The central legal point established in the judgment is that the insurer must prove a fundamental breach of the insurance policy to avoid liability in motor accidents claims.

Dilip Raosaheb Deshmukh, J.

1. This appeal by the Insurer is directed against the award dated 6.10.2006 passed in Claims Case No. 46 of 2006 by the 8th Additional Motor Accidents Claims Tribunal (F.T.C.), Raipur (hereinafter referred as the M.A.C.T.)

2. Admitted facts are that for the accidental death of Lekhram, aged 15 years on 27.1.2006, the M.A.C.T. awarded compensation of Rs. 1,17,500/-. Tulas Ram, respondent No. 4, was driving the Tractor No. C.G.04/D 0167 to which a Trailer No. C.G. 04 D/168 was attached and possessed a valid driving licence. The Insurance policy covers use of the Tractor/Trailer only for Agricultural and Forestry purposes and covers the risk of the paid driver and/or cleaner. The Tractor/Trailer was owned by Punitram Sahu, Respondent No. 5, on the date of accident.

3. Claimants had, in their application under Section 166 of the Motor Vehicles Act, 1988 (henceforth `the Act'), pleaded that due to rash and negligent driving by Tulas Ram, Lekhram, who was sitting by the side of the driver fell and died.

4. The respondents No. 4 and 5, being the driver and the owner of the Tractor Trailer, denied the pleadings in toto in their written statement.

5. The appellant/Insurer while denying the claim as also the liability to pay compensation pleaded that Lekhram was seated on the Tractor with the Driver which was a fundamental breach of the insurance policy, and therefore, the Insurance-Company was liable to be exonerated. In the alternative, it was also contended that even if it was held that Lekhram was travelling on the Trailer, he was a gratuitous passenger for whom no extra premium was paid, and therefore, the liability to pay compensation could not be fastened on the Insurance- Company.

6. The M.A.C.T. placing implicit reliance on the testimony of the driver and disbelieving claimant- Lakhanlal's evidence on the ground that he did not see the accident held that the deceased Lekhram was seated on the Trailer at the time of the accident which had occurred due to rash and negligent driving of Tulas Ram. Since the driver possessed a valid driving licence, the Insurance-Company was liable to pay compensation as risk of third party was statutorily covered under the policy. It awarded compensation of Rs. 1,17,500/- against the appellant/Insurance Company.

7. Shri Sachin Singh Rajput, learned counsel for the Insurance Company contended that the evidence of Tulas Ram ought to have been rejected as an afterthought because he sought permission and entered the witness box before the M.A.C.T. only after the closure of evidence by the parties It was further argued that in the first information report as also in the application under Section 166 of the Act, the claimants had pleaded that Lekhram was seated besides the driver. Having placed reliance on the F.I.R. and exhibited the same the claimants could not turn around and contend that it was not proved that Lekhram was seated on the Tractor besides the driver at the time of accident. Reliance was placed on Oriental Insurance Company Limited v. Premlata Shukla and Ors. 2007 INDLAW SC 553 and National Insurance Co. Ltd. v. Bramaranbike and Ors. while contending that since Lekhram was a gratuitous passenger, the Insurer was not liable to pay compensation.

8. On the other hand, Shri Prakash Tiwari, learned counsel for the respondents No. 4 & 5 placed reliance on Rule 97 (7) of the M.P.Motor Vehicles Rules, 1994 (hereinafter referred to as the Rules) wherein carrying of labourers and the members of the family of agriculturists for the purpose of agriculture or any purpose connected with agriculture including sale and purchase of articles or agriculture was included. Reliance was placed on New India Assurance Co. Ltd. v. Dhanurjaya Khosla and Ors. 1988 ACJ 1065 while contending that since Lekhram was travelling in the Tractor as a helper, the insurer cannot escape liability to pay compensation. Shri Sudhir Verma, learned counsel for respondents No. 1 to 3 argued in support of th