Insurance Company Not Liable For Compensation If A Gratuitous Passenger, Not Covered Under Insurance Policy Travels By Offending Vehicle: J&K HC

The Jammu & Kashmir and Ladakh High Court has reiterated that Insurance Company is not liable for compensation if a gratuitous passenger, not covered under the Insurance Policy travels by offending vehicle.

The Court was considering an appeal challenging the Award passed by the Motor Accident Claims Tribunal whereby an amount of Rs. 12,65,000/-, inclusive of the interim already granted, on “No Fault Basis Liability” was awarded in favour of the Claimants/ Respondents along with interest @ 6 percent per annum from the date of filing of the Claim Petition till final realization of the awarded amount.

The single-bench of Justice M.A. Chowdhary observed, "......Needless to say here that it is settled position of law that in a case where it is proved that a person travelling by the offending vehicle as a gratuitous passenger, not covered under the policy of insurance, in such eventuality, the Insurance Company is not liable to pay compensation to the Claimants concerned, even under the statutory provision of pay and recover."

The Appellant was represented by Advocate Aatir Javed Kawoosa while the Respondent was represented by Advocate Sheikh Abdul Hai.

Facts of the Case

The husband of Respondent No.1 (Claimant) and father of Claimant/ Respondent Nos. 2 to 4 was travelling in a vehicle LP Truck being driven by its driver (Respondent No.5) rashly and negligently. After reaching a certain point, the driver lost control of the vehicle, as a result whereof, the vehicle skidded off the road and fell down about 150/200 feet deep gorge, thereby completely damaging the vehicle and inflicting serious injuries upon the Respondent No.1 who was taken to District Hospital, wherefrom he was referred to SKIMS, Srinagar, where he died and an FIR came to be registered with regard to the incident.

Thereafter, the Respondent Nos. 1 to 4 approached the Tribunal with a Claim Petition seeking compensation to the tune of Rs. 45.00 lacs for the death of the deceased. Pursuant to notice having been issued by the Tribunal, the Respondent Insurance-Company/ Appellant appeared and filed its Objections to the Claim Petition, while as, the Respondent Nos. 2 and 3, Driver and Owner of the offending vehicle, did not file any Objections and were, accordingly, proceeded ex-parte before the Tribunal.

In its objections before the Tribunal, the Appellant stated that the Claim Petition was not maintainable against the Company, in as much as, the deceased was not a Labourer of the Truck employed by the insured and was not covered under the policy of insurance. Later, the impugned order came to pass.

The award stands challenged on various grounds, including that the deceased was travelling by the offending Insured vehicle gratuitously, as such, the Claimants, though entitled to receive compensation, but the Insurer is not liable to indemnify the Insured of his liability.

Counsel for the Appellant argued that the offending vehicle, though admittedly was insured with the Appellant-Insurance Company as on the date of accident, wherein the deceased, husband of Respondent No.1 and father of Respondent Nos. 2 to 4 had died.

He had raised two important points for determination: first, that the registered owner of the offending vehicle, who was insured with the Appellant-Insurance Company, had not been arrayed as a party Respondent in the Claim Petition, though he was a necessary and proper party in the matter; and, secondly, that the deceased was working with a Construction CompanyHCC and not with the offending vehicle as a labourer, which has been projected to be believed.

He further argued that the Company/ RespondentInsurer, while discharging the burden placed on it, had examined the investigator of the Company and an official of the Respondent-Insurance Company both of whom had stated that the deceased was travelling by the offending vehicle as a gratuitous passenger and not as a labourer with the offending truck, but he was working with a Construction Company-HCC for the last six months on a monthly wages of Rs. 6,000/-, however, the Tribunal, while returning a finding on issue No.3, had turned down the said plea on the basis of the statement of the witnesses examined by the Claimants that the deceased was working as a labourer while being engaged with the offending vehicle for loading and unloading of the stones. The Counsel argued that the aforesaid issue was wrongly decided by the Tribunal, ignoring the fact that the deceased was not working with the offending vehicle, but was a gratuitous passenger travelling by it.

Counsel for the Appellant-Insurance Company also argued that the Insurance Company, as Respondent-Insurer, had raised a plea before the Tribunal during the course of trial of the Claim Petition that the registered owner of the offending vehicle, who was insured with the Insurance Company as on the date of accident of the vehicle, had not been arrayed as a party, though he was a necessary and proper party to be impleaded in the proceedings before the Tribunal.

Reasoning By Court

The Court was of the view that the plea raised by the Appellant-Insurance Company as to whether the deceased was, in fact, working with a Construction Company-HCC on a monthly remuneration should have been inquired into by the Tribunal and an official from the said Construction Company should have been examined with regard to that fact or, in the alternative, the driver or owner of the offending vehicle should have been examined by the Tribunal, so as to state whether the deceased was working with the truck owned by the registered owner and driven by the Respondent-driver, as on the date of accident.

"This, given the facts and circumstances of the case before the Tribunal, was required, so as to rule out the fact that the deceased was not a gratuitous passenger. Needless to say here that it is settled position of law that in a case where it is proved that a person travelling by the offending vehicle as a gratuitous passenger, not covered under the policy of insurance, in such eventuality, the Insurance Company is not liable to pay compensation to the Claimants concerned, even under the statutory provision of pay and recover. That being so, this Court is of the considered opinion that the Tribunal has wrongly decided the issue No.3, while passing the impugned Award," the Court observed.

The appeal was accordingly allowed.

Cause Title: National Insurance Company Limited vs. Gulshana Begum & Ors.

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