Insurer Must Pay and Recover Compensation for a Gratuitous Passenger Travelling with Goods

On 14 June 2006, the claimant was travelling with millet in a loading tempo when it overturned, causing him injuries.

The Motor Accident Claims Tribunal awarded ₹75,440 with 6% interest, held the vehicle’s opponents jointly and severally liable, and exonerated the insurer on grounds that the driver lacked a transport-vehicle endorsement and the claimant was a gratuitous passenger.

The claimant appealed, challenging the insurer’s exoneration and seeking enhancement.

Whether an LMV licence, without a separate transport-vehicle endorsement, authorised the driver to drive the vehicle involved in the accident.

Whether the insurer could be directed to satisfy the award first and recover the amount from the insured where the claimant travelled in a goods vehicle as a gratuitous passenger accompanying his goods.

Whether the compensation awarded by the Tribunal should be enhanced in light of the claimant’s injuries and resulting limitations.

In Bajaj Allianz General Insurance Co. Ltd. v. Rambha Devi & Ors., 2024 INSC 840, the Supreme Court held that a person holding an LMV licence may drive a transport vehicle with gross vehicle weight below 7,500 kg without a separate transport-vehicle authorisation, subject to applicable exceptions.

The Court also relied on Kaminiben v. Oriental Insurance Company Limited, 2026 LiveLaw (SC) 174, which applied the “pay and recover” principle to a gratuitous passenger travelling with goods where carriage of the goods was the dominant purpose and the passenger’s travel was incidental.

That approach draws on Manuara Khatun and National Insurance Co. Ltd. v. Saju P. Paul, which permit the insurer to satisfy the award for the claimant’s benefit and then recover the amount from the insured in the same proceedings.

The Court held that the vehicle’s unladen weight was below 7,500 kg and, applying Bajaj Allianz, concluded that the absence of a separate transport-vehicle endorsement did not justify exonerating the insurer.

The FIR recorded that the claimant was travelling with millet in the vehicle; treating his travel as incidental to carriage of the goods, the Court applied Kaminiben and the cited “pay and recover” authorities.

As to quantum, it considered the claimant’s limp, difficulty sitting cross-legged and squatting, and surgery for a right calcaneum fracture, and found a global award of ₹1,25,000 appropriate.

The Court fixed the claimant’s total compensation at ₹1,25,000, with interest at 6% per annum from the date of the claim petition until realisation and proportionate costs.

It directed the insurer to deposit the enhanced amount with interest before the Tribunal within eight weeks, with liberty to recover it from opponents Nos. 1 and 2 by executing the judgment.

The Tribunal was directed to disburse the amount held by it, subject to verification, due procedure and deduction of any unpaid court fees.