In a recent landmark judgment, the Himachal Pradesh High Court has ruled that insurance companies are not liable to compensate gratuitous passengers, such as porters or labourers, travelling in goods vehicles. The judgment was passed by Justice Satyen Vaidya in the case The Oriental Insurance Company Ltd. vs. Sheru @ Sher Singh @ Sukhraj & Others (FAO No. 448 of 2018 along with FAO No. 34 of 2019), decided on April 30, 2025.
Background of the Case
The case originated from a claim petition filed by Sheru Singh (the claimant) before the Motor Accident Claims Tribunal, Shimla. Singh contended that he suffered severe injuries and a permanent disability due to an accident involving a goods vehicle. The Tribunal had initially directed the insurance company to pay Rs. 18,42,711/- as compensation for 60% disability.
Subsequently, two appeals were filed—one by the insurance company challenging their liability, and the other by the claimant seeking enhanced compensation.
Key Legal Findings
The High Court emphasized the interpretation of Section 147 of the Motor Vehicles Act, 1988, which mandates compulsory insurance for third-party risks. However, the law specifically limits such liability in goods carriages to:
- The driver of the vehicle
- The owner of the goods
- The authorized representative of the owner
- Certain categories of employees defined under the Act
Justice Vaidya held that gratuitous passengers, including porters or labourers not covered under these categories, do not qualify as “third parties” under Section 147. The court clarified that when the vehicle owner is travelling personally for the transportation of goods, any porter accompanying him is not considered an authorized representative but rather a helper without coverage.
Supreme Court Precedents Considered
The High Court relied on two key Supreme Court decisions:
- New India Assurance Co. Ltd. vs. Asha Rani (2003)
- National Insurance Co. Ltd. vs. Baljit Kaur (2004)
Both rulings reinforce the interpretation that insurance providers are not liable for injuries or fatalities of gratuitous passengers in goods vehicles.
Reassessment of Compensation
The Court also found that the Tribunal had erred in estimating the claimant’s disability at 60%. Medical evidence showed a certified disability of 45%. Accordingly, the compensation was revised downwards to Rs. 15,20,151/-.
Final Judgment
In its final verdict, the Himachal Pradesh High Court ruled that the insurance company had no liability to indemnify the claimant. Instead, the responsibility to satisfy the compensation rested solely with the owner of the goods vehicle.
Conclusion
This ruling reiterates the legal position that gratuitous passengers in goods vehicles are not covered under the mandatory third-party insurance policy as per Section 147 of the Motor Vehicles Act, 1988. Vehicle owners must remain aware of the limited scope of insurance liability in such cases to avoid unexpected legal burdens.