The insurance company is liable for the full compensation awarded to the family of a non-fare paying passenger who died in an accident involving a goods vehicle carrying his goods.

1. This is an appeal against the order passed by the Motor Accidents Claims Tribunal in MCOP No.

34 of 1983, on the file of the Additional Motor Accidents Claims Tribunal (Additional Sub Judge, Salem), dated 18.11.1985.

2. The case of the petitions is as follows: The first petitioner is the wife, petitioners 2 to 4 are the children, the fifth and sixth petitioners are the parents of one Rama Gounder, aged 40 years and having a ‘Javvarisi’ mill. On 2.11.1982 at about 2.30 pm while he was carrying ‘Kuchikizhangu’ from Pondicherry in the goods vehicle belonging to the first respondent, the vehicle met with ah accident on account of the rash and negligent driving of the same by its driver. The driver of the bus as well as Rama Gounder died on the spot. Rama Gounder was earning a sum of Rs. 1,500/- per month in his ‘Javvarisi’ mill. The petitioners have filed the application for payment of compensation of Rs. 1,00,000/-.

3. The first respondent in his counter has stated that he had sold the vehicle on 9.10.1982 itself and on 2.11.1982 he was not the owner of the vehicle, and therefore he is an unnecessary party to the proceedings, and that the petition may be dismissed against him.

4. The second respondent has contended in his counter that he has become the owner of the vehicle on 4.11.1982, and since the accident took place on 2.11.1982, he is an unnecessary party to the proceedings, and that the petition against him may be dismissed.

5. The third respondent in its counter has contended as follows: The first respondent has sold the vehicle on 9.10.1982. He is therefore not the owner of the vehicle. The insurance policy issued to the first respondent lapsed immediately after the change of the name of the insured in the policy. The accident was not due to the rash and negligent driving of the bus by its driver. The vehicle was driven by the person who had no valid licence. Therefore, the insurance company is not liable to pay any compensation. The claim is also excessive.

6. On the above pleadings, the Motor Accidents Claims Tribunal held an enquiry and gave a finding that the accident was due to the rash and negligent driving of the lorry by its driver, and the petitioners are entitled to a total compensation of Rs. 75,000/- and apportioned the same among the petitioners. Aggrieved over the same, the first respondent/appellant has come forward with this appeal.

7. The learned counsel appearing for the appellant has made it clear even at the outset that even though in the grounds of appeal, the appellant has challenged the finding of the Tribunal that the appellant is not the owner of the lorry involved in the accident and there was no negligence on the part of the driver of the lorry, he is not pressing these grounds in this appeal and restricts his arguments with regard to the liability of the appellant to the claimants.

8. According to the learned counsel appearing for the appellant, the deceased Rama Gounder was travelling in the lorry along with the goods owned by him and he is to be considered as a nonfare paying passenger at the time of the accident and the insurance company cannot be absolved of its liability from making payment of the compensation awarded as held by the Tribunal relying on the decision reported in G. Dayananda and Anr. v. Sanmani Bi & Ors. (1982 ACJ Page 399), and the liability of the insurance company arises under Section 95(2)(a) of the Motor Vehicles Act, in view of the payment of additional premium by the insured as per Clause 14(a) of the policy. The learned counsel appearing for the respondent-insurance company would contend that Section 95(1) of the Motor Vehicles Act alone will apply and Section 95(2) of the Act does not apply, to make the insurance company liable, and the liability of the insurance company is only Rs. 10,000/- and not more, as contended by the appellant.

9. Before proceeding further, it is desirable to bear in mind that as regards the liability of the insurance company, in