Insurance Company Not Liable To Unauthorised Passengers Traveling In Offending Vehicle, Pay & Recover Principle Not Applicable: J&K High Court

The Jammu and Kashmir and Ladakh High Court has observed that once it is shown that deceased/injured persons were traveling as unauthorised passengers in an offending vehicle and their risk is not covered under the terms insurance policy, the insurer cannot be saddled with the liability to compensate them and even the principle of 'Pay and Recover' will not be attracted.

Justice Sanjay Dhar made these observations in an appeal filed by an Insurance Company against an award passed by the Motor Accidents Claims Tribunal, Doda granting compensation in favour of the claims made by or on behalf of unauthorised passengers traveling in a load carrier truck, allegedly driven in a rash and negligent manner.

Counsel for the Insurance Company Adv. Dinesh Singh Chouhan premised his appeal on the ground that the deceased/injured in the case were travelling as gratuitous passengers and as such, risk to the life was not covered under the policy of insurance.

The claimants contended that they were forced to board the truck after being stranded in the middle of the road by some Army personnel, who needed the bus in which the claimants were travelling for their own purpose.

The moot question that fell for adjudication was as to whether the appellant-Insurance Company could be saddled with the liability to satisfy an award on account of death or bodily injuries of an unauthorised passenger or in the alternative whether order of “pay and recover” could be made against the insurer in such a case.

Dealing with the matter Justice Dhar noted though the offending vehicle was insured, the risk to the lives of passengers in the offending vehicle, which is a load carrier, was not covered in the policy. The bench said,

"If at all the deceased/injured were forcibly made to board the offending vehicle, they may have the grievance against the Army personnel but they cannot have a cause of action against the appellant-Insurance Company, as it had nothing to do with the alleged forcible boarding of the deceased/injured in the truck in question", the court said.

Commenting on the Pay and Recover principle with respect to an unauthorised passenger, Justice Dhar explained that once it is shown that deceased/injured were travelling as unauthorised passengers in the offending truck, their risk was not covered under the terms of policy of insurance. Thus, the direction for pay and recover can also not be passed against the appellant-Insurance Company in these cases, it maintained.

In view of the said legal position the bench allowed the appeal and the appellant-Insurance Company was exonerated from its liability to satisfy the awards impugned.

Case Title: National Insurance Co. ltd.Vs Mursa Begum and ors.

Citation: 2023 LiveLaw (JKL) 56

Coram: Justice Sanjay Dhar

Counsel For Petitioner: Mr. Dinesh Singh Chouhan, Adv. & Ms. Damini Singh Chouhan, Adv

Counsel For Respondent: Mr. Sheikh Altaf Hussain, Advocate.

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