Case: Smt. Mallawwa Vs. Oriental Insurance Co. Ltd

Upon hearing the counsel, the Division Bench passed the following order :"What we are concerned with in these matters is the correct interpretation of Section 95 of the Motor Vehicles Act, 1939. The question arises, specifically, in the context of the death of the owner of goods being carried in a goods vehicle, and the question is whether the insurer of the goods vehicle is liable to pay the compensation awarded to his legal heirs. We note that there are divergent views expressed by the High Courts. Apart from that, in our view, a decision of a bench of two learned Judges in Pushpabai Parshottam Udeshi and Ors. v. M/s. Ranjit Ginning and Pressing Co. Pvt. Ltd. and Anr., AIR 1977 SC 1735 , needs to be reconsidered in greater detail. In these circumstances, it is appropriate that these matters should be heard and disposed of by a bench of three learned Judges."Accordingly, they have been placed before us for final disposal. In Civil Appeal Nos. 3659 of 1993 and 880/86, the deceased were owners of goods and as such were carried in the goods vehicles which had met with accidents. In C.A. Nos. 1478/87, 6001/90, 6002/90, 2098/96, 5872/94, SLP(C) Nos. 10745, 10747 and 10748 of 1995 the deceased were travelling in goods vehicles as passengers on payment of fare. In SLP (C) Nos. 9727 of 1989 the deceased was a gratuitous passenger.2. In CA Nos. 3659 of 1993 the facts are that on 6.11.90 while Suresh was travelling in a goods carriage vehicle from Belgaum to Bagewadi, died as it met with an accident. His widow Mallawa, therefore, filed a claim petition claiming compensation. The claimant also made an application under Section 140 of the Motor Vehicles Act, 1988 for interim compensation. The Motor Accident Claims Tribunal Belgaum, awarded Rs. 25,000/under Section 140 and directed the insurance company to pay that amount. The insurance company filed an appeal before the Karnataka High Court against that interim award. The High Court set aside the order holding that under a motor vehicle insurance policy issued by an insurance company in conformity with Section 147 of the 1988 Act, the insurance company is not liable to pay compensation in respect of death of or bodily injury to any person travelling in goods carriage as passenger whether as a hirer or otherwise. It also held that under the insurance policy there is no extra coverage in respect of a passenger like an owner or hirer travelling in the vehicle and, therefore also, the insurance company is not liable to pay compensation to the claimants either on the ground of fault liability or on the ground of no fault liability. Aggrieved by the judgment of the High Court, the claimant has filed this appeal.

Reasoning:
(22). Therefore it is not required that a policy of insurance should cover risk to the passengers who are not carried for hire or reward. As under section 95 the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured the plea of the counsel for the insurance company will have to be accepted and the insurance company held not liable under the requirements of the Motor Vehicles Act."What was held in that case is, with respect, consistent with our interpretation of Section 95 as it stood before and after its Amendment by Act 56 of 1969.