http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

CASE NO.: Appeal (civil)  5287 of 2004

PETITIONER: Sri Pramod Kumar Agrawal and Anr.                                

RESPONDENT: Smt. Mushtari Begum and Ors.                                     

DATE OF JUDGMENT: 18/08/2004

BENCH: ARIJIT PASAYAT & C.K. THAKKER

JUDGMENT: J U D G M E N T (Arising out of SLP) No. 6042/2002)

ARIJTI PASAYAT, J

       Leave granted.  

       Challenge in this appeal is to the judgment of a Division Bench of the  Allahabad High Court which did not find any error in the judgment of the  Motor Accident Claims Tribunal, Bijnor (in short the ’Tribunal’) either on  facts or law to warrant interference.            Background facts in a nutshell are as follows:                  The present respondents 1 to 10 filed a Claim Petition in terms of  Section 166 of the Motor Vehicles Act, 1988 (in short the ’Act’) claiming  compensation from the present appellants and United India Insurance  Company Ltd., (hereinafter referred to as the ’insurer’).  

       According to the claimants, Amir Hassan (hereinafter referred to as  the ’deceased’) sustained injuries and subsequently died due to an accident  on 11.11.2000 at about 4.00 p.m.  The accident occurred on account of rash  and negligent driving by Kamal Kumar Agrawal (appellant No.2) who was  the driver of the vehicle No. UPN-8975 which was involved in the accident.  It was stated that appellant No.1 was the owner of the vehicle, and that the  vehicle was subject-matter of insurance with the insurer.  Claim of Rs.  5,10,000/- was made as compensation.  

       The insurer took the plea that the driver had no valid or effective  driving licence, vehicle was not insured and the claim petition was filed in  collusion with the owner and the driver of the vehicle in question.   

The Tribunal framed two issues which run as follows:

1)      Whether the accident took place due to rash and negligent  driving of Truck No. UPN 8975 by O.P. No.2? 2)      To what relief and compensation, if any, are claimants entitled?         The Tribunal found that the accident took place when it was coming  from Haridwar laden with sand. Thirty to forty persons were sitting on the  sand and at the place called ’Chandighat’ the said persons climbed on the  truck and it overturned resulting in the accident. Three persons died  including the deceased and several others were injured.  According to the  witnesses examined, none of them climbed on the truck forcibly.  On the  other hand, they had paid fare for traveling in the truck. They stated that  Rs.25/- per passenger as fare was taken.  The driver was examined as DW-1.  According to him, number of persons forcibly climbed on the truck and as a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

result the truck met with an accident. He admitted that there was a conductor  in the vehicle who ran away from the place of accident. He also admitted in  his written statement that the persons forcibly climbed on the truck and 30 to  40 persons were in the truck. Analysing the evidence, the Tribunal came to  hold that the conductor of the truck had collected fare and the persons had  not climbed forcibly. In these circumstances, taking into account the age of  the deceased and  his estimated income, it was held that that claimants were  entitled to Rs.2,06,000/- as compensation. It was further held that the vehicle  was a goods vehicle and the owner had not insured the vehicle for carrying  passengers in a goods vehicle. Only the driver, conductor and certain  number of labourers could be carried, but there was no scope for carrying  any passenger. Taking note of the terms and conditions of the policy note it  was held that the insurer was not liable to make payment of the  compensation and it was the owner who has to make the payment of the  awarded amount with interest @9% p.a. from the date of presentation of the  claim petition. As noted above, the appeal filed by the owner and the driver  before the High Court did not bring any relief to them.

       Learned counsel for the appellants submitted that the accident took  place after the amendment in 1994 in Section 147 of the Act and, therefore,  the insurer ought to have been made liable to indemnify the award.

       Learned counsel for the insurer on the other hand submitted that the  position has not changed after amendment in 1994.  

It is to be noted that in Ramesh Kumar v. National Insurance Co. Ltd.  and Ors. (2001 (6) SCC 713) it was held that though the vehicle concerned  was a goods vehicle yet the liability of the insurance company was not  wiped out. The decision was subsequently reversed by a three-Judge Bench  of this Court in New India Assurance Co. Ltd. v. Asha Rani and Ors. (2003  (2) SCC 223) which was followed in Oriental Insurance Co. Ltd. v.  Devireddy Konda Reddy and Ors. (2003 (2) SCC 339). Recently in National  Insurance Co. Ltd. v. Baljit Kaur and Ors. (2004 (2) SCC 1) the effect of  1994 amendment vis-a-vis Section 147 of the Act was considered. It was  observed as follows:

       "17- By reason of the 1994 amendment what was  added is "including owner of the goods or his authorised  representative carried in the vehicle". The liability of the  owner of the vehicle to insure it compulsorily, thus, by  reason of the aforementioned amendment included only  the owner of the goods or his authorized representative  carried in the vehicle besides the third parties. The  intention of Parliament, therefore, could not have been  that the words "any person" occurring in Section 147  would cover all persons who were traveling in a goods  carriage in any capacity whatsoever. If such was the  intention, there was no necessity of Parliament to carry  out an amendment inasmuch as the expression "any  person" contained in sub-clause (i) of clause (b) of sub- section (1) of Section 147 would have included the owner  of the goods or his authorized representative besides the  passengers who are gratuitous or otherwise.  

       19- In Asha Rani’s case (supra) it has been noticed  that sub-clause (i) of clause (b) of sub-section (1) of  Section 147 of the 1988 Act 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. Furthermore, an  owner of a passenger carrying vehicle must pay premium  for covering the risks of the passengers traveling in the  vehicle. The premium in view of the 1994 amendment  would only cover a third party as also the owner of the

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

goods or his authorized representative and not any  passenger carried in a goods vehicle whether for hire or  reward or otherwise.

       20- It is, therefore, manifest that in spite of the  amendment of 1994, the effect of the provision contained  in Section 147 with respect of persons other than the  owner of the goods or his authorised 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."  

       The plea of the appellants has been rightly rejected both by the  Tribunal and the High Court.

       Therefore, while upholding the judgment of the High Court we direct  in terms of what has been stated in Baljit Kaur’s case (supra) that the insurer  shall pay the quantum of compensation fixed by the Tribunal, about which  there was no dispute raised, to the respondents-claimants within three  months from today. For the purpose of recovering the same from the owner   the insurer shall not be required to file a suit. It may initiate a proceeding  before the concerned 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.  Before release of the amount to the claimants, owner of the vehicle i.e.  appellant no.1 shall furnish security for the entire amount which the insurer  will pay to the claimants. The offending vehicle shall be attached, as a part  of the security. If necessity arises the Executing Court shall take assistance  of the concerned Regional Transport Authority. The Executing Court shall  pass appropriate orders in accordance with law as to the manner in which the  owner of the vehicle i.e. appellant no.1 shall make payment to the insurer. In  case there is any default it shall be open to the Executing Court to direct  realization by disposal of the securities to be furnished or from any other  property or properties of the owner of the vehicle, the insured (the appellant  no.1).  

       The appeal is disposed of accordingly.   No costs.