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CASE NO.:

Appeal (civil) 981-990 of 2002

Appeal (civil) 1141-1158 of 2002

PETITIONER:

Oriental Insurance Company Ltd.

Oriental Insurance Company Ltd.

RESPONDENT:

Devireddy Konda Reddy & Ors. etc.etc.

Jogi Subbamma and Ors. etc.etc.

DATE OF JUDGMENT: 24/01/2003

BENCH:

SHIVARAJ V. PATIL & ARIJIT PASAYAT.

JUDGMENT:

J U D G M E N T

ARIJIT PASAYAT,J.

These appeals are directed against the common judgment

rendered by a Division Bench of the Andhra Pradesh High

Court. By the said judgment, it upheld view of learned

Single Judge that compensation is payable by the insurer

even if the deceased persons in respect of whom claims are

made were gratuitous passengers. Both the learned Single

Judge and the Division Bench relied on the decision of this

Court in New India Assurance Company vs. Satpal Singh and

Ors. (2000 (1) SCC 237) for coming to this conclusion.

Since the point involved is one of law, the factual

position which is almost undisputed needs to be noted in

brief. Certain persons were traveling in goods vehicles

which were subject-matter of insurance with the appellant-

Oriental Insurance Company Limited (hereinafter referred to

as "the Insurer'). The vehicles met with accidents

resulting in death of several persons who were either

unauthorized or gratuitous passengers in the said vehicles.

Their legal representatives lodged claims under Motor

Vehicles Act, 1988 (hereinafter referred to as 'the Act').

Though the accidents took place on different dates, the

Motor Accident Claims Tribunal, Anantapur, (hereinafter

referred to as 'the Tribunal') took up the cases together as

according to it the points of dispute were identical. It

held that the deceased persons accompanied the goods which

were transported by the goods carriages in question.

Accordingly, it held that the insurer was liable to

indemnify the award passed. In appeals filed by the

insurer, learned Single Judge concurred with view of the

Tribunal relying on Satpal Singh's case (supra). As noted

above, the Division Bench dismissed the appeals against

learned Single Judge's judgments. The said common judgment

as noted above is under challenge in these appeals.

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Learned counsel for the insurer-appellant submitted

that Section 149 (2) of the Act is etymologically different

from proviso (ii) to Section 96 (2)(b) of the Motor Vehicles

Act 1939 (hereinafter referred to as the 'old Act') and,

therefore, the ratio in Satpal Singh's case (supra) has no

application. In response, learned counsel appearing for the

claimants submitted that in Satpal Singh's case (supra) such

a stand has been negatived and it has been held that insurer

is liable to pay compensation to gratuitous passengers.

This Court had occasion to deal with cases of

passengers traveling in goods vehicles which met accident

resulting in death of such person or bodily injury. Such

cases belong to three categories i.e. (1) those covered by

the old Act;(2) those covered by the Act; and (3) those

covered by amendment of the Act in 1994 by the Motor

Vehicles (Amendment) Act, 1994 (hereinafter referred to as

the 'Amendment Act').

The present appeals belong to the second category.

In Satpal Singh's case (supra) this Court proceeded on

the footing that provision of Section 95(1) of the old Act

are in pari materia with Section 147(1) of the Act, as it

stood prior to the amendment in 1994.

On a closer reading of the expressions "goods

vehicle", "public service vehicle", "stage carrier" and

"transport vehicle" occurring in Sections 2(8), 2(25),

2(29) and 2(33) of the old Act with the corresponding

provisions i.e. Section 2(14), 2(35), 2(40) and 2(47) of the

Act, it is clear that there are conceptual differences. The

provisions read as follows:

Old Act:

"2(8) "goods vehicle" means any motor

vehicle constructed or adapted for use for

the carriage of goods, or any motor vehicle

not so constructed or adapted when used for

the carriage of goods solely or in addition

to passengers;"

"2(25) "public service vehicle" means any

motor vehicle used or adapted to be used for

the carriage of passengers for hire or

reward, and includes a motorcab, contract

carriage, and stage carriage;"

"2(29) "stage carriage" means a motor

vehicle carrying or adapted to carry more

than six persons excluding the driver which

carries passengers for hire or reward at

separate fares paid by or for individual

passengers, either for the whole journey or

for stages of the journey;"

"2(33) "transport vehicle" means a public

service vehicle or a goods vehicle;"

New Act:

"2(14) "goods carriage" any motor vehicle

constructed or adapted for use solely for the

carriage of goods, or any motor vehicle not

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so constructed or adapted when used for the

carriage of goods;"

"2(35) "public service vehicle" means any

motor vehicle used or adapted to be used for

the carriage of passengers for hire or

reward, and includes a maxicab, a motorcab,

contract, and stage carriage;"

"2(40) "stage carriage" means a motor

vehicle constructed or adapted to carry more

than six passengers excluding the driver for

hire or reward at separate fares paid by or

for individual passengers, either for the

whole journey or for stages of the journey;"

"2(47) "transport vehicle" means a public

service vehicle, a goods carriage, an

educational institution bus or a private

service vehicle;"

(Underlined for emphasis)

"Liability" as defined in Section 145(c) of the Act

reads as follows:

"'Liability' wherever used in relation to

the death of or bodily injury to any person,

includes liability in respect thereof under

Section 140;"

Third party risks in the background of vehicles which

are subject-matter of insurance are dealt with in Chapter

VIII of the old Act and Chapter XI of the Act. Proviso to

Section 147 needs to be juxtaposed with Section 95 of the

old Act. Proviso to Section 147 of the Act reads as

follows:

"Provided that a policy shall not be

required-

(i) to cover liability in respect of the

death, arising out of and in the course of

his employment, of the employee of a person

insured by the policy or in respect of bodily

injury sustained by such an employee arising

out of and in the course of his employment

other than a liability arising under the

Workmen's Compensation Act, 1923 (8 of 1923)

in respect of the death of, or bodily injury

to, any such employee

(a) engaged in driving the vehicle, or

(b) if it is a public service vehicle

engaged as conductor of the vehicle

or in examining tickets on the

vehicles, or

(c) if it is a goods carriage, being

carried in the vehicle, or

(ii) to cover any contractual liability."

It is of significance that proviso appended to Section 95

of the old Act contained clause(ii) which does not find

place in the new Act. The same reads as follows:-

"except where the vehicle is a vehicle in

which passengers are carried for hire or

reward or by reason of or in pursuance of a

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contract of employment, to cover liability in

respect of the death of or bodily injury to

persons being carried in or upon or entering

or mounting or alighting from the vehicle at

the time of the occurrence of the event out

of which a claim arises."

The difference in the language of "goods vehicle" as

appearing in the old Act and "goods carriage" in the Act

is of significance. A bare reading of the provisions makes

it clear that the legislative intent was to prohibit goods

vehicle from carrying any passenger. This is clear from the

expression "in addition to passengers" as contained in

definition of "goods vehicle" in the old Act. The

position becomes further clear because the expression used

is "goods carriage" is solely for the carriage of goods".

Carrying of passengers in a goods carriage is not

contemplated in the Act. There is no provision similar to

clause (ii) of the proviso appended to Section 95 of the old

Act prescribing requirement of insurance policy. Even

Section 147 of the Act mandates compulsory coverage against

death of or bodily injury to any passenger of "public

service vehicle". The proviso makes it further clear that

compulsory coverage in respect of drivers and conductors of

public service vehicle and employees carried in goods

vehicle would be limited to liability under the Workmen's

Compensation Act, 1923 (in short 'WC Act'). There is no

reference to any passenger in "goods carriage'.

The inevitable conclusion, therefore, is that

provisions of the Act do not enjoin any statutory liability

on the owner of a vehicle to get his vehicle insured for any

passenger traveling in a goods carriage and the insurer

would have no liability therefor.

Our view gets support from a recent decision of a

three-judge Bench of this Court in New India Assurance

Company Limited vs. Asha Rani & Ors. [2002 (8) Supreme 594]

in which it has been held that Satpal Singh's case (supra)

was not correctly decided. That being the position the

Tribunal and the High Court were not justified in holding

that the insurer had the liability to satisfy the award.

The appeals are accordingly allowed by setting aside

judgments of Tribunal and High Court but in the peculiar

circumstances without any order as to costs.

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