Insurer bears no liability for gratuitous passengers carried in a goods carriage.

On 21 July 2010, at about 11:00 p.m., a Tata 207 DI vehicle bearing registration No. AS-19C/1501, carrying 11 labourers, collided with truck No. AS-01P/9354. The husband of respondent No. 1 sustained fatal injuries and died at the spot.

The Motor Accident Claims Tribunal, Jorhat, in M.A.C. Case No. 47/2010, held the insurers liable and imposed 50% of the compensation liability, amounting to ₹6,87,600, upon the appellant insurer.

The appellant challenged the award, contending that the deceased was a gratuitous passenger in a goods vehicle and that the insurance policy did not cover such risk.

The policy described the vehicle as a Tata 207 DI with seating capacity of 2+1 and restricted its use to carriage of goods, permitting only specified employees covered under the Workmen’s Compensation Act to be carried as passengers.

Whether the appellant insurer was liable to indemnify the owner for the death of a gratuitous passenger travelling in a goods vehicle under the applicable insurance policy and Section 147 of the Motor Vehicles Act, 1988?

Whether the Tribunal’s direction imposing 50% of the compensation liability upon the appellant insurer was legally sustainable?

Whether the claimants could recover the remaining compensation from the owner of the offending vehicle after the insurer was absolved of liability?

The Court applied Section 147 of the Motor Vehicles Act, 1988, under which compulsory third-party insurance does not ordinarily require coverage for gratuitous passengers travelling in a goods carriage; coverage for employees carried in a goods vehicle is limited to the statutory liability under the Workmen’s Compensation Act.

Relying on New India Assurance Co. Ltd. v. Asha Rani, New India Assurance Co. Ltd. v. Vedwati, and National Insurance Co. Ltd. v. Prema Devi, the Court held that an insurer has no statutory liability for gratuitous passengers in a goods carriage.

The Court distinguished National Insurance Co. Ltd. v. Balakrishnan, which concerned occupants of a private car covered by a comprehensive/package policy, because the present vehicle was a goods vehicle and the policy expressly restricted carriage of passengers.

The Court also relied on Oriental Insurance Co. Ltd. v. Miss Monjuma Begum, holding that where the insurer has no contractual or statutory coverage, liability should not be imposed on the insurer through a “pay and recover” direction; the burden rests upon the owner.

The deceased was travelling in a Tata 207 DI goods vehicle carrying 11 labourers, although the policy recorded a seating capacity of only 2+1 and permitted carriage only of specified employees covered by the Workmen’s Compensation Act.

Consequently, he was not a passenger whose risk was compulsorily covered under Section 147, nor was there evidence that the policy extended coverage to such passengers.

The Tribunal’s reliance on the comprehensive/package-policy principle in Balakrishnan was misplaced because that decision concerned occupants of a private car, whereas the present case involved a goods carriage and an expressly restrictive policy.

Applying Vedwati, Prema Devi, and the reasoning adopted in the connected MAC Appeal No. 105/2015 arising from the same accident, the Court concluded that the appellant insurer could not be made liable for 50% of the award.

The claimants retained the right to recover the unpaid portion of the compensation from the owner of the offending vehicle in accordance with law and were permitted to approach the Tribunal for that purpose.

The appellant’s deposits were directed to be refunded in accordance with the applicable procedure, and the appeal was disposed of.