The Supreme Court has clarified that an insurer can be directed to first pay compensation to claimants and then recover the amount from the vehicle owner, even if the deceased was a gratuitous passenger in a goods vehicle. This principle applies when the vehicle was hired primarily for transporting goods and the travel was only incidental.
A Bench of Justice Prashant Kumar Mishra and Justice N.V. Anjaria delivered the ruling in Kaminiben & Ors. v. Oriental Insurance Company Limited & Ors. The Court restored the order of the Motor Accident Claims Tribunal (MACT).
Background of the Case
The matter arose from a fatal accident involving a tempo hired during a Ganesh immersion festival. The deceased travelled in the goods vehicle along with a Ganesh idol that was being taken to the Narmada River for immersion.
The vehicle was insured with The Oriental Insurance Company Limited on the date of the accident.
On January 11, 2010, the Tribunal awarded ₹13,23,000 as compensation to the claimants. It directed the insurer to deposit the amount and recover it from the vehicle owner.
The insurance company challenged this direction before the High Court. The High Court set aside the Tribunal’s order requiring the insurer to first pay and then recover the compensation.
Arguments Before the Supreme Court
Before the Supreme Court, the claimants argued that even if the deceased was treated as a gratuitous passenger in a goods vehicle, the insurer could still be directed to satisfy the award first and recover the amount later from the owner.
On the other hand, the insurance company relied on Amudhavalli & Ors. v. HDFC Ergo General Insurance Company Ltd. & Ors. It contended that where a deceased travelled in a rented goods vehicle, the insurer could not be made liable even on a “pay and recover” basis.
Supreme Court’s Analysis
The Court examined the purpose for which the vehicle had been hired. It noted that the tempo was engaged to transport the Ganesh idol for immersion in the Narmada River.
The Bench observed that the dominant purpose of hiring the vehicle was not passenger travel but carriage of the idol. Travel in the vehicle was merely incidental.
The Court stated:
“In the present case, the deceased was travelling in the subject tempo along with Ganesh Idol, which was taken for immersion in Narmada River. Thus, the dominant purpose for hiring the vehicle was not for travelling but for carrying the Ganesh idol for immersion. Travelling in the vehicle was only incidental, therefore, at best, the deceased can be treated as gratuitous passenger travelling with his goods (Ganesh idol).”
The Court relied on Manuara Khatun & Ors. v. Rajesh Kumar Singh & Ors., where it directed the insurer to first satisfy the award and then recover the amount from the insured in the same proceedings.
At the same time, the Bench distinguished Amudhavalli on facts. In that case, the vehicle had been hired primarily for travel and not for carrying goods with incidental travel.
Conclusion
Allowing the appeal, the Supreme Court set aside the High Court’s judgment and restored the Tribunal’s direction.
Accordingly, the insurer must pay ₹13,23,000 to the claimants and may recover the amount from the vehicle owner.
The decision was rendered in Kaminiben & Ors. v. Oriental Insurance Company Limited & Ors.
