Tarlok Singh Chauhan, J
1. The Insurance Company takes exception to the award passed by the learned Motor Accident Claims Tribunal, Una, H.P. on 31.08.2012 (for short
‘Tribunal’) whereby it fastened the liability upon the Insurance Company to pay the entire award amount along with interest at the rate of 8%
per annum.
2. The petitioner filed a claim petition under Section 166 of the Motor Vehicles Act, seeking therein compensation amount on account of death of her
son Ravi Kumar in an accident involving Jeep No. HP-19B-0480 which took place on the intervening night of 15/16th June, 2010 at about 1.30 a.m. at
village Nangal Jarialan.
3. The case of the petitioner was that on the intervening night of 15/16th June, 2010, after attending marriage function, Ravi Kumar being DJ operator
was coming back in a Jeep No. HP-19B-0480. He was sitting in the rear of the vehicle along with Amit Kumar and boxes of Disco Jockey system
were lying in the rear of the jeep. The owner of the DJ system Raman Kumar was sitting in the cabin of vehicle along with the driver. According to
the petitioner, the vehicle was being driven in a rash and negligent manner by its driver Sukhdev Singh and on account of this, the same struck against
a tree, as a result whereof, one heavy speaker box of DJ fell on Ravi Kumar, who sustained multiple fractures and injuries and ultimately succumbed
to the injuries.
4. The learned Tribunal after recording the evidence held the petitioner to be entitled to a sum of Rs.4,18,000/-along with interest at the rate of 8% per
annum. However, the liability to pay the same was fastened upon the Insurance Company constraining it to file the instant appeal.
5. It is vehemently argued by Shri Ashwani K. Sharma, Senior Advocate, assisted by Shri Ishan Sharma, Advocate, for the appellant that the vehicle
in question was admittedly a goods carriage vehicle and the deceased at the time of accident was admittedly travelling in the rear open luggage space
of the vehicle as is pleaded by the petitioner in her claim petition and since the deceased was travelling as an unauthorized gratuitous passenger,
therefore, the liability could not have been fastened upon the Insurance Company.
6. On the other hand, Shri Sanjeev K. Suri, learned counsel for respondent No.1 would argue that the deceased was travelling in the vehicle and,
therefore, the learned Tribunal has rightly fastened the liability to pay the compensation amount on the Insurance Company.
I have heard the learned counsel for the parties and gone through the records of the case carefully.
 7. Section 147 of the Act deals with requirement of policies and limits of liability and the provision, as is relevant for the purpose of the adjudication
of the appeal, is reproduced as under:-
“147. Requirements of policies and limits of liability.
1. In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which-
a. is issued by a person who is an authorised insurer; and
b. insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)-
i. Against any liability which may be incurred by him in respect of the 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;
ii. Against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:
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 injury 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, 1923, (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 a conductor of the vehicle or in examining tickets on the vehicle, or
c. If it is a goods carriage, being carried in the vehicle, or To cover any contractual liability.
Explanation.- For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party
shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or
injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred
in a public place.â€
8. Bearing in mind the provisions, as contained in the aforesaid section, while determining the liability of the Insurance Company in respect of the
passengers being carried in goods vehicle, this Court in Oriental Insurance Company vs. Neelam Kumari and others, 2011 (2) Shim. L.C. 335
observed as under:-
“[7] The law with regard to the liability of the Insurance Company in respect of passengers being carried in a goods vehicle is now well settled. A
three Judge Bench of the Apex Court in New India Assurance Company Ltd. v. Asha Rani and others,2003 1 SCC 223, considered the question
whether it is compulsory for the Insurance Company to cover the liability in respect of passengers travelling in a goods vehicle. This decision was in
context of the un-amended Act. The Apex Court over-ruled its earlier judgment in New India Assurance Company Ltd. v. Satpal Singh, 2000 1 SCC
237 and held as follows:
“... It is held that the insurer will not be liable for paying compensation to the owner of the goods or his authorized representative on being carried
in a goods vehicle when that vehicle meets with an accident and the owner of the goods or his representative dies or suffers any bodily injury.
Justice S.B. Sinha in his concurring judgment held as follows:
25. Section 147 of the 1988 Act, inter-alia, prescribes compulsory coverage against the death of or bodily injury to any passenger of 'public service
vehicle'. Proviso appended thereto categorically states that compulsory coverage in respect of drivers and conductors of public service vehicle and
employees carried in a goods vehicle would be limited to the liability under the Workmen's Compensation Act. It does not speak of any passenger in a
'goods carriage'.
26. In view of the changes in the relevant provisions in the 1988 Act vis- a- vis the 1939 Act, we are of the opinion that the meaning of the words ""any
person"" must also be attributed having regard to the context in which they have been used i.e. ""a third party"". Keeping in view the provisions of the
1988 Act, we are of the, opinion that as the provisions thereof do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured
for any passenger travelling in a goods vehicle, the insurers would not be liable therefor.
[8] This matter again come up for consideration in Oriental Insurance Company v. Devireddy Konda Reddy, 2003 2 SCC 339. The Apex Court
considered the difference between the definition of 'goods vehicle' appearing in the Motor Vehicles Act, 1939 and 'goods carriage' appearing in the
Motor Vehicles Act, 1988 and held as follows:-
The difference in the language of ""goods vehicle"" as appearing 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 the definition of ""goods vehicle"" in the old Act. The position becomes further clear because the expression used
is ""goods carriage"" is solely for the carriage of ""goods"". Carrying of passengers in a goods carriage is not contemplated in the Act.
Thus, the Apex Court held that passengers cannot be carried in a goods vehicle .
[9] In National Insurance Company Ltd. v. Baljit Kaur and others, 2004 2 SCC 1, the Apex Court considered the impact of the amendment to the
Motor Vehicles Act made in 1994. The Apex Court held that after the amendment of 1994, the Insurance Company was bound to cover liability in
respect of owner of the goods or his authorized representative travelling in the goods vehicle. However, it further held that no passenger can be
carried in a goods vehicle and the Insurance Company was not liable to pay compensation with respect to passengers especially gratuitous
passengers. The Apex Court held thus:
20. It is, therefore, manifest that in spite of the amendment of 1994, the effect of the provision contained in Section 147 with respect to persons other
than the owner of the goods or his authorized 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 benefits of insurance to such category of people.
[10] The Apex Court also considered this point in National Insurance Company Ltd. v. Ajit Kumar and others, 2003 9 SCC 668. After considering the
definitions and various provisions of the Motor Vehicles Act both amended and unamended, the Apex Court held as follows:-
“The difference in the language of ""goods vehicle"" as appearing 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 the definition of ""goods vehicle"" in the old Act. The position becomes further clear because the expression used
in ""goods carriage"" is solely for the carriage of goods"". Carrying of passengers in 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 the 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 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 ""the WC Act""). There is no reference to any passenger in ""goods carriage.â€
[11] Following the aforesaid judgments, a similar view was taken by the Apex Court in National Insurance Company v. Chinnamma and others, 2004
8 SCC 697.
[12] In National Insurance Company Ltd. v. Cholleti Bharatamma and others, 2008 1 SCC 42,3 the Apex Court was dealing with a matter in which a
large number of persons were travelling in a goods carriage vehicle. It was contended on behalf of the claimants that all these persons were travelling
as owners of the goods and hence, the Insurance Company was liable to pay the compensation. The Apex Court rejected this contention and held as
follows:-
8. The Act does not contemplate that a goods carriage shall carry a large number of passengers with small percentage of goods as considerably the
insurance policy covers the death or injury either of the owner of the goods or his authorized representative.
9. While explaining the effect of Section 147(b)(i) of the Act, the Hon’ble Supreme Court inU nited India Insurance Company Ltd. vs. Suresh
K.K., 2008 (12) SCC, 657, held as follows:-
“9. The Insurance policy should, inter alia, be in respect of death or bodily injury of the person carried in the vehicle. Such person may be the
owner of the goods or his authorized representative. The High Court, therefore, may be correct that the owner of the goods would be covered in
terms of the said provision. But the question which has not been adverted to by the High Court is as to whether the policy contemplates the liability of
the owner of the vehicle in respect of a person who was in the vehicle in a capacity other than owner of the goods. If a person has been travelling in a
capacity other than the owner of the goods, the insurer would not be liable. The purpose for which the provision had to be amended by Act No.54 of
1994 was to widen the scope of the liability of the insurance company.
10. It is now well settled that the term ‘any person’ envisaged under the said provision shall not include any gratuitous passenger. [National Co.
Ltd. vs. Baljit Kaur, {(2004) 2 SCC 1}]. If the claimant had not been travelling in the vehicle as owner of the goods, he shall not be covered by the
policy of the insurance……â€.
10. Admittedly, the offending vehicle in the instant case is Mahindra Jeep which is primarily a goods carriage vehicle and not meant for carrying
passengers other than the one specified in the policy of the insurance. In the case of a gratuitous passenger, the Insurance Company is not liable to
make any payment of compensation as the same contravenes the terms of the policy.
11. Similar issue came up for consideration before me in FAO(MVA) No. 402 of 2010 , titled Oriental Insurance Company Ltd. vs. Amri Devi and
others, along with other connected matters, decided on 7 th July, 2016. The facts therein were that the deceased were travelling in a Mahindra Jeep,
which was a goods carriage vehicle, in the rear of the jeep and not in the passenger cabin of the jeep and this Court after placing reliance upon the
judgment of the Hon’ble Supreme Court held as under:
“9. It is then argued by learned counsel for the appellant that unless and until the deceased are proved to have been travelling in the cabin of the
jeep, they will not be entitled to any compensation. In support of this submission, reliance is placed on the judgment of the Hon’ble Supreme Court
in National
Insurance Co. Ltd. versus Cholleti Bharatamma and others (2008) 1 SCC 423 and thereafter support is also sought to be drawn upon a judgment
rendered by this Court in Parkash Chand versus New India Insurance Company Ltd. & Ors Latest HLJ 2011(HP) 551 wherein the judgment
rendered by the Hon’ble Supreme Court in Cholleti Bharatamma’s case (supra) was relied upon and it has been held that in order to claim the
benefit of travelling in a vehicle as owner of the goods, there must be evidence to show that the deceased had hired the goods vehicle and that the
deceased was travelling in the cabin of the vehicle. It was specifically held that Insurance Company even in respect of the owner of the goods is only
liable if such owner travels in the cabin of the truck and not if he is travelling in the rear of the truck. Relevant observations read thus:-
“11.The Apex Court in National Insurance Co. Ltd. Vs. Cholleti Bharatamma and others, 2008(1), SCC 423 specifically held that the Insurance
Company even in respect of the owner is only liable if such owner travels in the cabin of the truck and not if he is travelling in the rear of the truck.
Reference may be made to that portion of the judgment wherein the Apex Court held as follows:-
“19. It is now well settled that the owner of the goods means only the person who travels in the cabin of the vehicle.â€
12. Learned counsel for respondent No.1 would then argue that the principle of pay and recover apply to the facts of the instant case and the
Insurance Company be made liable to pay the amount at the first instance with the right of recovering the same from the owner of the vehicle.
However, I find no merit in the said contention.
13. The issue in question has been dealt with in detail by a Division Bench of the Hon’ble Madras High Court in Bharti AXA General Insurance
Co. Ltd. vs. Aandi and others, 2019 ACJ 1975 wherein after taking into consideration the entire law on the subject, it was observed as under:-
“4. The Tribunal which heard the Original Petitions quantified the compensation payable in each of the Original Petitions depending upon the loss of
earning capacity in the injury cases and the loss of dependency suffered in fatal case and awarded various amounts as compensation. The Tribunal
also directed the Insurance Company to pay the compensation and gave it liberty to recover the same by filing execution petition against the owner of
the vehicle viz., 1st respondent in the Original Petitions. Aggrieved the Insurance Company is on appeal.
15. While Mr.S.Arunkumar, learned counsel appearing for the Insurance Company would contend that the doctrine of pay and recover evolved by the
Courts in National Insurance Company Ltd., Vs. Swaran Singh, 2004 ACJ 1 (SC) would apply only to cases where there is a subsisting contract of
Insurance covering the risk and there is a violation of a certain condition in the contract of insurance and not to cases where there is no contract
covering the risk.
24. We have considered the rival submissions. Section 147 of the Motor Vehicles Act, spells out the requirements of the motor insurance policy as
well as the limits of liability. While Section 147(1) deals with the matters which will have to be covered by the policy proviso to Section 147(1) sets out
exemptions. Section 147(1)(b) which requires the policy to insure the person or classes of persons specified in the policy to the extent specified in sub-
Section 2 against any liability which may be incurred by him in respect of the death or bodily injury to any person, including owner of the goods or his
authorized representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public
place.
25. A reading of the above provision makes it clear that an insurance policy which is a mandatory statutory requirement is required to cover only
certain classes of persons and not every person who chooses to travel in any type of vehicle. Therefore, there is no mandatory requirement for the
Insurance company to cover persons who are travelling as passengers in a non-passenger vehicle/ goods vehicle.
26. Section 149 imposes an obligation on the part of the insurers to satisfy the judgments and awards made against the persons insured in respect of
third party risks. Section 149(2) requires the Court or the Tribunal to notify the Insurance Company regarding the claim and also hear the Insurance
Company and prescribes the defences that are available to the insurer in such third party claims. One of the defences that is available to the insurer in
such third party claims as set out under Section 149(2)(a)(i)(c) is that the insured vehicle being used for a purpose not allowed by the permit under
which the vehicle is used where the vehicle is a transport vehicle. Therefore, it is clear that a Insurance Company which faces the claim petition can
raise a statutory defence to the effect that the vehicle in question was used for a purpose other than the purpose for which the permit had been issued,
in order to avoid the liability. Both these provisions have to be necessarily read together.
27. The Hon'ble Supreme Court has repeatedly considered the effect of these provisions in various judgments. It should be pointed out at this juncture,
Section 147(1)(b)(i), which read as follows:-
(i) against any liability which may be incurred by him in respect of the 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.
was amended by Act 54 of 1994 with effect from 14.11.1994 to read as follows:-
(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including the owner of the goods or his
authorized representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public
place.
28. The addition of the words ""including the owner of the goods or his authorized representative carried in the vehicle"" introduced a class of persons
who were otherwise not required to be covered statutorily. Therefore, it is only after 14.11.1994, the owner of the goods or the authorized
representative of such owner were required to be covered by the Insurance Companies and not before that.
29. Therefore, a passenger in a goods vehicle even if he was the owner of the goods or the authorized representative of the owner of the goods was
not covered prior to 14.11.1994 or there was no statutory requirement to cover such person. A close reading of Section 147(1) would show that a
policy of insurance covering risks relating to motor accidents are required to cover the persons or classes of persons specified in the policy, against
any liability incurred by him in respect of death or bodily injury or damage to any property of a-
(1) third party.
(2) the owner of the goods or his authorized representative carried in a goods vehicle.
(3) against the death or bodily injury to the passenger of a public service vehicle.
30. Sub-Section (2) of Section 147 lays down the limits of liability. Sub-Section (5) of Section 147 is a non obstante clause, which makes the insurers
liable to indemnify the person or class of persons specified in the policy, in respect of the liability covered by the policy.
31. Section 149 of the Motor Vehicles Act imposes an obligation on the Insurance Company to satisfy the judgments and awards passed against the
insured. Sub-section (2) of section 149 provides that the insurer must be heard in a proceeding before the claims Tribunal seeking compensation, it also
sets out the defences that are available to the Insurance Company in such claims. One of the defences that is set out in Section 149(2)(a)(i)(c) is the
purpose for which the vehicle was used at the time of the accident. Under the said provision it is open to the Insurance Company to plead and prove
that the vehicle was used for the purpose other than which it was permitted and extricate itself from the liability to pay compensation.
32. The Hon'ble Supreme Court considered the scope of Section 95 of the Motor Vehicles Act, 1939 which is identical to Section 147 of the 1988 Act
in Mallawwa Vs. Oriental Insurance Co. Ltd., 1999 ACJ 1 (SC). While considering the purport of Section 95(a), the Hon'ble Supreme Court had
quoted the following portions from the judgment of the Full Bench of the Orissa High Court in New India Assurance Company Ltd., Vs. Kanchan
Bewa, 1994 ACJ 138 (Orissa):
 “(10)...‘(19) Being concerned with a beneficial legislation like the one at hand, we would have normally preferred liberal interpretation, but the
question is whether, without any extra premium having been paid, the owner of a goods vehicle can claim indemnification from the insurer just
because once in a year the goods vehicle had carried a passenger for hire or reward along with the goods. This would perhaps robe the third proviso
dealing with coverage of contractual liability lame…
XXX XXX XXX
(22). Thus, to find oat whether an insurer would be liable to indemnify an owner of a goods vehicle in a case of the present nature, the mere fact that
the passenger was carried for hire or reward would not be enough; it shall have to be found out as to whether he was the owner of the goods, or an
employee of such an owner, and then whether there were more than six persons in all in the goods vehicle and whether the goods vehicle was being
habitually used to carry passengers. The position would thus become very uncertain and would vary from case to case. Production of such result
would not be conducive to the advancement of the object sought to be achieved by requiring a compulsory insurance policy.
(23). There is another aspect of the matter which had led us to differ from the Full Bench decision of Rajasthan High Court. The same is what finds
place in sub-section (2) of Section 95. That sub-section specifies the limits of liability and clause (a) deals with goods vehicle; and in so far as the
person travelling in goods vehicles is concerned, it has confined the liability to the employees only. This is ah indicator, and almost a sure indicator, of
the fact that legislature did not have in mind carrying of either the hirer of the vehicle or his employee in the goods vehicle, otherwise, clause (a) would
have provided a limit of liability regarding such persons also.
(11) Though, the conclusion was arrived at after taking into consideration the Orissa Motor Vehicle Rules, in our opinion the said view is correct, even
otherwise also. In view of what we have said, the contrary view expressed by other High Courts has to be regarded as incorrect.
33. Thus, the law came to be settled to the effect that the Insurance Company is not bound to indemnify the insured for the loss or injury caused to a
person who had travelled as a passenger in a goods vehicle.
34. Then came the judgment in New India Assurance Company Vs. Shri Satpal Singh, 2000 ACJ 1(SC), where the Hon'ble Supreme Court upheld the
judgment of the Bombay High Court which repelled the contention of the Insurance Company that the Insurance Company is not liable to indemnify
the insurer, since the deceased was a gratuitous passenger in a truck. In coming to the said conclusion, the Hon'ble Supreme Court pointed out that the
case arouse when the Motor Vehicles Act, 1939 was in force, therefore it is Section 95 of the said Act that would apply and not Section 147 of the
New Act.
35. Even there, the Hon'ble Supreme Court pointed out that as a result of the new Act, an Insurance policy covering a third party risk is not required
to exclude gratuitous passenger in a vehicle, no matter that the vehicle is of any type or class. Hence, the decision rendered under the old Act vis-a-vis
gratuitous passenger are of no use, while considering the liability of the Insurance Company in respect of any accident that had occurred or would
occur after the new Act came into force.
36. In New India Assurance company Ltd., Vs. Asha Rani, 2001 ACJ 1847(SC), a two Judge bench of the Hon'ble Supreme Court doubted the
correctness of the conclusion reached by another two Judge bench in New India Assurance Company Vs. Shri Satpal Singh, 2000 ACJ 1 (SC) and
placed the matter before a larger bench for reconsideration. The question referred to by the judgment in New India Assurance company Ltd., Vs.
Asha Rani, 2001 ACJ 1847 (SC), was decided by a larger bench consisting of three Judges of the Hon'ble Supreme Court in New India Assurance
Company Ltd., Vs. Asha Rani, 2003 ACJ 1(SC). The larger bench of the Hon'ble Supreme Court after an elaborate consideration of the provisions of
Sections 147 and 149 of the Motor Vehicles Act, 1988 as amended by the amendment Act 54 of 1994 held that the judgment in New India Assurance
Company Vs. Shri Satpal Singh, 2000 ACJ 1 (SC) has not been correctly decided.
37. However, in National Insurance Company Ltd., Vs. Baljit Kaur, 2004 ACJ 428(SC), a three Judge bench of the Hon'ble Supreme Court again
went into the question as to whether an insurance policy in respect of the goods vehicle would also cover gratuitous passengers in view of the
legislative amendment to Section 147 introduced by Act 54 of 1994. After referring to the larger bench decision in New India Assurance Company
Ltd., Vs. Asha Rani 2003 ACJ 1 (SC), the Hon'ble Supreme Court observed as follows:-
“(20) It is therefore, manifest that in spite of the amendment of 1994, the effect of the provision contained in Section 147 with respect to persons
other than the owner of the goods or his authorized 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 any premium was paid to the extent of the benefit of insurance to such category of people.â€
38. However, the Hon'ble Supreme Court clarified that the said judgment will have only prospective effect so that the awards that were made against
the insurer during the period between the decision in New India Assurance Company Vs. Shri Satpal Singh, 2000 ACJ 1 (SC) and the decision of the
larger bench in New India Assurance Company Ltd., Vs. Asha Rani, 2003 ACJ 1(SC), will not be nullified.
39. The Hon'ble Supreme Court also permitted the Insurance Company in the said case to pay the award amount and recover the same from the
owner of the vehicle/insured. From the above, it is clear that the policy of insurance which is mandatory under the provisions of Motor Vehicles Act is
not required to cover the risk in case of an unauthorized or a gratuitous passenger in the goods vehicle after the amendment of Section 147 by Act 54
of 1994 and it will be the liability of the insured only to satisfy such awards and not the Insurance Company.
40. The question again was dealt with by a Full Bench of this Court in United India Insurance company Vs. Nagammal, 2009 ACJ 865 (Madras). The
Full Bench after elaborate reference to the judgments of the Hon'ble Supreme Court in New India Assurance Company Vs. Asha Rani, 2003 ACJ 1
(SC); New India Assurance Company Vs. Shri Satpal Singh, 2000 ACJ 1 (SC) and National Insurance Company Ltd., Vs. Baljit Kaur, 2004 ACJ 428
(SC) concluded as follows:-
30. From a conspectus of the decisions, thus analysed, it is now apparent that before Asha Rani's case 2003 ACJ 1 (SC) was decided, the decision in
Satpal Singh's case 2000 ACJ 1 (SC) was holding the field and such latter decision was overruled only in Asha Rani's case. Under such peculiar
circumstances in Baljit Kaur's case, 2004 ACJ 428 (SC), it was observed, that even though the Insurance Company was not liable to pay the
compensation in respect of a passenger in a goods vehicle, yet since the law was not clear before Asha Rani's case was decided, the doctrine of
prospective overruling was applied and a direction was issued in the interest of justice directing the Insurance Company to satisfy the award and
recover the same from the owner of the vehicle. In other words, even though the statutory provision under Section 149(4) and Section 149(5) was not
applicable, the Supreme Court applied the Doctrine of ""pay and recover"". The ratio of the said decision has been applied selectively in some of the
later decisions and in some of the subsequent decisions, the doctrine of ""pay and recover"" in respect of matters which are not strictly covered under
Sections 149(4) and 149(5) has not been applied by the Supreme Court depending upon the facts and circumstances of a particular case.
Therefore, it cannot be said as an inexorable principle of law that in each case where the liability is in respect of a passenger in a goods vehicle, which
is not required to be covered under Section 147 of the Act, the Insurance Company would be directed to first pay the amount and thereafter recover
the same from the owner and such discretion is obviously with the Court either to apply such principle or not.
31.Thus from an analysis of the statutory provisions as explained by the Supreme Court in various decisions rendered from time to time, the following
pictures emerges:
(i)The Insurance Policy is required to cover the liability envisaged under Section 147, but wider risk can always be undertaken.
(ii)Section 149 envisages the defences which are open to the Insurance Company. Where the Insurance Company is not successful in its defence,
obviously it is required to satisfy the decree and the award. Where it is successful in its defence, it may yet be required to pay the amount to the
claimant and thereafter recover the same from the owner under such circumstance envisaged and enumerated in Section 149(4) and Section 149(5).
(iii)Under Section 147 the Insurance Company is not statutorily required to cover the liability in respect of a passenger in a goods vehicle unless such
passenger is the owner or agent of the owner of the goods accompanying such goods in the concerned goods vehicle.
(iv)Since there is no statutory requirement to cover the liability in respect of a passenger in a goods vehicle, the principle of ""pay and recover"", as
statutorily recognised in Section 149(4) and Section 149(5), is not applicable ipso facto to such cases and, therefore, ordinarily the Court is not
expected to issue such a direction to the Insurance Company to pay to the claimant and thereafter recover from the owner.
(v)Where, by relying upon the decision of the Supreme Court in Satpal Singh's case 2000 ACJ 1 (SC), either expressly or even by implication, there
has been a direction by the Trial Court to the Insurance Company to pay, the Appellate Court is obviously required to consider as to whether such
direction should be set aside in its entirety and the liability should be fastened only on the driver and the owner or whether the Insurance Company
should be directed to comply with the direction regarding payment to the claimant and recover thereafter from the owner.
(vi)No such direction can be issued by any Trial Court to the Insurance Company to pay and recover relating to liability in respect of a passenger
travelling in a goods vehicle after the decision in Baljit Kaur's case 2004 ACJ 428 (SC), merely because the date of accident was before such
decision. The date of the accident is immaterial. Since the law has been specifically clarified, no Trial Court is expected to decide contrary to such
decision.
(vii)Where, however, the matter has already been decided by the Trial Court before the decision in Baljit Kaur's case 2004 ACJ 428 (SC), it would be
in the discretion of the Appellate Court, depending upon the facts and circumstances of the case, whether the doctrine of ""pay and recover"" should be
applied or as to whether the claimant would be left to recover the amount from the person liable i.e., the driver or the owner, as the case may be.
41. Therefore, in view of the authoritative pronouncement of the Full Bench of this Court in United India Insurance company Vs. Nagammal, 2009
ACJ 865 (Madras), it is to be seen as to whether the law laid down in New India Assurance Company Vs. Asha Rani, 2003 ACJ 1 (SC); National
Insurance Company Ltd., Vs. Baljit Kaur, 2004 ACJ 428 (SC) and United India Insurance company Vs. Nagammal (supra), has been faulted
subsequently by the Hon'ble Supreme Court.
42. Mr. N.Vijayaraghavan would of course rely upon the judgment in Oriental Insurance Company Vs. Nanjappan, 2004 ACJ 721 (SC;) Oriental
Insurance Co. Ltd Vs. Brij Mohan, 2007 ACJ 1909 (SC) and Manager, National Insurance Company Ltd., Vs. Saju P. Paul, 2013 ACJ 554 (SC).
43. In Oriental Insurance company Vs. Nanjappan 2004 ACJ 721 (SC), the Hon'ble Supreme Court was considering a case where the High Court had
made the insurance Company liable relying upon New India Assurance Company Vs. Shri Satpal Singh, 2000 ACJ 1 (SC), before the larger bench
judgment in New India Assurance Company Vs. Asha Rani, 2003 ACJ 1 (SC). Therefore, the Hon'ble Supreme Court, in view of the judgment in
National Insurance Company Ltd., Vs. Baljit Kaur, 2004 ACJ 428 (SC), affirmed the judgment of the High Court, but, however, allowed the Insurance
Company the liberty to recover the compensation by initiating execution proceedings in the very same case.
44. Therefore, the judgment in Oriental Insurance company Vs. Nanjappan, 2004 ACJ 721 (SC,) cannot be taken as a precedent to hold that the
insurer would be liable or could be made liable to pay the compensation to an unauthorized or a gratuitous passenger in a goods vehicle, even after the
judgment of the Hon'ble Supreme Court in National Insurance Company Ltd., Vs. Baljit Kaur, 2004 ACJ 428 (SC).
45. In Oriental Insurance Co. Ltd Vs. Brij Mohan, 2007 ACJ 1909 (SC) the Hon'ble Supreme Court held that the intention of the parliament was that
the words ""any person"" occurring in Section 147 will not cover all persons who are travelling in a goods carriage in any capacity whatsoever. It was
also found that the tractor in question was used for non-agricultural purpose, though, it had permit for agricultural purpose only. After having held that
the Insurance Company cannot be statutorily made liable, the Hon'ble Supreme Court chose to exercise its power under Article 142 of the Constitution
of India to direct the Insurance Company to pay the compensation and gave liberty to it to recover the same from the Insured/ owner of the tractor.
We do not think that the said decision could be used as a precedent to enable us to direct the Insurance Company to pay with liberty to recover the
compensation in respect of an injury caused to a person who is found to be a gratuitous passenger or a passenger for hire or reward in a goods
vehicle.
46.The next decision relied upon by Mr.N.Vijayaraghavan in support of his contention that this Court has ample power to direct the Insurance
Company to pay the compensation with liberty to recover the same even in respect of a gratuitous passenger in a goods vehicle is Manager, National
Insurance Company Ltd., Vs. Saju P. Paul, 2013 ACJ 554 (SC). There again the Hon'ble Supreme Court held that the High court was not right in
directing the Insurance Company to pay the compensation. In fact, the Hon'ble Supreme Court while dealing with the liability of the Insurance
Company to pay the compensation for a spare driver who was travelling in a goods vehicle observed as follows:-
17. The High Court misconstrued the proviso following sub-Section (1) of Section 147 of the 1988 Act. What is contemplated by the proviso to
Section 147(1) is that the policy shall not be required to cover liability in respect of death or bodily injury sustained by an employee arising out of and in
the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923. The claimant was admittedly not driving the
vehicle nor he was engaged in driving the said vehicle. Merely because he was travelling in the cabin would not make his case different from any
other gratuitous passenger.
18. The impugned judgment is founded on a misconstruction of Section 147. The High Court was wrong in holding that the Insurance Company shall
be liable to indemnify the owner of the vehicle and pay the compensation to the claimant as directed in the award by the Tribunal.â€
47. However, the Hon'ble Supreme Court invoked the power under Article 142 taking note of the peculiar facts of the case and directed the Insurance
Company to pay the compensation with liberty to recover. Therefore, in our considered opinion the judgment in Manager, National Insurance
Company Ltd., Vs. Saju P. Paul, 2013 ACJ 554 (SC )cannot also be taken as a precedent, as contended by Mr.N.Vijayaraghavan, to impose the
obligation to indemnify the insured in respect of death or bodily injury caused to the persons who are unauthorized passengers in a goods vehicle.
48. Coming to the latest judgment viz., Shivaraj Vs. Rajendra, 2018 ACJ 2755 (SC), there again the Hon'ble Supreme Court affirmed the conclusion of
the High Court to the effect that the Insurance Company was not liable for the loss or injuries suffered by the appellant or to indemnify the owner of
the tractor. However, the Hon'ble Supreme Court taking note of the peculiar circumstances of the case directed the Insurance Company to pay the
compensation with liberty to recover the same. Unfortunately, the decisions of the larger bench in New India Assurance Company Vs. Asha Rani,
2003 ACJ 1 (SC) or National Insurance Company Ltd., Vs. Baljit Kaur, 2004 ACJ 428 (SC), were not brought to the notice of the two Judge Bench
which decided Shivaraj Vs. Rajendra (supra).
49. We find that the judgments relied upon by the Hon'ble Supreme Court in Shivaraj Vs. Rajendra, 2018 ACJ 2755 (SC), in support of its conclusion
that the Insurance Company can be directed to pay the compensation with liberty to recover the same even in respect of a gratuitous passenger or an
unauthorized passenger in a goods vehicle, do not support the said conclusion.
50. In fact, we find that in none of the judgments referred to viz., National Insurance Co. Ltd. Vs. Swarn Singh, 2004 ACJ 1 (SC; )Mangla Ram Vs.
Oriental Insurance Co. Ltd. 2018 ACJ 1300 (SC;) Rani Vs. National Insurance Co.Ltd., 2018 ACJ 2430 (SC )and Manuara Khatun Vs. Rajesh
Kumar Singh, 2017 ACJ 1031 (SC,) the question regarding the liability of the Insurance Company to pay the compensation in respect of an
unauthorized passenger in the goods vehicle did arise for consideration. We are therefore of the considered opinion that the judgment of the two Judge
bench in Shivaraj Vs. Rajendra, 2018 ACJ 2755 (SC,) cannot be taken as a precedent to conclude that the Insurance Company would be liable to pay
the compensation even in respect of an unauthorized passenger, in a goods vehicle, in the light of categorical pronouncement of larger bench of the
Hon'ble Supreme Court in New India Assurance Company Vs. Asha Rani, 2003 ACJ 1(SC )and National Insurance Company Ltd., Vs. Baljit Kaur,
2004 ACJ 428 (SC). We therefore conclude that the Tribunal, in the case on hand, was not right in directing the Insurance Company to pay the
compensation and giving it the liberty to recover the same from the owner.â€
14. As a matter of fact, the issue of pay and recover in such circumstances is no longer res integra in view of the recent judgment of the Hon’ble
Supreme Court in Shamanna and another vs. Divisional Manager, Oriental Insurance Company Limited and others (2018) 9 SCC 65 0wherein it was
held that if the Insurance Company has no liability to pay at all, then it cannot be compelled to pay the compensation amount and later on recover it
from the owner of the vehicle.
15. In view of the aforesaid discussion, I find merit in this appeal and the same is accordingly allowed. The award insofar as it fastens liability to pay
the award on the appellant is set aside. The parties are left to bear their own costs. Pending application, if any, also stands disposed of.
