Insurance condition barring agricultural tractor-trailers from ‘hire or reward’ use illegal: Karnataka High Court
The Karnataka High Court ruled that insurance policies cannot bar agricultural tractor-trailers from being used for 'hire or reward'. The court stated that such conditions violate the Motor Vehicles Act, which takes precedence over general insurance regulations.
Why it matters
This provides legal protection for farmers who use their equipment for commercial purposes, preventing insurers from denying claims based on these specific policy exclusions.
The High Court of Karnataka has held illegal the standard insurance policy condition that a transport tractor-trailer used for agricultural activities should not be used for “hire or reward”, observing that such a condition is contrary to Section 149(2) of the Motor Vehicles (MV) Act, 1988.
“If there is a conflict between the MV Act and general provisions of insurance under other enactments in relation to requirement of insurance of motor vehicles, the special provisions and the Rules framed thereunder under the MV Act will prevail,” the Court held, pointing out that Section 28 of the Insurance Regulatory Development Act states that its provisions are not in derogation of any other law in force.
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