Chauffeur akin to owner for claims: Supreme Court

New Delhi: In a significant ruling, the Supreme Court on Saturday held that an insurance company is liable to pay compensation to the owner of the vehicle, even if thieves stole it en route after assaulting a professional driver. Giving this ruling a Bench of Justices Madan B. Lokur and Deepak Gupta said in the present case, the appellant, Manjeet Singh, who is the owner, was not at fault. His driver gave a lift to some passengers.

Carrying such passengers may be a breach of the policy, but it cannot be said to be such a fundamental breach as to bring the insurance policy to an end and to terminate it. The driver, on a cold wintry night, gave lift to some persons standing on the road.  It was a humanitarian gesture.  It cannot be said to be such a breach that it nullifies the policy.  The Bench said no doubt, these passengers turned against the driver and stole the truck, but this, the driver could not have foreseen. 

In such claims where there is breach of policy, they have been treated to be non-standard claims and have been directed to be settled at 75 per cent, the Bench added. The arbitration proceedings between the financer and the insurer, relating to recovery of the loan amount, can in any way, negate the rights of the insured against the insurance company, it said.  The Bench allowed the appeal and directed the National Insurance company to pay 75 per cent of the insured amount of Rs 7,28,000 along with interest at the rate of 9% per annum from the date of filing the claim petition till the deposit of the amount.