Case Note & Summary
The Supreme Court considered appeals arising from a motor vehicle accident in which eleven claim petitions were filed before the Motor Accidents Claims Tribunal. The Tribunal awarded compensation for death and injuries, holding the registered owner, the ostensible owner/driver, and the insurance company jointly and severally liable. The insurance company challenged three awards before the High Court of Chhattisgarh, contending that the injured/deceased were gratuitous passengers in a goods vehicle and that ownership had been transferred to the ostensible owner/driver on the basis of an agreement, while the insurance policy stood in the name of the registered owner. The High Court allowed the insurer's appeals, absolving the insurer and enhancing compensation in two claimant appeals while affirming the Tribunal's award in one. The appellant, the ostensible owner/driver, challenged the High Court's orders casting personal liability on him, including a review order. Two connected appeals were settled in a Lok Adalat and dismissed as nothing survived. The remaining appeals concerned determination of liability and indemnification. The Court examined the evidence and found that the injured claimant was a fish monger and the deceased passenger was a vegetable hawker, both accompanying their goods in the goods vehicle. The insurer's witness in cross-examination conceded lack of knowledge about whether the passengers were accompanying goods, and the insurer failed to produce any seizure mahazar or criminal case records to support its assertion. The Tribunal had specifically held that the persons travelling in the goods vehicle to safeguard their goods were not gratuitous passengers, and the High Court's reversal was perfunctory and without material. The Court held that Section 147(1)(b)(i) of the Motor Vehicles Act, 1988 covers liability for death or bodily injury to any person including the owner of goods or his authorized representative carried in the vehicle. On the question of transfer of ownership, the sale agreement showed that out of Rs.90,000 consideration, Rs.80,000 was paid, but the balance of Rs.10,000 was payable within two months and only after payment would the registration be transferred. No report under Section 50(1)(a)(i) of the Act was made by the registered owner, and the Magistrate's order handing over the vehicle directed change of ownership within 30 days, indicating that ownership had not been transferred. The Court relied on Naveen Kumar v. Vijay Kumar & Ors., (2018) 3 SCC 1, which interpreted the definition of owner to avoid burdening claimants with tracing successive transfers, and held that the liability to pay falls squarely on the registered owner, which must be indemnified by the insurer. The Court also noted the insurer's selective challenge to only three of eleven claim petitions but found that issue irrelevant once the substantive grounds were negatived. Accordingly, Civil Appeal Nos. 6338-6339 of 2024 and Civil Appeal No. 6340 of 2024 were allowed, and the insurer was directed to satisfy the impugned awards with interest at 12% for the Tribunal award and 6% for the enhanced amounts from the date of filing of the claim petitions. Civil Appeal Nos. 6341 and 6342 were dismissed as settled. Pending applications were disposed of.
Headnote
A) Motor Vehicles Act, 1988 - Insurance Liability - Owner of Goods Not Gratuitous Passenger - Section 147(1)(b)(i), Motor Vehicles Act, 1988 - The injured/deceased were petty hawkers travelling in a goods vehicle with their goods for sale, as a fish monger and a vegetable hawker respectively; the insurer's assertion that they were gratuitous passengers was unsupported by evidence, and the insurer's administrative officer admitted in cross-examination that he had no knowledge of their status - The Tribunal's finding that they were accompanying their goods for safety was not disturbed; the High Court reversed it perfunctorily without material - Held that under Section 147(1)(b)(i), liability for death or bodily injury includes owner of goods or authorized representative carried in a motor vehicle; insurer liable to indemnify (Paras 7-8). B) Motor Vehicles Act, 1988 - Transfer of Ownership - Non-compliance with Section 50 Leaves Registered Owner Liable - Section 50, Motor Vehicles Act, 1988 - The sale agreement fixed consideration at Rs.90,000, recital showed balance Rs.10,000 payable within two months and only then registration would be transferred; no report of transfer under Section 50(1)(a)(i) was made by registered owner; Magistrate's order directing handing over of vehicle noted registered owner's name not changed and directed transfer within 30 days - Held that ownership did not transfer, appellant had mere possession, registered owner remained owner and liable to compensate victims, which liability must be indemnified by insurer, following Naveen Kumar v. Vijay Kumar & Ors. (Paras 9-10). C) Motor Vehicles Act, 1988 - Insurance - Insurer Cannot Pick and Choose Which Awards to Challenge - No Specific Section - The insurer challenged only three of eleven claim petitions; the High Court failed to consider this; the insurer did not refute the pick-and-choose allegation with documentary proof before Supreme Court - Held that this issue did not assume relevance because the substantive grounds to absolve insurer were negatived (Para 11).
Issue of Consideration
Whether the injured/deceased were gratuitous passengers in a goods vehicle, thereby absolving the insurer; whether ownership of the vehicle had been transferred to the appellant/driver, exonerating the registered owner and insurer; whether the insurer could selectively challenge only some of the multiple claim petitions.
Final Decision
Civil Appeal Nos. 6338-6339 of 2024 and Civil Appeal No. 6340 of 2024 allowed; Civil Appeal Nos. 6341 and 6342 of 2024 dismissed as settled in Lok Adalat; insurer directed to satisfy the impugned awards other than those dismissed, with 12% interest from date of claim petition for Tribunal award and 6% interest for enhanced amounts from date of filing claim petition; pending applications disposed of.
Law Points
- Insurer must indemnify liability for death or bodily injury to owner of goods or authorized representative carried in a goods vehicle under Section 147(1)(b)(i) of Motor Vehicles Act
- 1988
- passengers accompanying their goods are not gratuitous passengers
- transfer of ownership of a motor vehicle requires compliance with Section 50
- including payment of full consideration and report to Registering Authority
- registered owner remains liable even if possession is transferred
- insurer cannot avoid liability by selectively challenging only some claim petitions
- liability falls on registered owner and must be indemnified by insurer
