http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 4  

CASE NO.: Appeal (civil)  860 of 2007

PETITIONER: New India Assurance Co. Ltd

RESPONDENT: Vedwati & Ors.

DATE OF JUDGMENT: 20/02/2007

BENCH: Dr. ARIJIT PASAYAT & S.H. KAPADIA

JUDGMENT: J U D G M E N T (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.

       Leave granted.

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 the insurer.   

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.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 4  

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 "transport vehicle"  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 follows: Old Act: "2 (8) "gods vehicle" 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" "2(25) "public service 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  stage carriage." "2(29) "stage carriage" 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:" "2(33) "transport vehicle" means a public  service vehicle or a goods vehicle:" The Act (New Act): "2(14) "goods carriage" 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:" "2(35) "public service 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:" " 2(40) "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 journey:"

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 4  

"2(47) "transport 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  arises."

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 4  

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 award. 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.