Insurer Must Compensate Gratuitous Passenger Injured In Motor Accident But Can Recover Amount From Owner: Kerala High Court

The Kerala High Court in a recently ruling clarified that an insurance company cannot be exonerated from the liability to pay compensation in motor accidents claims cases when the injured person is a gratuitous passenger on a goods vehicle.Relying on Kaminiben & Ors v. The Oriental Insurance Company Limited & Ors., Justice M.B. Snehalatha observed that the insurer is entitled to recover the amount paid from the owner of the vehicle.“In Kaminiben & Ors v. The Oriental Insurance Company Limited & Ors. reported in 2026 LiveLaw (SC) 174, after referring to its earlier decisions… the Hon'ble Supreme Court held that when the deceased was a gratuitous passenger in a goods vehicle, the insurance company is liable to pay the amount and recover the same from the insured… Therefore, R2 insurance company cannot be exonerated from the liability. R2 is liable to pay the amount and after payment of the award amount, R2 insurance company is entitled to recover the amount…,” the Court observed.The appeal before the Court was preferred by the claimant before the Motor Accidents Claims Tribunal. He was travelling in a pick-up van accompanying the goods of the employer when it capsized due to rash and negligent driving of the owner/driver. He sustained grievous injuries, which led to permanent disability of 13% requiring treatment for a long period.The insurer contended that it is not liable to pay due to violation of policy conditions since the claimant was a gratuitous passenger, who had travelled on the platform of the vehicle.The Tribunal awarded a sum of Rs. 1,37,400 as compensation along with interest. It was also held that the insurer is not liable to indemnify the owner of the vehicle as there was violation of permit and policy.The claimant/appellant prayed for enhancement of compensation while also challenging the Tribunal's finding exonerating the insurance company from liability.The Court first considered the question of whether there is a need to enhance compensation awarded. Referring to the precedents, it was of the opinion that the notional income ought to have been fixed at Rs. 6000 instead of Rs. 3000 since the claimant was a catering worker, who claimed that he was earning Rs. 6000 per month. Thus, loss of earnings for 6 months was enhanced from Rs. 18,000 to Rs. 36,000.The Tribunal had awarded Rs. 70,200 under loss of disability. This was enhanced to Rs. 1,96,560 taking the multiplier as 15 since the claimant was 38 years and 40% of the income has to be added towards future prospects.The Court also felt that sum of Rs. 20,000 awarded by the Tribunal under 'pain and suffering' was low and enhanced it to Rs. 40,000. By stander expenses was increased from Rs. 300 to Rs. 1000. Therefore, the total enhancement was Rs. 1,65,060.It then considered the question of whether the insurance company can be exonerated when the injured is a gratuitous passenger in a goods vehicle. The Court felt that the insurer has to be made liable to pay the amount and thereafter, it can opt to recover the compensation paid from the owner of the vehicle.Thus, the Court allowed the appeal and directed the insurer to deposit the enhanced amount into the bank account of the appellant.Case No: MACA No. 2904 of 2016Case Title: Shaji v. Soman and Anr.Citation: 2026 LiveLaw (Ker) 201Counsel for the appellant: S. Sachithananda PaiCounsel for the respondents: A.C. Devasia, P. Jacob Mathew, Mathew DevassiClick to Read/Download Judgment

Insurer Must Compensate Gratuitous Passenger Injured In Motor Accident But Can Recover Amount From Owner: Kerala High Court

K. Salma Jennath

Tags