IMPORTANT POINT
An insurance policy in respect of a goods vehicle would not cover gratuitous passengers, in view of the legislative amendment in 1994 to Section 147 of the Motor Vehicles Act, 1988.

JUDGMENT

V.N. Khare, CJI.-Leave granted.

2. The question that arises for consideration in these appeals is whether an insurance policy in respect of a goods vehicle would also cover gratuitous passengers, in view of the legislative amendment in 1994 to Section 147 of the Motor Vehicles Act, 1988.

3. The first respondent herein preferred a claim petition for compensation before the Motor Accident Claims Tribunal, Ludhiana (hereinafter referred to as the Claims Tribunal ), in view of the death of her sixteen year old son, Sukhwinder Singh, due to the allegedly reckless driving by the second respondent and driver of the goods vehicle, bearing Number PB-10U-8937, on February 19, 1999. It was found by the Claims Tribunal that the victim, who was returning in the truck from a marriage ceremony, died as a result of the rash and negligent driving by the driver of the goods vehicle, the second respondent herein. It was an admitted fact that the said vehicle was insured with the appellant insurance company.

4. The Claims Tribunal relying upon the decision of this Court in New India Assurance Co. v. Satpal Singh (2000) 1 SCC 237, accepted the claim petition, and rejected the contention of the appellant insurance company that the concerned vehicle being a goods vehicle, it would not have to incur any liability with respect to passengers transported in the vehicle. It further directed the appellant to pay an amount of Rs. 1,32,000/- as compensation, with interest at the rate of 9% from the date of application. The High Court upheld the verdict of the Claims Tribunal on appeal, with the further direction that in the event the owner, the third respondent herein, had committed any breach, the appellant insurer would be entitled to recover the amount of compensation from him.

5. It may be noticed at the outset that the Judgment rendered in Satpal Singh case (supra) has been subsequently reversed by a three-judge Bench of this Court in New India Assurance Co. Ltd. vs. Asha Rani (2003) 2 SCC 223, which was followed in the case of Oriental Insurance Co. Ltd. vs. Devireddy Konda Reddy (2003) 2 SCC 339.

6. Reference in this connection may also be made to National Insurance Co. Ltd. v. Ajit Kumar and Others [JT 2003(7) SC 520].

7. In the case of New India Assurance Co. Ltd. vs. Asha Rani (Supra), it was held that the previous decision in Satpal Singh case, was incorrectly rendered, and that the words "any person" as used in Section 147 of the Motor Vehicles Act, 1988, would not include passengers in the goods vehicle, but would rather be confined to the legislative intent to provide for third party risk. The question in the subsequent judgment in Oriental Insurance Co. Ltd. vs. Devireddy Konda Reddy (supra), involved, as in the present case, the liability of the insurance company in the event of death caused to a gratuitous passenger travelling in a goods vehicle. The Court held that the Tribunal and the High Court were not justified in placing reliance upon Satpal Singh case (supra), in view of its reversal by Asha Rani (supra), and that, accordingly, the insurer would not be liable to pay compensation to the family of the victim who was travelling in a goods vehicle.

8. It was contended by the learned counsel appearing on behalf of the second and third respondents, the driver and owner of the vehicle respectively, that the decision in Asha Rani case (supra) and Konda Reddy case (supra) were delivered with respect to the position prevailing prior to the amendment of Section 147 by the Motor Vehicles (Amendment) Act, 1994. As such, the effect of the legislative amendment was not in question in the above cases, and therefore, the law laid down by these decisions would not be considered as binding law in view of coming into force of the said amendment. Since the accident in the present instance occurred in 1999, this Court would now have to consider afresh the impact of the 1994 amendment, and could not consider itself circumscribed by the aforementioned dec