Court holds that when a pillion rider is not covered under a ‘Liability Only’ motor insurance policy due to no additional premium being paid, the insurer is still required to indemnify the claimant first and may then recover the amount from the vehicle owner; precedent status is binding within Chhattisgarh and affirms recent Supreme Court guidance.
Summary
| Category | Data |
|---|---|
| Case Name | MAC/613/2024 of SONIYA BAI SATNAMI Vs VIJAY TANDON |
| CNR | CGHC010102482024 |
| Date of Registration | 22-03-2024 |
| Decision Date | 16-10-2025 |
| Disposal Nature | DISPOSED OFF |
| Judgment Author | Hon’ble Shri Justice Rakesh Mohan Pandey |
| Court | High Court of Chhattisgarh, Bilaspur |
| Precedent Value | Binding within jurisdiction; persuasive elsewhere |
| Overrules / Affirms | Affirms Supreme Court decision in Sunita and Others Vs. United India Insurance Co. Ltd. (2025 SCC OnLine SC 1464) and other SC precedents |
| Type of Law | Motor Vehicle Accident Claims; Insurance Law |
| Questions of Law |
|
| Ratio Decidendi | The High Court held that even where a ‘Liability Only Policy’ does not cover a pillion rider as no premium was paid for this coverage, the insurer must pay compensation to the claimants at the first instance, with the right to recover the same from the owner/driver. It relied on the Supreme Court’s recent judgment in Sunita (2025 SCC OnLine SC 1464) and a line of cases upholding the ‘Pay and Recover’ doctrine for similar fact situations. The notional income of the deceased must be pegged to prevailing minimum wages for skilled labour as per state notifications, and the earlier calculation by the tribunal was corrected accordingly. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon by the Court | The doctrine of ‘pay and recover’ as evolved by Supreme Court jurisprudence where a third party or gratuitous passenger not covered by the policy is injured or killed; insurance companies must pay compensation and may recover from the owner/driver due to statutory scheme protecting third parties. |
| Facts as Summarised by the Court | Deceased was pillion rider on a motorcycle driven by respondent no.1, involved in a single-vehicle accident. Motorcycle was covered by a liability-only policy with no extra premium for owner, driver, or pillion. Tribunal granted compensation but fixed liability on the owner/driver, exonerating the insurer. Claimants sought higher compensation and cover from insurer. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts in Chhattisgarh, Motor Accident Claims Tribunals within the State |
| Persuasive For | Other High Courts and Motor Accident Claim Tribunals across India; especially where Supreme Court precedents cited are applicable |
| Follows | Sunita and Others Vs. United India Insurance Co. Ltd. (2025 SCC OnLine SC 1464); National Insurance Co. Ltd. v. Baljit Kaur (2004) 2 SCC 1; line of other SC judgments |
What’s New / What Lawyers Should Note
- Affirms that insurers must pay compensation for pillion riders not covered under “Liability Only” policies and can subsequently recover from the owner/driver (“pay and recover” principle).
- Application of latest Supreme Court precedent (Sunita, 2025 SCC OnLine SC 1464) regarding the scope of insurer liability where no additional premium covers third parties or gratuitous passengers.
- Notional income for accident compensation must be at least equal to notified minimum wages for skilled labour when the deceased’s occupation supports this classification.
- Lawyers may rely on this judgment to secure compensation awards from insurers in cases involving pillion riders or other classes not specifically covered by the policy due to non-payment of extra premium.
Summary of Legal Reasoning
- The High Court examined the terms of the insurance policy and found it to be a “Liability Only Policy” with no extra premium to cover pillion riders, owner, or driver.
- The Tribunal had fixed liability on the vehicle owner/driver and exonerated the insurer according to a narrow reading of policy coverage.
- Relying extensively on Sunita (2025 SCC OnLine SC 1464), Baljit Kaur (2004) 2 SCC 1, Anu Bhanvara (2020) 20 SCC 632, and further Supreme Court precedents, the High Court reiterated the “pay and recover” doctrine as binding.
- The Court held that, in alignment with the Supreme Court’s uniform jurisprudence, Insurance Companies must indemnify claimants for such claims and may recover the amounts from the policyholder/vehicle owner afterwards.
- For calculation of compensation, the Court noted the deceased was a skilled labourer (mason), and the Tribunal’s use of a lower notional income was contrary to the notified minimum wages, requiring correction.
- Compensation was recalculated as per the statutory rates and enhanced accordingly.
Arguments by the Parties
Petitioner (Claimant):
- Deceased was returning as pillion rider; accident was due to rash/negligent driving by respondent no.1.
- Monthly income assessed lower than minimum wages for skilled labour; correct figure is Rs.10,970/-.
- Compensation should be enhanced.
- Cited Sunita (2025 SCC OnLine SC 1464) to urge insurer should pay first, then recover from owner/driver.
Respondent No.2 (Insurance Company):
- Policy was liability-only; no premium for pillion rider risk.
- Tribunal was correct to exonerate insurer and fix liability on owner/driver.
- No basis to enhance compensation or shift liability.
Respondent No.1 (Owner/Driver):
- No appearance; no submissions recorded.
Factual Background
The matter arose from a single-vehicle accident on 08.09.2022 in which Ramkrishna, riding pillion, died following injuries. The motorcycle, insured by a liability-only policy with HDFC ERGO, had been driven negligently by respondent no.1, resulting in a collision with a cement pole. The claimants, deceased’s widow and children, sought compensation under Section 166 of the Motor Vehicles Act. The Tribunal awarded compensation, fixing liability solely on owner/driver and absolving the insurance company, prompting the present appeal for enhanced and insurer-indemnified compensation.
Statutory Analysis
- The judgment involved Section 166 (claims for compensation) and Section 173 (appeal) of the Motor Vehicles Act.
- The Court interpreted statutory minimum wage notifications to determine the appropriate notional income for calculating loss of dependency.
- The insurance policy was “liability only”, with the contractual/statutory implications interpreted in light of Supreme Court precedent.
- The statutory scheme for third party risk and the judicially evolved “pay and recover” mechanism were reaffirmed.
Alert Indicators
- ✔ Precedent Followed – Judgment closely follows and affirms Supreme Court precedents including Sunita (2025 SCC OnLine SC 1464) and others.