer.
Key Observations
“Merely because the tanker was carrying spirit would not, by itself, lead to the conclusion that it was transporting within the meaning of the Rules.”
The Court further held:
“Such submission cannot be accepted in the absence of any evidence demonstrating that the particular substance being transported belonged to one of the specified categories of ethanol mentioned in Serial Nos. 851 to 853 of Table III. In the absence of such evidence, it cannot be assumed that the offending vehicle was carrying so as to require a special endorsement on the driver's licence.”
Appeal Dismissed
Finding no illegality in the Tribunal's findings and holding that the insurer failed to establish any , the High Court dismissed the appeal. It directed that any statutory amount deposited by the appellant be remitted to the Tribunal for adjustment.
The ruling reinforces that insurers must substantiate their claims of policy violations with concrete evidence, particularly when seeking to avoid compensation to accident victims' families.
