Rajasthan High Court - Jodhpur
National Insurance Co Ltd vs Kabu And Ors (2025:Rj-Jd:40141) on 9 September, 2025
Author: Vinit Kumar Mathur
Bench: Vinit Kumar Mathur
[2025:RJ-JD:40141]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Misc. Appeal No. 751/2004
National Insurance Co Ltd., Branch Office, Banswara through
Assistant manager, National Insurance Company Ltd. Residency
Road, Jodhpur.
----Appellant
Versus
1. Shri Kabu S/o Shri Navala, R/o Udapan, Teh. Bagidaura,
District Banswara.
2. Smt. Dubali W/o Shri Kabu, R/o Udapan, Teh. Bagidaura,
District Banswara.
3. Shri Badamilal S/o Shri Kaliya, R/o Kahawada, Teh. Bagidaura,
District Banswara.
4. Shri Mohanlal S/o Shri Dalichand, R/o Anandpuri, Tehsil
Bagidaura, District Banswara.
----Respondents
For Appellant(s) : Mr. Shubhankar Johari
Mr. Hardik Kadohwaha
For Respondent(s) : Ms. Urvashi Kalla
Mr. Jayant Jain
HON'BLE MR. JUSTICE VINIT KUMAR MATHUR
Order
09/09/2025
1. Heard learned counsel for the parties.
2. The present appeal has been filed against the Judgment and
Award dated 22.10.2003 passed by Motor Accident Claims
Tribunal, Kushalgarh, Sub - Divisonal Area, Banswara (hereinafter
referred to as 'the tribunal') in Claim Case No.01/2001, whereby
the claim petition preferred by the respondent/claimant Nos.1 & 2
was allowed.
3. Briefly noted the facts in the present appeal are that the
Jeep bearing No. RJ-03-C-01148 was insured with the present
(Uploaded on 10/09/2025 at 04:56:25 PM)
[2025:RJ-JD:40141] (2 of 5) [CMA-751/2004]
appellant as per 'Act Only Policy'. The Jeep was owned by
respondent No.4 - Mohanlal and the same was driven by
respondent No.3 - Badamilal, which met with an accident on
24.06.2000, while going from Anandpuri to Choradi. At the time of
accident, six to seven passengers were traveling in the Jeep
including one - Suresh Chandra, who died in the accident. On
account of the death of Suresh Chandra, respondent Nos.1 & 2
filed a claim petition before the learned tribunal and the tribunal
vide its Judgment and Award dated 22.10.2003 holding that
insurance company and owner/driver were jointly and severly
liable to indemnify the award amount, awarded an amount of
Rs.1,70,000/- in favour of the claimants. Hence, the present
appeal has been filed by the appellant - insurance company
assailing the validity of the order dated 22.10.2003.
4. Learned counsel for the appellant - Insurance Company
vehemently submitted that the findings on issue No.3 have been
recorded to the effect that Suresh Chandra was traveling in the
Jeep after paying the fare and, therefore, it can safely be
presumed that the Jeep was being used for transport purpose on
commercial basis. He submits that as per the 'Act Only Policy', the
vehicle was not required to be plied on commercial basis and the
risk of those passengers was not covered by the insurance
company under this policy and, therefore, the liability to pay the
compensation in the present case cannot be fastened upon the
appellant - insurance company beyond "No Fault Liability".
5. Learned counsel for the appellant further submits that the
findings recorded on issue No.3 by the tribunal is on the face of it
erroneous and contrary to the Judgments of the Hon'ble Supreme
(Uploaded on 10/09/2025 at 04:56:25 PM)
[2025:RJ-JD:40141] (3 of 5) [CMA-751/2004]
Court, which is holding the field even today. He submits that as
per Insurance Policy (Ex.4), it is very clear that the vehicle
involved was insured under the 'Act Only Policy', therefore, the risk
of the passengers traveling in the same was covered to that
extent only.
6. He, further submits that as per the condition No.6 of the
Insurance Policy, the vehicle insured under the 'Act Only Policy'
cannot be plied for hire and reward purposes and since it has
come on record that Suresh Chandra was traveling in the Jeep
after paying the fare for the same, therefore the same was not
covered under the policy. Since the risk of the passengers in the
vehicle was not covered, therefore, the liability to pay the
compensation cannot be fastened upon the appellant - insurance
company.
7. Learned counsel submits that findings recorded on the issue
No.3 is erroneous. He submits that even if Rs.400/- has been
charged in addition to the premium, then only the risk of those
passengers, who were not fare - paying is covered as per
condition No.6 of the Insurance Cover Note.
8. Learned counsel for the Insurance Company has relied upon
the Judgments rendered by the Hon'ble Supreme Court in NIC
Vs. Balakrishnan & Ors. reported in (2013) 1 SCC 731,
United India Vs. Tilak Singh reported in (2006) 4 SCC 404
and The Oriental Insurance Company Vs. Meena Variyal &
Ors. reported in (2007) 5 SCC 428. He, therefore, prays that the
present appeal may be allowed and the liability to pay the
compensation may be quashed and set aside qua the insurance
company.
(Uploaded on 10/09/2025 at 04:56:25 PM)
[2025:RJ-JD:40141] (4 of 5) [CMA-751/2004]
9. Nobody has appeared on behalf of the respondent - Mohanlal
(owner of the vehicle) despite service.
10. Learned counsel for the claimants have not controverted the
submissions made by the learned counsel for the appellant.
11. I have considered the submissions made at the Bar and have
gone through the relevant record of the case.
12. The undisputed fact in the present case shows that a Jeep
bearing No. RJ-03-C-01148 was insured with the present appellant
under the 'Act Only Policy'. The policy covered has been produced
on record as Ex.4. The owner of the Jeep was Mohanlal and the
same was being driven by its driver Badamilal, which met with an
accident on 24.06.2000. In the accident, one - Suresh Chandra
sustained injuries and ultimately succumbed to those injuries. The
claimants are the mother and the father of the Suresh Chandra,
who appeared before the learned tribunal and in their statements
it has come on record that Suresh Chandra was traveling in the
Jeep after paying the due fare for the same. It has also come on
record that the other persons, who were traveling in the Jeep,
were traveling after paying the fare for the travel undertaken.
13. Since the factum of accident was not disputed, therefore, the
learned tribunal has awarded a sum of Rs.1,70,000/- as
compensation to the claimants. The findings recorded by the
tribunal on issue No.3 fastening the liability upon the insurance
company is under challenge. Learned tribunal has held that since
the insurance company has charged Rs.400/- in addition to the
premium taken, therefore, they are liable to cover the risk of the
occupants of Jeep to the extent of Rs.1,00,000/- per person and
thus they are liable to pay the compensation in the present case
(Uploaded on 10/09/2025 at 04:56:25 PM)
[2025:RJ-JD:40141] (5 of 5) [CMA-751/2004]
of Rs.1,00,000-/ to the claimants on account of the death of
Suresh Chandra.
14. Since it has come on record that Suresh Chandra was
traveling in the Jeep after paying the fare and, therefore, the risk
of the Suresh Chandra was not covered as per the Insurance
Policy. In the 'Act Only Policy', the risk of the fare paid passengers
is not covered, more, particularly, keeping in mind the condition
No.6 of the Insurance Cover Note, which reads as under:-
"Use only for social domestic and pleasure
purpose and insured's own business. The policy
does not cover use for hire or reward or for
organized racing, peacemaking, reliability trials,
speed testing, carriage of goods (other than
samples) in connection with any trade or business
of use for any purpose in connection with Motor
Trade".
15. In the considered opinion of this Court, the tribunal was not
right in fastening the liability of paying compensation upon the
Insurance Company in the present case.
16. In view of the discussion made above, the appeal merits
acceptance and the same is allowed. The Insurance Company is
exonerated from payment of compensation beyond NFL amount
and if the same has been paid, they will be free to recover the
same from the owner of the Jeep in accordance with law from the
owner.
(VINIT KUMAR MATHUR),J
20-nitin/-
(Uploaded on 10/09/2025 at 04:56:25 PM)
Powered by TCPDF (www.tcpdf.org)
