The insurance company's liability for the personal accident of an owner-cum-driver is limited to the contractual sum insured, provided the deceased possessed a valid and effective driving licence.

Judgment on Board

15.04.2026

1. The appellants/claimants have preferred this appeal under Section 173 of the Motor Vehicles Act, 1988 calling in question the legality, validity and correctness of the impugned award dated 28.02.2019 passed by the learned Fourth Additional Motor Accident Claims Tribunal, Raipur in Claim Case No. 413/2015, by which the claim application of the claimants for grant of compensation has been rejected finding no merit.

2. Mr. A.L.Singroul, learned counsel for the appellants/claimants would submit that the vehicle’s registered owner is father and vehicle was being driven by son Mukesh Markhandey, who died in the accident and he being the driver covered under the insurance policy (Ex.D-1) as for the personal accident of owner-cum-driver an extra premium of Rs.50/- has been paid, therefore, the liability would be confined to Rs. 1,00,000/-, which should have been awarded.

3. Mr. Sudhanshu Upadhyay, learned counsel appearing for the insurance company/respondent No.2, would support the impugned award and submit the the appeal is liable to be dismissed.

4. Heard learned counsel appearing for the parties and gone through the records meticulously.

5. The Supreme Court in the matter of National Insurance Company Limited v. Ashalata Bhowmik & Others¹(2018) 9SCC 801 has held that contractual liability is limited and held in para 9 as under :-

“9. Therefore, the High Court was not justified in directing the appellant insurer to pay the compensation determined by the Tribunal. Since the indemnification extended to personal accident of the deceased is limited to Rs.2,00,000/- under the contract of insurance, the respondents are entitled for the said amount towards compensation. Hence the appellant is directed to deposit the said sum of Rs.2,00,000/- with interest @9% per cent p.a. from the date of the claim petition till the date of deposit with the Tribunal within a period of four weeks from today.”

The principles of law laid down in Ashalata Bhowmik (supra) has further been followed in the matter of Ramkhiladi & Another v. United India Insurance Company & Another²(2020) 2 SCC 550.

6. The insurance policy (Ex.D-1) proved by Rishabh Pandey (NAW-1) also covers the personal accident of owner-cum-driver and premium of Rs.50/- has been paid and the actual liability would be Rs.1,00,000/-, but the person must have valid and effective driving licence to drive the vehicle.

7. Admittedly, the deceased has a valid and effective driving licence to drive the offending vehicle. Therefore, the appellants will be entitled for Rs. 1,00,000/- along-with interest @7.5% from the date of filing of claim application. The compensation amount will be deposited within 30 days from the date of receipt of a copy of this order.

8. Accordingly, the appeal is allowed to the extent as indicated herein above.

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