Gratuitous passenger – Traveling in goods carriage vehicle to attend marriage ceremony

Interesting facts on lack of Due Diligence of Insurer in prosecuting case of motor accident compensation claim in appeal and its adverse effect on its exchequer.

Accidental death of 20 years boy travelling in “goods carriage” tempo (covered by goods carriage permit) on 18.5.2003 due to rash driving of tempo driver – Insurer denied the liability as the offending vehicle was predominately used for carriage of passengers for marriage ceremony – However, the Tribunal granted compensation of Rs.2,00,000 – In appeal of the Insurer HELD that the deceased was travelling as gratuitous passenger in goods carriage at the time of accident, he was not covered by third party insurance in terms of Section 147 of MV Act as also under Section 149 and under section 149(2) since there was breach of goods carriage permit.

Lack of Due Diligence of Insurer – The Appeal of the Insurer was admitted on 16.12.2004.  Notices issued to the claimants were returned unserved. Since the Insurer failed to take further steps, the appeal was dismissed against the claimants for want of prosecution by the order dated 14.02.2006.

The net result was that inspite of favourable findings on its favour, the High Court held that the Insurer will have to satisfy award with liberty to recover compensation from the insured / owner of the vehicle.

This is an eye opener for the Insurers to diligently prosecute cases and to avoid burden on its exchequer as also on court docket.

First Appeal No.1574 of 2004 (Aurangabad Bench) – New India Assurance Co. Ltd Vs. Thavra Badhu Chavan and others.