1 2025:CGHC:42508 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 1196 of 2018 1 - National Insurance Company Limited Branch Office - Second Floor Mobin Mahal, Behind Shahid Smarak Bhawan, G.E. Road, Post Box No. 122, Raipur, Tahsil And District Raipur Chhattisgarh. (Insurer Of Offending Vehicle) (Non Applicant No. 3), District : Raipur, Chhattisgarh ... Appellant versus 1 - Ramadhar Tati S/o Jagdeep Tati, Aged About 50 Years R/o Village Rachiyahi, Police Station Matihani, Tahsil Ularwa, District Vegusara Bihar., Bihar 2 - Smt. Kaliya Devi W/o Ramadhar Tati, Aged About 45 Years R/o Village Rachiyahi, Police Station Matihani, Tahsil Ularwa, District Vegusara Bihar. (Claimants), Bihar 3 - Sudama Sao S/o Sukuldhar Singh Rajendar Sao, R/o Chhata Complex, Post Chhata, Police Station Basdih Road, District Baliya (U.P.), Presently Residing At Waliya Complex, Tatiband Raipur, Tahsil And District Raipur Chhattisgarh. (Driver Of Offending Vehicle), District : Raipur, Chhattisgarh 4 - Ranjeet Singh Waliya S/o Late Harbansh Singh Waliya, R/o Waliya Trailer Service, Waliya Complex Ring Road No. 02, Tatibandh Raipur, Tahsil And District Raipur Chhattisgarh. (Owner Of Offending Vehicle), District : Raipur, Chhattisgarh ... Respondent(s) (Cause-title is taken from Case Information System) For Appellant : Mr. G. V. K. Rao, Advocate SB- Hon'ble Shri Justice Amitendra Kishore Prasad Order on Board 21/08/2025 1. This appeal has been filed under Section 173 of the Motor Vehicle Act, 1988, against the award dated 31.07.2017 passed by the learned ABHIGYA SAXENA Digitally signed by ABHIGYA SAXENA 2 Additional Motor Accident Claims Tribunal, Dantewada, District – South Bastar Dantewada (C.G.), in Motor Accident Claim Case No. 06/2015. 2. Facts of the case, in a nutshell, are that the present case arises out of a tragic motor vehicle accident that occurred on 04.01.2014, involving the deceased Vikrant Tati, who was travelling in a tractor-trailer bearing registration number CG-04-HA-6012. The vehicle was reportedly carrying an electric pole to Sukma when the driver, Sudama Sao, lost control and overturned the vehicle. As a result, Vikrant Tati sustained fatal injuries and died on the spot. The accident was initially reported at Police Station Dantewada under Crime No. 0/2014 and was subsequently transferred to Police Station Bhasi, where it was registered as Crime No. 02/2014 under Sections 279, 337, 338, and 304-A of the Indian Penal Code. The tractor-trailer involved in the accident was owned by non-applicant No. 2 and insured with non- applicant No. 3, who is the appellant in the present case. The claimants, being legal heirs of the deceased Vikrant Tati, filed a claim petition before the Motor Accident Claims Tribunal. It was their case that the deceased was 22 years old at the time of the accident and earning Rs. 6,000/- per month. On account of his untimely death, the claimants sought a compensation of Rs. 10,06,000/- under various heads, including loss of dependency and funeral expenses. During the proceedings before the learned Tribunal, non-applicant Nos. 1 and 2, i.e., the driver and owner of the offending vehicle, remained ex-parte and did not file any reply or contest the claim. However, non-applicant No. 3, i.e., the insurer of the offending vehicle, appeared and filed a written statement, denying the material averments of the claim petition. 3 The insurer contended that the accident was caused due to the negligence of the deceased himself, and therefore, the claim was not maintainable. It was also submitted that the vehicle was being operated in violation of the insurance policy, as it was not covered by a valid permit or fitness certificate, and such breach absolved the insurer of any liability. After appreciating the pleadings, documents, and evidence placed on record, the learned Tribunal held the owner and insurer jointly and severally liable and awarded a compensation of Rs. 7,74,000/- in favour of the claimants. Aggrieved by the said award, the insurance company (non-applicant No. 3) has filed the present appeal, challenging the impugned judgment mainly on the grounds that there was a breach of policy conditions, and the accident occurred due to the own negligence of deceased. 3. Learned counsel for the appellant would submit that the learned Motor Accident Claims Tribunal has erred in law and facts in awarding an excessive and unjustified amount of Rs. 7,74,000/- in favour of the claimants. The impugned award deserves to be set aside as it is contrary to the terms and conditions of the insurance policy and established legal principles. It is submitted that there was a fundamental breach of policy conditions at the time of the accident. The offending vehicle was being operated in violation of the insurance policy, as it was overloaded and not used for the purposes it was insured for. The learned Tribunal has overlooked this serious breach while fixing the liability upon the insurer. Further, it is contended that the offending tractor-trailer was insured solely for the carriage of goods and loading/unloading labourers. However, the deceased was 4 travelling as a gratuitous passenger, which is specifically excluded from coverage under the insurance contract. Therefore, the insurance company cannot be held liable to compensate for a risk it never agreed to cover. It is also submitted that the offending vehicle was registered to carry only three persons, but at the time of the accident, nine persons were found to be travelling in it. This constitutes a gross violation of the statutory permit and seating capacity, further evidencing the unauthorized use of the vehicle. In light of these facts, the fastening of liability upon the insurance company by the learned Tribunal is not only legally unsustainable but also contrary to the contract of insurance. The Tribunal failed to appreciate these critical aspects and has instead imposed an unwarranted financial burden upon the insurer. It is therefore prayed that this Court may kindly be pleased to allow the appeal, and further be pleased to quash and set aside the award dated 31.07.2017 passed by the learned Additional Motor Accident Claims Tribunal, Dantewada, District South Bastar Dantewada (C.G.) in Claim Case No. 06/2015, in the interest of justice. 4. I have heard learned counsel for the appellant – Insurance Company and also perused the documents available on record. 5. This appeal has been preferred under Section 173 of the Motor Vehicles Act, 1988, by the appellant, National Insurance Company Ltd., challenging the award dated 31.07.2017 passed by the learned Additional Motor Accident Claims Tribunal, Dantewada, District South Bastar Dantewada (C.G.), whereby compensation of Rs. 7,74,000/- was awarded in favour of the claimants, fastening joint and several liability on the owner and insurer of the offending vehicle. 5 6. The primary questions for consideration before this Court are whether the insurance company can be held liable to pay compensation when the deceased was travelling as a gratuitous passenger in a goods vehicle? Whether there was a breach of policy conditions and statutory regulations by the owner of the vehicle? and whether the learned Tribunal erred in fixing joint and several liability on the insurer? 7. From the evidence on record, it is undisputed that the deceased was travelling in a tractor-trailer meant for transporting goods. It is not the case of the claimants that the deceased was employed by the owner or was assisting in the transportation of goods. No material has been produced to suggest that the deceased was engaged in any activity that would bring him under the scope of a “covered person” under the insurance policy. As per the insurance contract, the liability of the insurer is limited and conditional. The insurer is liable to indemnify only those persons whose risk is specifically covered. Gratuitous passengers in goods vehicles are explicitly excluded unless otherwise stated. 8. In the present case, no extra premium or endorsement was produced to show coverage for non-employed passengers. Further, the record reveals that nine persons were travelling in a vehicle designed for three persons. The vehicle was being used in contravention of the Motor Vehicles Act, permit conditions, and insurance policy, thereby constituting a fundamental breach. 9. The Hon’ble Apex Court in United India Insurance Co. Ltd. v. Tilak Singh, reported in (2006) 4 SCC 404, reiterated that where a person travels in a goods vehicle without any legal capacity or authorisation, 6 the insurance company cannot be held liable. Relevant paragraph is quoted below for ready reference : “21. In our view, although the observations made in Asha Rani case [(2003) 2 SCC 223 : 2003 SCC (Cri) 493] were in connection with carrying passengers in a goods vehicle, the same would apply with equal force to gratuitous passengers in any other vehicle also. Thus, we must uphold the contention of the appellant Insurance Company that it owed no liability towards the injuries suffered by the deceased Rajinder Singh who was a pillion rider, as the insurance policy was a statutory policy, and hence it did not cover the risk of death of or bodily injury to a gratuitous passenger.” 10. In view of the above legal position, this Court is of the firm view that the deceased was a gratuitous passenger, and the use of the vehicle was in violation of the policy conditions. Therefore, fastening liability on the insurer is not sustainable in law. Consequently, the appeal filed by the insurance company is allowed. 11. The award dated 31.07.2017 passed by the learned Additional Motor Accident Claims Tribunal, Dantewada, in Claim Case No. 06/2015 is modified to the extent that the insurer (appellant herein) is exonerated of any liability to pay compensation to the claimants. The entire liability to pay the awarded compensation of Rs. 7,74,000/-, along with interest as directed by the learned Tribunal, shall rest solely upon non-applicant No. 2, the owner of the offending vehicle. Although the insurer cannot be fastened with direct liability for the breaches committed by the vehicle owner, it must, in the interest of justice and in furtherance of the 7 principles of benevolent legislation underlying the Motor Vehicles Act, be directed to satisfy the award in the first instance. Thereafter, the insurer shall be entitled to recover the same from the owner of the offending vehicle in accordance with law. 12. In view of the doctrine of “pay and recover”, and in the interest of justice and claimants’ welfare, the insurance company is directed to satisfy the award amount in each claim case in the first instance, along with interest as awarded by the Tribunal. The insurance company shall thereafter be entitled to recover the compensation amount from the owner of the offending vehicle, by initiating appropriate proceedings in accordance with law. The quantum of compensation awarded by the Tribunal is not disturbed and is affirmed. The rate of interest and apportionment, as determined by the Tribunal, shall also remain unaltered. Sd/- (Amitendra Kishore Prasad) Saxena JUDGE