LexSHYAM LAL versus SHRIRAM GENERAL INSURANCE CO. LTD. AND OTHERS
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[2025] 9 S.C.R. 522 : 2025 INSC 1078 Shyam Lal v. Shriram General Insurance Co. Ltd. and Others (Civil Appeal No(s). 5177-81 of 2022) 04 September 2025 [K. Vinod Chandran* and N.V. Anjaria, JJ.] Issue for Consideration Whether the order of the High Court directing pay and recovery is sustainable. Headnotes† Motor Vehicles Act, 1988 – Motor Vehicle Accident Claim – Owner of utility vehicle was involved in an accident – Five claim petitions were filed – The High Court found that the utility vehicle was not entitled to carry passengers by reason of the specific restriction in the policy which is evident from “Limitation as to Use” – The High Court ordered “pay and recover” – Correctness: Held: It was admitted by the Branch Manager in charge of the Insurance Company that the insurance policy was issued to the owner, in accordance with the rules and looking at the registration certificate, wherein the category of the vehicle is registered as “Utility Van” – The witness further admitted that the seating capacity in the policy is also written as 4+1 and that there is no recital in the policy document regarding the premium for passengers having not been charged – It was also admitted that the utility van is a vehicle in which half portion is used for carrying of goods and half portion in front is used for carrying passengers – Hence, there can be no restriction insofar as the ‘limitation as to use’ as found in the policy which applies only to goods vehicles while the present vehicle as per the certificate of registration is a utility vehicle and the permit issued is of a contract carriage – The package policy was issued by the Insurance Company after looking at the certificate of registration and the permit issued and it has been clearly specified that the vehicle is entitled to carry 4+1 passengers in addition to the goods – The Insurance Company in the above circumstance, cannot wriggle out of its liability to indemnify the owner – As far as the contention regarding 5 persons having filed claim petitionss, indicating more * Author [2025] 9 S.C.R. 523 Shyam Lal v. Shriram General Insurance Co. Ltd. and Others than 4 persons having been carried in the vehicle is concerned, the eyewitness, PW2 who saw the accident clearly stated that just prior to the accident, he saw the vehicle coming with 4 passengers in it – There was no challenge to the said evidence in the cross examination by the Insurance Company – There is absolutely no reason to sustain the order of the High Court directing pay and recovery – The liability is on the Insurance Company and that has to be satisfied fully by the Insurance Company. [Paras 6, 7] List of Acts Motor Vehicles Act, 1988; Workmen’s Compensation Act, 1923. List of Keywords Motor vehicle accident claim; Insurance company; Certificate of registration; Contract carriage; Seating capacity of vehicle; Pay and recovery; Overloading; Valid package policy; Goods carriage; Insurance policy; Specific restriction in insurance policy. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No(s). 5177-81 of 2022 From the Judgment and Order dated 10.04.2019 of the High Court of Uttarakhand at Nainital in AFO Nos. 604, 605, 606, 607, and 608 of 2016 Appearances for Parties Advs. for the Appellant: Manohar Pratap, Ms. Bhavana Bisht. Advs. for the Respondents: Kshitij Mittal, Aryan Sharma, Mukesh Kumar. Judgment / Order of the Supreme Court Judgment K. Vinod Chandran, J. The owner of the utility vehicle involved in an accident, which gave rise to 5 claim petitions, has filed the instant appeal challenging the 524 [2025] 9 S.C.R. Supreme Court Reports order of “pay and recover” issued by the High Court in the appeal filed by the Insurance Company. The High Court found that the utility vehicle was not entitled to carry passengers by reason of the specific restriction in the policy which is evident from “Limitation as to Use”. The contention was that the 4 passengers excluding the driver who were entitled to travel in the utility vehicle, are only employees who come under the purview of Workmen’s Compensation Act, 1923. 2. The learned Counsel for the appellant-owner took us through the Certificate of Registration (Annexure P1), the contract carriage permit (Annexure P2) and the package policy (Annexure P3) which indicated the seating capacity including the driver to be 4+1. It is argued that the limitation as to use insofar as carriage of goods appli
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