IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision : 11.03.2026

1. FAO-2532-2009 (O&M)

Oriental Insurance Company Ltd. ...... Appellant versus Manohar Lal and others ...... Respondents

2. FAO-4300-2009 (O&M)

Manohar Lal (since deceased) through his LRs ...... Appellant versus Ashok Kumar and others ...... Respondents CORAM : HON'BLE MR. JUSTICE PANKAJ JAIN Present: Mr. Ashwani Talwar, Senior Advocate with Mr. Satpal Dhamija, Ms. Pratiksha Sharma, Mr. Siddeshwar Hansa, Mr. Deepak Goyal, Advocates for the appellants in FAO-2532-2009 and for respondent No.6 in FAO-4300-2009 Mr. Gulshan Nandwani, Advocate for the LRs of appellant in FAO-4300-2009 and for the LRs respondent No.1 in FAO-2532-2009.

Ms. Jyotsna Saini, Advocate for respondents No.2 to 6 in FAO-2532-2009 and for respondents No.1 to 5 in FAO-4300-2009.

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PANKAJ JAIN, J. (Oral)

1. Insurance company is in appeal, aggrieved of award passed by MACT, Rewari dated 16.01.2009, whereby the Tribunal has awarded compensation of Rs.1 lakh along with interest @ 9% per annum. Cross appeal is at the instance of claimants seeking enhancement of compensation.

2. Mr. Talwar, Senior counsel inter alia submits that the insured vehicle is a tractor trolley which could be used only for agricultural purposes. In the present case, the same was being used to transport gratuitous passengers for a social function. The vehicle thus was being used in breach of insurance policy which is a Farmer’s Package Policy. Accordingly, the insurance company is entitled for recovery rights against the owner and driver.

3. Mr. Talwar, senior counsel has drawn attention of this Court to the insurance cover note to submit that the seating capacity of the tractor was one person. Thus, the passenger travelling in the trailer cannot be held to be insured. The only exception is where the passenger in the trailer is travelling for agricultural operations. He has further drawn attention to the general conditions of Farmer’s Package Policy to contend that as per the same, third party including passengers’ liability can be enforced qua insurer only when the number of passengers falls within the seating capacity. He has further drawn attention to the general exceptions, as per which any loss, damage or liability caused by or through or in connection with any animal and/or vehicle while such animal and/or vehicle is being used otherwise than for the purpose of the business specified in the schedule or for social domestic or pleasure purposes is not covered in the policy. He further contends that even as per special exceptions to the policy, accidental loss/damage while the tractor is being used otherwise than in accordance with the limitation as to use, cannot be fastened upon the insurer.

4. During the course of arguments, Mr. Talwar was asked whether the document relied upon by him, i.e. conditions of the Farmer’s Package Policy was part of the insurance cover note issued to the insured, Mr. Talwar very candidly admits that there is no such evidence to prove that the conditions were made part of the contract or were handed over to the insured so has been held by the Tribunal. The precise issue with respect to liability of the insurer arose before this Court in “Laxmi Narain and another vs. Bhagu Ram and others” reported as 2025 NCPHHC 145507, wherein this Court observed as under:-

“16. In order to escape the liability, the insurer is required to prove that the case falls within the exclusion clause of the policy. Nothing has been shown from the record that can lead to the inference that the farm labourer travelling on the tractor is excluded from the ambit of the policy in the present case.”

5. In view of the fact that the contract of insurance is a bilateral contract and is strictly governed by the contractual relationship apart from provisions of 1988 Act for third party, this Court finds that the insurance company cannot be allowed to evade liability relying upon the terms and conditions which were not even