# National Insurance Co. Ltd v. Sri Bhoora Kha & Ors

- **Citation:** (2023) 10 ILRA 712
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-09-20
- **Case number:** FAFO No. 841 of 2000
- **Bench:** J.J. Munir
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/national-insurance-co-ltd-v-sri-bhoora-kha-ors-49514
- **Pages:** 37

## Headnote

Civi Law - Motor Vehicles Act, 1988 - Sections
147, 148, 149 & 166 - Insurance Liability -
Compensation for Death and Injury - Goods
Vehicle Passengers - Pay and Recover
Principle A batch of ten appeals arising from a
common judgment of the Motor Accident Claims
Tribunal, Aligarh, dated 26.02.2000, partly allowing
five claim petitions for a motor accident on
18.06.1993 involving a Swaraj Mazda Truck (UP-81B5068) carrying a bridal party, which turned turtle due
to rash and negligent driving, causing four deaths and
one grievous injury. Insurance Company
appealed against liability to indemnify, while
claimants
sought
enhancement
of
compensation. Tribunal's reliance on New
India Assurance Co. Vs Satpal Singh (2000) 1
SCC
237,
holding
insurer
liable
for
passengers in goods vehicles, was erroneous
post-Asha Rani (2003) 2 SCC 223, which
overruled Satpal Singh, clarifying no insurer
liability for passengers in goods vehicles
prior to 1994 Amendment unless they were
owners/agents
of
goods.
As
accident
predated 1994 Amendment and victims were
gratuitous passengers, insurer not statutorily
liable. However, applying Baljit Kaur (2004) 2
SCC 1, insurer directed to pay compensation
and recover from owner due to prevailing
law at Tribunal's decision (26.02.2000).
Claimants' appeals for enhancement allowed,
revising compensation for injury (MACP No.
31/1994) from Rs. 40,000 to Rs. 70,000 and
for fatalities (MACP Nos. 25, 26, 33,
34/1994) based on recalculated income,
future prospects (U.P. Motor Vehicles Rules,
1998, Rule 220-A(3)), multipliers (Sarla
Verma), and conventional heads (Pranay
Sethi). Interest reduced from 12% to 7%
p.a. (Paras 25-100).

Appeals Partly Allowed.

Case Law Cited:

## Text

_Characters 0–39,750 of 124,624. This is a partial read: ask again with offset=39750 for what follows._

712 INDIAN LAW REPORTS ALLAHABAD SERIES
the status quo, as regard the present
possession be maintained.

30. In the aforesaid circumstances, this
petition is disposed of in following manner.

(i) The relief (A) is declined.

(ii) The respondents are directed not to
interfere in the possession of the petitioner over
the disputed property, till the matter is decided
by the court concerned in the light of the
observations and directions contained in the
impugned order dated 25.07.2013.

(iii) The court concerned shall endevour to
expedite the hearing.

31. Accordingly, this writ petition is
disposed of.
----------
(2023) 10 ILRA 712
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 20.09.2023

BEFORE

THE HON'BLE J.J. MUNIR, J.

FAFO No. 841 of 2000
alongwith FAFO Nos. 842 of 2000, 843 of 2000, 844
of 2000, 845 of 2000, 1641 of 2000, 1642 of 2000,
1640 of 2000, 1264 of 2000 and 1638 of 2000

National Insurance Co. Ltd. ...Appellant
Versus
Sri Bhoora Kha & Ors. ...Respondents

Counsel for the Appellant:
Sri Amit Manohar

Counsel for the Respondents:
Sri Amit Kumar Singh, Sri Ram Singh, Sri Vennet
Singh

Civi Law - Motor Vehicles Act, 1988 - Sections
147, 148, 149 & 166 - Insurance Liability -
Compensation for Death and Injury - Goods
Vehicle Passengers - Pay and Recover
Principle A batch of ten appeals arising from a
common judgment of the Motor Accident Claims
Tribunal, Aligarh, dated 26.02.2000, partly allowing
five claim petitions for a motor accident on
18.06.1993 involving a Swaraj Mazda Truck (UP-81B5068) carrying a bridal party, which turned turtle due
to rash and negligent driving, causing four deaths and
one grievous injury. Insurance Company
appealed against liability to indemnify, while
claimants
sought
enhancement
of
compensation. Tribunal's reliance on New
India Assurance Co. Vs Satpal Singh (2000) 1
SCC
237,
holding
insurer
liable
for
passengers in goods vehicles, was erroneous
post-Asha Rani (2003) 2 SCC 223, which
overruled Satpal Singh, clarifying no insurer
liability for passengers in goods vehicles
prior to 1994 Amendment unless they were
owners/agents
of
goods.
As
accident
predated 1994 Amendment and victims were
gratuitous passengers, insurer not statutorily
liable. However, applying Baljit Kaur (2004) 2
SCC 1, insurer directed to pay compensation
and recover from owner due to prevailing
law at Tribunal's decision (26.02.2000).
Claimants' appeals for enhancement allowed,
revising compensation for injury (MACP No.
31/1994) from Rs. 40,000 to Rs. 70,000 and
for fatalities (MACP Nos. 25, 26, 33,
34/1994) based on recalculated income,
future prospects (U.P. Motor Vehicles Rules,
1998, Rule 220-A(3)), multipliers (Sarla
Verma), and conventional heads (Pranay
Sethi). Interest reduced from 12% to 7%
p.a. (Paras 25-100).

Appeals Partly Allowed.

Case Law Cited:

1. New India Assurance Co. Vs Satpal Singh,
(2000) 1 SCC 237 (Para 21)

2. New India Assurance Co. Ltd. Vs Asha Rani,
(2003) 2 SCC 223 (Para 26)

3. National Insurance Co. Ltd. Vs Baljit Kaur,
(2004) 2 SCC 1 (Para 29)

4. Sarla Verma Vs Delhi Transport Corp., (2009)
6 SCC 121 (Paras 50, 67, 79)

5. National Insurance Co. Ltd. Vs Pranay Sethi,
(2017)
16
SCC
680
(Paras
53,
58)
10 All. National Insurance Co. Ltd. Vs. Sri Bhoora Kha & Ors..
713
(Delivered by Hon'ble J.J.Munir, J.)

1. This is a batch of ten appeals
arising out of a common judgment and
award of Mr. Naresh Chandra Dubey, the
then Motor Accident Claims Tribunal/ 6th
Additional District Judge, Aligarh, dated
26.02.2000, partly allowing five claim
petitions. One set of appeals has been
preferred by the Insurance Company, who
have been held liable to indemnify, whereas
the other set is by the claimants, who think
that
they
have
been
inadequately
compensated. There are, thus, five appeals
by the Insurance Company and five by the
claimants.

2. FAFO Nos.841 of 2000, 842 of
2000, 843 of 2000, 844 of 2000 and 845 of
2000 have been preferred by the Insurance
Company, whereas FAFO Nos.1264 of
2000, 1638 of 2000, 1640 of 2000, 1642 of
2000 and 1641 of 2000 have all been
preferred
by
the
claimants,
seeking
enhancement of the compensation awarded.
Since all the ten appeals relate to the same
motor accident, giving rise to common
questions of fact and law, except some
difference in entitlement, based on facts in
case of the claimants' appeals, this Court
proposes to decide all the appeals by this
common judgment.

3. For the sake of convenience, FAFO
No.841 of 2000 shall be treated as the
leading case and facts, that are common,
noticed from the records of the said case. In
case of the claimants' appeals, dealt with in
this
judgment
after
the
Insurance
Company's appeals, facts individual to each
case for enhancement, would be separately
noticed.

The Accident

4. On the 18th of June, 1993, Nusarat
Khan, Smt. Raisan, Abdul Latif, Bhura
Khan son of the late Aziz Ullah and Bhura
Khan son of the late Bashir Khan, all
residents of Village Tikta, Police Station
Barla, District Aligarh, were members of a
bridal party (Barat), proceeding to attend
the wedding of a certain Abdul Sattar son
of Abdul Zabbar. They had with them some
necessaries relating to the wedding and
were in the company of other members of
the bridal party, proceeding to destination
on board a Swaraj Mazda Truck, bearing
Registration No. UP-81B-5068. The driver
of the Swaraj Mazda Truck, which has
quaintly been described by the learned
Judge in the Tribunal as a 'Matador Swaraj
Mazda', is said to have been driven at an
uncontrolled
speed.
The
driver
was
cautioned by those on board not to do so,
but he did not heed. As the vehicle reached
Village Shafipur, within the local limits of
Police
Station
Palimukimpur,
District
Aligarh, the driver lost control, leading the
vehicle to turn turtle. In consequence of
this accident, some passengers on board
died on the spot whereas others were
grievously injured.

The Claim Petitions

5. Five claim petitions were instituted
before the Motor Accident Claims Tribunal,
Aligarh, to wit, the District Judge, Aligarh.
These are: MACP No.25 of 1994, Asit
Ullah Khan vs. Prakash Chandra and
another; MACP No.26 of 1994, Ash
Mohammad @ Asi Mohammad vs. Prakash
Chandra and another; MACP No.31 of
1994, Bhura Khan vs. Prakash Chandra and
another; MACP No.33 of 1994, Farakh
Sultana vs. Prakash Chandra and another;
and, MACP No.34 of 1994, Smt. Nazeeran
vs. Prakash Chandra and another. All the
claim petitions were assigned to the 6th
714 INDIAN LAW REPORTS ALLAHABAD SERIES
Additional District Judge, Aligarh, sitting
as the Tribunal, who vide order dated
26.07.1995 directed all the petitions to be
consolidated and heard together, with
MACP No. 25 of 1994 as the leading case.
Evidence was recorded in the leading case
alone.

6. MACP No.25 of 1994 is a case of
fatal accident, where the victim Nusarat
Khan son of Asit Ullah Khan died.
Compensation was claimed by his heirs and
LRs, numbering four. Since this is the
leading case and the Tribunal has noticed
facts and acted on pleadings in this claim
petition, besides recording the evidence
here, a greater detail of facts and
proceedings
relating
to
it,
will
be
mentioned shortly. The deceased here
was a young man of 18 years and a
student, who was also engaged in dairy
business. The claimants asserted an
income of Rs.2000/- per month for him
and claimed a total compensation of
Rs.8,50,000/-.

7. MACP No.26 of 1994 is again a
case of fatal accident. The deceased is
one Smt. Raisan. Her heirs and LRs,
who
are
her
husband,
sons
and
daughters, numbering a total of seven,
asserted that she was a housewife and
also did work at home, undertaking
tailoring and sewing jobs. She would
earn Rs.1500/- a month. The heirs and
LRs,
therefore,
claimed
a
total
compensation of Rs.3,50,000/-.

8. MACP No.31 of 1994 is an
injury case, where the victim Bhura
Khan son of Aziz Ullah was a boy of 16
years, when he met with the accident. He
sustained grievous injuries, which entailed
immediate medical expenses to the tune of
Rs.25,000/-. His treatment was still going
on, when the claim petition was instituted.
The
claimant
demanded
a
total
compensation in the sum of Rs.6,45,000/-.

9. MACP No.33 of 1994 is a case of
fatality, where the deceased was one Abdul
Latif, a man aged about 42 years. The
deceased is claimed to have had a monthly
income of Rs.3000/- from farming. The
claim petition has been preferred by his
widow, Smt. Farakh Sultana, Chhotey, his
brother and a nephew. The claimants
sought a total compensation in the sum of
Rs.5,50,000/-.

10. MACP No.34 of 1994 is also a
case of fatility. The deceased here is Bhura
Khan son of the late Bashir Khan. The
claim petition in this case was instituted by
his mother, Smt. Nazeeran, besides four of
his brothers and two sisters, said to be his
dependents. Among them, two brothers and
two sisters were minors and have moved
through the deceased's mother, Nazeeran as
the minor claimants' next friend. The
deceased was aged 18 years and is said to
have had an income of Rs.3000/- per
month, earned by from offering private
tuitions to Class-X students. A total
compensation in the sum of Rs.8,25,000/-
was sought.

Proceedings and Judgment of the
Tribunal

11. The Tribunal has proceeded to
notice facts from the leading case. The
pleadings of parties have been noticed in
the leading case with remarks to the effect
that in the connected matters, opposite
parties, who are the same, have raised
similar pleas. In the leading case, opposite
party No.1 is Prakash Chandra, the owner
of the offending vehicle; opposite party
No.2 is Dinesh, the driver of the offending
10 All. National Insurance Co. Ltd. Vs. Sri Bhoora Kha & Ors..
715
vehicle and opposite party No.3 is the
National
Insurance
Company
Ltd.,
Bulandshahr
through
the
Divisional
Manager at Aligarh, who are the insurers of
the offending truck. In the other four claim
petitions, the opposite parties are arrayed in
identical profile.

12. In the leading case, two written
statements have been filed, one on behalf
of the driver, Dinesh and the other on
behalf of the National Insurance Company
Ltd., who shall hereinafter be called 'the
Insurers'.
Dinesh
will
hereinafter
be
referred to as 'the driver' and Prakash
Chandra as 'the owner'.

13. In his written statement, the driver
has generally denied the claimants' case,
but averred that it is admitted that on
18.06.1993, the offending vehicle was hired
to carry some luggage, ornaments, boxes,
dala etc. to present to the bridegroom at
Atrauli, and, also, ferry articles of dowry
from the bridegroom's house to the bride's
house at Village Tikta. It is also averred
that about ten persons were asked to sit and
look after the said movables. It is next
admitted in the written statement that the
vehicle's brakes failed, on account of
which, it turned turtle near Village
Shafipur, resulting in the death of four,
including the claimant's son and injuries to
six others, who were on board the vehicle.
There is also an averment in the written
statement that the ill-fated vehicle was duly
insured with the Insurers on the date of the
accident vide Policy No. 0562110, valid
from 23.04.1993 to 22.04.1994. The plea is
that compensation awarded, if any, would
have to be borne by the Insurers.

14. The other written statement is the
one on behalf of the Insurers. There is a
general denial of all that is alleged in the
claim petition with detailed defences being
raised by the Insurers in their additional
pleas. It is averred that no cause of action
has arisen to the claimants to institute the
petition. The claim petition is said to be not
maintainable as it is in contravention of the
provisions of the Motor Vehicles Act, as
well as the law of torts. There is a specific
plea raised to the effect that the Swaraj
Mazda Truck/ vehicle was carrying the
bridal party with consent of the owner of
the goods. The Insurers would not be liable.
It is more particularly averred that the
bridal party, travelling in the truck, are not
covered under the contract of insurance
and, therefore, the Insurers are not liable to
indemnify the owner of the vehicle. It is
next pleaded on behalf of the Insurers that
there was a specific condition in the policy
stipulating
that
the
insured
is
not
indemnified if the vehicle is used or driven
otherwise than for carrying goods. The
policy does not cover use of the vehicle for
carriage of
passengers. The
Insurers
pleaded that they are not liable with regard
to third-party risk in view of the provisions
contained in sub-Section (2) of Section 95
(new Section 148) of the Motor Vehicles
Act. It is also averred that it was the
insured's fault that he allowed the driver to
carry a bridal party in a truck. The Insurers
claimed protection of the provisions of
Sections 147, 148 and 149 of the Motor
Vehicles Act, 1988 (for short, 'the Act of
1988') and conditions of the policy.

15. On the pleadings of parties, the
following issues were framed by the
Tribunal in the leading petition (translated
into English from Hindi):

"(1) Whether the accident occurred
due to the mini-truck bearing Registration
No. UP-81B-5068 being driven at a high
speed and negligently?
716 INDIAN LAW REPORTS ALLAHABAD SERIES

(2)
Whether
the
deceased
was
unlawfully travelling in the truck? If yes,
its effect?

(3) Whether the aforesaid vehicle had
contracted separately with the Insurance
Company to ferry passengers?

(4) Whether the aforesaid vehicle was
being driven without a valid permit and
without a valid licence held by the driver?

(5) Whether the claimants are entitled
to receive any compensation? If yes, how
much and from which party?"

16. In the leading petition, the
testimony of all witnesses for the claimants,
in the various claim petitions, was
recorded. The claimants examined Ummed
Hasan, Nazreen, Ash Mohammad, Smt.
Farakh Sultana, Asit Ullah and Bhura
Khan, besides Abdul Sattar as witnesses
and
produced
in
their
documentary
evidence certified copies of the First
Information Report, charge-sheet, site plan,
a copy of the postmortem report relating to
the deceased Bhura. Apart from these
documents, a certificate from the Gaon
Sabha, Tikta was produced, but it was not
proved by any one. On behalf of the
claimants, an affidavit of Asit Ullah was
filed, annexing therewith a copy of the
offending vehicle's registration certificate,
fitness certificate, tax certificate, permit,
the contract relating to the vehicle's lease,
the insurance cover note, all of which were
photostat copies. The claimants further
filed through another list, a photostat copy
the driver's driving licence. Since evidence
was recorded in the leading petition alone,
this Court assumes that this was all that
was for evidence produced by the claimants
in all the petitions before the Tribunal.

17. The Tribunal took up Issues Nos.1
and 2 together. A reading of the findings on
Issues Nos.1 and 2 reveals that the cases of
parties involved in all the claim petitions
were considered in terms of the said issues
on the evidence that was before the Court.
The Tribunal has remarked that in the
leading petition, the driver in his written
statement has admitted the fact that the
truck was booked for carrying goods for
hire and ten persons had boarded it. The
truck turned turtle near Village Shafipur on
account of brake failure. In consequence,
the son of the claimant in the leading
petition died, besides three other persons
and six others received injuries. The
Tribunal has gone on to notice the
admission of fatality or injury in the
connected claim petitions by the driver.
From the admission of the said fact in the
written statements filed in the leading
petitions and the connected matters, the
Tribunal has concluded on Issue No.2 that
the deceased and the injured were all
passengers
on
board
the
mini-truck
involved in the accident, and, further, that
the persons concerned died or received
injuries on account of the mini-truck
turning turtle.

18. The Tribunal has remarked that
since the driver has admitted the factum of
accident and the passengers on board, the
victims of the motor accident, suffering
fatal consequences or injuries in the
accident, involving the mini-truck, these
are established. The issue, if the accident
happened on account of the driver's
negligence, has been examined by the
Tribunal with an opening observation that
the driver has not examined himself as a
witness. To the contrary, PW-1 Ummed
Hasan has said that he had gone to watch
the Barat on the wedding of his uncle
(Mama), when on way, he saw the minitruck, bearing Registration No. UP-81B5068, driven at a high speed, swerving
from one side to the other. The witness has
10 All. National Insurance Co. Ltd. Vs. Sri Bhoora Kha & Ors..
717
said that moving in this uncontrolled
fashion, the truck turned turtle. PW-6,
Bhura Khan has said that he was travelling
on board truck with goods that the bridal
party had to carry. He has testified that the
accident happened because of the driver's
negligence and the high speed that he was
driving the vehicle.

19. It is also remarked by the
Tribunal that the witnesses' contention is
corroborated by the First Information
Report and the site-plan. There is no
evidence offered by the opposite parties
to rebut the claimants' testimony. The
Tribunal has held that in the absence of
any evidence to rebut, what the claimants
have said on affidavit, their testimony has
to be accepted as reliable. The Tribunal,
therefore, concluded that the accident
happened on account
of rash and
negligent driving by the driver of minitruck bearing Registration No. UP-81B5068.
Issue
No.1
was,
therefore,
answered in the affirmative.

20. The Tribunal has very briefly
dealt with Issue No.2 and remarked that the
driver has admitted the fact that he was
carrying goods which he had accepted for hire.
The ten persons, that he was carrying on board
truck, were there to take care of goods that he was
ferrying. It is observed by the Tribunal that in the
written statement there is no averment to the effect
that the driver had declined the ten persons to
board the truck, which leads to the conclusion that
the passengers were travelling with the driver's
permission. The Tribunal has then concluded from
the said fact that the passengers cannot be
regarded as unauthorized travellers on board truck.
Issue No.2 has, accordingly, been answered in the
negative.

21. So far as Issue No.3 is concerned, the
Tribunal has answered it with remarks to the effect
that it had already been held while deciding Issue
No.2 that the deceased and the injured were
travelling on board truck with the driver's consent.
The learned Judge in the Tribunal has then
referred to a decision of the Madhya Pradesh High
Court mentioning its citation alone as 1998 ACJ
880. It is observed that in the said decision, it has
been laid down that where in a goods vehicle,
twelve passengers were travelling with the driver's
permission, the Insurance Company would not be
liable to compensate. It is then said that the
aforesaid law has been laid down in the context of
the Motor Vehicles Act, 1939. The learned Judge
has gone on to notice the decision of the Supreme
Court in New India Assurance Company v.
Satpal Singh and others, (2000) 1 SCC 237,
where it is noted that their Lordships have held
that under Section 147 of the Act of 1988, the
obligation to compensate a third party is on the
Insurance Company, irrespective of the fact
whether the passenger travelling is doing so
validly or not. The Tribunal has observed that the
fact that the vehicle is of what kind or type has
little bearing on the liability of the party obliged to
compensate. The Tribunal has, therefore, held that
irrespective of the issue whether the vehicle was a
goods vehicles and the passengers gratuitous or
otherwise, the liability would fasten upon the
insurers to compensate. Issue No.3 was decided
accordingly.

22. The Tribunal has proceeded to
decide what compensation would be
payable to the claimants in each of the
claim petitions, commencing with the
leading petition. In the leading petition, a
total compensation of Rs.1,12,000/- was
awarded, whereas in MACP No.26 of 1994,
compensation awarded was Rs.1,17,000/-.
In MACP No.33 of 1994, Rs.1,21,000/-
were awarded whereas in MACP No.34 of
1994, the total compensation awarded is
Rs.1,06,000/-. So far as MACP No.31 of
1994 is concerned, which is an injury case,
the total compensation awarded was
718 INDIAN LAW REPORTS ALLAHABAD SERIES
Rs.40,000/-. The Tribunal ordered that the
compensation payable in each of the motor
accident claims petitions would be paid by
the Insurers from the date of the institution
of the claim petition until realization,
together with 12% simple interest annually.

The Hearing before this Court

23. Heard Mr. Amit Manohar, learned
Counsel for the Insurers in support of
FAFO Nos.841 of 2000, 842 of 2000, 843
of 2000, 844 of 2000 and 845 of 2000
whereas Mr. Amit Kumar Singh, Advocate
holding brief of Mr. Ram Singh, learned
Counsel has been heard in each of these
appeals on behalf of the claimants. No one
has appeared on behalf of the owner and
the driver.

24. Mr. Amit Kumar Singh, Advocate
holding brief of Mr. Ram Singh, learned
Counsel for the claimants has been heard in
support of FAFO Nos.1264 of 2000, 1638
of 2000, 1640 of 2000, 1641 of 2000 and
1642 of 2000 whereas Mr. Amit Manohar,
learned Counsel has been heard on behalf
of the Insurers in each of these appeals. No
one has appeared on behalf of the owner
and the driver.

The Appeals by the Insurers

25. The Insurers have come up
through
their
appeals,
assailing
the
impugned judgment and the award passed
by the Tribunal, saying that they are not
liable to pay the compensation awarded.
The question to be answered for the
purpose of deciding the Insurers' appeals is
whether the passengers on board a goods
vehicle, if they suffer death or bodily injury
in consequence of an accident, are entitled
to compensation from the insurers of the
goods vehicle ? In this case, there is hardly
any cavil on facts. The passengers were
travelling on board a goods vehicle, a
Swaraj
Mazda
Mini-Truck,
bearing
Registration No. UP-81B-5068, which was
hired to carry goods along with the bridal
party. The deceased and the injured, for
whose loss of life or injury these claims
have been brought, boarded the mini-truck
to travel to the wedding destination. They
were part of the bridal party. It is also not in
dispute that on way, the mini-truck turned
turtle, leading to death of four of the
victims and one sustaining grievous injury.
There is also no issue between parties about
the fact that the victims boarded the illfated truck with the driver's consent. The
Insurers say that they are not liable to
compensate the dependents of the deceased
victims or the injured, because they were
travelling in a goods vehicle and the
insurance policy does not cover their risk at
all. It is the Insurers' case that payment of
compensation to these victims would be the
owner's liability; not the Insurers'. The
learned Judge in the Tribunal has rejected
the aforesaid submission of the Insurers
relying on the decision of the Supreme
Court in Satpal Singh (supra). In Satpal
Singh, it has been held:

"11. The result is that under the new
Act an insurance policy covering thirdparty risk is not required to exclude
gratuitous passengers in a vehicle, no
matter that the vehicle is of any type or
class. Hence the decisions rendered under
the old Act vis-à-vis gratuitous passengers
are of no avail while considering the
liability of the insurance company in
respect of any accident which occurred or
would occur after the new Act came into
force."

26. This Court must remark that at the
time the impugned judgment was rendered,
10 All. National Insurance Co. Ltd. Vs. Sri Bhoora Kha & Ors..
719
the learned Judge in the Tribunal may not
have been very wrong, going by the
position of the law as it then stood. It was a
time when the law laid down by the
Supreme Court in Satpal Singh was
Authority. Later on, a three Judge Bench of
the
Supreme
Court
in
New
India
Assurance Co. Ltd. v. Asha Rani and
others, (2003) 2 SCC 223 overruled Satpal
Singh on the point that passengers on board
a goods vehicles - even the owner of the
goods or his authorized representative,
would not make the Insurance Company
liable
for
any
bodily
injury
or
compensation for death, if the accident
happened prior to the Motor Vehicles
(Amendment) Act, 1994. Any other kind
of passenger a fortiori would never be
entitled to claim compensation payable
by the Insurer, if travelling as a
passenger on a goods vehicle, whether
before
the
1994
Amendment
or
afterwards. It is not so much the point
involved in this case whether the
accident happened before the 1994
Amendment to the Act of 1998, but the
fact is that the accident in this case did
happen after the Act of 1988 came into
force and before it was amended by the
Act of 1994, that is to say, the accident
happened on 18.06.1993.

27. Here, the injured victims as
well as those who died were travelling
on board the mini-truck, a goods
vehicle, who do not fall in the category
of the owner of the goods or his
authorized representative in the sense it
is
understood
under
Section
147(1)(b)(i) of the Act of 1988, as
amended by the Amendment Act of
1994. It would be profitable to refer to
the holding of their Lordships in Asha
Rani (supra). The majority judgment was
delivered by G.B. Pattanaik, C.J., who
held:

"9. In Satpal case [New India
Assurance Co. v. Satpal Singh, (2000) 1
SCC 237 : 2000 SCC (Cri) 130] the Court
assumed that the provisions of Section
95(1) of the Motor Vehicles Act, 1939 are
identical with Section 147(1) of the Motor
Vehicles Act, 1988, as it stood prior to its
amendment. But a careful scrutiny of the
provisions would make it clear that prior to
the amendment of 1994 it was not
necessary for the insurer to insure against
the owner of the goods or his authorised
representative being carried in a goods
vehicle. On an erroneous impression this
Court came to the conclusion that the
insurer
would
be
liable
to
pay
compensation in respect of the death or
bodily injury caused to either the owner of
the goods or his authorised representative
when being carried in a goods vehicle the
accident occurred. If the Motor Vehicles
Amendment Act of 1994 is examined,
particularly Section 46, by which the
expression "injury to any person" in the
original Act stood substituted by the
expression "injury to any person including
owner of the goods or his authorised
representative carried in the vehicle", the
conclusion is irresistible that prior to the
aforesaid Amendment Act of 1994, even if
the widest interpretation is given to the
expression "to any person" it will not cover
either the owner of the goods or his
authorised representative being carried in
the vehicle. The objects and reasons of
clause 46 also state that it seeks to amend
Section 147 to include owner of the goods
or his authorised representative carried in
the vehicle for the purposes of liability
under the insurance policy. It is no doubt
true that sometimes the legislature amends
the law by way of amplification and
720 INDIAN LAW REPORTS ALLAHABAD SERIES
clarification of an inherent position which
is there in the statute, but a plain meaning
being given to the words used in the statute,
as it stood prior to its amendment of 1994,
and as it stands subsequent to its
amendment in 1994 and bearing in mind
the objects and reasons engrafted in the
amended provisions referred to earlier, it is
difficult for us to construe that the
expression "including owner of the goods
or his authorised representative carried in
the vehicle" which was added to the preexisting expression "injury to any person"
is either clarificatory or amplification of the
pre-existing statute. On the other hand it
clearly demonstrates that the legislature
wanted to bring within the sweep of
Section 147 and making it compulsory for
the insurer to insure even in case of a goods
vehicle, the owner of the goods or his
authorised representative being carried in a
goods vehicle when that vehicle met with
an accident and the owner of the goods or
his representative either dies or suffers
bodily injury. The judgment of this Court in
Satpal case [New India Assurance Co. v.
Satpal Singh, (2000) 1 SCC 237 : 2000
SCC (Cri) 130] therefore must be held to
have not been correctly decided and the
impugned judgment of the Tribunal as well
as that of the High Court accordingly are
set aside and these appeals are allowed. It is
held that the insurer will not be liable for
paying compensation to the owner of the
goods or his authorised representative on
being carried in a goods vehicle when that
vehicle meets with an accident and the
owner of the goods or his representative
dies or suffers any bodily injury."

28. In his supplementing opinion, his
Lordship S.B. Sinha, J. held:

"23. The applicability of the decision
of this Court in Mallawwa v. Oriental
Insurance Co. Ltd. [(1999) 1 SCC 403 :
1999 SCC (Cri) 58] in this case must be
considered keeping that aspect in view.
Section 2(35) of the 1988 Act does not
include passengers in goods carriage
whereas Section 2(25) of the 1939 Act did
as even passengers could be carried in a
goods vehicle. The difference in the
definitions of "goods vehicle" in the 1939
Act and "goods carriage" in the 1988 Act is
significant. By reason of the change in the
definitions
of
the
terminology,
the
legislature intended that a goods vehicle
could not carry any passenger, as the words
"in addition to passengers" occurring in the
definition of goods vehicle in the 1939 Act
were omitted. Furthermore, it categorically
states that "goods carriage" would mean a
motor vehicle constructed or adapted for
use "solely for the carriage of goods".
Carrying of passengers in a "goods
carriage", thus, is not contemplated under
the 1988 Act.

24. We have further noticed that
Section 147 of the 1988 Act prescribing the
requirements of an insurance policy does
not contain a provision similar to clause (ii)
of the proviso appended to Section 95 of
the 1939 Act. The decision of this Court in
Mallawwa case [(1999) 1 SCC 403 : 1999
SCC (Cri) 58] must be held to have been
rendered
having
regard
to
the
aforementioned provisions.

25. Section 147 of the 1988 Act, inter
alia,
prescribes
compulsory
coverage
against the death of or bodily injury to any
passenger of "public service vehicle".
Proviso appended thereto categorically
states that compulsory coverage in respect
of drivers and conductors of public service
vehicle and employees carried in a goods
vehicle would be limited to the liability
under the Workmen's Compensation Act. It
does not speak of any passenger in a
"goods carriage".
10 All. National Insurance Co. Ltd. Vs. Sri Bhoora Kha & Ors..
721

26. In view of the changes in the
relevant provisions in the 1988 Act vis-àvis the 1939 Act, we are of the opinion that
the meaning of the words "any person"
must also be attributed having regard to the
context in which they have been used i.e.
"a third party". Keeping in view the
provisions of the 1988 Act, we are of the
opinion that as the provisions thereof do
not enjoin any statutory liability on the
owner of a vehicle to get his vehicle
insured for any passenger travelling in a
goods vehicle, the insurers would not be
liable therefor.

27. Furthermore, sub-clause (i) of
clause (b) of sub-section (1) of Section 147
speaks of liability which may be incurred
by the owner of a vehicle in respect of
death of or bodily injury to any person or
damage to any property of a third party
caused by or arising out of the use of the
vehicle in a public place, whereas subclause (ii) thereof deals with liability which
may be incurred by the owner of a vehicle
against the death of or bodily injury to any
passenger of a public service vehicle
caused by or arising out of the use of the
vehicle in a public place."

29. The question next fell for
consideration before a three Judge Bench
of their Lordships of the Supreme Court in
National Insurance Co. Ltd. v. Baljit
Kaur and others, (2004) 2 SCC 1. In
Baljit Kaur (supra), the most important
principle, that was laid down, is about the
liability of the insurer to pay in the first
instance, and then recover from the owner,
in cases of passengers travelling on board
goods vehicles, suffering injury or death,
by reason of negligence. The principle was
evolved apparently because Satpal Singh
had been the law for a long time and the
Tribunals and the High Courts had held
insurers liable for injuries or death suffered
by passengers travelling on goods vehicles,
until time that Asha Rani came to change
the legal perspective altogether. Baljit
Kaur,
therefore,
laid
down
another
principle along side the principle of pay
and recover for the insurer in the same
proceedings, and that was that the owner's
liability to satisfy the award in case of
carriage of gratuitous passengers on board
goods vehicles would be the law applicable
prospectively. In other words, the law that
the insurer would no longer be liable for
injuries or death sustained by passengers or
gratuitous passengers on board goods
vehicles, would be applicable in those cases
that were decided after Asha Rani. In
Baljit Kaur, it was laid down:

"20. It is, therefore, manifest that in
spite of the amendment of 1994, the effect
of the provision contained in Section 147
with respect to persons other than the
owner of the goods or his authorized
representative remains the same. Although
the owner of the goods or his authorized
representative would now be covered by
the policy of insurance in respect of a
goods vehicle, it was not the intention of
the legislature to provide for the liability of
the insurer with respect to passengers,
especially gratuitous passengers, who were
neither contemplated at the time the
contract of insurance was entered into, nor
was any premium paid to the extent of the
benefit of insurance to such category of
people.

21. The upshot of the aforementioned
discussions is that instead and in place of
the insurer the owner of the vehicle shall be
liable to satisfy the decree. The question,
however, would be as to whether keeping
in view the fact that the law was not clear
so long such a direction would be fair and
equitable. We do not think so. We,
therefore, clarify the legal position which
722 INDIAN LAW REPORTS ALLAHABAD SERIES
shall have prospective effect. The Tribunal
as also the High Court had proceeded in
terms of the decision of this Court in Satpal
Singh [(2000) 1 SCC 237 : 2000 SCC (Cri)
130] . The said decision has been overruled
only in Asha Rani [(2003) 2 SCC 223 :
2003 SCC (Cri) 493] . We, therefore, are of
the opinion that the interest of justice will
be subserved if the appellant herein is
directed to satisfy the awarded amount in
favour of the claimant, if not already
satisfied, and recover the same from the
owner of the vehicle. For the purpose of
such recovery, it would not be necessary for
the insurer to file a separate suit but it may
initiate a proceeding before the executing
court as if the dispute between the insurer
and the owner was the subject-matter of
determination before the Tribunal and the
issue is decided against the owner and in
favour of the insurer. We have issued the
aforementioned directions having regard
to the scope and purport of Section 168 of
the Motor Vehicles Act, 1988, in terms
whereof, it is not only entitled to
determine the amount of claim as put
forth by the claimant for recovery thereof
from the insurer, owner or driver of the
vehicle jointly or severally but also the
dispute between the insurer on the one
hand and the owner or driver of the
vehicle involved in the accident inasmuch
as can be resolved by the Tribunal in such
a proceeding."

(emphasis by Court)

30. Before the Full Bench of the
Madras High Court in Branch Manager,
United India Insurance Co. Ltd.,
Branch Office, Nethaji Bye Pass Road,
Dharmapuri Town v. Nagammal and
others, 2008 SCC OnLine Mad 973, the
question that came up for consideration is
set out in Paragraph No.2 of the report,
which reads:

"2. The precise question to be
answered is whether the Insurer can be
directed to pay compensation to the
claimant in a case where the deceased
and/or the injured was travelling as a
gratuitous passenger in a goods vehicle and
recover the same thereafter from the owner
of such goods vehicle."

31. In Nagammal (supra), speaking
for the Full Bench, P.K. Misra, J. observed
and summarized the principles to be
applied in the transition between Satpal
Singh and Asha Rani thus:

"30. From a conspectus of the
decisions, thus analysed, it is now apparent
that before Asha Rani's case was decided,
the decision in Satpal Singh's case was
holding the field and such latter decision
was overruled only in Asha Rani's case.
Under such peculiar circumstances in Baljit
Kaur's case it was observed, that even
though the Insurance Company was not
liable to pay the compensation in respect of
a passenger in a goods vehicle, yet since
the law was not clear before Asha Rani's
case
was
decided,
the
doctrine
of
prospective overruling was applied and a
direction was issued in the interest of
justice directing the Insurance Company to
satisfy the award and recover the same
from the owner of the vehicle. In other
words, even though the statutory provision
under Section 149(4) and Section 149(5)
was not applicable, the Supreme Court
applied the Doctrine of "pay and recover".
The ratio of the said decision has been
applied selectively in some of the later
decisions and in some of the subsequent
decisions, the doctrine of "pay and recover"
in respect of matters which are not strictly
covered under Sections 149(4) and 149(5)
has not been applied by the Supreme Court
10 All. National Insurance Co. Ltd. Vs. Sri Bhoora Kha & Ors..
723
depending
upon
the
facts
and
circumstances of a particular case.

Therefore, it cannot be said as an
inexorable principle of law that in each
case where the liability is in respect of a
passenger in a goods vehicle, which is not
required to be covered under Section 147 of
the Act, the Insurance Company would be
directed to first pay the amount and
thereafter recover the same from the owner
and such discretion is obviously with the
Court either to apply such principle or not.

31. Thus from an analysis of the
statutory provisions as explained by the
Supreme
Court
in
various
decisions
rendered from time to time, the following
picture emerges:

(i) The Insurance Policy is required to
cover the liability envisaged under Section
147, but wider risk can always be
undertaken.

(ii) Section 149 envisages the defences
which are open to the Insurance Company.
Where the Insurance Company is not
successful in its defence, obviously it is
required to satisfy the decree and the
award. Where it is successful in its defence,
it may yet be required to pay the amount to
the claimant and thereafter recover the
same
from
the
owner
under
such
circumstance envisaged and enumerated in
Section 149(4) and Section 149(5).

(iii) Under Section 147 the Insurance
Company is not statutorily required to
cover the liability in respect of a passenger
in a goods vehicle unless such passenger is
the owner or agent of the owner of the
goods accompanying such goods in the
concerned goods vehicle.