The High Court upheld the principle—following Supreme Court precedent—that the insurer must pay awarded compensation to the claimants even where the deceased was a gratuitous passenger in a goods-carrying vehicle, while retaining the right to recover the amount from the vehicle owner. This decision follows and applies existing Supreme Court authority, and serves as binding precedent within the High Court’s territorial jurisdiction for motor accident cases involving similar facts.
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 within Jharkhand High Court jurisdiction; persuasive for other courts |
| Overrules / Affirms | Affirms Supreme Court: National Insurance Co. Limited Vs. Swaran Singh & Ors., (2004) 3 SCC 297 |
| Type of Law | Motor Vehicle Accident / Insurance Law |
| Questions of Law | Whether insurance company is liable to pay compensation for a gratuitous passenger in a goods vehicle and hold right of recovery against owner |
| Ratio Decidendi |
The High Court held that following the law laid down by the Supreme Court in Swaran Singh, the insurer is required to pay compensation even for a gratuitous passenger in a goods vehicle, but retains the right of recovery against the vehicle owner for breach of policy terms. The Tribunal correctly imposed initial liability on the insurance company with the right to recover from the insured, and such an award is legally sustainable. No infirmity was found with the judgment or award of compensation passed by the Tribunal. |
| Judgments Relied Upon | National Insurance Co. Limited Vs. Swaran Singh & Ors., (2004) 3 SCC 297 |
| Logic / Jurisprudence / Authorities Relied Upon by the Court | The binding Supreme Court precedent in Swaran Singh sets out the nature of insurer liability and right of recovery in such cases. |
| Facts as Summarised by the Court | The deceased was travelling as a gratuitous passenger in a goods-carrying tempo (registration no. JH-01EA-7305). Compensation under Section 166 of the Motor Vehicles Act was awarded against the insurer, arguing breach of policy due to carriage of a gratuitous passenger. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within Jharkhand High Court’s jurisdiction |
| Persuasive For | Other High Courts, Supreme Court |
| Follows | National Insurance Co. Limited Vs. Swaran Singh & Ors., (2004) 3 SCC 297 |
What’s New / What Lawyers Should Note
- Reconfirms that insurers must pay compensation for gratuitous passengers in goods vehicles, subject to right of recovery from owner.
- Cites and follows binding precedent (Swaran Singh), so advocates can rely on this for claims involving policy breach by carrying unauthorized passengers.
- Clarifies that awards by tribunals imposing such liability are legally sustainable and will not be interfered with in appeal.
Summary of Legal Reasoning
- The appellant-insurer contended that liability cannot be fastened upon it due to the deceased being a gratuitous passenger in a goods carrying vehicle, constituting a fundamental breach of policy.
- The Court observed that the Motor Accident Claims Tribunal had already considered the deceased as a gratuitous passenger in a goods vehicle.
- Following the ratio in Supreme Court’s National Insurance Co. Ltd. vs. Swaran Singh, the High Court held that despite such policy breach, the insurer is mandated to pay compensation to claimants first but retains the right to recover the sum from the owner.
- The High Court found no error in the Tribunal’s judgment, affirming its correctness and thereby dismissing the insurance company’s appeal.
- The Court ordered the statutory amount deposited by the insurer to be remitted to the Tribunal for adjustment/disbursement to the claimants.
Arguments by the Parties
Petitioner (Insurance Company):
- The main ground of challenge was that the offending vehicle was a goods carrying tempo, and the deceased was a gratuitous passenger.
- Argued that carriage of gratuitous passengers was a fundamental breach of insurance policy; thus, liability should not be fixed on the insurer.
Respondents (Claimants):
- No specific arguments recorded apart from representation by counsel.
Factual Background
The case arose from a motor accident involving a tempo (goods vehicle: JH-01EA-7305), in which the deceased was travelling as a gratuitous passenger. The Motor Accident Claims Tribunal, in Motor Accident Claim Case No. 212 of 2022, awarded compensation of Rs. 17,07,440/- under Section 166 of the Motor Vehicles Act, fixing liability on the insurance company. The insurer appealed, citing a breach of policy.
Statutory Analysis
- Section 166 of the Motor Vehicles Act was applied for awarding compensation in motor accident claim.
- The judgment interprets and applies the statutory regime linking insurer liability and right of recovery against the vehicle owner under policy breach scenarios, following Supreme Court precedent.
Procedural Innovations
The Court directed remittance of the statutory deposit made at the time of the appeal to the Tribunal for prompt disbursal to the claimants, after adjustment with the final compensation.
Alert Indicators
- ✔ Precedent Followed – Court reaffirms and follows existing Supreme Court precedent (National Insurance Co. Ltd. v. Swaran Singh).