THE ORIENTAL INSURANCE COMPANY LIMITED NAHAN vs SUMITRA DEVI
- Court
- High Court of Himachal Pradesh
Neutral Citation No. ( 2026:HHC:48776 )
IN THE HIGH COURT OF HIMACHAL PRADESH AT
High Court of H.P.
SHIMLA
FAO No. 321 of 2025
Reserved on: 29.10.2026
Date of decision: 05.11.2026
Date of uploading on website:
05.11.2026
________________________________________________
The Oriental Insurance Company Ltd. …..Appellant.
Versus
Sumitra Devi & others …..Respondents.
________________________________________________
Coram
The Hon'ble Mr. Justice Sushil Kukreja, Judge.
1
Whether approved for reporting? Yes .
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For the appellant: Mr. Jagdish Thakur, Advocate.
For respondents No. 1 to 4: Mr. Arvind Negi, Advocate.
For respondent No. 5: Dr. Rajesh K. Parmar,
Advocate.
For respondent No. 6: Mr. Rajesh K. Sharma,
Advocate.
Sushil Kukreja, Judge.
The instant appeal has been maintained by
appellant-The Oriental Insurance Company Limited, who was
respondent No. 2 before the learned Tribunal below, under
Section 173 of the Motor Vehicles Act, 1988 (for short ‘the
Act’) against impugned award, dated 28.08.2025, passed by
learned Tribunal below, in MAC Petition No. 44-MAC/2 of
1
Whether reporters of Local Papers may be allowed to see the judgment?
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2021, filed by the petitioners-claimants, under Section 166 of
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the Act, wherein they were held entitled for compensation in
the sum of Rs.14,79,080/- and respondent No. 1-Shri Atma
Ram, owner of the offending vehicle, was held liable to pay
the compensation amount to the claimants. However,
respondent No. 2, i.e., Insurance Company (appellant
herein), under the principle of “pay and recover” was directed
to pay the compensation amount to the claimants with a right
to recover the same from respondent No. 1/ owner of the
offending vehicle, in accordance with law. The
petitioners/claimants were also held entitled to interest at the
rate of 6% per annum on the aforesaid amount from the date
of filing of the petition till its realization.
2. The facts giving rise to the instant appeal, in
brief, are that petitioner No. 1-Smt. Sumitra Devi, being wife,
and petitioners No. 2 to 4, i.e., Kumari Archana, Kumari Antra
and Master Sagar Thakur, being daughters and son,
respectively, of Shri Abhimanyu @ Pappu (deceased),
preferred a petition under Section 166 of the Act, seeking
compensation on account of death of the deceased in a
motor vehicle accident involving Mahindra Pick-up, bearing
registration No. HP-71-4783 (offending vehicle). As per the
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petitioners, on 31.05.2017, the deceased had hired the
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offending vehicle for transporting his agricultural produce to
Dadahu and around 03:15 p.m., when the said vehicle
reached near PWD Rest House, Sangrah, it met with an
accident due to rash and negligent driving of its driver, i.e.,
respondent No. 3- Ved Parkash (respondent No. 6 herein).
Consequently, the deceased sustained serious injuries and
ultimately succumbed to his injuries. The petitioners averred
in their claim petition that the deceased used to earn
Rs.25,000/- per month by growing cash crops and in addition
to this, he also used to earn Rs.10,000/- per month by selling
milk. The petitioners further averred that they were
dependent upon the income of the deceased.
3. The owner of the offending vehicle, Shri Atma
Ram (respondent No. 1) filed his reply, wherein he averred
that the vehicle was hired to transport the agricultural
produce to Dadahu by the deceased and one Shri Krishan
Kumar and they, being the owners of the goods, were
travelling in the offending vehicle. As per the replying
respondent, suddenly due to mechanical failure, the vehicle
went off the road and there was no negligence on part of
respondent No. 3, Shri Ved Parkash, i.e., driver of the
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offending vehicle. The petitioners have sought excessive
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compensation and as the offending vehicle was insured with
respondent No. 2-Insurance Company, the Insurance
Company was liable to pay the compensation, if any.
4. Respondent No. 2-Insurance Company, in its
separate reply, took preliminary objections that the driver of
the vehicle was not having any valid and effective driving
licence on the date of the accident and the owner of the
vehicle was willfully negligent in committing breach of the
terms and conditions of the insurance policy. It was further
averred that the owner of the offending vehicle, in
connivance with the petitioners, had changed the driver as
Ved Parkash from late Krishan Kumar, who was actually
driving the vehicle at the time of the accident and had no
driving licence and in order to escape from liability, the name
of Ved Parkash was introduced as driver of the vehicle. As
per the replying respondent, the offending vehicle was being
plied in the area of Himachal Pradesh without any valid and
effective permit. The claim petition was filed by the
petitioners in collusion with respondents No. 1 and 3 and the
deceased was travelling in the offending vehicle as
gratuitous passenger and respondent No. 3 had no concern
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with the alleged accident. The replying respondent denied
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that the offending vehicle was hired for transportation of
agricultural produce, thus the petitioners were not entitled for
any compensation from the replying respondent. Moreover,
the compensation sought was highly excessive.
5. Respondent No. 3, Shri Ved Parkash, in his
separate reply, denied that the deceased was travelling in the
offending vehicle on the date of the accident. He also denied
that the offending vehicle had met with an accident due to his
rash and negligent driving. As per the replying respondent,
the accident had occurred due to some mechanical failure in
the vehicle.
6. After hearing the learned counsel for the parties,
the learned Tribunal below had allowed the claim petition and
the petitioners/claimants were held entitled for compensation
of Rs.14,79,080/- and respondent No. 1, i.e., owner of the
offending vehicle, was held liable to pay the said
compensation amount to the petitioners. However,
respondent No. 2-Insurance Company, under the principle of
“pay and recover” was directed to pay the compensation
amount to the petitioners with a right to recover the same
from respondent No. 1. The petitioners were also held
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entitled to interest @ 6% per annum on the aforesaid amount
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from the date of filing of the petition till its realization.
7. Feeling aggrieved and dissatisfied, the appellant-
Insurance Company preferred the instant appeal against the
impugned award dated 28.08.2025, with a prayer to allow the
instant appeal by quashing and setting-aside the impugned
award.
8. The learned counsel for the appellant (insurance
company) contended that once the learned Tribunal has
come to the conclusion that the deceased was travelling in
the offending vehicle in question as a gratuitous passenger,
the learned Tribunal below could not have directed the
appellant-Insurance Company to pay the awarded amount to
the claimants with the right to recover the same from the
insured, as such the impugned award deserves to be
quashed and set-aside.
9. Conversely, learned counsel for respondents No.
1 to 4 (petitioners/claimants) as well as learned counsel for
respondent No. 5, i.e., Shri Atma Ram, owner of the
offending vehicle in question, supported the impugned
award. They contended that the impugned award is the
outcome of proper appreciation of both law and facts, thus
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the same does not need any interference. They prayed that
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the appeal, being devoid of merits, deserves to be dismissed.
10. I have heard the learned counsel for the appellant,
learned counsel for the respective respondents and
examined the entire records carefully.
11. It has specifically been held by the learned
Tribunal below that the deceased Abhimanyu @ Pappu died
in the accident in question on 31.05.2017 due to the rash
and negligent driving of its driver and in paras No. 37 and 39
of the impugned award, the learned Tribunal below has
specifically held that the deceased was travelling in the
vehicle in question as an unauthorized/gratuitous passenger
at the time of the accident and the claim petition was allowed
with the direction to the appellant-Insurance Company to pay
the award amount to the claimants and recover the same
from the owner of the offending vehicle in question under the
principle of “pay and recover”. So far as these findings of the
learned Tribunal qua the negligence of the driver of the
offending vehicle and also qua the fact that the deceased
was travelling in the offending vehicle as an
unauthorized/gratuitous passenger at the time of the
accident, the same have attained finality, having not been
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assailed by the owner/driver of the offending vehicle.
High Court of H.P.
12. Now the question which arises for consideration
before this Court is that once the Tribunal below has held
that the deceased was travelling in the vehicle in question as
a gratuitous passenger at the time of the accident, could it
direct the appellant-Insurance Company to pay the awarded
amount of compensation to the claimants with the right to
recover the same from the owner of the offending vehicle in
question under the principle of “pay and recover”.
13. At this stage, it would be relevant to refer to
Section 147 of the Motor Vehicles Act, 1988. For ready
reference, the relevant part of Section 147 of the Motor
Vehicles Act, 1988, as amended by the Motor Vehicles
(Amendment) Act, 1994, is extracted hereunder:
"147. Requirements of policies and limits of liability -
(1) In order to comply with the requirements of this
Chapter, a policy of insurance must be a policy
which -
(a) is issued by a person who is an authorized
insurer; or Page No.# 7/19
(b) insures the person or classes of persons
specified in the policy to the extent specified
in sub-section (2) -
(i) against any liability which may be incurred by
him in respect of the death of or bodily injury
to any person, including owner of the goods or
his authorized representative carried in the
vehicle or damage to any property of a third
party caused by or arising out of the use of the
vehicle in a public place;
(ii) against the death of or bodily injury to any
passenger of a public service vehicle caused by or
arising out of the use of the vehicle in a public place
: Provided that a policy shall not be required -
(i) to cover liability in respect of the death, arising out
of and in the course of his employment, of the
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employee of a person insured by the policy or in
respect of bodily injury sustained by such an
employee arising out of and in the course of his
employment other than a liability arising under the
Workmen's Compensation Act, 1923 (8 of 1923) in
respect of the death of, or bodily injury to, any such
employee -
(a) engaged in driving the vehicle, or
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(b) if it is a public service vehicle engaged as
conductor of the vehicle or in examining
tickets on the vehicle, or
(c) if it is a goods carriage, being carried in the
vehicle, or
(ii) to cover any contractual liability.
Explanation - For the removal of doubts, it is hereby
declared that the death of or bodily injury to any
person or damage to any property of a third party
shall be deemed to have been caused by or to have
arisen out of, the use of a vehicle in a public place
notwithstanding that the person who is dead or
injured or the property which is damaged was not in
a public place at the time of the accident, if the act or
omission which led to the accident occurred in a
public place"
14. The aforesaid provision of Section 147 of the Act,
as it stood prior to its amendment in 1994 and after its
amendment in 1994, came to be considered by a three-
Judge Bench of the Apex Court in New India Assurance Co.
Ltd. vs. Asha Rani and others, reported in (2003) 2 SCC
223. The relevant portion of the aforesaid judgment reads as
under:
"9. In Satpal case (New India Assurance Co. vs. Satpal
Singh, (2000) 1 SCC 237) the Court assumed that the
provisions of Section 95(1) of Motor Vehicles Act, 1939
are identical with Section 147(1) of the Motor Vehicles
Act, 1988, as it stood prior to its Page No.# 8/19
amendment. But a careful scrutiny of the provisions
would make it clear that prior to the amendment of 1994
it was not necessary for the insurer to insure against
the owner of the goods or his authorized representative
being carried in a goods vehicle. On an erroneous
impression this Court came to the conclusion that the
insurer would be liable to pay compensation in respect
of the death or bodily injury caused to either the owner
of the goods or his authorized representative when
being carried in a goods vehicle the accident occurred.
If the Motor Vehicles Amendment Act of 1994 is
examined, particularly Section 46, by which expression
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"injury to any person" in the original Act stood
substituted by the expression "injury to any person
including owner of the goods or his authorized
representative carried in the vehicle", the conclusion is
irresistible that prior to the aforesaid Amendment Act of
1994, even if the widest interpretation is given to the
expression "to any person" it will not cover either the
owner of the goods or his authorized representative
being carried in the vehicle. The objects and reasons of
clause 46 also state that it seeks to amend Section 147
to include owner of the goods or his authorized
representative carried in the vehicle for the purposes of
liability under the insurance policy. It is no doubt true
that sometimes the legislature amends the law by way
of amplification and clarification of an inherent position
which is there in the statute, but a plain meaning being
given to the words used in the statute, as it stood prior
to its amendment of 1994, and as it stands subsequent
to its amendment in 1994 and bearing in mind the
objects and reasons engrafted in the amended
provisions referred to earlier, it is difficult for us to
construe that the expression "including owner of the
goods or his authorized representative carried in the
vehicle" which was added to the pre-existed expression
"injury to any person" is either clarificatory or
amplification of the pre-existing statute. On the other
hand it clearly demonstrates that the legislature wanted
to bring within the sweep of Section 147 and making it
compulsory for the insurer to insure even in case of a
goods vehicle, the owner of the goods or his authorized
representative being carried in a goods vehicle when
that vehicle met with an accident and the owner of the
goods or his representative either dies or suffers bodily
injury. The judgment of this Court in Satpal case
therefore must be held to have not been correctly
decided and the impugned judgment of the Tribunal as
well as that of the High Court accordingly are set aside
and these appeals are allowed. It is held that the insurer
will not be liable for paying compensation to the owner
of the goods or his authorized representative on being
carried in a goods vehicle when that vehicle Page No.#
9/19 meets with an accident and the owner of goods or
his representative dies or suffers any bodily injury.
High Court of H.P.
23. The applicability of decision of this Court in Mallawwa
vs. Oriental Insurance Co. Ltd. ((1999) 1 SCC 403) in this
case must be considered keeping that aspect in view.
Section 2(35) of 1988 Act does not include passengers
in goods carriage whereas Section 2(25) of 1939 Act did
as even passengers could be carried in a goods
vehicle. The difference in the definitions of the "goods
vehicle" in 1939 Act and "goods carriage" in 1988 Act is
significant. By reason of the change in the definitions of
the terminology, the legislature intended that a goods
vehicle could not carry any passenger, as the words "in
addition to passengers" occurring in the definition of
goods vehicle in 1939 Act were omitted. Furthermore, it
categorically states that "goods carriage" would mean a
motor vehicle constructed or adapted for use "solely
for the carriage of goods". Carrying of passengers in a
"goods carriage", thus, is not contemplated under 1988
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Act.
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25. Section 147 of 1988 Act, inter alia, prescribes
compulsory coverage against the death of or bodily
injury to any passenger of "public service vehicle".
Proviso appended thereto categorically states that
compulsory coverage in respect of drivers and
conductors of public service vehicle and employees
carried in a goods vehicle would be limited to the
liability under the Workmen's Compensation Act. It
does not speak of any passenger in a "goods carriage".
26. In view of the changes in the relevant provisions in
1988 Act vis-a-vis 1939 Act, we are of the opinion that
the meaning of the words "any person" must also be
attributed having regard to the context in which they
have been used i.e. "a third party". Keeping in view the
provisions of 1988 Act, we are of the opinion that as the
provisions thereof do not enjoin any statutory liability
on the owner of a vehicle to get his vehicle insured for
any passenger travelling in a goods vehicle, the
insurers would not be liable therefore."
It is to be borne in mind that in Asha Rani (supra), the
provision of Section 147, as it stood prior to 1994
Amendment was considered.
15. The question whether the insurance policy in
respect of a goods vehicle covered even gratuitous
passengers came up for consideration before a three-Judge
Bench of Hon’ble Supreme Court in National Insurance
Company Limited vs. Baljit Kaur and others, reported in
(2004) 2 SCC 1. The Supreme Court upon consideration of
the affect of amendment made in Section 147 of the Motor
Vehicles Act, 1988 by the 1994 amendment, observed as
under :
"17. By reason of the 1994 Amendment what was added is
"including the owner of the goods or his authorized
representative carried in the vehicle". The liability of the
owner of the vehicle to insure it compulsorily, thus, by
reason of the aforementioned amendment included only
the owner of the goods or his authorized representative
carried in the vehicle besides the third parties. The
intention of the Parliament, therefore, could not have
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been that the words "any person" occurring in Section
147 would cover all persons who were travelling in a
goods carriage in any capacity whatsoever. If such was
the intention, there was no necessity of Parliament to
carry out an amendment inasmuch as expression "any
person" contained in sub- clause (i) of clause (b) of
sub-section (1) of Section 147 would have included the
owner of the goods or his authorized representative
besides the passengers who are gratuitous or
otherwise.
18. The observations made in this connection by the Court
in Asha Rani case to which one of us, Sinha, J., was a
party, however, bear repetition (SCC p. 235, para 26):
High Court of H.P.
"26. In view of the changes in the relevant provisions
in the 1988 Act vis-a-vis the 1939 Act, we are of
the opinion that the meaning of the words "any
person" must also be attributed having regard to
the context in which they have been used i.e. "a
third party". Keeping in view the provisions of the
1988 Act, we are of the opinion that as the
provisions thereof do not enjoin any statutory
liability on the owner of a vehicle to get his
vehicle insured for any passenger traveling in a
goods vehicle, the insurers would not be liable
therefor."
16. In Asha Rani’s case (supra) it has been noticed
that sub-clause (i) of clause (b) of sub-section (1) of Section
147 of the 1988 Act speaks of liability which may be incurred
by the owner of a vehicle in respect of death of or bodily
injury to any person or damage to any property of a third
party caused by or arising out of the use of the vehicle in a
public place. Furthermore, an owner of a passenger-carrying
vehicle must pay premium for covering the risks of the
passengers travelling in the vehicle. The premium in view of
the 1994 Amendment would only cover a third party as also
the owner of the goods or his authorized representative and
not any passenger carried in a goods vehicle whether for hire
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or reward or otherwise.
High Court of H.P.
17. It is, therefore, clear that in spite of the
amendment of 1994, the effect of the provision contained in
Section 147 with respect to persons other than the owner of
the goods or his authorized representative remains the
same. Although the owner of the goods or his authorized
representative would now be covered by the policy of
insurance in respect of a goods vehicle, it was not the
intention of the legislature to provide for the liability of the
insurer with respect to passengers, especially gratuitous
passengers, who were neither contemplated at the time the
contract of insurance was entered into, nor any premium was
paid to the extent of the benefit of insurance to such category
of people.
18. In the instant case, on appreciation of the
evidence on record, the Tribunal below had arrived at the
conclusion that the deceased was gratuitous passenger
travelling in the vehicle in question and the said findings
have attained finality in the absence of any challenge either
by the owner/driver of the vehicle or by the claimants. Thus,
in view of the aforesaid judicial pronouncements by the
Hon’ble Supreme Court, the insurance company has no
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liability under the law to pay the amount of compensation to
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the petitioners/claimants for the death of Abhimanyu @
Pappu (deceased) who was travelling as gratuitous
passenger.
19. The learned counsel for the owner of the offending
vehicle submitted that since the vehicle was duly insured with
the appellant-Oriental Insurance Company, the learned Tribunal
below has rightly directed the insurance company to pay the
compensation amount to the petitioners and then to recover it
from the owner of the vehicle. In this respect he has also
placed reliance upon National Insurance Company Limited
vs. Baljit Kaur & others, reported in (2004) 2 SCC 1,
National Insurance Company vs. Saju P. Paul & another,
reported in (2013) 2 SCC 41 and Manuara Khatun & others
vs. Rajesh Kumar Singh & others, reported in (2017) 4
SCC 796. However, the perusal of the aforesaid decisions of
the Hon’ble Supreme Court shows that the insurance
company is not liable to pay compensation for the death of or
injury to any gratuitous passenger and, therefore, the
insurance company is not liable to indemnify the award.
From a close perusal of the aforesaid decisions, it is
discernible that the direction of pay and recover made in
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Baljit Kaur, Saju P. Paul & Manuara Khatun’s cases
High Court of H.P.
(supra) by the Apex Court was in exercise of its extra-
ordinary jurisdiction vested in it under Article 142 of the
Constitution of India. However, in National Insurance
Company Ltd. vs. Parvathneni, (2018) 9SCC 657, the
Hon’ble Supreme Court has kept the question of law open on
the issue whether the Supreme Court in exercise of powers
under Article 142 of the Constitution can direct the insurer to
pay and recover, where the liability otherwise does not arise
in case of gratuitous passenger. In such situation, the
question that arises in the instant appeal as to whether it was
within the purview of power vested in the Claims Tribunal to
make the direction of pay and recover like the directions
made by the Supreme Court in the above referred cases.
Since such a power is not available to a Claims Tribunal
constituted under the Motor Vehicles Act, 1988, as amended,
it cannot go against the law settled to the effect that in case
of a gratuitous passenger carried in a goods vehicle, the
insurance company is not liable to satisfy an award and the
owner is the person who shall be liable to pay the
compensation and as such, any direction to the insurance
company to satisfy the award first and to recover the same
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from the owner of the vehicle is incongruous. Therefore, the
High Court of H.P.
decision of the Claims Tribunal to follow a direction issued by
the Supreme Court in exercise of its extraordinary jurisdiction
under Article 142 of the Constitution of India in the present
case is not accordance with law. In the light of the decisions
of the Supreme Court on the matter of gratuitous passenger
carried in a goods vehicle and there being an excess of
jurisdiction on the part of the Claims Tribunal, this Court is of
the considered opinion that the learned Tribunal below has
committed grave illegality by not fastening any liability
directly on the owner of the vehicle, but, by fastening the
liability for the payment of the compensation at the first
instance upon the appellant-Insurance Company and then to
recover it from the owner of the vehicle. In view of the
settled position of the law, the insurance company cannot be
held liable to indemnify the insured. Consequently, the
direction of the Claims Tribunal to the insurance company to
pay the compensation awarded first to the claimants and
thereafter, to recover the same from the owner later on is not
sustainable and therefore, is liable to be set aside. The
owner is liable to satisfy the award and to pay the
compensation to the claimants.
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20. In view of what has been discussed hereinabove,
High Court of H.P.
.
the appeal filed by the insurance company is allowed The
impugned award stands modified and the owner of the
offending vehicle, is liable to satisfy the award and to pay the
compensation to the petitioners-claimants. The remaining
terms of the impugned award, shall remain the same. The
appeal stands disposed of in the above terms, so also the
pending applications, if any.
( Sushil Kukreja )
Judge
th
5 November, 2026
(virender)
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