Oriental Insurance Rs.14.79 Lakh Award Quashed

Authority: High Court of Himachal Pradesh at Shimla

Order Date: 05.11.2026

Case Overview

• Parties: Appellant – Oriental Insurance Company Ltd.; Respondents – Sumitra Devi (wife of the deceased) and her children Archana, Antra, Sagar Thakur (petitioners/claimants), Shri Atma Ram (owner of the offending vehicle), Shri Ved Parkash (driver), and other respondents as listed.
• Proceedings: Appeal filed under Section 173 of the Motor Vehicles Act, 1988 against the award dated 28.08.2025 passed by the Motor Accident Claims Tribunal (MAC Petition No. 44‑MAC/2 of 2021).
• Background: On 31.05.2017, a Mahindra Pick‑up (Reg. No. HP‑71‑4783) hired by the deceased Abhimanyu @ Pappu for transporting agricultural produce met with an accident near PWD Rest House, Sangrah, allegedly due to rash driving by the driver (Shri Ved Parkash). The deceased sustained serious injuries and later died. The claimants asserted dependence on the deceased’s income of Rs.25,000 per month from cash‑crop farming and Rs.10,000 per month from milk sales.
• Tribunal Findings (28.08.2025): The Tribunal held the deceased was a gratuitous passenger, awarded compensation of Rs.14,79,080 to the claimants, directed the owner (Shri Atma Ram) to pay the amount, and ordered the insurer (Oriental Insurance) to pay the amount on a “pay‑and‑recover” basis. Interest at 6% per annum from the filing date was also awarded.
• Contentions: Oriental Insurance argued that, having found the deceased a gratuitous passenger, the Tribunal could not impose the “pay‑and‑recover” liability on it. The claimants and the vehicle owner supported the Tribunal’s award.
• Legal Provisions Cited: Section 147 of the Motor Vehicles Act, 1988 (as amended 1994); relevant Supreme Court judgments – New India Assurance Co. Ltd. vs Asha Rani (2003), Mallawwa vs Oriental Insurance Co. Ltd. (1999), National Insurance Co. Ltd. vs Baljit Kaur (2004), National Insurance Co. Ltd. vs Saju P. Paul (2013), Manuara Khatun vs Rajesh Kumar Singh (2017), and National Insurance Co. Ltd. vs Parvathneni (2018).
• Supreme Court Reasoning Referenced: The Court clarified that post‑1994 amendment, Section 147 obliges insurers to cover the owner of the goods or his authorized representative, but not gratuitous passengers in a goods carriage. The insurer therefore has no liability for compensation to such passengers.

Final Outcome

• The High Court allowed Oriental Insurance’s appeal and set aside the Tribunal’s direction that the insurer pay the Rs.14,79,080 compensation.
• The award is modified: the owner of the offending vehicle, Shri Atma Ram, is solely liable to satisfy the compensation award to the claimants.
• All other terms of the original award remain unchanged.
• The Court held that the Tribunal exceeded its jurisdiction by imposing a “pay‑and‑recover” direction, a power that only the Supreme Court can exercise under Article 142 of the Constitution.

Topics: Legal Liability, Motor Accident Compensation, Insurance Law