Goods Owner Travelling In Truck With His Goods Not A Gratuitous Passenger; Insurer Liable: Gujarat High Court

The Gujarat High Court has held that an insurer is liable to compensate the owner of goods travelling in goods carriage for injuries caused due to accident, as statutory rules permit the owner or hirer of goods to travel in a goods vehicle free of charge and such an individual does not qualify as a “gratuitous passenger.”

A Division Bench of Justice N.S. Sanjay Gowda and Justice J.L. Odedra dismissed the appeal filed by United India Insurance Company Limited, and partly allowed the claimant's cross-objection. The Bench enhanced the compensation granted to the claimant from Rs. 13,06,000 to Rs. 18,80,400.

Referring to Section 147(1)(b)(i) of the Motor Vehicles Act, as it stood on the date of the accident, and Rule 122(1) of the Gujarat Motor Vehicles Rules, 1989, the Bench noted that although the rule bars the carriage of persons in a goods carriage, its proviso carves out an exception.

“As could be seen from the above, though under sub-rule (1) of Rule 122, there is an absolute bar for any person being carried in a goods carriage, the proviso carves out an exception and permits either the owner or the hirer or a bona fide employee of the owner or the hirer of the vehicle to be carried free of charge. This would fundamentally mean that though there is a bar for any person carried in a goods carriage, the law does permit the hirer of the goods carriage or even his employee to be carried in the truck free of charge,” the Court said.

It added, “If Section 147 (b) and Rule 122(1) along with its proviso are read in conjunction, it makes it clear that the owner of the truck was entitled to carry in the truck, the hirer of his vehicle free of charge and as a consequence, the requirements of the policy, as contemplated under Section 147 (b) would cover the liability of the Insurer with respect of such persons being carried in a goods carriage.”

Noting the statement of the claimant's wife that the claimant earned his livelihood selling fire bricks and clay items and he was carrying the same on the day of accident in his brother-in-law's truck to Indore, the Court found the claimant to be not a gratuitous passenger.

“In light of the positive evidence of the wife of the claimant that he was travelling in the truck along with his goods in order to sell them at Indore, it will have to be held that he was not a gratuitous passenger and was entitled to be carried in the truck free of charge, as provided under the Gujarat Motor Vehicles Act,1988,” the Court said.

Noting that the Tribunal had omitted future prospects, the Court applied a 40% addition towards future prospects and enhanced the compensation by Rs. 5,74,400.

Background

The case arose from an accident that took place on May 7, 1990, when the truck in which the claimant was travelling, owned by his brother-in-law, turned turtle. The claimant suffered grievous injuries and became paraplegic. The claim petition was filed on November 9, 1998, about eight years after the accident.

The Tribunal held that the accident was caused by the driver's negligence and awarded Rs. 13,06,000. Both the insurer, by way of an appeal, and the claimant, by way of a cross-objection, challenged the award before the High Court.

The insurance company argued that there was no liability on the insurer to cover the risk of occupants in the truck, since this liability was fastened on insurers only from 1994 by amendment of Section 147(1)(b)(i). He also argued that there was no credible evidence that the claimant was travelling with his goods, and that the compensation was excessive.

On the other hand, the claimant argued that the policy covered occupants of the truck, since its limitations as to use indicated that the vehicle should be used only as permitted under the public carriers' permit. It was contended that Rule 122 permitted the owner of goods to be carried free of charge in a goods carriage. Since the company had not suggested that the claimant was not travelling with his goods, the insurer was liable. The claimant further sought enhancement in compensation, pointing out that no future prospects had been awarded and that reasonable sums were needed for attendant charges and loss of amenities.