Insurance Company Not Liable To Indemnify Gratuitous Passenger In Goods Vehicle: Himachal Pradesh High Court

Himachal Pradesh High court held than an insurance company is not liable to provide compensation for injuries sustained by a gratuitous passenger/ porter in a goods vehicle under Section 147 of the Motor Vehicles Act, 1988.

Justice Satyen Vaidya held: The term “any person” used in Section 147 of the Motor Vehicles Act, relates only to a third party and a passenger in goods carriage vehicle is not a third party.

Background Facts:

A petition was filed by Sheru Singh (“Claimant”) before the Motor Accident Claims Tribunal, Shimla. The claimant contended that he was involved in an accident suffered various injuries that have led to disablement.

The Tribunal passed an award directing the insurance company to compensate the claimant with a sum of Rs.18,42,711/- on account of injuries and 60% disability that had been caused to him during an accident.

Two appeals were filed against the award, one by the insurance company and another one by the claimant.

The insurance company in their appeal contended that they were not liable to pay compensation to the claimant as he was a gratuitous passenger. On the other hand, the claimant, stated that he had not been adequately compensated for the disablement suffered by him.

Findings:

The court noted that Section 147 of the Motor Vehicles Act mandates insurance coverage for third-party risks but limits liability in cases of goods carriages to:

• The driver;
• The owner of the goods;
• The authorized representative of the owner of goods;
• Or employees of the insured falling within specified categories.

Based on the above, it opined that the claimant did not fall under any of these categories and, therefore, could not be considered a third party. Section 147 either considers the owner of the goods or his authorized representative for insurance coverage. However when the owner is travelling himself in the vehicle, the claimant cannot be a representative but is rather a porter/labourer engaged by the owner for assistance in transportation.

The court also held that the tribunal had erred in assessing the disability of the claimant to be 60%, as the experts had certified it to be 45%. Consequently, the compensation was reduced to Rs 15,20,151.

The Supreme Court in New India Insurance Company Ltd. Vs. Asha Rani (2003) and National Insurance Co. Vs. Baljeet Kaur (2004), interpreted the law with respect to liability of insurance company to indemnify the insured in respect of claims arising out of death or bodily injury to a gratuitous passenger in a Goods carriage Vehicle and it was held that the insurer is not liable for the same.

Accordingly, it was held by the court that the insurance company was not liable to indemnify the claimant. The owner of the vehicle was held liable to satisfy the award.

Case Name: The Oriental Insurance Company Ltd v/s Sh. Sheru @ Sher Singh @ Sukhraj & Ors.

FAO No.: 448 of 2018 a/w FAO No. 34 of 2019

Date of Decision: 30.04.2025

FAO No. 448 of 2018

For the appellant(s) : Mr. Jagdish Thakur, Advocate, for the appellant.

For the respondent(s) : Mr. Dheeraj K. Verma, Advocate, for respondent No.1.

Mr. Abhishek Nagta, Advocate, vice Mr. Parmod Singh Thakur, Advocate, for respondent No.2.

Mr. Bhisham Sharma, Advocate, vice Mr. Inderjeet Singh Narwal, Advocate, for respondent No.3.

FAO No. 34 of 2019

For the appellant(s) : Mr. Dheeraj K. Verma, Advocate, for the appellant.

For the respondent(s) : Mr. Abhishek Nagta, Advocate vice Mr. Parmod Singh Thakur, Advocate, for respondent No.1.

Mr. Bhisham Sharma, Advocate, vice Mr. Inderjeet Singh Narwal, Advocate, for respondent No.2.

Mr. P.S. Chandel, Advocate, for respondent No.3.

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