Insurers may be directed to satisfy awards for gratuitous passengers first, then recover from vehicle owners.

On 13.03.2017, Kartik, aged approximately 23 years, was travelling as a gratuitous passenger on the bonnet of an agricultural tractor bearing registration No. HR-60G-9769, driven by Ajay. The tractor met with an accident due to rash and negligent driving, and Kartik subsequently died from the injuries sustained.

His father and two siblings filed a claim petition under Sections 166 and 140 of the Motor Vehicles Act, 1988, against the driver, owner and insurer.

The Motor Accident Claims Tribunal, Panipat, assessed the deceased’s monthly income at ₹8,280, deducted 50% towards personal expenses, applied a multiplier of 18, and awarded total compensation of ₹12,81,936 with interest. The driver, owner and insurer were held jointly and severally liable, but the insurer was granted the right to recover the amount from the driver and owner.

The insurer filed FAO-7144-2019 seeking complete exoneration, while the claimants filed FAO-967-2021 seeking enhancement by way of filial consortium to the deceased’s father.

1. Whether the Insurance Company, despite the deceased being a gratuitous passenger travelling on an agricultural tractor and the risk not being covered under the policy, could be directed to satisfy the award in the first instance and thereafter recover the amount from the driver and owner?

2. Whether the deceased’s father was entitled to compensation for loss of filial consortium, and whether the deceased’s siblings were independently entitled to consortium?

3. Whether the amount of compensation awarded by the Tribunal required modification on account of the additional consortium amount?

Under Sections 166 and 140 of the Motor Vehicles Act, 1988, victims or legal representatives may claim compensation for death arising from a motor accident. A gratuitous passenger travelling in a goods vehicle or tractor, whose risk is not covered by the insurance policy, is not a person whom the insurer is statutorily or contractually bound to indemnify, as recognised in New India Assurance Co. Ltd. v. Asha Rani, National Insurance Co. Ltd. v. Baljit Kaur, New India Assurance Co. Ltd. v. Vedwati and National Insurance Co. Ltd. v. Prema Devi.

Nevertheless, in appropriate cases, courts may apply the “pay and recover” principle, directing the insurer to satisfy the award initially and recover the amount from the insured, as held in Baljit Kaur, National Insurance Co. Ltd. v. Challa Bharathamma, Manager, National Insurance Co. Ltd. v. Saju P. Paul, Manuara Khatun v. Rajesh Kumar Singh, Anu Bhanvara v. IFFCO Tokio General Insurance Co. Ltd., Sunita v. United India Insurance Co. Ltd., and Kaminiben v. The Oriental Insurance Co. Ltd.

Under Magma General Insurance Co. Ltd. v. Nanu Ram and United India Insurance Co. Ltd. v. Satinder Kaur, a parent is entitled to compensation for filial or parental consortium, whereas siblings are not ordinarily entitled to an independent consortium award in such circumstances.

Pranay Sethi fixed ₹40,000 as the conventional amount for consortium, subject to a 10% enhancement every three years; for a 2017 accident, the enhanced amount is ₹48,400.

The Court distinguished the question of the insurer’s ultimate contractual liability from the procedural question of who should initially satisfy the award.

Since Kartik was admittedly a gratuitous passenger travelling on the tractor, his risk was not covered by the policy, and the insurer was therefore entitled to recover the amount from the driver and owner.

However, the subsequent Supreme Court authorities, particularly Sunita and Kaminiben, established that non-coverage of the passenger did not prevent a court from directing the insurer to pay the compensation first and recover it in the same proceedings, especially where travelling was incidental to the use of the vehicle and the object was to secure effective compensation for innocent claimants.

The facts were held to fall within this principle, and the Tribunal’s pay-and-recover direction was upheld.

On enhancement, the Court held that the deceased’s father, as a parent, was entitled to filial consortium under Magma General Insurance and Satinder Kaur, while the siblings had no independent entitlement to consortium.

Applying the enhanced conventional amount applicable to a 2017 accident, the Court awarded ₹48,400 to the father.

FAO-967-2021 filed by the claimants was allowed in part. The deceased’s father was awarded an additional ₹48,400 towards loss of filial consortium, carrying interest at 7.5% per annum from the date of filing of the claim petition until realization.

The siblings were denied an independent consortium award, and the liability of the respondents remained joint and several.