The Hindu Business Line : What goods vehicles are no good for

IS AN insurance company liable if death occurs when travelling in a goods vehicle? This was the question that occupied the Bombay High Court (Nagpur Bench) in New India Assurance Company Ltd vs Diwakar S/o Daulatrao Rohankar and Others.

The story begins in 1993, in village Sukli. Swati, a girl aged 11 years, "was travelling by sitting on the mudguard of the motor vehicle, i.e., tractor bearing registration No. MH-27/A-2354 owned by respondent No. 4 and driven by respondent No. 3," reads the text of the verdict narrating the facts of the case.

The Tribunal ruled that New India was `jointly and severally liable to pay compensation to the claimants'. Aggrieved, the insurance company brought up the case before the High Court. New India contended that it was not liable to pay the compensation in view of the decisions of the Supreme Court in New India Assurance vs Asha Rani (2002), National Insurance vs Ajit Kumar (2003), and Oriental Insurance vs Devireddy Konda Reddy (2003).

The Asha Rani case was extensively cited in the judgment. Justice S. T. Kharche referred to the apex court's observations in that case about how the amended Section 147 of the Motor Vehicles Act includes owner of the goods or his authorised representative carried in the vehicle for the purposes of liability under the insurance policy.

However, Section 149(2) enabled the insurers to raise defences against the claim of the claimants. "In terms of clause (c) of Sub-section (2) of Section 149 of the Act, one of the defences which is available to the insurer is that the vehicle in question has been used for a purpose not allowed by the permit under which the vehicle was used," the Supreme Court had said. The legislative intent is to prohibit goods vehicle from carrying any passenger, the apex court had noted in another of the cited precedents. "Goods carriage is solely for the carriage of goods. Carrying of passengers in a goods carriage is not contemplated in the Act."

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, said the court. "Goods vehicle cannot be held to be a passenger vehicle even if the vehicle was found to be used on some stray occasions for carrying passengers for hire or reward," reads another snatch from an earlier decision.

"Thus, having regard to the law position laid down by the Supreme Court, it is clear that the insurance company is not statutorily required to insure the passengers travelling in a goods vehicle and, as such, would not be liable to pay compensation," ruled Justice Kharche.

In the present case, admittedly, the deceased was sitting on the mudguard of the tractor, which is undoubtedly a goods carrier, and in such circumstances the insurance company cannot be made liable to pay compensation to the respondents, he added.

Following the decision of the apex court, in National Insurance vs Bommithi Subbhayamma, the court stated that the insurance company is not liable to pay compensation first to claimant, and then get it recovered from the owner, "as it is the owner of the goods vehicle who alone is liable to pay compensation." The claimants would be entitled to recover the amount of compensation granted in their favour by the Motor Accident Claims Tribunal from the owner of the vehicle, the court clarified.

Moral: Goods vehicles are no good for ferrying passengers.

LawLane@TheHindu.co.in

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