Motor Accident | Insurer Be Asked To 'Pay & Recover' If Deceased Was Gratuitous Passenger In Goods Vehicle : Supreme Court

The Supreme Court recently held that even if an insurance company is not liable to pay compensation in an accident involving a passenger in a goods vehicle, it can be directed to first pay compensation to the claimants and then recover the amount from the vehicle owner, if the vehicle was hired for carrying goods and travel was only incidental.

A bench of Justice Prashant Kumar Mishra and Justice N.V. Anjaria restored a Motor Accident Claims Tribunal order requiring an insurer to first pay compensation to the claimants and then recover the amount from the owner of the vehicle, in a case arising out of a fatal accident involving a goods vehicle hired for Ganesh idol immersion.

“In the present case, the deceased was travelling in the subject tempo along with Ganesh Idol, which was taken for immersion in Narmada River. Thus, the dominant purpose for hiring the vehicle was not for travelling but for carrying the Ganesh idol for immersion. Travelling in the vehicle was only incidental, therefore, at best, the deceased can be treated as gratuitous passenger travelling with his goods (Ganesh idol)”, the Court observed.

The case arose from a fatal accident in which the deceased was travelling in a tempo hired on the occasion of a Ganesh immersion festival to carry the idol to the Narmada River. The vehicle was a goods vehicle insured with The Oriental Insurance Company Limited on the date of the accident.

On January 11, 2010, the Tribunal granted compensation of ₹13,23,000 to the claimants. It directed the insurance company to deposit the amount and recover it from the vehicle owner.

The insurance company challenged this part of the award before the High Court. The High Court set aside the Tribunal's direction and held that the insurer was not liable to first pay and then recover the compensation from the owner.

Before the Supreme Court, the claimants argued that where the deceased was a gratuitous passenger in a goods vehicle, the insurer could be directed to pay the awarded amount first and then recover it from the owner.

On the other hand, the insurance company, relying on Amudhavalli & Ors. v. HDFC Ergo General Insurance Company Ltd. & Ors., contended that where a deceased was travelling in a goods vehicle taken on rent, the insurer could not be made liable even on a pay and recover basis.

The Supreme Court noted that the deceased was travelling in the tempo along with the Ganesh idol, which was taken for immersion in the Narmada River. The Court observed that the dominant purpose for hiring the vehicle was not travelling but carrying the idol for immersion, and travelling in the vehicle was only incidental. At best, the deceased could be treated as a gratuitous passenger travelling with his goods, namely the Ganesh idol, the Court observed.

The Court relied on the judgment in Manuara Khatun & Ors. v. Rajesh Kumar Singh & Ors., which had directed the insurer to first satisfy the award and then recover the amount from the insured in the same proceedings. It distinguished the Amudhavalli case on facts, observing that in that case the goods vehicle had been hired for travelling and not for carrying goods with travel being incidental.

The Court allowed the appeal, set aside the High Court's order and restored the Tribunal's award.

Case no. – SLP (Civil) No. 21802/2023)

Case Title – Kaminiben & Ors. v. Oriental Insurance Company Limited & Ors.

Citation : 2026 LiveLaw (SC) 174