Brij Bihari Gupta vs Manmet

Non-Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION Civil Appeal Nos. 6338-6339 of 2024

Brij Bihari Gupta …Appellant Versus Manmet & Ors. …Respondents with

Civil Appeal No. 6341 of 2024

Civil Appeal No.6340 of 2024 and Civil Appeal No.6342 of 2024

J U D G M E NT

K. VINOD CHANDRAN, J.

The appeals arise from the orders of the High Court of

Chhattisgarh at Bilaspur, wherein the order of the Motor

Accidents Claims Tribunal granting compensation with

respect to the death/injuries suffered in a motor vehicle

Signature Not Verified accident was challenged by both the insurance company Digitally signed by NARENDRA PRASAD Date: 2025.08.08 18:52:02 IST Reason: Page 1 of 12 C. A. No. 6338-39 of 2024 & Ors.

and the claimants. There were a total of 11 claim petitions

before the Tribunal out of which the insurance company

choose to challenge the award in only three such claim

petitions. The challenge was on the ground of there being

no liability to indemnify, since the injured were gratuitous

passengers in the goods vehicle and the driver was in

possession and ownership of the vehicle on the strength of

an agreement with the registered owner, while the policy

was in the name of the registered owner. Before the

Tribunal, though these contentions were taken,

compensation was awarded and the registered owner, the

driver alleged to be the ostensible owner and the insurance

company were made jointly and severally liable.

2. The claimants and the insurance company filed appeals

before the High Court in which the company’s appeals were

allowed finding the insurer absolved of its liability. In the

claimant’s appeals, in two cases, the compensation was

enhanced, and the other appeal was dismissed, affirming

the Tribunal’s award insofar as the compensation is Page 2 of 12 Civil Appeal Nos. 6338-39 of 2024 & Ors.

concerned. The present appeals are filed by the ostensible

owner who also was the driver of the vehicle, who had also

unsuccessfully sought a review insofar as the liability cast

on him personally, to satisfy the award; which order in

review also is challenged in two appeals captioned above.

3. That the vehicle had a valid insurance policy in the

name of the registered owner and that the driver had a valid

driving license are admitted. Insurer claimed no liability to

indemnify the registered owner because at the time of the

accident, even according to the registered owner, by an

agreement the possession and ownership of the vehicle was

handed over to the appellant who was also driving the

vehicle. The appellant did not transfer the registration, nor

did he take out a policy in his name. It is also argued before

the High Court that the injured claimants and the deceased

were gratuitous passengers.

4. Sh. Kaustubh Shukla learned counsel for the appellants

would first point out that the issue as to the passengers

being gratuitous has to be considered in the context of the Page 3 of 12 Civil Appeal Nos. 6338-39 of 2024 & Ors.

village setting where the goods vehicle was plying. The

injured /deceased were petty hawkers who had been

transporting their goods in the goods vehicle and their

presence in the vehicle was in their capacity of the owner

of the goods. It is also argued that at the time of accident,

the ownership had not been transferred in the name of the

appellant. The appellant assails the order of the High Court

mulcting the entire liability for the satisfaction of the awards

on him. It is also argued that there were eleven claim

petitions in which awards were passed, and the insurer

employed a pick and choose method to challenge only

three awards. The learned counsel also relied on a decision

of this Court in Naveen Kumar vs. Vijay Kumar & Ors.1to

further his claim for indemnification by the insurer,

determining the liability on the registered owner.

5. Sh. Subhranshu Padhi, learned Amicus Curiae for the

claimants supported the appellant and also provided a

1 (2018) 3 SCC 1

Page 4 of 12 Civil Appeal Nos. 6338-39 of 2024 & Ors.

chart dealing with the facts of the case, award of

compensation as also the enhancement made by the High

Court. The learned counsel for the insurance company Sh.

Rajesh Kumar Gupta resisted the claim pointing out that on

both the grounds urged, the insurer has no liability. Insofar

as the eleven claim petitions filed, the learned counsel

sought time to appraise this Court about the fate of the other

eight claim petitions and verify whether there were appeals

filed.

6. We are not concerned with the compensation as

awarded by the Tribunal and enhanced in two cases by the

High Court in these appeals, which seek determination of

liability and its indemnification. It has to be first noticed, as

submitted by learned Amicus Curiae, that in Civil Appeal

Nos.6341 and 6342 there has been a settlement arrived at

in the Lok Adalat. The documents relating to the Lok Adalat

have been filed along with I.A. No.190313/2022, produced

as Annexure R7. The entire claim has been settled by the

appellant in a Lok Adalat by payment of part amount and Page 5 of 12 Civil Appeal Nos. 6338-39 of 2024 & Ors.

issuance of a cheque for the balance amount and nothing

survives in the said appeals, which stand dismissed.

7. Insofar as the contention regarding the passengers in

the goods vehicle being gratuitous, we have to notice the

evidence as produced by the second respondent along with

I.A. No.190303/2022 in C.A. Nos. 6338-6339/2024. The

deposition of the claimant injured in the said appeal clearly

indicates that he was a fish monger and the basket with fish

for sale, was being carried in the goods vehicle, in which

the claimant was also accompanying the goods. Likewise in

C.A. No.6340/2024, the deceased passenger was a

vegetable hawker, who too accompanied the goods carried

in the vehicle. We see from the cross-examination by the

learned counsel for the insurer that the said fact was

challenged by way of a suggestion. In the examination-in-

chief of the witness for the insurer produced as Annexure-

R/13, the Administrative Officer asserted that the

passengers were gratuitous. But, in cross-examination he

categorically stated that he did not have any knowledge Page 6 of 12 Civil Appeal Nos. 6338-39 of 2024 & Ors.

regarding the status of the deceased / injured in the

accident and he does not have any information as to

whether they were accompanying the goods in the vehicle

or not. The suggestion made to the claimant hence has to be

ignored. It is pertinent that in the reply to the claim filed,

produced as Annexure-R/11, the insurer had raised a

contention that if there were goods in the vehicle then the

seizure of such goods would have been recorded in the

mahazar prepared in the criminal case. However, the

insurance company did not take any effort to produce any

such mahazar. The claimant while being cross-examined

was also not confronted with the records of the criminal

case which were produced and marked by the claimants in

their evidence.

8. We also find that the Tribunal had specifically found so

with respect to the issue of gratuitous passengers:

“बीमा कंपनी का केवल एक ही बचाव है कक, आवेकिका िु र्घटनाग्रस्त वाहन, जो कक माल वाहक यान है , में अनुग्रह यात्री

थी और उसे तृ तीय पक्ष नहीं माना जा सकता है परं तु प्रकरण

Page 7 of 12 Civil Appeal Nos. 6338-39 of 2024 & Ors.

में उपलब्ध तथ्ों एवं साक्ष्यो से स्पष्ट होता है कक आवेकिका िु र्घटनाग्रस्त वाहन में अपने सामान की सुरक्षा के कलए बैठी हुई

थी और मोटर यान अकिकनयम के प्राविानों के अनुसार माल

वाहक यान में अपनी सामान की सुरक्षा के कलए बै ठे व्यक्ति को अनुग्रह याकत्र नही माना जा सकता।“

The High Court has interfered with the said finding of fact

without any material and in a perfunctory manner. We

hence find that the contention raised by the insurer that the

deceased/injured in the accident were gratuitous

passengers in the vehicle remains in the realm of mere

assertion without substantiation. Section 147 which has the

nominal heading “Requirements of policies and limits of

liability” by sub-section (1)(b)(i) enables indemnification

by the insurer, any liability with respect to the death or

bodily injury to third parties and any person including

owner of the goods or his authorized representative carried

in the motor vehicle.

9. The next contention is with respect to the transfer of

ownership to the appellant herein which even the Page 8 of 12 Civil Appeal Nos. 6338-39 of 2024 & Ors.

registered owner asserts. To substantiate, the agreement is

produced as Annexure-R/1 again in IA No.190313/2022 in

the appeals we have dismissed herein above for having

settled the matter in the Lok Adalat. The agreement only

indicates that the sale consideration was fixed at

Rs.90,000/- and on payment of Rs.80,000/- there was a

transfer of possession. The recital in the agreement clearly

indicates that the balance of Rs.10,000/- shall be paid within

two months and only after the balance is paid the

registration of the vehicle would be transferred. The recitals

clearly indicate that there has been no transfer of

ownership of the vehicle and the appellant merely had

possession of the same.

10. There is considerable reliance placed by the insurer

on the fact that the appellant had received the vehicle from

the Magistrate’s Court, asserting his ownership. The order

directing handing over the vehicle to the appellant is

produced as Annexure-R/4, in IA No.190313/2022, where it

is indicated that even at that point the registered owner’s Page 9 of 12 Civil Appeal Nos. 6338-39 of 2024 & Ors.

name was not changed. The registered owner was present

before the Magistrate as we see from the order and while

ordering handing over of the vehicle, the

applicant/appellant was directed to change the ownership

within 30 days. Hence obviously the balance consideration

of Rs.10,000/- had not been paid till that date. The transfer

of the registration as per Section 50 of the Motor Vehicle Act,

19882 requires the transferee to report the fact of transfer in

the prescribed form to the Registering Authority within

whose jurisdiction the transfer is affected within 14 days of

the transfer. There is no contention raised by the registered

owner that he made such a report as required under Section

50(1)(a)(i) of the Act. Hence the ownership was with the

registered owner even at the time of the accident and it is

his liability to compensate the victims in the accident, which

also has to be indemnified by the insurer. We also notice

that in Naveen Kumar1, the definition of owner in the Act of

2 “the Act” Page 10 of 12 Civil Appeal Nos. 6338-39 of 2024 & Ors.

1988 was interpreted to facilitate fulfilment of the object of

the law, which was not to burden the claimant to follow the

trail of successive transfers. The liability to pay falls

squarely on the registered owner, even if there has been

successive transfers which has to be indemnified by the

insurer.

11. We also notice that the contention raised of eight claim

petitions having not been challenged has not been repelled

by the insurer. We were not inclined to grant any time to the

learned counsel for the insurer to verify as to what occurred

in the eight other claim petitions, since the judgment of the

High Court clearly records the contention of the claimants,

that there was a pick and choose employed. The High Court

has failed to consider the same and it was for the insurer to

have refuted the same with documentary proof in the

present appeals. In any event, the said issue does not

assume relevance since we have negatived the grounds

raised by the insurer to absolve itself of the liability. We

hence allow C.A. No.6338-6339/2024 and C.A. Page 11 of 12 Civil Appeal Nos. 6338-39 of 2024 & Ors.

No.6340/2024. For completeness we notice that the Tribunal

had granted 12% interest from the date of the claim petition

and for the enhanced amount, the High Court has granted

6% interest, again from the date of filing of the claim

petition. Awards impugned in the appeals, other than that

dismissed shall be satisfied by the insurer. Ordered

accordingly.

12. Pending applications, if any, shall stand disposed of.

………….……………………. J.

(K. VINOD CHANDRAN)

………….……………………. J.

(N. V. ANJARIA)

NEW DELHI;

AUGUST 08, 2025

Page 12 of 12 Civil Appeal Nos. 6338-39 of 2024 & Ors.