Man Killed In Goods Vehicle Crash Was A Gratuitous Passenger; Himachal Pradesh HC Makes Owner Pay ₹14.79 Lakh, Not Insurer

The claimants, the deceased’s wife and children, sought compensation under Section 166 of the Motor Vehicles Act, 1988, for his death in an accident involving an insured goods vehicle.

The Tribunal found that the driver’s negligence caused the accident and that the deceased was travelling as an unauthorised/gratuitous passenger. It awarded Rs. 14,79,080 with 6% annual interest, directing the insurer to pay and recover the amount from the vehicle owner. The insurer appealed, challenging that direction.

Section 147(1) of the Motor Vehicles Act, 1988, as amended in 1994, requires coverage for third parties and for the owner of goods or the owner’s authorised representative carried in a goods vehicle; it does not make an insurer liable for a gratuitous passenger in such a vehicle.

Relying on New India Assurance Co. Ltd. v. Asha Rani, (2003) 2 SCC 223, and National Insurance Co. Ltd. v. Baljit Kaur, (2004) 2 SCC 1, the Court held that such passengers are outside compulsory insurance coverage.

It considered National Insurance Co. Ltd. v. Saju P. Paul, (2013) 2 SCC 41, and Manuara Khatun v. Rajesh Kumar Singh, (2017) 4 SCC 796, as involving “pay and recover” directions issued by the Supreme Court in exercise of its Article 142 powers. National Insurance Co. Ltd. v. Parvathneni, (2018) 9 SCC 657, had left open the question of the Supreme Court’s power to make such a direction where insurer liability did not otherwise arise.

The Tribunal, unlike the Supreme Court exercising Article 142 powers, could not direct the insurer to pay first where the statute imposed no liability on it.

The Tribunal’s finding that the deceased was a gratuitous passenger had not been challenged and had attained finality.

Under Section 147 and the cited Supreme Court authorities, the insurer therefore had no statutory liability to indemnify the owner for the deceased’s death. The Court distinguished Supreme Court “pay and recover” directions made under Article 142, holding that the Tribunal could not rely on those exceptional directions to impose liability on the insurer where none arose under the policy or statute.

The vehicle owner was held liable to satisfy the award and pay the claimants; the remaining terms of the award, including the compensation and interest, were left unchanged.