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Monday, December 20, 2021

insuring school bus ! - perception and .. .. a pay & recovery award !

Traffic in Chennai city – aerial view of Beach Road aka Kamarajar salai – don’t get carried away by the lean movement on the road on Right side of photo – it is inner loop road nearer Marina beach – generally vehicles not allowed as people walk !! 


How does your kid commute to school … in our school days, we just walked ! now some drop their children in their 2 wheeler / cars; many of us are not in a position to drop them to school…. some make arrangements with private autos; vans and cycle rickshaws….. and feel that they have done their duty….. how many have cared to see the way their children commute in the vehicle arranged….. many a parents would keep on making calls to their van driver … just to know where the van is, whether their delay in preparations  could impact and whether their children is safely travelling…….. all ‘without even thinking that they are imperilling their own and other children travelling in that van’………..you see some small boyish driver driving the van rashly ~ speaking on the mobile phone all the time !! and he could well be answering your call…..  

Chennai bursts at seams .. you see vehicles of every variety on road, most of them domineering, threatening your very life .. .. .. in the category of water tankers,  high end luxury cars – you can add them ‘those yellow coloured Educational Institution buses’ – at breakneck speeds ! 

Insurance is all about risk exposure, the probability of peril occurrence – and based on various such parameters, Insurers decide their risk appetite.Many Insurers feel among Motor vehicles,  ‘School buses’ are very good risk and hence offer unimaginable discounts + various incentives to the sources that place them.  One factor influencing that perception is :  ‘these vehicles are not on road all time, ply only on specified routes’ and thus exposure is less !  .. .. for those of us seeing those yellow buses on city roads and on highways, would vouch differently – as they generate fear among other road users. 

Of the many vehicle documents like RC, FC -  there is Permit.  Any vehicle which is used for carrying goods or passengers for Commercial purpose requires a permit from State Government under the provisions of Motor Vehicles Act 1988.  Difference commercial vehicles require and obtain different types of permits – for carriage, route and the like.  Buses used for ferrying school students, owned / operated by Educational institutions are given a special permit.  In recent times, these buses besides permit are identified by their yellow colour. 

Remember that sometime back in a tragic accident, a  class II student of Zion Matriculation Higher Secondary School, Selaiyur,  fell through a hole in the school bus and was run over. Taking suo motu cognisance of the matter, the court had directed the State government to undertake the exercise of framing the Rules.  The specific rules called -  Tamil Nadu Motor Vehicles (Regulation and Control of School Buses) Special Rules, 2012 followed, coming into effect from 1st Oct 2012.  The rules inter-alia staed : No School Bus shall be used in any public place, whether or not such vehicle is actually carrying any student, without obtaining necessary permit from the appropriate authority under Section 76 of the Act. 

The Motor Vehicles Act 1988, Sec 88 states : Validation of permits for use outside region in which granted.—(1) Except as may be otherwise prescribed, a permit granted by the Regional Transport Authority of any one region shall not be valid in any other region .. .. …  

Sec 149 of the MV Act :  Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.—

(1) If, after a certificate of insurance has been issued under sub-section (3) of section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (1) of section 147 .. .. … the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments 

(2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, …. ..  ..  to defend the action on any of the following grounds, namely:— (a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:— (i) a condition excluding the use of the vehicle— (a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or (b) for organised racing and speed testing, or (c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or  .. .. ..  [partially excerpted here] 

School buses are to conform to additional norms including fitment of speed controlling device (speed governor); first step of footboard should be at a height not exceeding 300 mm and not less than 250 mm from the ground.  Despite every precaution, accidents do occur, bringing great tragedy to affected families. 

Today TOI news report states that a City MACT has directed Insurer of a school bus to pay compensation of Rs.21 lakhs to the family of an accident victim.  The accident occurred in Nov 2017 involving a school bus.  The bus had Permit to ply on Kanchipuram and Thiruvallur districts while the accident occurred near Koyambedu in Chennai city.  The Insurers took the plea of ‘permit violation’ but the Court has held that having insured the vehicle, Insures can pay the award less 10% towards contributory negligence of the victim for not wearing helmet – and Insurers can recover from the policy holder. 

The accident was fatal for a 23 year old working as a Marketing manager in a private firm.  The family sought a compensation of 50 lakh. There were not much of defence and the Insurers had pleaded that the vehicle had permit to ply only in Kancheepuram and Thiruvallur and use of the vehicle in Chennai was  breach of policy conditions.  The Tribunal did not take cognizance of this plea, but held that there was contributory negligence on part of the victim as he was not wearing helmet. The school management contended that the vehicle required repair works for which it was sent to Perungudi and was returning to Thiruvallur through Koyambedu when the accident happened. Based on various factors including loss of dependency, loss of love and affection for the family members and other factors, the tribunal arrived at an amount of 23.3 lakh as compensation. After deducting 2.3 lakh for contributory negligence, the tribunal held that a compensation of 21.04 lakh be paid to the victim’s family.  The Tribunal directed the Insurer of the vehicle to compensate and   recover the same from the school management. (Pay & recovery award) 

There are lessons from every judgement and hopefully those involved, Educational institutions, Road users, Transporters, general Public and Insurers learn some ! 

With regards – S. Sampathkumar
20th Dec 2021. 

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