HC put on hold hiking premium for vehicles of edu institutions

Updated on: Monday, May 16, 2011

Madras High Court granted interim stay on enhancing tariff hike by Insurance Regulatory and Development Authoritys notification for third party premium.

Justice V Dhanapalan gave the order following identical petitions by Association of Management of Coimbatore Anna University Affiliated Colleges, Federation of Association of Matriculation Higher Secondary Schools and Federation of association of Private Schools in Tamil Nadu.

IRDA issued a notification enhancing premium in respect of the passenger transport vehicle from Rs 235 to Rs 380 and in the case of basic third party premium from Rs 3160 to Rs 5220.

The notification was given effect from 25th April.

Contending it was unacceptable as such increase has to be decided with reference to the earning of the insured but not on the operational cost, the petitioners said overlooking genuine representation the impugned notification was passed by the IRDA on April 15, 2011.

The petitioners submitted regarding passenger vehicles the impugned notification said the premium was fixed taking all the 4 wheelers which are having seating capacity exceeding 6 passengers for hire or reward treating all equal categories which has no rationale in treating all the unequals as equals.

The petitioners said as the authorities are demanding heavy premium and in case members of the Petitioner Associations refuse to pay it, the insurance companies are refusing to renew the insurance policy. No vehicle could not be operated on the public road unless it was covered by third party insurance policy as contemplated under Section 146 of the Motor Vehicles Act.

The impugned notification was already challenged before the High Court by Private Bus Owners and their petition was admitted and has granted interim order on April 27 staying the impugned order so far as it relates to enhancement of premium.

Justice Dhanapalan said following the earlier order, there would be an order of interim stay in respect of the enhanced tariff alone.

HC put on hold hiking premium for vehicles of edu institutions

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