Full Judgment Text
2025 INSC 1078
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal Nos. 5177-81 of 2022
Shyam Lal
…Appellant
Versus
Shriram General
Insurance Co. Ltd. and Others.
…Respondents
J U D G M E N T
K. VINOD CHANDRAN, J.
The owner of the utility vehicle involved in an
accident, which gave rise to 5 claim petitions, has filed
the instant appeal challenging the order of “pay and
recover” issued by the High Court in the appeal filed by
the Insurance Company. The High Court found that the
utility vehicle was not entitled to carry passengers by
reason of the specific restriction in the policy which is
evident from “Limitation as to Use” . The contention was
that the 4 passengers excluding the driver who were
Signature Not Verified
Digitally signed by
babita pandey
Date: 2025.09.06
12:32:12 IST
Reason:
entitled to travel in the utility vehicle, are only
Page 1 of 9
Civil Appeal Nos. 5177-81 of 2022
employees who come under the purview of Workmen’s
Compensation Act, 1923.
2. The learned Counsel for the appellant-owner took
us through the Certificate of Registration (Annexure P1),
the contract carriage permit (Annexure P2) and the
package policy (Annexure P3) which indicated the
seating capacity including the driver to be 4+1. It is
argued that the limitation as to use insofar as carriage of
goods applies only to a goods vehicle and not an utility
vehicle which can carry both passengers and goods.
There is no ground for ordering “pay and recovery” in the
facts and circumstances of the case, especially when the
Insurance Company had not taken a defence that the
vehicle was insured as a goods vehicle. The claimants
are the legal representatives of the deceased who were
either travelling in the vehicle or standing/walking at the
accident site.
3. The learned Counsel for the Insurance Company,
however, contended that there could be no plea of goods
Page 2 of 9
Civil Appeal Nos. 5177-81 of 2022
being carried in the vehicle because one of the deceased
was a student and the others; a catering employee, a
painter, an employee in the postal department and an
unemployed man. The restriction squarely applies, and
the passengers cannot be said to be validly covered
under the policy. It is also argued that even if the
passengers are said to be owners of goods or his
representative, there could not have been more than four
passengers in the vehicle, when the claim petitions were
numbering five. There was also an allegation of nine
deaths having occurred in the accident, which clearly
indicates overloading.
4. The appeal was filed only on the ground of the
limitation in the policy. The Tribunal found the
negligence and rashness in the driving of the utility
vehicle and the vehicle is covered by a valid package
policy issued by the Insurance Company are
established. Having gone through the records, we see
that the certificate of registration indicates the class of the
Page 3 of 9
Civil Appeal Nos. 5177-81 of 2022
offending vehicle to be an Utility Van which has a seating
capacity of 5, including the driver. The permit issued as
a contract carriage, also allows 5 passengers to be
carried in the vehicle. A ‘contract carriage’ as defined
under Section 2(7) of the Motor Vehicles Act, 1988 means
a motor vehicle which carries a passenger or passengers
for hire or reward and is engaged under an express or
implied contract and includes a motor cab
notwithstanding that separate fares are charged for its
passengers. This is in clear distinction with a ‘goods
carriage’ defined under Section 2(14) of the Act which is
a vehicle constructed or adapted or used solely for the
carriage of goods.
5. The package policy produced shows the make &
model as seen from the Certificate of Registration
indicating the vehicle to be manufactured by Mahindra &
Mahindra, a Bolero Camper Utility DC, 2WD, BS2. The
utility vehicle obviously is for carriage of passengers and
goods; the passengers not being necessarily the owners
Page 4 of 9
Civil Appeal Nos. 5177-81 of 2022
of the goods as seen from the seating capacity of 4+1
including the driver specified also in the insurance
policy. In the above circumstances, it cannot be said that
the vehicle was insured as a goods vehicle, which is not
specified in the policy and hence ‘the limitation as to the
use only of carriage of goods’ does not apply; the utility
vehicle being the vehicle registered with a seating
capacity of 5 passengers including the driver, and the
permit issued being one of a contract carriage also
indicating 5 passengers including the driver to be
carried within it.
6. In this context, we have also gone through the
evidence of the Branch Manager in charge of the
Insurance Company which is produced as Annexure
No.P6. In chief examination, it was stated that though the
seating capacity is shown as 4+1 including the driver, the
premium was taken only for the owner driver and no
separate amounts were charged for the passengers;
which is contrary to the recitals in the document. In cross
Page 5 of 9
Civil Appeal Nos. 5177-81 of 2022
examination, the witness admitted that the insurance of
any vehicle is issued after perusing the records of the
vehicle like, registration certificate, fitness and permit
validity. It was admitted that the insurance policy was
issued to the owner, in accordance with the rules and
looking at the registration certificate, wherein the
category of the vehicle is registered as “Utility Van”. The
witness further admitted that the seating capacity in the
policy is also written as 4+1 and that there is no recital in
the policy document regarding the premium for
passengers having not been charged. It has also been
deposed, which is again a clear admission, that the utility
van is a vehicle in which half portion is used for carrying
of goods and half portion in front is used for carrying
passengers. Hence, there can be no restriction insofar as
the ‘limitation as to use’ as found in the policy which
applies only to goods vehicles while the present vehicle
as per the certificate of registration is a utility vehicle and
the permit issued is of a contract carriage. The package
Page 6 of 9
Civil Appeal Nos. 5177-81 of 2022
policy was issued by the Insurance Company after
looking at the certificate of registration and the permit
issued and it has been clearly specified that the vehicle
is entitled to carry 4+1 passengers in addition to the
goods. The Insurance Company in the above
circumstance, cannot wriggle out of its liability to
indemnify the owner.
7. The contention regarding 5 persons having filed
claim petitions, indicating more than 4 persons having
been carried in the vehicle, though is attractive has no
significance on the facts as revealed from the order of the
Tribunal. The Tribunal, on the basis of the evidence led,
clearly found that in addition to the passengers carried in
the vehicle, some pedestrians were also dragged down
by the vehicle when the accident occurred. The
eyewitness, PW2 who saw the accident clearly stated that
just prior to the accident, he saw the vehicle coming with
4 passengers in it. There was no challenge to the said
evidence in the cross examination by the Insurance
Page 7 of 9
Civil Appeal Nos. 5177-81 of 2022
Company. The vehicle having fallen down the gorge,
with the passengers as also the pedestrians, one of the
claim petitions is of a pedestrian, which is not clearly
demarcated for reason of the 5 persons having been
extricated at the accident site from and around the
vehicle. We find absolutely no reason to sustain the order
of the High Court directing pay and recovery. The
liability is on the Insurance Company and that has to be
satisfied fully by the Insurance Company.
8. Before leaving the matter, we notice that insofar as
one of the claim petitions, MACT Case No. 134 of 2014
relatable to the compensation for the death of one
Jagdish Prasad Gaur, there was a contention taken in the
appeal filed before the High Court by the Insurance
rd
Company that no deduction towards 1/3 of the amount
determined as compensation for loss of income, as
personal expenses has been made by the Tribunal. We
did not have the benefit of going through the order of the
Tribunal since the same was not produced before us.
Page 8 of 9
Civil Appeal Nos. 5177-81 of 2022
However, in the fitness of things especially since just
compensation is to be awarded, we are of the opinion
that in computing the income at the time of disbursing the
rd
amount, the Tribunal shall ensure that 1/3 deduction is
made from the total loss of income computed before
disbursing the amounts directed in MACT Case No. 134
of 2014 relatable to Appeal No. 607 of 2016.
9. The appeals hence stand allowed with the above
reservation, setting aside the judgment of the High Court
and restoring the order of the Tribunal with the
modification to one of the awards as mentioned above.
10. Pending applications, if any, shall stand disposed
of.
…….…………………….….. J.
(K. VINOD CHANDRAN)
…….…………………….….. J.
(N. V. ANJARIA)
NEW DELHI;
SEPTEMBER 04, 2025.
Page 9 of 9
Civil Appeal Nos. 5177-81 of 2022
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal Nos. 5177-81 of 2022
Shyam Lal
…Appellant
Versus
Shriram General
Insurance Co. Ltd. and Others.
…Respondents
J U D G M E N T
K. VINOD CHANDRAN, J.
The owner of the utility vehicle involved in an
accident, which gave rise to 5 claim petitions, has filed
the instant appeal challenging the order of “pay and
recover” issued by the High Court in the appeal filed by
the Insurance Company. The High Court found that the
utility vehicle was not entitled to carry passengers by
reason of the specific restriction in the policy which is
evident from “Limitation as to Use” . The contention was
that the 4 passengers excluding the driver who were
Signature Not Verified
Digitally signed by
babita pandey
Date: 2025.09.06
12:32:12 IST
Reason:
entitled to travel in the utility vehicle, are only
Page 1 of 9
Civil Appeal Nos. 5177-81 of 2022
employees who come under the purview of Workmen’s
Compensation Act, 1923.
2. The learned Counsel for the appellant-owner took
us through the Certificate of Registration (Annexure P1),
the contract carriage permit (Annexure P2) and the
package policy (Annexure P3) which indicated the
seating capacity including the driver to be 4+1. It is
argued that the limitation as to use insofar as carriage of
goods applies only to a goods vehicle and not an utility
vehicle which can carry both passengers and goods.
There is no ground for ordering “pay and recovery” in the
facts and circumstances of the case, especially when the
Insurance Company had not taken a defence that the
vehicle was insured as a goods vehicle. The claimants
are the legal representatives of the deceased who were
either travelling in the vehicle or standing/walking at the
accident site.
3. The learned Counsel for the Insurance Company,
however, contended that there could be no plea of goods
Page 2 of 9
Civil Appeal Nos. 5177-81 of 2022
being carried in the vehicle because one of the deceased
was a student and the others; a catering employee, a
painter, an employee in the postal department and an
unemployed man. The restriction squarely applies, and
the passengers cannot be said to be validly covered
under the policy. It is also argued that even if the
passengers are said to be owners of goods or his
representative, there could not have been more than four
passengers in the vehicle, when the claim petitions were
numbering five. There was also an allegation of nine
deaths having occurred in the accident, which clearly
indicates overloading.
4. The appeal was filed only on the ground of the
limitation in the policy. The Tribunal found the
negligence and rashness in the driving of the utility
vehicle and the vehicle is covered by a valid package
policy issued by the Insurance Company are
established. Having gone through the records, we see
that the certificate of registration indicates the class of the
Page 3 of 9
Civil Appeal Nos. 5177-81 of 2022
offending vehicle to be an Utility Van which has a seating
capacity of 5, including the driver. The permit issued as
a contract carriage, also allows 5 passengers to be
carried in the vehicle. A ‘contract carriage’ as defined
under Section 2(7) of the Motor Vehicles Act, 1988 means
a motor vehicle which carries a passenger or passengers
for hire or reward and is engaged under an express or
implied contract and includes a motor cab
notwithstanding that separate fares are charged for its
passengers. This is in clear distinction with a ‘goods
carriage’ defined under Section 2(14) of the Act which is
a vehicle constructed or adapted or used solely for the
carriage of goods.
5. The package policy produced shows the make &
model as seen from the Certificate of Registration
indicating the vehicle to be manufactured by Mahindra &
Mahindra, a Bolero Camper Utility DC, 2WD, BS2. The
utility vehicle obviously is for carriage of passengers and
goods; the passengers not being necessarily the owners
Page 4 of 9
Civil Appeal Nos. 5177-81 of 2022
of the goods as seen from the seating capacity of 4+1
including the driver specified also in the insurance
policy. In the above circumstances, it cannot be said that
the vehicle was insured as a goods vehicle, which is not
specified in the policy and hence ‘the limitation as to the
use only of carriage of goods’ does not apply; the utility
vehicle being the vehicle registered with a seating
capacity of 5 passengers including the driver, and the
permit issued being one of a contract carriage also
indicating 5 passengers including the driver to be
carried within it.
6. In this context, we have also gone through the
evidence of the Branch Manager in charge of the
Insurance Company which is produced as Annexure
No.P6. In chief examination, it was stated that though the
seating capacity is shown as 4+1 including the driver, the
premium was taken only for the owner driver and no
separate amounts were charged for the passengers;
which is contrary to the recitals in the document. In cross
Page 5 of 9
Civil Appeal Nos. 5177-81 of 2022
examination, the witness admitted that the insurance of
any vehicle is issued after perusing the records of the
vehicle like, registration certificate, fitness and permit
validity. It was admitted that the insurance policy was
issued to the owner, in accordance with the rules and
looking at the registration certificate, wherein the
category of the vehicle is registered as “Utility Van”. The
witness further admitted that the seating capacity in the
policy is also written as 4+1 and that there is no recital in
the policy document regarding the premium for
passengers having not been charged. It has also been
deposed, which is again a clear admission, that the utility
van is a vehicle in which half portion is used for carrying
of goods and half portion in front is used for carrying
passengers. Hence, there can be no restriction insofar as
the ‘limitation as to use’ as found in the policy which
applies only to goods vehicles while the present vehicle
as per the certificate of registration is a utility vehicle and
the permit issued is of a contract carriage. The package
Page 6 of 9
Civil Appeal Nos. 5177-81 of 2022
policy was issued by the Insurance Company after
looking at the certificate of registration and the permit
issued and it has been clearly specified that the vehicle
is entitled to carry 4+1 passengers in addition to the
goods. The Insurance Company in the above
circumstance, cannot wriggle out of its liability to
indemnify the owner.
7. The contention regarding 5 persons having filed
claim petitions, indicating more than 4 persons having
been carried in the vehicle, though is attractive has no
significance on the facts as revealed from the order of the
Tribunal. The Tribunal, on the basis of the evidence led,
clearly found that in addition to the passengers carried in
the vehicle, some pedestrians were also dragged down
by the vehicle when the accident occurred. The
eyewitness, PW2 who saw the accident clearly stated that
just prior to the accident, he saw the vehicle coming with
4 passengers in it. There was no challenge to the said
evidence in the cross examination by the Insurance
Page 7 of 9
Civil Appeal Nos. 5177-81 of 2022
Company. The vehicle having fallen down the gorge,
with the passengers as also the pedestrians, one of the
claim petitions is of a pedestrian, which is not clearly
demarcated for reason of the 5 persons having been
extricated at the accident site from and around the
vehicle. We find absolutely no reason to sustain the order
of the High Court directing pay and recovery. The
liability is on the Insurance Company and that has to be
satisfied fully by the Insurance Company.
8. Before leaving the matter, we notice that insofar as
one of the claim petitions, MACT Case No. 134 of 2014
relatable to the compensation for the death of one
Jagdish Prasad Gaur, there was a contention taken in the
appeal filed before the High Court by the Insurance
rd
Company that no deduction towards 1/3 of the amount
determined as compensation for loss of income, as
personal expenses has been made by the Tribunal. We
did not have the benefit of going through the order of the
Tribunal since the same was not produced before us.
Page 8 of 9
Civil Appeal Nos. 5177-81 of 2022
However, in the fitness of things especially since just
compensation is to be awarded, we are of the opinion
that in computing the income at the time of disbursing the
rd
amount, the Tribunal shall ensure that 1/3 deduction is
made from the total loss of income computed before
disbursing the amounts directed in MACT Case No. 134
of 2014 relatable to Appeal No. 607 of 2016.
9. The appeals hence stand allowed with the above
reservation, setting aside the judgment of the High Court
and restoring the order of the Tribunal with the
modification to one of the awards as mentioned above.
10. Pending applications, if any, shall stand disposed
of.
…….…………………….….. J.
(K. VINOD CHANDRAN)
…….…………………….….. J.
(N. V. ANJARIA)
NEW DELHI;
SEPTEMBER 04, 2025.
Page 9 of 9
Civil Appeal Nos. 5177-81 of 2022