Insurers are not liable for passengers on tractor engines; "pay and recover" applies for policy breaches.

On January 1, 2014, Milan @ Tikleshwar Maitri (deceased) died after the Mahindra Tractor (offending vehicle) he was associated with overturned near Sarangarh.

The claimants (widow, children, and parents) filed a claim under Section 166 of the Motor Vehicles Act, 1988, alleging the deceased was standing near the road when the tractor, driven negligently by Respondent No. 6 and owned by Respondent No. 7, crushed him.

The Tribunal awarded Rs. 4,94,000/- with 6% interest, holding the Appellant/Insurance Company primarily liable.

The Insurance Company appealed, contending that police records (FIR and Final Report) proved the deceased was actually a gratuitous passenger sitting on the tractor's engine, which constitutes a breach of policy conditions as tractors are not meant for carrying passengers.

Whether the Insurance Company can be held liable for compensation when the deceased was traveling as a passenger on the engine of a tractor.

Whether the ocular testimony of witnesses claiming the deceased was a pedestrian can override the documentary evidence contained in the Police FIR and Final Report.

The Court applied Section 147 of the Motor Vehicles Act, 1988 regarding the requirements of policies and limits of liability.

It relied on the Supreme Court precedent in *New India Assurance Co. Ltd. v. Asha Rani* (2003), which established that insurers are not liable for passengers in goods vehicles unless they are the owner of the goods or an employee.

It further cited *Ranjeet v. Abdul Kayam Neb* (2025) regarding the evidentiary weight of a police charge sheet in proving negligence and the circumstances of an accident.

and *Royal Sundaram Alliance Insurance Co. Ltd. v. Eshwar* (2008), which held that carrying a passenger on a tractor engine constitutes a fundamental breach of policy conditions.

The Court observed a stark contradiction between the claimants' oral evidence and the police documents.

While AW-1 and AW-2 claimed the deceased was a pedestrian, the FIR (Ex. P-2) and Merg Intimation (Ex. P-3)—lodged shortly after the accident—explicitly stated the deceased was sitting on the tractor's engine when it overturned.

The Court noted that the purported eyewitness (AW-2) was not listed as such in the Final Report, but only as a seizure witness.

Following the principle that police reports filed by the claimants themselves carry significant evidentiary value, the Court concluded the deceased was a gratuitous passenger.

Since a tractor is a single-seater vehicle intended for agricultural use and not passenger transport, the Court found a fundamental breach of the insurance policy conditions.

It held that the Insurance Company is exonerated from liability due to the breach of policy conditions.

However, invoking the "pay and recover" principle to protect the claimants under the benevolent spirit of the Motor Vehicles Act, the Court directed the Appellant/Insurance Company to pay the compensation amount to the claimants first and subsequently recover the same from the owner and driver of the vehicle.