Insurance companies are not liable for unauthorized passengers in goods vehicles under Section 147 of the Motor Vehicles Act, 1988, as there is no statutory requirement to cover such risks.

JUDGMENT :

This Civil Miscellaneous Appeal has been preferred by the Insurance Company against the Award dated 02.03.2020 made in M.C.O.P.No.53 of 2015 by the Motor Accidents Claims Tribunal/Additional District Court, Dindigul as regards the liability issue.

2. Despite the receipt of notice, the eighth respondent/first respondent neither appeared nor represented through his counsel.

3. Heard the learned counsel for the appellant/second respondent and the respondents 1 to 6/claimants.

4. The claim petition was filed by the dependents of the deceased Jeyaraman claiming compensation of Rs.10,00,000/- for the death of Jeyaraman in a motor vehicle accident that occurred on 03.08.2013.

5. At trial, on the claimants’ side, two witnesses were examined and three documents were marked. On the side of the second respondent/insurance company, two witnesses were examined and three documents were marked.

6. Upon consideration, the Tribunal held that the deceased was an unauthorised passenger and though the first respondent vehicle is a goods vehicle, as the first respondent having allowed the unauthorised person to travel in the vehicle has breached the policy conditions, the Tribunal has ordered that the insurance company is liable to pay the award amount to the claimants at the first instance and recover the same from the owner of the vehicle at a later point of time. Against this finding, the Insurance Company has preferred this appeal.

7. The learned counsel for the appellant Ms.Malini would vehemently argue that when the deceased was an unauthorised passenger, then it is a clear violation of the policy condition by the owner of the vehicle. She would further contend that as per Section 147 of the Motor Vehicle Act, 1988, insurer is not statutorily required to cover the risk of unauthorised passenger in goods vehicle unless such passenger is owner or agent of the owner of the goods carried in the goods vehicle. As the deceased was an unauthorised passenger in the goods vehicle, the award passed invoking the principle of pay and recovery by the Tribunal, is totally incorrect. In order to substantiate her contention, she has relied upon the judgment in Cholamandalam MS General Insurance Company Limited vs. T.Ganesan and another reported in 2022 (1) TNMAC 789.

8. It is observed that if the owner of the vehicle has violated the policy condition and the claimant is being the third party to the contract of insurance, the liability is fastened on the insurance company and the insurance company is at liberty to recover the amount awarded from the owner there of.

9. It is relevant to refer to the observations made by the Hon’ble Supreme Court in National Insurance Company Limited vs. Asha Rani and others reported in 2004 (2) TNMAC 387 wherein the Apex Court has held that in a case where the passenger who travelled in a good vehicle, met with an accident and died, the defence of the insurance company to the effect that the insurer is not liable to pay compensation, since the deceased was travelled in a good vehicle, is not accepted.

10. In a similar matter in Branch Manager, United India Insurance Company, Dharmapuri vs. Nagammal and others reported in (2009) 1 CTC 1 (FB) in similar situation, the Full Bench of this Court held as follows:

"31.(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.

31.(iv) Since there is no statutory requirement to cover the liability in respect of a passenger in a goo