Man Killed After Falling From Tractor As Gratuitous Passenger: Gujarat HC Directs Insurer To Pay Family First, Recover From Owner

On 10 November 2013, Parsottambhai Solanki was travelling in a tractor after hiring it to transport watermelons and other goods. He fell from the tractor and later died from his injuries.

The claimants sought compensation, and the Motor Accident Claims Tribunal awarded Rs. 7,31,140 with interest at 8% per annum, but held the insurer not liable because the deceased was travelling as a gratuitous passenger.

The claimants appealed under Section 173 of the Motor Vehicles Act, 1988, challenging the failure to direct the insurer to pay the award and recover it from the vehicle owner.

Whether the insurer should be directed to satisfy the compensation award, with liberty to recover the amount from the vehicle owner, despite the deceased having travelled as a gratuitous passenger in the tractor.

Under the “pay and recover” principle, an insurer may be directed to pay compensation to the claimant first and recover the amount from the vehicle owner, even where the insurer is not liable to indemnify the owner because of a policy breach.

The Court relied on Shivaraj v. Rajendra & Anr., (2018) 10 SCC 432, which held that, in the circumstances considered there, the insurer was not liable to indemnify the tractor owner for a passenger’s injury but should nevertheless pay the claimant and recover from the owner.

The judgment also referred to National Insurance Co. Ltd. v. Swarna Singh, (2004) 3 SCC 297; Mangla Ram v. Oriental Insurance Co. Ltd., (2018) 5 SCC 656; Rani v. National Insurance Co. Ltd., 2018 (9) SCALE 310; and Manuara Khatun v. Rajesh Kumar Singh, (2017) 4 SCC 796, as supporting the principle.

The deceased’s status as a gratuitous passenger in a tractor with no seating capacity was undisputed.

The Tribunal had therefore exonerated the insurer, but had not considered Shivaraj, which distinguishes the insurer’s obligation to indemnify the owner from the direction that it pay the claimant first and recover from the owner. Applying that authority to the undisputed facts, the High Court modified the award only to impose the pay-and-recover direction.

The insurer was directed to deposit the compensation, including interest and costs, with the Tribunal within nine weeks.

The Tribunal was directed to disburse the amount to the claimants, subject to verification, procedure and applicable court fees; the remaining directions of the Tribunal’s award were left unchanged.