Motor Vehicles Act Section 147 | Insurer Liable for Compensation Even If Deceased Was Gratuitous Passenger in Goods Vehicle: Andhra Pradesh HC

The Andhra Pradesh High Court recently upheld a Motor Accidents Claims Tribunal award, holding that an insurer cannot avoid liability under Section 147 of the Motor Vehicles Act, 1988 merely because the deceased was not the sole owner of goods being transported in the insured vehicle. The judgment reaffirms that owners or authorized representatives of goods travelling in goods carriages are covered under insurance policies, provided no breach of policy conditions is proven.

Background & Facts

The Dispute

The case arises from a tragic road accident on 23.10.2004, where the deceased, a fruit vendor, sustained fatal injuries while travelling in a lorry bearing registration number AP 16 TU 4601. The lorry, driven rashly and negligently, collided with an electrical pole near Addanki, leading to the deceased's death on 29.10.2004 after treatment at Government Hospital, Ongole, and Asvini Private Hospital, Guntur. The deceased had boarded the lorry at Santhamaguluru with three or four bags of jujube fruits purchased for resale.

Key Facts

• 23.10.2004: Deceased boarded the lorry at Santhamaguluru with jujube fruits for transportation
• 23.10.2004, 10:30 AM: Accident occurred due to rash and negligent driving, resulting in fatal injuries to the deceased
• 29.10.2004: Deceased succumbed to injuries after medical treatment
• The deceased was a fruit vendor by profession, earning Rs. 30-40 per day
• The lorry was insured under Ex.B.1 policy, valid on the date of the accident
• The claimants, legal representatives of the deceased, filed a petition seeking Rs. 2,50,000 as compensation

The Parties

Appellant: National Insurance Company Ltd., Divisional Office, Vijayawada (Insurer of the offending vehicle)

Respondents:

1. Shaik Pyari John, wife of the deceased, aged 41
2. Shaik Mastan Bee, mother of the deceased, aged 66
3. Shaik Chand Begum, daughter of the deceased, aged 26
4. Shaik Mumtaj Begum, daughter of the deceased, aged 23
5. T Venkateswara Rao, owner of the lorry (AP 16 TU 4601)

Procedural History

• M.V.O.P.No.63 of 2005: Claim petition filed before the Motor Accidents Claims Tribunal-cum-II Additional District Judge, Ongole
• 27.06.2006: Tribunal awarded Rs. 1,49,800 with 7.5% interest per annum from the date of filing the petition till realization, holding both the owner and insurer jointly and severally liable
• M.A.C.M.A.No.2491/2006: Appeal filed by the insurer before the Andhra Pradesh High Court challenging the liability
• 22.06.2026: High Court dismissed the appeal, upholding the Tribunal's award

Relief Sought

The appellant-insurer sought exoneration from liability, contending that:

• The deceased was a gratuitous passenger (not connected with the goods being transported)
• The owner violated policy conditions by permitting the deceased to travel in the lorry

The respondents sought:

• Upholding of the Tribunal's award of Rs. 1,49,800 with 7.5% interest
• Confirmation of joint and several liability of the insurer and owner

The Legal Issue

The central question before the Court was whether the insurer is liable to pay compensation under Section 147 of the Motor Vehicles Act, 1988 when the deceased, who was travelling with goods in a goods carriage, was not the sole owner of the entire consignment. Specifically, the Court had to determine if the deceased qualified as a gratuitous passenger or was covered under the insurance policy as an owner/authorized representative of the goods.

Arguments Presented

For the Appellant (Insurer)

• The deceased was not the owner of the entire consignment of goods in the lorry and was merely a gratuitous passenger
• The owner of the vehicle violated the terms and conditions of the insurance policy by permitting the deceased to travel in the lorry without authorization
• No liability should be fastened on the insurer as the deceased's travel was unconnected with the goods being transported
• Relied on the general principle that insurers are not liable for gratuitous passengers unless specifically covered under the policy

For the Respondents (Claimants)

• The deceased was a fruit vendor who had purchased jujube fruits and was transporting them in the lorry, establishing a direct connection with the goods
• P.W.1 (wife of the deceased) and P.W.2 (eye-witness) deposed that the deceased boarded the lorry with fruits, proving he was not a gratuitous passenger
• The insurance policy (Ex.B.1) was valid and subsisting on the date of the accident, covering the vehicle
• The insurer failed to prove any breach of policy conditions or that the deceased was a gratuitous passenger
• Cited Supreme Court precedents (National Insurance Co. Ltd. v. Cholleti Bharatamma and United India Insurance Co. Ltd. v. Suresh K.K.) holding that owners of goods travelling in goods carriages are covered under insurance policies

The Court's Analysis

The Court undertook a detailed examination of the evidence and legal principles governing insurance liability under the Motor Vehicles Act, 1988.

"The evidence on record indicates that the fruits constituted goods being carried in the lorry and were not articles that could ordinarily be carried by hand like personal luggage. Significantly, no evidence was adduced by the insurer to establish that the deceased was travelling in the vehicle unconnected with the goods or that he was a gratuitous passenger."

The Court observed that:

• P.W.2, an eye-witness, deposed that the deceased boarded the lorry at Santhamaguluru with three or four bags of jujube fruits
• P.W.1, the wife of the deceased, stated that the deceased was a fruit vendor who had gone to Kurnool District to purchase fruits on a wholesale basis
• The insurer failed to adduce cogent evidence to prove that the deceased was a gratuitous passenger or that there was any breach of policy conditions
• Ex.B.1 policy was valid and subsisting on the date of the accident, and its existence was not disputed

The Court relied on two landmark Supreme Court judgments to reinforce its reasoning:

1. National Insurance Co. Ltd. v. Cholleti Bharatamma ((2008) 1 SCC 423): The Supreme Court held that the owner of the goods or his authorized representative travelling in a goods carriage is covered under the policy in view of the amendment to Section 147 of the Motor Vehicles Act, 1988.

2. United India Insurance Co. Ltd. v. Suresh K.K. ((2008) 1 SCC 657): The Supreme Court observed that where the deceased was accompanying the goods belonging to him, he could not be treated as a gratuitous passenger, and the insurer would be liable.

Applying these principles, the Court held:

"Even assuming that the deceased was travelling in the offending vehicle as contended by the insurer, in view of the law laid down by the Hon’ble Supreme Court in the decisions referred to above, the insurer cannot avoid its statutory liability and is bound to satisfy the award."

The Court rejected the insurer's contention that the deceased was a gratuitous passenger merely because he was not the sole owner of the goods. It emphasized that the burden of proof to establish breach of policy conditions or gratuitous travel lay on the insurer, which it failed to discharge.

The Verdict

The Andhra Pradesh High Court dismissed the appeal (M.A.C.M.A.No.2491/2006) filed by the insurer, upholding the Tribunal's award of Rs. 1,49,800 with 7.5% interest per annum from the date of filing the claim petition till realization. The Court held the insurer jointly and severally liable with the owner of the vehicle to satisfy the compensation award. No costs were awarded, and interim orders, if any, were vacated.

What This Means For Similar Cases

Insurer Cannot Avoid Liability for Goods Owners Travelling in Goods Vehicles

This judgment reinforces the principle that insurers cannot escape liability under Section 147 of the Motor Vehicles Act merely by alleging that the deceased was not the sole owner of the goods being transported. Key takeaways include:

• Owners or authorized representatives of goods travelling in goods carriages are covered under insurance policies, provided the policy is valid and subsisting
• The insurer bears the burden of proof to establish that the deceased was a gratuitous passenger or that there was a breach of policy conditions
• Mere absence of ownership of the entire consignment does not disqualify the deceased from coverage under the policy

Evidence of Connection with Goods is Crucial

Practitioners must ensure that evidence establishing the deceased's connection with the goods is adduced before the Tribunal:

• Eye-witness testimony (e.g., P.W.2 in this case) proving the deceased boarded the vehicle with goods
• Documentary evidence (e.g., purchase receipts, invoices) showing the deceased's ownership or authorization over the goods
• Depositions of family members (e.g., P.W.1) establishing the deceased's profession and purpose of travel

Tribunal's Discretion Upheld in Absence of Cogent Evidence by Insurer

The judgment underscores that Tribunals are justified in fastening liability on insurers when:

• The insurer fails to prove breach of policy conditions
• The insurer does not adduce cogent evidence to establish that the deceased was a gratuitous passenger
• The insurance policy is valid and subsisting on the date of the accident

Practitioners should note that bald pleas without supporting evidence are unlikely to succeed in exonerating insurers from liability.