Insurance Company Cannot Escape Liability Under Owner-Driver Personal Accident Cover Merely Because Deceased Was Driving Another Owned Vehicle: Punjab and Haryana High Court
Case Name: The New India Assurance Company Ltd. v. Permanent Lok Adalat & Ors.
Date of Judgment: 01 April 2026
Citation: CWP-9592-2026
Bench: Justice Jagmohan Bansal
Held: The High Court held that an insurance company remains liable under the Personal Accident Cover (Owner-Driver) even if the deceased was driving another vehicle owned by him at the time of the accident, provided the cover was valid. The Court upheld the award of ₹15 lakhs granted by the Permanent Lok Adalat.
Summary: The petitioner insurance company challenged the award passed by the Permanent Lok Adalat directing payment of ₹15 lakhs to the legal heirs of the deceased insured. The insurer argued that the claim was not maintainable because the deceased was driving a different vehicle than the one insured under the policy at the time of the accident.
The deceased owned two vehicles—a two-wheeler and a four-wheeler—and had insurance coverage. However, the accident occurred while he was driving the two-wheeler, whereas the Personal Accident Cover was linked to the four-wheeler.
The Permanent Lok Adalat relied upon IRDAI Circular dated 11.12.2018 and General Regulation 36 of the Indian Motor Tariff to hold that a single valid owner-driver personal accident cover extends to all vehicles owned by the insured. It clarified that separate policies for each vehicle are not required for such coverage.
The High Court examined the reasoning of the Lok Adalat and found no legal infirmity. It noted that the deceased had valid personal accident coverage and owned both vehicles, making the insurer liable regardless of which vehicle was being driven at the time of the accident.
Decision: The High Court dismissed the writ petition filed by the insurance company and upheld the award passed by the Permanent Lok Adalat. The Court affirmed that the insurer could not deny liability merely on the ground that the deceased was driving a different vehicle than the one insured, as long as the personal accident cover was valid and the deceased owned the vehicles in question. The reasoning adopted by the Lok Adalat was found to be consistent with IRDAI guidelines and applicable tariff regulations, leaving no scope for judicial interference.