The main legal point established in the judgment is the interpretation of the liability of the insurance company under the Motor Vehicles Act, 1988, and the determination of the insurer's obligation to indemnify the insured in respect of the awards passed against the claimants.

Prabha Sridevan,J.

The claimants P. Murugan, V. Subramani and P. Ayyakannu were travelling in a goods vehicle bearing registration No.TN-55/K-4584 which capsized due to the rash and negligent driving of the driver. According to the claimants, all the three were travelling in the vehicle along with the goods, to ensure the safe transportation. The vehicle was insured with the appellant and therefore, according to the claimants, the appellant is bound to pay the compensation. The individual facts are as follows:

2. Murugan is a seasonal agricultural worker and also seasonal construction worker. According to him, his monthly income range from 7000 to 10,000/-. His left shoulder was dislocated. He had suffered injury on the left upper arm and internal injuries on skull and chest and multiple injuries all over the body. He was an inpatient for one day at Annal Gandhi Memorial General Hospital, Trichy – 620 017 and an out-patient thereafter. He claimed Rs.3,00,000/-.

3. Subramani was also similarly employed as Murugan mentioned above earning allegedly the same income. His left hip joint was also dislocated and also his left knee and his left elbow and internal injuries in skull and chest and multiple injuries all over the body. He was also an inpatient for one day and thereafter an out-patient at the same hospital. He too claimed a sum of Rs.3,00,000/-.

4. Ayyakannu was also similarly employed and earning the same amount. Because of the accident all the fingers in the left hand except the index finger had to be amputated. He also suffered dislocation of left leg knee, left jaw and left hand shoulder and internal injuries. He was an in-patient from 18-01-2005 to 12-02-2005 and an out-patient thereafter. He claimed a compensation of Rs.23,00,000/-. The Tribunal awarded Rs.7500/-to Murugan and Subramani each and Rs.2,36,800/- to Ayyakannu. The Tribunal did not accept the case of the respondent that the vehicle involved in the accident was not meant to be used for commercial purposes and therefore, the risk of the loadman and owner of goods accompanying them are not required to be covered by the insurer.

5. The learned counsel for the appellant submitted that the Insurance Company is required to cover the liabilities which it is required to indemnify under the contract of insurance and the Insurance Company must indemnify the liability only in respect of those passengers who are authorized to be carried in the vehicle. The learned counsel referred to 2007 ACJ 2129 (National Insurance Co. Ltd. Vs. Anjana Shyam and others) and 2008 ACJ 268 (National Insurance Co. Ltd., Vs. Cholleti Bharatamma and others) and also the following Motor Vehicles Rules:

236. Limit of persons in goods carriage.-- No person shall be carried in the cabin of a goods carriage beyond the number for which there is a seating accommodation at the rate of thirty eight centimetres measured along the seat, excluding the space reserved for the driver, for each person, and not more than six persons in all in addition to the driver shall be carried in any goods carriage.

238. Prohibition of persons on the top of goods carriage. - No person shall be carried in goods carriage upon the goods or otherwise in such a manner that such person is in danger of falling from the vehicle, and in no case shall any person be carried in a goods carriage in such a manner that in any part of his person when he is in a sitting position, is at a height exceeding 300 centimetres from the surface upon which the vehicle rests.

240. No person to be carried for hire or reward. – Nothing contained in rules 236, 238 and 239 shall be deemed to authorise the carriage of any person for hire or reward on any goods carriage.”

The following paragraphs in the above judgments are relevant:

(i) National Insurance Co. Ltd. v. Anjana Shyam,(2007) 7 SCC 445,

"11. Section 149 of the Act speaks of the judgment or award in respect of the liability as is required to be covered by a policy under Claus