Under the 1939 Act, insurers are not liable for gratuitous passengers in goods vehicles.

On 31 July 1994, the original claimant was injured while attempting to board a goods truck after arranging a fare with its driver.

The Claims Tribunal awarded him ₹80,000 in compensation, holding the owner liable but exonerating the insurer because the claimant was a gratuitous passenger in a goods vehicle.

The claimant’s heirs appealed against the insurer’s exoneration.

Whether the insurer was liable under the applicable law to indemnify the owner for injuries sustained by a gratuitous passenger in a goods vehicle in an accident that occurred before the 1994 amendment came into force.

Whether the Tribunal erred in exonerating the insurer.

The Court applied Section 95 of the Motor Vehicles Act, 1939, as the accident occurred before the relevant 1994 amendment took effect on 14 November 1994.

Relying principally on New India Assurance Co. Ltd. v. Asha Rani and the authorities following it, including National Insurance Co. Ltd. v. V. Chinnamma and National Insurance Co. Ltd. v. Baljit Kaur, the Court held that compulsory insurance did not cover a gratuitous passenger travelling in a goods vehicle. The 1994 amendment’s inclusion of the owner of goods or an authorised representative did not extend coverage to gratuitous passengers.

The claimant was undisputedly a gratuitous passenger in a goods vehicle, and the accident occurred on 31 July 1994, before the amendment’s commencement.

Applying Section 95 of the 1939 Act and the cited Supreme Court authorities, the Court concluded that the insurer had no statutory liability to cover the claimant’s injuries. It found no error in the Tribunal’s decision to place liability on the vehicle owner and exonerate the insurer.

Finding no error in the Tribunal’s exoneration of the insurer, it dismissed the appeal and directed that the record and proceedings, if any, be returned to the Tribunal.