IN THE HIGH COURT OF MADHYA PRADESH

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AT GWALIOR

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BEFORE

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HON'BLE SHRI JUSTICE HIRDESH

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ON THE 26

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th

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OF FEBRUARY, 2026

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MISC. APPEAL No. 1613 of 2022

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IFFCO TOKIO GENERAL INSURANCE CO LTD.

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Versus

KRISHNABAI AND OTHERS

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Appearance:

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Shri Bal Krishna Agrawal - Advocate for the appellant.

Shri Anshu Gupta- Advocate for respondent No.1.

ORDER

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This appeal has been preferred by the appellant–Insurance Company

under Section 173(1) of the Motor Vehicles Act, 1988, challenging the award

dated 05.01.2022 passed by the learned Member, Motor Accident Claims

Tribunal, Ganjbasoda, District Vidisha (M.P.) in Claim Case No. 28/2019,

whereby the Claims Tribunal fastened liability upon the Insurance Company

to pay compensation to the claimants.

2. The date of the accident and the finding regarding negligence are not

in dispute. The findings recorded by the Claims Tribunal on these aspects

have not been questioned and have, therefore, attained finality.

3. Learned counsel for the appellant–Insurance Company has assailed the

impugned award on the ground that it is contrary to the facts and material

available on record and the settled principles of law. It is submitted that the

learned Claims Tribunal committed an error in saddling the liability to pay

compensation upon the appellant–Insurance Company. It is further contended

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that as per Insurance Policy Ex.D/3, the sitting capacity of the insured

vehicle (tractor) was only one person, i.e., the driver, and no premium was

paid for covering the risk of any occupant other than the driver. Therefore,

the Insurance Company owed no liability to pay compensation in respect of

the deceased.

4. It is also submitted that at the time of the accident, the deceased was

travelling on the insured tractor as an unauthorized passenger and died when

the tractor turned turtle. Such carriage was in breach of the terms and

conditions of the insurance policy. The learned Claims Tribunal, in

paragraph 29 of the impugned award, erred in relying upon Rule 97 sub-rule

7(ii) of the Madhya Pradesh Motor Vehicle Rules, 1994, and held that a

tractor and trailer could be used for transporting labourers and family

members. It is contended that in the present case no trolley was attached to

the insured tractor and, moreover, under the law, the risk of such

passengers/labourers travelling in the insured vehicle cannot be assumed

unless specifically covered by the policy. On these grounds, the appellant–

Insurance Company seeks exoneration from its liability.

5. Per contra, learned counsel for the claimant/respondent No.1

supported the impugned award and prayed for dismissal of the appeal.

6. Heard learned counsel for the parties and perused the record of the

Claims Tribunal.

7. Upon perusal of the record, it is evident that in paragraph 28 of the

impugned award, the Claims Tribunal has held that at the time of the

accident, the deceased was travelling on the tractor. From Ex.D/3 (Insurance

Policy), it is clear that the seating capacity of the tractor was only one person

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(the driver), and the Insurance Company had not charged any additional

premium to cover the risk of any person travelling on the tractor other than

the driver.

8. In paragraph 29 of the impugned award, the Claims Tribunal relied

upon Rule 97 sub-rule 7 of the Madhya Pradesh Motor Vehicle Rules, 1994,

and held that as the tractor was insured for agricultural purposes, it was

entitled to transport labourers and, therefore, there was no breach of the

terms and conditions of the insurance policy.

9. Rule 97 sub-rule 7(ii) of the Madhya Pradesh Motor Vehicle Rules,

1994 reads as under:

(7) Notwithstanding anything contained in sub-rules (1) and

(2) but subject to the provisions of sub-rule (5) such tractor-trailer

other than those registered in the name of industrial organisation.

Municipal Institutions, water supply institution and non-

agricultural cooperative societies, and the unladen weight of which

does not exceed 7300 Kgs. may be used for the following

purposes-

(i) for carrying labourers and the member of the family of

agriculturist for the purpose of agriculture or any purpose

connected with agriculture including sale and purchase of articles

or agriculture.

(ii) for carrying persons at the time of Mela, Markets, Religious

Functions, Marriages and at other ceremonial occasions provided

that the number of persons so carried shall not exceed 20 at a time.

10. In the case of Arun Kumar Patel and Anr. vs. Smt. Terasi Saket and

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Ors. 2007 SCC OnLine MP 442,

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Hon'ble Apex Court has held in para 10 is

as under:-

10.

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Coming to the submission based on Rule 97 of MP Motor

Vehicle Rules, that has been considered by a Full Bench of this

Court in Bhav Singh v. Smt. Savirani, M.A No. 687/99 decided on

11-10-2007, 2008 (1) MPLJ (FB) 72 in which the Full Bench has

opined that Rule 97 is not with respect to section 147 of Motor

Vehicles Act, Rule 97 has been framed with respect to permit

conditions not to cover the risk under section 147 which is

contained in a different chapter of Motor Vehicles Act. Full Bench

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of this Court has held thus:

"12. Regarding the Division Bench judgment in Sarvanlal (supra),

we find that the Division Bench has relied on not only the

judgment of the Full Bench in Jugal Kishore (supra) but also

clause (vii) of Rule 97 of the Motor Vehicle Rules, 1994 (for short

the Rules of 1994) made by the State of M.P So far as the

judgment of the Full Bench in Jugal Kishore (supra) is concerned,

we have already clarified the position of law. Regarding clause (7)

of Rule 97 of the Rules of 1994, we find that the Rules of 1994

have been made by the State of M.P under section 96 of the Act

and in particular sub-section (2)(xxxi) which provides that without

prejudice to the generality of the foregoing power, rules under

section 96 may be made with respect to the carriage of persons

other than the driver in goods carriage. Section 96 is placed in

Chapter-V of the Act which relates to "Control of Transport

Vehicles". Sub-section (1) of section 96 of the Act states that the

State Government may make rules for the purpose of carrying into

effect the provisions of Chapter-V. Hence, Rule 97 of the Rules of

1994 has been made by the State Government to give effect to the

provisions of Chapter-V of the Act, which, as we have seen,

relates to "control of transport vehicles". These rules obviously

cannot have a bearing in interpreting the provisions of Chapter-XI

of the Act including sections 145 and 147 of the Act. As we have

indicated above, the liability of the insurer to indemnify the

insured in respect of death or bodily injury suffered by a passenger

or an employee would be covered by the provisions of section 147

of the Act or the terms and conditions of insurance policy. Thus,

the decision of the Division Bench in Sarwan Lal (supra) insofar

as it relies on Rule 97 of the Rules of 1994 to hold the insurer

liable for death or bodily injury suffered by the passengers does

not lay down the correct law."

11. The Full Bench decision in Bhav Singh vs. Smt. Savirani

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2008 (1)

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MPLJ (FB) 72

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and the Division Bench judgment in Arun Kumar (supra)

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clearly lay down that Rule 97 of the Madhya Pradesh Motor Vehicle Rules,

1994 has no application while determining the liability of the insurer under

Section 147 of the Motor Vehicles Act. The liability of the insurer to

indemnify the insured in respect of death or bodily injury suffered by a

passenger or employee is governed strictly by Section 147 of the Act and the

terms and conditions of the insurance policy.

12. In the present case, it is undisputed that the deceased was travelling

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(HIRDESH)

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JUDGE

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on the tractor; the tractor had a seating capacity of only one person; and no

premium was paid to cover the risk of any person travelling on the tractor

other than the driver. Therefore, the risk of such a person was not covered

under the policy, and the Insurance Company cannot be fastened with

liability.

13. Accordingly, it is held that the Claims Tribunal committed an error in

holding the Insurance Company liable to pay compensation.

14. In view of the above, the instant appeal filed by the appellant–

Insurance Company is allowed

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. The impugned award, insofar as it fastens

liability upon the Insurance Company, is hereby set aside.

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The

claimant/respondent No.1 shall be entitled to recover the compensation

amount from respondent Nos.2 and 3, namely, the owner and driver of the

offending vehicle.

15. Accordingly, the appeal stands disposed of.

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*VJ*

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