India Assurance Co. Ltd Vs. Vedwati & Ors.  Insc 170 (20 February 2007)
Dr. ARIJIT PASAYAT & S.H. KAPADIA
(Arising out of SLP(C) No. 8317 of 2002) WITH
CIVIL APPEAL NO. 861 OF 2007 (Arising out of SLP(C) No. 8802 of 2002) Dr.
ARIJIT PASAYAT, J.
Challenge in these appeals is to the judgment rendered by a Division Bench
of the Allahabad High Court dismissing the appeal filed by the appellant
(hereinafter referred to as the 'Insurer'). By the impugned judgment the High
Court held that the respondent Nos.1 to 6 (hereinafter referred to as the
'Claimants') were entitled to compensation and that the same was to be paid by
Background facts in a nutshell are as follows:
A Claim Petition was filed under Section 166 of the Motor Vehicles Act, 1988
(in short the 'Act') claiming compensation with the allegation that Paras Ram
Agnihotri (hereinafter referred to as the 'deceased') was returning from his
village Gokhia from Atarra in tractor No.MP 16A/2637 after delivering certain goods
there. The tractor overturned due to rash and negligent driving by the driver,
with the result the deceased has lost his life. He was aged about 38 years and
was working as priest and agricultural farmer from which he was earning about
Rs.7,000/- per month. Adjudicating the Claim Petition, the IVth Additional
District Judge Banda-cum-Motor
Accidents Claims Tribunal (in short the 'MACT') did not accept
the plea of the insurer that there was violation of terms of the policy
issued to Jagdish Prasad (hereinafter referred to as the 'insured'). The
tractor could only be used for agricultural work.
Since the same was used for carrying passenger, the insurer was not
responsible to indemnify to any award and to pay any amount to the claimants.
The Tribunal rejected this plea and held that in view of this Court's judgment
in New India Assurance Company v. Satpal Singh & Ors. (2000(1) SCC 237),
passenger travelling in a goods vehicle graciously was also entitled to claim
compensation which was to be paid by the insurer. The High Court affirmed the
view by the impugned order.
In support of the appeals, learned counsel for the appellant submitted that
the view in Satpal Singh's case (supra) has subsequently been overruled by this
Court and therefore the view of the High Court is unsustainable.
In response, learned counsel for the claimants submitted that in any event
the liability of the insurer vis-a-vis the third party will not be altered.
This Court had occasion to deal with cases of passengers traveling in goods
vehicles which met accident resulting in death of such person or bodily injury.
Such cases belong to three categories i.e. (1) those covered by the old Act,
(2) those covered by the Act; and (3) those covered by amendment of the Act in
1994 by the Motor Vehicles (Amendment) Act. 1994 (hereinafter referred to as
the 'Amendment Act').
The present appeals belong to the second category.
In Satpal Singh's case (supra) this Court proceeded on the footing that
provisions of Section 95(1) of the old Act are in pari materia with Section
147(1) of the Act as it stood prior to the amendment in 1994.
On a closer reading of the expressions "goods vehicle".
"public service vehicle", "state carrier" and
occurring in Sections 2(8), 2(25), 2(29) and 2(33) of the old Act with the
corresponding provisions i.e. Section 2(14), 2(35) 2(40) and 2(47) of the Act,
it is clear that there are conceptual differences. The provisions read as
means any motor vehicle constructed or adapted for use for the carriage of
goods, or any motor vehicle not so constructed or adapted when used for the
carriage of goods solely or in addition to passengers"
vehicle" means any motor vehicle used or adapted to be used for the carriage of
passengers for hire or reward and includes a motor cab contract carriage, and
means a motor vehicle carrying or adapted to carry more than six persons
excluding the driver which carries passengers for hire or reward at separate
fares paid by or for individual passengers either for the whole journey or for
stages of the journey:"
vehicle" means a public service vehicle or a goods vehicle:"
The Act (New Act):
any motor vehicle constructed or adapted for use solely for the carriage of
goods or any motor vehicle not to constructed or adapted when used for the
carriage of goods:"
vehicles" means any motor vehicles used or adapted to be used for the carriage
of passengers for hire or reward, and includes a maxicab a motorcab, contract
and stage carriage:"
" stage carriage"
means a motor vehicle constructed or adapted to carry more than six passengers
excluding the driver for (SIC) or reward at separate fares paid by or for
individual passengers either for the whole journey or for stages of the
vehicle" means a pubic services vehicle a goods carriage an educational
institution bus or a private service vehicle:"
(Underlined for emphasis) "Liability" as defined in Section 145(c)
of the Act reads as follows:
"Liability", wherever used in relation to the death of or bodily
injury to any person, includes liability in respect thereof under Section 140."
Third party risks in the background of vehicles which are subject-matter of
insurance are dealt with in Chapter VIII of the old Act and Chapter XI of the
Act. Proviso to Section 147 of the Act (sic) is to be (sic) with Section 96 of
the old Act.
Proviso to Section 147 of the Act reads as follows:
'Provided that a policy shall not be required (i) to cover liability in
respect of the death arising out of and in the course of his employment of the
employee of a person insured by the policy or in respect of bodily injure
sustained by such an employee arising out of and in the course of his
employment other than a liability arising under the Workmen's Compensation Act.
1993 (8 of 1923) in respect of the death of or bodily injury to, any such
employee- (a) engaged in driving the vehicle, or (b) if it is a public service
vehicle engaged as conductor of the vehicle or in examining tickets on the
vehicles, or (c) if it is a good carriage, being carried in the vehicle, or
(ii) to cover any contractual liability."
It is of significance that proviso appended to Section 95 of the old Act
contained Clause (ii) which does not find place in the Act. The same reads as
follows:- "except where the vehicle is a vehicle in which passengers are
carried for hire or reward or by reason of or in pursuance of a contract of
employment to cover liability in respect of the death of or bodily injury to
persons being carried in or upon or entering or mounting or alighting from the
vehicle at the time of the occurrence of the event out of which a claim
The difference in the language of "goods vehicle" as appear in the
old Act and "goods carriage" in the Act is of significance. A bare
reading of the provisions makes it clear that the legislative intent was to
prohibit goods vehicle from carrying any passenger. This is clear from the
expression "in addition to passengers" as contained in definition of
"good vehicle" in the old Act. The position becomes further clear
because the expression used is "good carriage" is solely for the
carriage of goods. Carrying of passengers in a goods carriage is not
contemplated in the Act. There is no provision similar to Clause (ii) of the
proviso appended to Section 95 of the old Act prescribing requirement of
insurance policy. Even Section 147 of the Act mandates compulsory coverage
against death of or bodily injury to any passenger of "public service
vehicle". The proviso makes it further clear that compulsory coverage in
respect of drivers and conductors of public service vehicle and employees
carried in goods vehicle would be limited to liability under the Workmen's
Compensation Act, 1923 (in short 'WC Act"). There is no reference to any
passenger in "goods carriage".
The inevitable conclusion, therefore, is that provisions of the Act do not
enjoin any statutory liability on the owner of a vehicle to get his vehicle
insured for any passenger travelling in a goods carriage and the insurer would
have no liability therefor.
Our view gets support from a recent decision of a three- Judge Bench of this
Court in New India Assurance Company Limited v. Asha Rani and Ors. (2002 (8)
Supreme 594] in which it has been held that Satpal Singh's case (supra) was not
correctly decided. That being the position, the Tribunal and the High Court
were not justified in holding that the insurer had the liability to satisfy the
This position was also highlighted in Oriental Insurance Co. Ltd. v.
Devireddy Konda Reddy and Others (2003(2) SCC 339). Subsequently also in
National Insurance Co. Ltd. v. Ajit Kumar and Others (2003(9) SCC 668), in
National Insurance Co. Ltd. v. Baljit Kaur and Others (2004 (2) SCC 1) and in
National Insurance Co. Ltd. v. Bommithi Subbhayamma and Others (2005 (12) SCC
243), the view in Asha Rani's case (supra) was reiterated.
Above being the position, the impugned order of the High Court is not
sustainable and we accordingly set aside the same.
Appeals are allowed with no order as to costs.