Insurance Companies Not Liable To Pay Compensation To Unauthorised Passengers For Motor Vehicle Deaths/ Injuries: Madras HC [Read Judgment]

The Madras High Court recently reiterated that insurance companies cannot be held liable to compensate for deaths or injuries to unauthorised/ gratuitous passengers in goods or transport vehicles.In doing so, the Bench comprising Justice KK Sasidharan and Justice R. Subramanian refused to consider as precedent the recent judgment in Shivraj v. Rajendra, wherein the Supreme Court had affirmed the High Court’s conclusion that the insurance company was not liable for the loss or injuries suffered by the unauthorised passenger, but had opined that the High Court should have directed the company to pay such compensation with liberty to recover the same from the tractor owner.The Madras High Court, however, now noted that the Division Bench of the Supreme Court had failed to take note of the decisions of the larger bench in New India Assurance Company v. Asha Rani and others or National Insurance Company Ltd., v. Baljit Kaur and others. It further asserted that the judgments referred to by the Supreme Court did not consider the question of the liability of an insurance company to pay compensation to an unauthorised passenger.“We find that the judgments relied upon by the Hon'ble Supreme Court in Shivaraj Vs. Rajendra and another referred to supra in support of its conclusion that the Insurance Company can be directed to pay the compensation with liberty to recover the same even in respect of a gratuitous passenger or an unauthorized passenger in a goods vehicle, do not support the said conclusion…“…We are therefore of the considered opinion that the judgment of the two Judge bench in Shivaraj Vs. Rajendra and another referred to supra cannot be taken as a precedent to conclude that the Insurance Company would be liable to pay the compensation even in respect of an unauthorized passenger, in a goods vehicle, in the light of categorical pronouncement of larger bench of the Hon'ble Supreme Court in New India Assurance Company Vs. Asha Rani and others and National Insurance Company Ltd., Vs. Baljit Kaur and others referred to supra,” it therefore observed.The court was hearing a bunch of appeals challenging an award passed by the Motor Accident Claims Tribunal, which had, while granting compensation to eighteen victims of a road accident, directed the insurance company to pay the compensation to unauthorised passengers as well, with liberty to recover the same from the owner of the vehicle. The claimants in the case at hand, had engaged a goods vehicle to travel for a wedding, and were therefore, unauthorized passengers.The court noted that following a 1994 amendment to the Motor Vehicles Act, 1988, Section 147 of the Act restricts an insurer’s liability in case of motor vehicle accidents to a third party; the owner of the goods or his authorized representative carried in a goods vehicle; and the passenger of a public service vehicle.It also noted that Section 149 (2)(a)(i)(c) of the Act allows insurance companies to be exempted from liability if the vehicle in question, being a transport vehicle, was used for a purpose not allowed by its permit.The court then noted, “No doubt true that in many cases the claimants may not be able to realise the award amount from the owners of the vehicles involved in the accident. But, the said factual situation alone cannot impel us to do something against the provisions of the statute and the decisions of the larger benches of the Hon'ble Supreme Court of India.”All the appeals were therefore allowed. The quantum of compensation was affirmed, but it was clarified that there will be an award only against the owner of the vehicle.Read the Judgment hereJ U D G M E N TR.SUBRAMANIAN, J.1. The challenge in all these appeals is to the award of the Motor Accident Claims Tribunal, (Special District Judge), Dharmapuri made in MCOP.Nos.89 to 106 of 2014, dated 23.09.2014, in and by which, the Tribunal, while granting compensation to the victims of a road accident that occurred on 01.09.2011 directed the Insurance Company to pay the compensation with liberty to recover the same from the owner of the vehicle.The case of the claimants before the Tribunal is as follows:-2. On 01.09.2011, a group of persons had engaged an Eicher van (goods vehicle) bearing registration No.TN-29-AW-4232 belonging to the 1st respondent, to go to Soolakurichi from Kotapatty to attend the marriage of one Govindan with Bagyalakshmi. After the marriage, while they were returning in the same vehicle to Kotapatty, the driver of the vehicle drove the same in a rash and negligent manner, resulting in the vehicle toppling in the middle of the road. Due to the said accident, some of the persons travelling in the said Eicher van died and some of them suffered grievous injuries, which led to the filing of the above claim petitions which are 18 in number. The claimants sought for compensation on the ground that the driver of the Eicher van was negligent.3. All the claim petitions were resisted by the Insurance Company contending ...

Insurance Companies Not Liable To Pay Compensation To Unauthorised Passengers For Motor Vehicle Deaths/ Injuries: Madras HC [Read Judgment]

Apoorva Mandhani

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