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2025 Supreme(Online)(Guj) 12708

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Mool Chand Tyagi, J
United India Insurance Company Limited – Appellant
Versus
Maltiben Bhupendrabhai Shah – Respondent
R/FIRST APPEAL NO. 2376 of 2014



Advocates:
For the Appellants/Petitioners: R G Dwivedi
For the Respondents: Hiren M Modi, O I Pathan

In cases of motor accidents involving gratuitous passengers travelling in goods vehicles, the Insurance Company, despite having no primary liability due to breach of policy conditions, is directed to pay the compensation to the claimants and recover the same from the vehicle owner.

Headnote:(A) Motor Vehicles Act, 1988 - Section 147 - Liability of Insurer - Gratuitous passenger in a goods vehicle - Whether Insurance Company can be held liable to satisfy the award - Held, though the Insurance Company is not liable under the contract of policy for a gratuitous passenger, the principle of 'pay and recover' is applicable to protect the interests of third-party claimants where the vehicle is insured. (Paras 6, 9)

Facts of the case:
The deceased was travelling in a pick-up vehicle as a gratuitous passenger. The vehicle turned turtle due to the rash and negligent driving of the owner-driver, causing the death of the passenger. The Tribunal awarded compensation, holding the Insurance Company liable. The Insurance Company appealed, contending that as the deceased was an unauthorized/gratuitous passenger, it was not liable to indemnify the insured.

Findings of Court:
The High Court affirmed that travelling as a gratuitous passenger in a goods vehicle constitutes a breach of policy terms. However, following the principles laid down by the Supreme Court in Shamanna and Manuara Khatun, the Court directed the Insurance Company to satisfy the award at the first instance and subsequently recover the amount from the owner-driver of the vehicle.

Issues: Whether the Insurance Company is liable to compensate for the death of a gratuitous passenger travelling in a goods vehicle covered by a comprehensive insurance policy.

Ratio Decidendi: While an Insurance Company is not typically liable for unauthorized passengers in a goods vehicle, the doctrine of 'pay and recover' is invoked to ensure that third-party claimants are not deprived of compensation due to technical breaches of insurance policy conditions.

Result: Appeal partly allowed; impugned award modified to include the 'pay and recover' directive.

Table of Content
1. summary of accident facts and tribunal proceedings. (Para 1 , 2)
2. arguments regarding gratuitous passenger status and insurer liability. (Para 3 , 4 , 5)
3. analysis of precedents regarding 'pay and recover' and avoidance clauses. (Para 6 , 7 , 8)
4. final modification of the award to include pay and recover directive. (Para 9 , 10 , 11 , 12)

ORAL JUDGMENT

Approved for Reporting Yes No

1. The captioned appeal has been preferred against the impugned judgment and award dated 08.05.2014 passed by the learned Motor Accident Claims Tribunal (Aux.), Kheda at Nadiad in M.A.C.P. No. 928 of 2010, whereby the learned Tribunal has partly allowed the claim petition and awarded a sum of Rs.8,00,000/- (Rupees Eight Lakhs Only) along with interest at the rate of 7.5% per annum, from the date of filing of the claim petition till its realization, as compensation.

2. The succinct facts, which led to the filing of the instant appeal are summarized as under:-

i. On 16.03.2010, at about 8:45, at night, Mr. Vallabhbhai Somalal Shah (hereinafter referred to as “the deceased”) was travelling by pickup Car No. GJ-7-UU-1857 and was sitting for protection of goods and coming to Antarsumba. At that time, the said vehicle was being driven by respondent no.1 herein at excessive speed, in a rash and negligent manner, endangering human life and resultantly, he lost control over the steering, as a result thereof vehicle turned turtle. In the said vehicular accident, the deceased sustained serious injuries and was taken to J.B. Mehta Government Hospital, Kapadwanj for treatment and during the treatment he succumbed to the injuries.

ii. Upon being served the notices/summons of the Claim Petition, the appellant – Insurance Company filed its Written Statement at Exh. 16, wherein it denied the age, income, facts and averments made in the claim Petition and in brief, prayed for dismissal of the Claim Petition.

iii. Having considered the pleadings of the parties and the material available on record, the learned Tribunal framed the following issues at Exh.19:-

i. Whether the applicants proves that Deceased died due to rash and negligent driving of the driver of the vehicle involved in the vehicular accident as contended ?

ii. Whether the applicants are entitled to get compensation ? If yes, what amount and from whom ?

iii. What order and award?

iv. Having considered the oral as well as documentary evidences on record and after considering the submissions of the learned counsels for the parties, the learned Tribunal partly allowed the claim petition and awarded a sum of Rs.8,00,000/- (Rupees Eight Lakhs Only) along with interest at the rate of 7.5% per annum, from the date of filing of the claim petition till its realization, as compensation and Original opponents were held jointly and severally liable to pay awarded amount of compensation to the claimants.

v. Being aggrieved and dissatisfied with the impugned judgment and award passed by the learned Tribunal, the original opponent No.2/appellant herein - Insurance Company preferred the captioned appeal, thereby challenging the findings returned by the learned Tribunal.

3. Heard learned counsels for the parties.

4. Mr. R.G. Dwivedi, learned counsel for the appellant-Insurance Company vehemently submitted that the deceased was traveling in the goods vehicle as a gratuitous passenger, therefore the liability to satisfy the award cannot be fastened upon the Insurance Company/appellant herein. He placed reliance on the panchnama proved at Exh.61 and submitted that no goods were found at the place of accident, therefore, it has been proved on record that the deceased was travelling in goods vehicle as a gratuitous passenger, therefore, the learned Tribunal has committed illegality in fastening the liability on the Insurance Company. No other plea was raised by the learned counsel for the appellant-Insurance Company.

5. On the other hand, Mr. Hiren M Modi, learned counsel appearing for the Original Clai

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