Insurer liable to pay and recover for death of gratuitous passenger in goods carrying vehicle.

On June 21, 2014, a 13-year-old boy, Tularam, sustained fatal injuries when a Pick-up vehicle (Registration No. UP-64-T-1293) hit a tree due to the driver's rash and negligent driving

The deceased was returning from a marriage party and was sitting on a DJ set loaded in the vehicle

The offending vehicle, owned by Respondent No. 3 and insured by the Appellant, was a goods-carrying vehicle with a registered seating capacity of 1+1; however, it was carrying 7–8 passengers at the time of the accident

The Additional Motor Accident Claims Tribunal, Ramanujganj, awarded a total compensation of Rs. 5,00,000 with 9% interest, fastening primary liability on the Insurance Company

The Appellant challenged the award, contending that the deceased was a gratuitous passenger and his presence in the goods vehicle constituted a breach of policy conditions

1. Whether the Claims Tribunal was justified in fastening the liability upon the Insurance Company despite the deceased traveling as a gratuitous passenger in a goods-carrying vehicle in violation of policy terms?

The Court applied the statutory provisions of the Motor Vehicles Act, 1988, regarding the liability of insurers toward passengers in goods vehicles.

It referenced National Insurance Company Ltd. v. Cholleti Bharatamma (2008), which clarifies that insurance companies are not liable for gratuitous passengers in goods-carrying vehicles

The Court applied the "Pay and Recover" principle as established by the Supreme Court in Manuara Khatun and Others v. Rajesh Kumar Singh and Others (2017), which allows the court to direct the insurer to satisfy the award for the benefit of the third party and subsequently recover the amount from the insured in cases of policy breach

The Court observed that the deceased was a student with no professional connection to the DJ equipment or the vehicle owner, thereby classifying him as a gratuitous passenger

Evidence established that the vehicle was carrying significantly more passengers than its permitted seating capacity of two (1+1), which constituted a clear violation of the insurance policy conditions

Although the driver claimed he warned the deceased not to board, the Court found the driver negligent for permitting the minor to remain in an unsafe position while continuing to drive

The Court concluded that since the vehicle was a goods carrier being used for passenger transport, the insurer was not primarily liable

However, following established precedents to protect the claimants, the Court determined that the insurer must satisfy the judgment initially

It held that while the owner and driver are ultimately liable for the compensation due to policy breaches, the Insurance Company is directed to "pay and recover"

The Appellant must first pay the compensation of Rs. 5,00,000 plus interest to the claimants and is then entitled to recover the same from the owner and driver of the vehicle

The quantum of compensation was upheld as just and reasonable