INDIA BUSINESS WORLD - OCTOBER 21^st - NOVEMBER 15^th - 2007

NO COMPENSATION FOR ILLEGAL PASSENGERS IN GOODS CARRIER: SUPREME COURT

In the case of a road accident involving a goods carrier, unauthorised passengers travelling in the vehicle or their kith and kin are not entitled to any compensation from the insurance company, the Supreme Court has held.

Only the owners travelling along with their goods in the vehicles involved in accidents are entitled to compensation, a bench of Justices S B Sinha and H S Bedi said while dealing with a batch of petitions relating to cases from Andhra Pradesh.

Question involved in these appeals centred around the liability of the insurance company to indemnify the owner of the vehicle in respect of death of passengers travelling in goods carriage. In some of these cases, the victims travelled in goods carriage vehicle by paying Rs 20 and other such sum amounts of money to the driver. But in several cases the goods vehicles had met with accidents resulting in the death or injuries to the unauthorised passengers for which compensation claims were filed.

The National Insurance Company rejected the claims filed by the family members of illegal passengers.

The insurance company appealed before the apex court after the motor accidents tribunal and the High Court took the view that the insurer was liable to pay the compensation.

The Supreme Court, while interpreting various provisions of the Motor Vehicle (MV) Act, said the term "owner of the goods" as stipulated under the legislation implies only the person who is travelling in the cabin of the vehicle as owner of the goods.

According to the apex court it was clear that the legislative intent behind using the term "goods carriage" was to prohibit goods vehicle from carrying any passenger.

Section 147 of the MV Act mandates compulsory coverage against death or bodily injury to any passenger of public service vehicle, but there is no reference to any passenger travelling in goods carriage, the apex court said. "The inevitable conclusion, therefore is that the provision of the Act do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger travelling in a goods carriage and the insurer would have no liability therefore," the apex court said.