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

The claim arose from a road accident on 21 July 2010 at approximately 11:00 p.m., involving a Tata 207 DI bearing registration No. AS-19-C/1501, carrying 11 labourers, and another truck bearing registration No. AS-01-P-9354.

The claimant’s husband, who was travelling in the Tata 207 DI, sustained fatal injuries and died at the spot.

The Motor Accident Claims Tribunal, Jorhat, in M.A.C. Case No. 49/2010, awarded compensation of ₹6,04,400 and imposed 50% of the liability on the appellant-insurer.

The Tribunal treated the policy as a private comprehensive/package policy and held that the insurer was liable despite the deceased allegedly being a gratuitous passenger.

In appeal, the insurer contended that the vehicle was a goods vehicle with a seating capacity of 2+1 and that the policy excluded carriage of passengers, except specified employees covered under the Workmen’s Compensation Act, 1923.

Whether the appellant-insurer was liable to indemnify the owner for the death of a gratuitous passenger travelling in a goods vehicle insured under the relevant policy.

Whether the Tribunal was justified in imposing 50% of the compensation liability on the appellant-insurer.

Whether the claimants could recover the insurer’s portion of the compensation from the owner of the offending vehicle after the insurer was absolved of liability.

Section 147 of the Motor Vehicles Act, 1988 does not statutorily require an insurer to cover gratuitous passengers travelling in a goods carriage; compulsory coverage extends to specified employees carried in a goods vehicle only to the extent of liability under the Workmen’s Compensation Act, 1923.

The Court relied on New India Assurance Co. Ltd. v. Vedwati, (2007) 9 SCC 486, and National Insurance Co. Ltd. v. Prema Devi, (2008) 2 SCC (Crl.) 627, which hold that an insurer is not liable for gratuitous passengers in a goods carriage.

The Court distinguished National Insurance Co. Ltd. v. Balakrishnan, which holds that a comprehensive/package policy covers occupants of a private car, because the present vehicle was a goods vehicle and the policy expressly restricted its use to carriage of goods and excluded carriage of passengers, subject to the specified employee exception.

The Court also relied on its earlier decision in Oriental Insurance Co. Ltd. v. Miss Monjuma Begum & Ors., holding that, where no policy coverage exists, the liability should be borne by the owner and a direction to “pay and recover” cannot ordinarily be imposed on the insurer.

The Tribunal’s reliance on Balakrishnan was held inapposite because that decision concerned occupants of a private car covered by a comprehensive/package policy, whereas the insured vehicle here was a Tata 207 DI goods vehicle with a 2+1 seating capacity.

The policy’s limitation-of-use clause permitted carriage of goods and excluded passengers, except employees falling within the Workmen’s Compensation Act and not exceeding the number permitted in the registration document.

The deceased was one of 11 labourers travelling in the vehicle, and there was no basis to treat him as a statutorily covered employee or as a passenger covered by the policy.

Applying Vedwati and Prema Devi, the Court concluded that neither the Motor Vehicles Act nor the policy imposed liability on the appellant-insurer for the deceased gratuitous passenger.

Following its decision in the connected appeal arising from the same accident, the Court set aside the 50% liability imposed on the appellant.

The claimants’ right to recover the remaining compensation awarded by the Tribunal from the owner of the offending vehicle was expressly preserved.

They were granted liberty to approach the Tribunal for recovery against the owner.

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