The Jharkhand High Court reaffirmed that, despite a fundamental policy breach where a gratuitous passenger travels in a goods-carrying vehicle, the insurer can be directed to pay compensation to claimants with a right of recovery against the vehicle’s owner, applying Supreme Court precedent in Swaran Singh. This ruling upholds existing precedent and serves as binding authority for Motor Accident Claims Tribunal (MACT) cases in Jharkhand.
Summary
| Category | Data |
|---|---|
| Case Name | MA/278/2024 of BRANCH MANAGER H D F C EGRO GENERAL INSURANCE COMPANY LTD THRO ITS MANAGER LEGAL TEAM Vs RABINDRA PRASAD |
| CNR | JHHC010247952024 |
| Date of Registration | 01-08-2024 |
| Decision Date | 15-10-2025 |
| Disposal Nature | Dismissed |
| Judgment Author | HON’BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY |
| Court | High Court of Jharkhand |
| Precedent Value | Binding in Jharkhand High Court and subordinate courts; MACT and related motor accident claims |
| Overrules / Affirms | Affirms the legal position established by the Supreme Court in Swaran Singh & Ors. |
| Type of Law | Motor Vehicles Act, Insurance Law |
| Questions of Law |
|
| Ratio Decidendi |
The Court held that where the deceased is found to be a gratuitous passenger in a goods-carrying vehicle, constituting a fundamental breach of the insurance policy, the insurer can still be directed to pay the compensation to the claimants with the right to recover the amount from the vehicle owner. This follows the Supreme Court’s approach in National Insurance Co. Ltd. v. Swaran Singh & Ors., which allows compensation disbursement to victims and enables the insurer to seek recovery from the party at fault. The High Court found no infirmity in the Motor Accident Claims Tribunal awarding compensation on this basis. The appeal by the insurer was dismissed, with direction for adjustment of any statutory or interim payments made. |
| Judgments Relied Upon | National Insurance Co. Limited Vs. Swaran Singh & Ors., (2004) 3 SCC 297 |
| Logic / Jurisprudence / Authorities Relied Upon by the Court | The principle that compensation should reach the victims expeditiously even in cases of fundamental policy breach, but the insurer’s right to recover from the owner is protected, as per Supreme Court precedent. |
| Facts as Summarised by the Court | The deceased was travelling in a Tempo (goods vehicle) as a gratuitous passenger; the insurer was held liable by the Tribunal under Section 166 MV Act with the right of recovery; Insurance Company appealed on grounds of fundamental policy breach. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts and Motor Accident Claims Tribunals within the jurisdiction of Jharkhand High Court |
| Persuasive For | Other High Courts where similar questions arise in motor accident compensation cases; potential persuasive value before Supreme Court |
| Follows | National Insurance Co. Ltd. v. Swaran Singh & Ors., (2004) 3 SCC 297 |
What’s New / What Lawyers Should Note
- High Courts can direct insurers to pay compensation for accidents involving gratuitous passengers in goods vehicles, even where there is a fundamental breach of policy, while safeguarding the insurer’s right of recovery from the vehicle owner.
- The judgment confirms that Swaran Singh remains binding precedent on this point within Jharkhand, supporting speedy compensation to claimants.
- Lawyers should prepare for insurers being directed to pay first, with only subsequent recourse against owners in goods vehicle–gratuitous passenger cases.
- Statutory or interim amounts deposited in appeal will be adjusted in the disbursement and final compensation.
Summary of Legal Reasoning
- The appellant/insurer challenged the Tribunal’s direction to pay compensation, arguing fundamental breach of policy as the deceased was a gratuitous passenger in a goods vehicle.
- The High Court reviewed the Motor Accident Claims Tribunal’s finding, which recognized the breach but still imposed liability on the insurer to pay compensation to the claimants.
- The Court specifically invoked and relied upon the Supreme Court’s ruling in National Insurance Co. Ltd. v. Swaran Singh & Ors., which provides that while fundamental breach by carrying unauthorized passengers absolves the insurer from ultimate liability, the insurer can be directed to pay first and recover from the owner later to ensure expeditious payment to victims.
- Finding no errors or infirmity in the Tribunal’s application of this principle, the appeal was dismissed.
- Directions were issued for the statutory sum to be adjusted/disbursed in line with compensation payment procedures.
Arguments by the Parties
Petitioner (Appellant – Insurance Company):
- The deceased was travelling as a gratuitous passenger in a goods-carrying vehicle.
- This constituted a fundamental breach of the insurance policy.
- The insurer’s liability should therefore be excluded and it should not be made to pay the compensation.
Respondent (Claimants):
- No further arguments are detailed in the judgment extract provided.
Factual Background
The case arose from a motor accident claim involving a Tempo (goods vehicle) involved in an accident, with the deceased travelling as a gratuitous passenger. The Motor Accident Claims Tribunal awarded compensation of Rs.17,07,440/- under Section 166 of the Motor Vehicles Act, directing the insurance company to pay the amount with the right to recover from the vehicle owner. The insurance company appealed, arguing it should have no liability due to a fundamental breach of policy, but the High Court upheld the Tribunal’s award.
Statutory Analysis
- Section 166 of the Motor Vehicles Act – provisions relating to compensation for victims of motor vehicle accidents.
- The Court endorsed a consistent interpretation with Swaran Singh, reading the statute (MV Act) to protect quick payment to victims even in cases of policy breach, while preserving the insurer’s right of recovery.
- No further statutory or constitutional provisions are examined in the judgment extract.
Dissenting / Concurring Opinion Summary
No dissenting or concurring opinions are recorded in the judgment.
Procedural Innovations
No specific procedural innovations or new directions were issued beyond adjustment of statutory deposits in execution of the compensation award.
Alert Indicators
- ✔ Precedent Followed – Existing Supreme Court law (Swaran Singh) is applied and affirmed.