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2007 Supreme(SC) 204
SUPREME COURT OF INDIA
Dr. ARIJIT PASAYAT & S.H. KAPADIA
New India Assurance Co. LtdPETITIONER:
vrsus
Vedwati & Ors.RESPONDENT:
Appeal (civil) 860 of 2007
(Arising out of SLP(C) No. 8317 of 2002) WITH CIVIL APPEAL NO. 861 OF 2007
(Arising out of SLP(C) No. 8802 of 2002)
Decided on 20/02/2007
Under the Motor Vehicles Act, 1988, an insurer is not liable for compensation for passengers traveling in a 'goods carriage' as the Act does not mandate statutory insurance coverage for such passengers, distinguishing the current 'goods carriage' from the 'goods vehicle' concept in the previous legislation.
Headnote:(A) Motor Vehicles Act, 1988 - Sections 2(14), 2(35), 2(40), 2(47), 145(c) and 147 - Distinction between "goods vehicle" under the previous legislation and "goods carriage" under the 1988 Act - Legislative intent to prohibit goods carriages from carrying passengers - Section 147 does not mandate compulsory coverage against death or bodily injury to any passenger in a goods carriage. (Paras 12-16)
(B) Insurance liability - No statutory liability on the owner of a vehicle to insure passengers traveling in a goods carriage - Consequently, the insurer cannot be held liable for compensation in such cases. (Para 17)
Facts of the case:
The deceased died in an accident while traveling as a passenger in a tractor used as a goods carriage. A claim for compensation was filed, and the Tribunal and High Court held the insurer liable, relying on a previous judicial view that passengers in goods vehicles were entitled to compensation. The insurer challenged this, contending that the vehicle was used for carrying passengers in violation of the policy terms and that no statutory liability existed for passengers in a goods carriage.
Findings of Court:
The insurer is not liable to satisfy the award as the statutory provisions of the Motor Vehicles Act, 1988, do not require the insurance of passengers in a goods carriage.
Issues: Whether an insurer is liable to pay compensation for the death of or bodily injury to a person traveling as a passenger in a goods carriage under the Motor Vehicles Act, 1988.
Ratio Decidendi: The court observed a significant conceptual difference between "goods vehicle" as defined in the old Act and "goods carriage" in the 1988 Act. The current definition of "goods carriage" indicates it is used solely for the carriage of goods. As the 1988 Act does not mandate compulsory insurance coverage for passengers in a goods carriage, and Section 147 only provides such coverage for "public service vehicles," there is no statutory liability on the insurer for passengers in a goods carriage.
Result: Appeals allowed.
Legal Category Hierarchy
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tort
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motor accident compensation
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liability of insurer
- passenger in goods carriage
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statutory liability
- compulsory insurance
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liability of insurer
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motor accident compensation
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insurance law
-
motor insurance
- third-party liability
- scope of policy
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motor insurance
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practice and procedure
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appeal
- special leave petition
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tribunal
- motor accidents claims tribunal
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appeal
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statutory interpretation
-
definition of terms
- goods carriage
- goods vehicle
- transport vehicle
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definition of terms
JUDGMENT:
Dr. ARIJIT PASAYAT, J.
Leave granted.
Challenge in these appeals is to the judgment rendered by a Division Bench of the Allahabad High Court dismissing the appeal filed by the appellant (hereinafter referred to as the Insurer). By the impugned judgment the High Court held that the respondent Nos.1 to 6 (hereinafter referred to as the Claimants) were entitled to compensation and that the same was to be paid by the insurer.
Background facts in a nutshell are as follows:
A Claim Petition was filed under Section 166 of the Motor Vehicles Act, 1988 (in short the Act) claiming compensation with the allegation that Paras Ram Agnihotri (hereinafter referred to as the deceased) was returning from his village Gokhia from Atarra in tractor No. MP 16A/2637 after delivering certain goods there. The tractor overturned due to rash and negligent driving by the driver, with the result the deceased has lost his life. He was aged about 38 years and was working as priest and agricultural farmer from which he was earning about Rs.7,000/- per month. Adjudicating the Claim Petition, the IVth Additional District Judge Banda-cum-Motor Accidents Claims Tribunal (in short the MACT) did not accept the plea of the insurer that there was violation of terms of the policy issued to Jagdish Prasad (hereinafter referred to as the insured). The tractor could only be used for agricultural work. Since the same was used for carrying passenger, the insurer was not responsible to indemnify to any award and to pay any amount to the claimants. The Tribunal rejected this plea and held that in view of this Courts judgment in New India Assurance Company v. Satpal Singh & Ors. (2000(1) SCC 237), passenger travelling in a goods vehicle graciously was also entitled to claim compensation which was to be paid by the insurer. The High Court affirmed the view by the impugned order.
In support of the appeals, learned counsel for the appellant submitted that the view in Satpal Singhs case (supra) has subsequently been overruled by this Court and therefore the view of the High Court is unsustainable.
In response, learned counsel for the claimants submitted that in any event the liability of the insurer vis-a-vis the third party will not be altered.
This Court had occasion to deal with cases of passengers traveling in goods vehicles which met accident resulting in death of such person or bodily injury. Such cases belong to three categories i.e. (1) those covered by the old Act, (2) those covered by the Act; and (3) those covered by amendment of the Act in 1994 by the Motor Vehicles (Amendment) Act. 1994 (hereinafter referred to as the Amendment Act).
The present appeals belong to the second category.
In Satpal Singhs case (supra) this Court proceeded on the footing that provisions of Section 95(1) of the old Act are in pari materia with Section 147(1) of the Act as it stood prior to the amendment in 1994.On a closer reading of the expressions "goods vehicle".
"public service vehicle", "state carrier" and "transport vehicle" occurring in Sections 2(8), 2(25), 2(29) and 2(33) of the old Act with the corresponding provisions i.e. Section 2(14), 2(35) 2(40) and 2(47) of the Act, it is clear that there are conceptual differences. The provisions read as follows:
Old Act:
"2 (8) "gods vehicle" means any motor vehicle constructed or adapted for use for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the
carriage of goods solely or in addition to passengers"
"2(25) "public service vehicle" means any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward and includes a motor cab contract carriage, and stage carriage."
"2(29) "stage carriage" means a motor vehicle carrying or adapted to carry more than six
persons excluding the driver which carries passengers for hire or reward at separate fares
paid by or for individual passengers either for the whole journey or for stages of the journey:"
"2(33) "transport vehicle" mea
