National Insurance Co Ltd vs Nadeshwar Yadav & Ors

* IN THE HIGH COURT OF DELHI AT NEW DELHI
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% Reserved on : 14 September 2026
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Pronounced on : 16 October 2026
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Uploaded on : 17 October 2026

# CNR No. DLHC011805322013
+ MAC.APP. 1166/2013
NATIONAL INSURANCE CO LTD .....Appellant
Through: Ms. Seema Gulati, Advocate.

versus

NADESHWAR YADAV & ORS .....Respondents
Through: Mr. Kamal Kant Jha, Mr. Nikhil
Pandey and Ms. Aakriti, Advocates
for Respondent no.1.
Mr. Sumit Kumar, Advocate for
Respondent no.2
CORAM:
HON'BLE MR. JUSTICE ANISH DAYAL
JUDGMENT

ANISH DAYAL, J.
1. This appeal has been filed by appellant/Insurance Company assailing
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award dated 27 August 2013 passed by MACT, Central District, Tis Hazari
Courts, Delhi (‘ MACT/Tribunal ’), in Suit No. 435A/10, whereby
compensation of Rs.6,13,760/- along with interest at 9% per annum was
awarded in favour of respondent no. 1/claimant.
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2. The accident in question occurred on 19 June 2007 at about 5:45 a.m.,
when claimant was travelling in vehicle No. DL-1LB-2297, being driven by
Signature Not Verified
MAC.APP. 1166/2013 Page 1 of 13

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:17.10.2026
11:43:40

respondent no.2 in a rash and negligent manner. Vehicle hit the central
divider and overturned, resulting in grievous injuries to claimant and other
occupants. Respondent’s version was that the accident was caused due to
negligent act of one Suresh Dass , who was a pedestrian and had jumped from
the railing on the other side of the road and in order to save the said Suresh
Dass the vehicle had hit the central divider.
3. Claimant was taken to hospital, where his MLC was prepared; he was
initially recorded as an unknown injured person and was declared unfit to
make a statement, but was subsequently identified. FIR was registered, and
chargesheet filed for offences under Sections 279, 337, 338 and 304-A IPC.
4. Respondent no.2 is driver of the offending vehicle, respondent no.3 is
subsequent/present owner, and respondent no.4 is the previous/erstwhile
owner of offending vehicle.

Impugned award
5. Insurance Company contended before the Tribunal that the claimant
was travelling as a gratuitous passenger in offending vehicle; consequently,
Insurance Company was not liable to compensate him.
6. MACT noted that as per the chargesheet and FIR various persons
boarded offending vehicle with their vegetables and were travelling towards
Shahdara Subzi Mandi. Statement of Rajesh ( Mark A ), recorded that
respondent no. 1 along with other persons had boarded truck with their goods.
Reliance was placed on Suit No. 44/09 titled as “ Pramila Devi & Ors. v.
Bijender Kumar & Ors. ”, arising out of same accident, wherein liability had
been fastened upon respondent no. 3/Insurance Company.
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MAC.APP. 1166/2013 Page 2 of 13

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:17.10.2026
11:43:40

7. The Court decided the issue in favour of claimant observing that the
claimant was travelling as owner of goods and, plea of Insurance Company
that claimant was a gratuitous passenger was rejected.
8. Accordingly, respondent nos. 1, 2 and 4 were held jointly and severally
liable to pay compensation and directed respondent no. 3/Insurance Company
to indemnify the claim.

Submissions on behalf of appellant/Insurance Company
9. Ms. Seema Gulati , counsel for Insurance Company, challenges the
award on the ground that the Tribunal failed to take into account that the
claimant was travelling as a gratuitous passenger and liability should not have
been fastened upon them.
10. She contended that respondent no.2 and respondent no.3 stated that
accident had occurred when one Suresh suddenly jumped over the railing
from the opposite side of the road. In an attempt to avoid hitting him, vehicle
struck the central divider, resulting in accident.
11. Further, she categorically denied that respondent no.1 was travelling
in vehicle as a passenger; there is no evidence on record to show that
respondent no.1 was travelling in the offending vehicle.
12. She further submitted that even if assuming the claimant was travelling
in the offending vehicle, since claimant failed to establish that he was owner
of vegetables loaded in the offending vehicle, he would at best be considered
as a gratuitous passenger and ought not to have been awarded compensation.
In support of her contention, she relies upon the decision of the Supreme
Court in National Insurance Co. Ltd. v Baljit Kaur 2004 (2) SCC 1.
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MAC.APP. 1166/2013 Page 3 of 13

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:17.10.2026
11:43:40

13. She further submitted that claimant, in his claim petition, described
himself as a salesman and had not disclosed his source of income.
14. Accordingly, counsel for insurance company seeks complete
exoneration.

Submissions on behalf of respondent no. 1/claimant
15. Mr. K.K. Jha, counsel for claimant contended that the claimant was
travelling in offending vehicle along with his own vegetables and that
material on record sufficiently established his presence in vehicle for that
purpose. It was submitted that statement of eyewitness, Rajesh, expressly
recorded that respondent no. 1 and other persons were in the offending
vehicle. Mr. K.K. Jha contended that a person travelling with his own goods
cannot be called a gratuitous passenger merely because vehicle is a goods
carriage.
16. On the issue that the claimant’s name was not there in the chargesheet,
counsel for respondent no. 1 stated that due to injuries sustained in the
accident, he was unconscious. He relies upon MLC, wherein it is stated that
claimant was unfit for statement. That is the reason why he was not stated as
a witness in FIR.
17. Counsel for claimant also drew attention of the Court to the
proceedings in Suit no. 44/2009, arising out of same accident/FIR in the case
of deceased Suresh Das . It was submitted that in connected proceedings, the
Court had considered status of person travelling with goods and had held that
person travelling as owner of goods was not a gratuitous passenger and the
driver of the tempo was held to be negligent. In the said proceeding, a witness
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MAC.APP. 1166/2013 Page 4 of 13

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:17.10.2026
11:43:40

stated that many persons were travelling in the offending vehicle with their
vegetables to the mandi as they were vendors of those vegetables. The order
was also challenged, however, no order to the contrary was passed.
18. It was further submitted that MLC explains absence of name of
respondent no. 1 from FIR, since injured person was initially brought to
hospital as an ‘ unknown person ’ and was recorded as ‘ unfit for statement ’.
Subsequent identification of injured person as respondent no. 1 therefore
provides an explanation for the omission being relied upon by appellant.
19. He relies upon the decision of the Supreme Court in Akula Nrayana
v. The Oriental Insurance Company Limited & Anr . 2025 INSC 1301, to
state that even otherwise, at the least, direction of pay and recovery can be
given. The Supreme Court in this case was dealing with a case where the
offending vehicle was a five-seater but was carrying nine persons. The
Supreme Court, while accepting that the policy did not cover the risk of a
gratuitous passenger and that there was a breach of the policy conditions, held
that the insurer could not be completely absolved of liability and thereby
granted recovery rights to the Insurance Company.
20. He further submitted that, nevertheless, where the owner/driver of the
offending vehicle breaches any of the conditions of the insurance policy, the
Insurance Company is not completely exonerated from its liability and may
be granted the recovery rights qua owner/driver. In support of his contention,
he relied upon the judgment of the Supreme Court in Rama Bai v. M/s Amit
Minerals Through Incharge Officer/Competent Officer and Anr ., 2025
INSC 1162, wherein the Court was dealing with a case where the driver did
Signature Not Verified
MAC.APP. 1166/2013 Page 5 of 13

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:17.10.2026
11:43:40

not possess a valid driving licence on the date of the accident and observed
as under:
“ 7 . In the above circumstances, going by the series of
decisions of this Court, it is only proper that the
insurer be directed to satisfy the award, which
however can be recovered by the insurer from the
insured-owner of the vehicle. The appeal stands
allowed .”
(emphasis added)

Submissions on behalf of respondent no. 2/owner
21. Counsel for respondent no. 2/owner further challenged that the
claimant was travelling as a passenger in the offending vehicle.
22. However, counsel for respondent no. 2/owner submitted that, even if
it is assumed that claimant was travelling in the vehicle, he was travelling
along with his goods.

Analysis
23. Section 147 of the MV Act mandates compulsory insurance coverage
in respect of third parties, including the owner of the goods or his authorised
representative carried in the vehicle. A gratuitous passenger is a person
travelling in a vehicle without statutory or contractual coverage under the
insurance policy, i.e. a person not being carried in accordance with the
provisions of the Motor Vehicles Act, 1988 (“ MV Act ”), permit conditions,
or the terms of the insurance policy.
24. This provision has been interpreted to mean that, apart from those
specifically covered under the insurance policy, the owner of the goods
Signature Not Verified
MAC.APP. 1166/2013 Page 6 of 13

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:17.10.2026
11:43:40

travelling in the vehicle with his goods is definitely entitled to statutory
insurance coverage.
25. The insurer, therefore, bears no statutory liability in respect of such
occupants unless there is specific coverage in the contract under the policy
or the Court issues a direction to “ pay and recover ”. The Court, therefore,
needs to examine the status of the occupant, i.e. whether the person falls
within the statutory protection under Section 147 of the MV Act, the nature
of the vehicle and the purpose of travel, as well as the applicability of the
principle of “ pay and recover ”.
26. This Court, in National Insurance Co. Ltd. v. Kusum Kumari & Ors.
2026:DHC:1644, was dealing with a case in which the deceased was
travelling in a truck along with the driver when the truck collided with a
stationary vehicle. The Insurance Company contended that the deceased was
a gratuitous passenger, as the truck was owned by M/s Pushpa Trading
Corporation whereas the deceased was an employee of M/s Kuber
Enterprises . The claimants, on the other hand, argued that the deceased was
accompanying and transporting goods of M/s Kuber Enterprises in the truck
and was therefore travelling as the owner of the goods or its authorised
representative. While dealing with the expression “ gratuitous passenger ”,
this Court observed as under:
“14. The term "gratuitous passenger" though not
defined by the MV Act, means an individual who travels
in a vehicle without paying a fare or providing any
economic benefit to the driver or owner, often riding by
invitation, or having been given a lift. However, Section
147 (1) (b) (ii) of the MV Act expressly exempts the case
of a "gratuitous passenger" in a goods vehicle in a
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MAC.APP. 1166/2013 Page 7 of 13

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:17.10.2026
11:43:40

public place.”
16. In New India Assurance Co. Ltd. v. Asha Rani (2003)
2 SCC 223, the Supreme Court clarified that a goods
vehicle is not meant for carrying passengers and
"gratuitous passengers" are not covered under the
statutory policy. However, the statutory scheme
underwent a material change with the 1994 amendment
to Section 147 of the MV Act, whereby the policy is
required to cover the owner of goods or his authorised
representative travelling in the vehicle. Relevant
paragraphs are extracted as under:
"25. Section 147 of the 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 the 1988 Act vis-à-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 travelling in a goods
vehicle, the insurers would not be liable therefor.
27. Furthermore, sub-clause (i) of clause (b) of
sub-section (1) of Section 147 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
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MAC.APP. 1166/2013 Page 8 of 13

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:17.10.2026
11:43:40

by or arising out of the use of the vehicle in a public
place, whereas sub-clause (ii) thereof deals with
liability which may be incurred by the owner of a
vehicle 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.” (emphasis added)
17. This position was further explained in National
Insurance Co. Ltd. v. Baljit Kaur (2004) 2 SCC 1,
wherein the Supreme Court recognized that, after the
amendment, the risk of the owner of goods or his
authorised representative carried in a goods vehicle
stands statutorily covered, though “gratuitous
passengers” remain excluded. Thus, the determinative
question is whether the occupant had a nexus with the
goods or the business purpose of the vehicle. Relevant
paragraphs are extracted as under:
“12. We find ourselves unable, furthermore, to
countenance the contention of the respondents that
the words “any person” as used in Section 147 of
the Motor Vehicles Act, would be rendered otiose
by an interpretation that removed gratuitous
passengers from the ambit of the same. It was
observed by this Court in the case concerning New
India Assurance Co. Ltd. v. Asha Rani [(2003) 2
SCC 223 : 2003 SCC (Cri) 493] that the true
purport of the words “any person” is to be found
in the liability of the insurer for third-party risk,
which was sought to be provided for by the
enactment. ………
17. By reason of the 1994 amendment what was
added is “including owner of the goods or his
authorised 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 authorised
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MAC.APP. 1166/2013 Page 9 of 13

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:17.10.2026
11:43:40

representative carried in the vehicle besides the
third parties. The intention of Parliament,
therefore, could not have 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 the 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 authorised
representative besides the passengers who are
gratuitous or otherwise. ……..
20. It is, therefore, manifest 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 was any
premium paid to the extent of the benefit of
insurance to such category of people.”
(emphasis added)

27. In the facts of this case, the injured had stated by way of evidence that
he, along with his colleagues, boarded the offending vehicle from Azadpur
vegetable Mandi to Shahdara vegetable Mandi “ for supply of vegetable
items ” when the accident took place. He had stated that he was a salesman
and was self-employed.
Signature Not Verified
MAC.APP. 1166/2013 Page 10 of 13

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:17.10.2026
11:43:40

28. In the cross-examination, he denied that he was not employed and that
he was a gratuitous person. No evidence was otherwise placed by the
Insurance Company. As regards the plea that the statement of the injured was
not recorded in the FIR, the MLC was adverted to by counsel for the claimant,
wherein the patient/claimant was stated to be unconscious and unfit to make
a statement.
29. Statement under Section 161 Cr.P.C. was recorded of Rajesh (co-
occupant), who stated that, for several days, they had been going with
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vegetables to Azadpur Mandi at about 5:00 or 6:00 a.m. On 19 June 2007,
at about 5:15 a.m., he, along with several other occupants, including
Nadeshwar Yadav (claimant herein), was travelling with their vegetables in
the tempo driven by Vijender . He further stated that the occupants, along with
their vegetables, were seated either in the rear portion of the vehicle or in the
driver's cabin, where Rajesh himself was seated.
30. Mr. Jha had also pointed out to the award passed by the Sessions Judge
relating to the same accident and pointed out that the Insurance Company had
itself taken the stand that the deceased was travelling in the offending tempo
as the owner of the vegetables being transported and, therefore, the insurer
could not be absolved of liability. This aspect was recorded in the said order
and was subsequently referred to in paragraph 10 of the impugned award
while adverting to Suit No. 44/2009 titled as “ Pramila Devi & Ors. v
Bijender Kumar & Ors. ”
31. In the testimonies therein, there is no evidence produced by the
Insurance Company to rebut the claimant's assertion that he was not
Signature Not Verified
MAC.APP. 1166/2013 Page 11 of 13

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:17.10.2026
11:43:40

travelling in connection with the transportation of his vegetables and was not
a gratuitous passenger.
32. The testimonies of Rajesh and the injured claimant are consistent to
the extent that they were transporting their vegetables for sale, along with
other vendors.

33. The MACT noted that, during cross-examination, the claimant
admitted that his name was not mentioned in the FIR or in the list of
witnesses. However, a charge sheet was filed against the driver of the
offending vehicle. The Tribunal further noted that, as per the medical record
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dated 21 May 2011, the claimant was suffering from memory loss. The
MACT rightly relied upon the charge sheet, the statement of the eyewitness
recorded during the investigation, the FIR, and the MLC to conclude that the
claimant had also sustained injuries in the accident in question.
34. The MLC notes that the patient was brought as ‘ unknown person ’. The
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discharge summary dated 27 June 2007 notes his date of admission as 19
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June 2007 with a history of ‘ road traffic accident ’. The MLC’s date is 19
June 2007, as well, corroborating the claimant’s case regarding the
occurrence of the accident and the injuries sustained by him. The plea of the
appellant in this regard in untenable.
35. Accordingly, the appeal is dismissed. Pending applications are
rendered infructuous.
36. Statutory deposit, if any, be refunded to the Insurance Company only
if the order of deposit has been complied with.
Signature Not Verified
MAC.APP. 1166/2013 Page 12 of 13

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:17.10.2026
11:43:40

37. Copy of this judgment be sent to the concerned MACT/bank for
information and necessary compliance.
38. Judgment be uploaded on the website of this Court.

(ANISH DAYAL)
JUDGE
OCTOBER 16, 2026/ ak/bp

Signature Not Verified
MAC.APP. 1166/2013 Page 13 of 13

Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:17.10.2026
11:43:40