ORIENTAL INSURANCE COMPANY LTD. versus DEVIREDDY KONDA REDDY AND ORS. ETC. ETC.

Citation: [2003] 1 S.C.R. 537 · Decided: 24-01-2003 · Supreme Court of India · Bench: SHIVARAJ V. PATIL · Disposal: Appeal(s) allowed

Judgment (excerpt)

ORIENTAL INSURANCE COMPANY LTD. 
A 
~ 
v. 
DEVIREDDY KONDA REDDY AND ORS. ETC. ETC. 
-
JANUARY 24, 2003 
[SHIVARAJ V. PATIL AND ARIJIT PASAYAT, JJ.) 
B 
_... 
Motor Vehicles Act, 1988 
Ss.2(14), 2(35),2(40),2(47) and 147-"Goods carriage"-Carrying c 
unauthorised and gratuitous passengers-Accident-Death of passengers-
Compensation-Liability of insurer-Held, insurer not liable. 
Certain goods vehicles, which were insured with the appellant 
insurance company, met with accidents resulting in death of several 
persons who were either unauthorised or gratuitous passengers in the said D 
vehicles. Legal representatives of the deceased persons laid claim before 
the Motor Accidents Claim Tribunal under Motor Vehicles Act, 1988 The 
Tribunal held the insurer liable to indemnify the award passed. The 
appeals filed by the insurer were dismissed by the Single Judge as well as 
the Division Bench of the High Court, relying on the decision in Satpal 
E 
Singh 's case*. Aggrieved, the insurer filed the present appeals. 
It was contended for the appellant-insurance company that the ratio 
in Satpal Singh 's case had no application to the instant case. 
Allowing the appeals, the Court 
F 
.-L 
HELD: 1.1. The provisions of Motor Vehicles Act, 1988 do not enjoin 
any statutory liability on the owner of a goods carriage to get his vehicle 
insured for any passenger travelling therein, and the insurer would have 
no liability therefor. The Tribunal and the High Court were not justified 
in holding the insurer liable to satisfy the award. [542-D-E] 
G 
New India Assurance Company Limited v. Asha Rani and Ors., (2002) 
8 Supreme 594, followed. 
~ 
1.2. Jn Satpal Singh 's case the Court proceeded on the footing that 
H 
537 
538 
SUPREME COURT REPORTS 
[2003] 1 S.C.R. 
A provision of Section 95(1) of Motor Vehicles Act, 1939 were in pari materia 
with Section 147(1) of Motor Vehicles Act 1988 as it stood prior to the 
)r· 
amendment in 1994. On a closer reading of the expressions "goods 
vehicle", "public service vehicle", "stage carrier" and "transport vehicle" 
.... 
occurring in Sections 2(8), 2(25), 2(29) and 2(33) of the old Act with the 
B 
corresponding provisions i.e. Section 2(14), 2(35) 2(40) and 2(47) of the 
Act, it is clear that there are conceptual differences. It is of significance 
that proviso appended to Section 95 of the old Act contained clause(ii) 
which does not find place in the new Act. (539-H; 540-A-B; 541-F) 
*New India Assurance Company v. Satpal Singh and Ors., (2000) l 
c sec 237, referred to. 
1.3. The difference in the language of "goods vehicle" as appearing 
in the old Act and "goods carriage' in the Act is of significance. A bare 
reading of the provisions makes it clear that the legislative intent was to 
. prohibit goods vehicle from carrying any passenger. This is clear from 
D the expression "in addition to passengers" as contained in definition of 
"goods vehicle" in the old Act. The position becomes further clear because 
the expression used in the Act is "goods carriage", i.e., solely for the 
carriage of goods". Carrying of passengers in a goods carriage is not 
contemplated in the Act. (541-H; 542-A) 
E 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 981-990 
of 2002. 
From the Judgment and Order dated 18.6.2001 of the High Court of 
A.P. in LPA 172/01, 175-181/01, 195/01) 
F 
Joy Basu and B.K. Satija with him, for the Appellants. 
"' 
,J.._ 
M. Vijaya Bhaskar and D. Mahesh Babu with him, for the Respondents. 
The Judgment of the Court was delivered by 
G 
ARIJIT PASAYAT, J. These appeals are directed against the common 
judgment rendered by a Division Bench of the Andhra Pradesh High Court. 
By the said judgment, it upheld view of learned Single Judge that compensation 
).-.. 
is payable by the insurer even if the deceased persons in respect of whom 
claims are made were gratuitous passengers. Both the learned Single Judge 
H and the Division Bench relied on the decision of this Court in New India 
ORIENTAL INSURANCE COMPANY LTD. v. D.K. REDDYIARIJITPASAYAT. J.l 539 
Assurance Company v. Satpa/ Singh and Ors., (2000] I SCC 237 for coming A 
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to this conclusion. 
Since the point involved is one of law, the factual position which is 
almost undisputed needs to be noted in brief. Certain persons were travelling 
in goods vehicles which were subject-matter of insurance with th~ appellant-
Oriental Insurance Company Limited (hereinafter referred to as "the Insurer"). B 
The vehicles met with ac

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