KSRTC `drives away’ with Rs140 cr of passengers’ insurance cess

KSRTC `drives away’ with Rs140 cr of passengers’ insurance cess


The Kerala State Road Transport Corporation (KSRTC) has been running roughshod on its passengers and appears to have gobbled up a whopping Rs 140 crore it collected over the years as insurance cess from them. In an RTI query, the authorities said that there was no balance amount in the account and have little clue about having paid insurance claims to its passengers

It was way back in 2007 that the corporation introduced an Re1 cess on tickets above Rs 25 in fast passenger and other upper class services. According to the order of March 16, 2007, the decision was taken in view of the corporation spending more than Rs 1 crore per month towards awards of motor accident claims tribunals.

The target set was collection of Rs 7 crore annually which it started achieving since the fifth year. The very first year it collected Rs 2.7 crore as insurance cess. An account for this was opened at the Puthanchantha (Thiruvananthapuram) branch of State Bank of India.

The corporation has, after collecting Rs 140.14 crore over the years from passengers, said that as on May 31, 2019, there is no balance amount in the account. This was in reply to a query under the Rights to Information Act by social activist PG Sunil Kumar of Koothattukulam. Also, the corporation has admitted that it had not audited the accounts after 2015 for reasons best known only to the authorities.

Sunil pointed out that to a specific question on whether any amount had been paid so far as compensation to accident victims, the KSRTC has in a wishy-washy manner said no information was available.

However, with regard to using the amount for payment towards repair of damaged buses or insurance premium payment, the corporation has said it had not been done.

Then the vital question remains as to what happened to such a huge amount collected from passengers, said Sunil, who had raised the matter way back in 2014 and had not got a clear reply that forced him to pursue the matter.

There are still other questions that remain unanswered. Under what authority did the corporation decide to collect the insurance cess. Under rules, it was not for the passengers to pay for their insurance as under the Motor Vehicles Act, it was for the bus owner, here the corporation, to pay the premium under third party insurance. The cess, according to insurance experts, is unfair and goes against rules.

Also, there has been no deliberation with the Insurance Regulatory and Development Authority which is the final word to give the go-ahead. Collection on any insurance premium or cess has to be through an IRDA-approved agency and in this case KSRTC was not such a one, they point out.