Shyam Lal vs Shriram General Insurance Co Ltd

2025 INSC 1078 Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

Civil Appeal Nos. 5177-81 of 2022 Shyam Lal …Appellant Versus Shriram General Insurance Co. Ltd. and Others. …Respondents 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 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 Signature Not Verified

entitled to travel in the utility vehicle, are only Digitally signed by babita pandey Date: 2025.09.06 12:32:12 IST Reason: Page 1 of 9 Civil Appeal Nos. 5177-81 of 2022 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 applies only to a goods vehicle and not an utility

vehicle which can carry both passengers and goods.

There is no ground for ordering “pay and recovery” in the

facts and circumstances of the case, especially when the

Insurance Company had not taken a defence that the

vehicle was insured as a goods vehicle. The claimants

are the legal representatives of the deceased who were

either travelling in the vehicle or standing/walking at the

accident site.

3. The learned Counsel for the Insurance Company,

however, contended that there could be no plea of goods

Page 2 of 9 Civil Appeal Nos. 5177-81 of 2022 being carried in the vehicle because one of the deceased

was a student and the others; a catering employee, a

painter, an employee in the postal department and an

unemployed man. The restriction squarely applies, and

the passengers cannot be said to be validly covered

under the policy. It is also argued that even if the

passengers are said to be owners of goods or his

representative, there could not have been more than four

passengers in the vehicle, when the claim petitions were

numbering five. There was also an allegation of nine

deaths having occurred in the accident, which clearly

indicates overloading.

4. The appeal was filed only on the ground of the

limitation in the policy. The Tribunal found the

negligence and rashness in the driving of the utility

vehicle and the vehicle is covered by a valid package

policy issued by the Insurance Company are

established. Having gone through the records, we see

that the certificate of registration indicates the class of the

Page 3 of 9 Civil Appeal Nos. 5177-81 of 2022 offending vehicle to be an Utility Van which has a seating

capacity of 5, including the driver. The permit issued as

a contract carriage, also allows 5 passengers to be

carried in the vehicle. A ‘contract carriage’ as defined

under Section 2(7) of the Motor Vehicles Act, 1988 means

a motor vehicle which carries a passenger or passengers

for hire or reward and is engaged under an express or

implied contract and includes a motor cab

notwithstanding that separate fares are charged for its

passengers. This is in clear distinction with a ‘goods

carriage’ defined under Section 2(14) of the Act which is

a vehicle constructed or adapted or used solely for the

carriage of goods.

5. The package policy produced shows the make &

model as seen from the Certificate of Registration

indicating the vehicle to be manufactured by Mahindra &

Mahindra, a Bolero Camper Utility DC, 2WD, BS2. The

utility vehicle obviously is for carriage of passengers and

goods; the passengers not being necessarily the owners

Page 4 of 9 Civil Appeal Nos. 5177-81 of 2022 of the goods as seen from the seating capacity of 4+1

including the driver specified also in the insurance

policy. In the above circumstances, it cannot be said that

the vehicle was insured as a goods vehicle, which is not

specified in the policy and hence ‘the limitation as to the

use only of carriage of goods’ does not apply; the utility

vehicle being the vehicle registered with a seating

capacity of 5 passengers including the driver, and the

permit issued being one of a contract carriage also

indicating 5 passengers including the driver to be

carried within it.

6. In this context, we have also gone through the

evidence of the Branch Manager in charge of the

Insurance Company which is produced as Annexure

No.P6. In chief examination, it was stated that though the

seating capacity is shown as 4+1 including the driver, the

premium was taken only for the owner driver and no

separate amounts were charged for the passengers;

which is contrary to the recitals in the document. In cross

Page 5 of 9 Civil Appeal Nos. 5177-81 of 2022 examination, the witness admitted that the insurance of

any vehicle is issued after perusing the records of the

vehicle like, registration certificate, fitness and permit

validity. It was admitted 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 has also been

deposed, which is again a clear admission, 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

Page 6 of 9 Civil Appeal Nos. 5177-81 of 2022 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.

7. The contention regarding 5 persons having filed

claim petitions, indicating more than 4 persons having

been carried in the vehicle, though is attractive has no

significance on the facts as revealed from the order of the

Tribunal. The Tribunal, on the basis of the evidence led,

clearly found that in addition to the passengers carried in

the vehicle, some pedestrians were also dragged down

by the vehicle when the accident occurred. 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

Page 7 of 9 Civil Appeal Nos. 5177-81 of 2022 Company. The vehicle having fallen down the gorge,

with the passengers as also the pedestrians, one of the

claim petitions is of a pedestrian, which is not clearly

demarcated for reason of the 5 persons having been

extricated at the accident site from and around the

vehicle. We find 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.

8. Before leaving the matter, we notice that insofar as

one of the claim petitions, MACT Case No. 134 of 2014

relatable to the compensation for the death of one

Jagdish Prasad Gaur, there was a contention taken in the

appeal filed before the High Court by the Insurance

Company that no deduction towards 1/3rd of the amount

determined as compensation for loss of income, as

personal expenses has been made by the Tribunal. We

did not have the benefit of going through the order of the

Tribunal since the same was not produced before us.

Page 8 of 9 Civil Appeal Nos. 5177-81 of 2022 However, in the fitness of things especially since just

compensation is to be awarded, we are of the opinion

that in computing the income at the time of disbursing the

amount, the Tribunal shall ensure that 1/3rd deduction is

made from the total loss of income computed before

disbursing the amounts directed in MACT Case No. 134

of 2014 relatable to Appeal No. 607 of 2016.

9. The appeals hence stand allowed with the above

reservation, setting aside the judgment of the High Court

and restoring the order of the Tribunal with the

modification to one of the awards as mentioned above.

10. Pending applications, if any, shall stand disposed

of.

…….…………………….….. J.

(K. VINOD CHANDRAN)

…….…………………….….. J.

(N. V. ANJARIA)

NEW DELHI;

SEPTEMBER 04, 2025.

Page 9 of 9 Civil Appeal Nos. 5177-81 of 2022