Case Note & Summary
The appellants, legal heirs of Shankar Laxman Barve, filed a claim petition under Section 166 of the Motor Vehicles Act, 1939, seeking compensation for his death in a motor accident on 19th August 1983. The deceased was travelling in a goods truck as a hirer of the goods being carried from Chase Narudi to Pune. The first respondent was the truck owner, the second respondent the driver, and the third respondent the insurer. The Motor Accidents Claims Tribunal found the driver negligent and awarded compensation of Rs.1,38,000 with 12% interest, but dismissed the claim against the insurer, relying on the Supreme Court decision in Mallawwa v. Oriental Insurance Co. Ltd., which held that the risk of a passenger travelling with goods is not covered by the policy. The appellants appealed, contending that the Tribunal erred. They relied on a Division Bench decision of the Bombay High Court in Nasibdar Suba Fakir v. Adhia & Company, which held that a hirer of a goods vehicle travelling with his goods with the consent of the driver or owner is deemed a passenger whose risk must be covered under the insurance policy. The insurer argued that Mallawwa was binding. The High Court, per Justice A.S. Oka, held that the Division Bench decision was binding on the Single Judge and that the Tribunal had erred in not following it. The Court allowed the appeal, set aside the Tribunal's order dismissing the claim against the insurer, and directed the insurer to pay the compensation amount with interest.
Headnote
A) Motor Vehicles Act - Insurance - Liability of Insurer - Passenger in Goods Vehicle - Section 166 Motor Vehicles Act, 1939 - The issue was whether the insurer is liable for a person travelling in a goods vehicle as a hirer of the goods. The Tribunal had dismissed the claim against the insurer relying on Mallawwa v. Oriental Insurance Co. Ltd. However, the High Court followed the Division Bench decision in Nasibdar Suba Fakir v. Adhia & Company, which held that a hirer travelling with his goods with the consent of the driver/owner is deemed a passenger whose risk must be covered. The Court allowed the appeal and held the insurer liable. (Paras 2-4)
Issue of Consideration
Whether the insurer of a goods vehicle is liable to compensate the legal heirs of a deceased person who was travelling as a hirer of the goods vehicle along with his goods, when the policy does not expressly cover passengers.
Final Decision
Appeal allowed. The order of the Tribunal dismissing the claim against the third respondent insurer is set aside. The insurer is directed to pay the compensation amount with interest as awarded by the Tribunal.
Law Points
- Liability of insurer for passenger in goods vehicle
- Interpretation of Section 166 Motor Vehicles Act
- 1939
- Risk coverage for hirer travelling with goods
- Binding precedent of Division Bench over Single Judge
