Holding

The Court, exercising its jurisdiction under Article 142, directed the insurer to satisfy the compensation award, notwithstanding that the passenger was not covered under Section 147, and allowed the insurer to recover the amount from the tractor owner.

Summary

Brij Mohan, a labourer, was riding on a trolley attached to a tractor that was transporting earth to a brick kiln when the driver negligently lost control, causing Mohan to fall and sustain grievous injuries. The tractor was insured by Oriental Insurance Company only for agricultural use, and the insurer argued that the trolley was not covered and that Mohan, being a gratuitous passenger in a goods carriage, was not a third‑party under Section 147 of the Motor Vehicles Act, 1988. The Motor Accident Claims Tribunal awarded compensation to Mohan, a decision upheld by the High Court, which the insurer appealed. The Supreme Court held that, although the statutory provisions did not make the insurer liable for a passenger in a goods carriage, it could exercise its extraordinary jurisdiction under Article 142 of the Constitution to direct the insurer to satisfy the award, allowing the insurer to recover the amount from the tractor owner. Consequently, the appeal was allowed, and the compensation award was to be paid by the insurer, with recovery against the owner.

Issues considered

The tractor and trolley were insured only for agricultural purposes; does this affect liability under the Motor Vehicles Act?
Whether a passenger travelling on a trolley attached to a tractor qualifies as a 'third party' under Section 147 of the Motor Vehicles Act, 1988.
Whether the insurer is liable to pay compensation despite the statutory exclusion of passengers in goods carriages.
Whether the Court can, under Article 142 of the Constitution, direct the insurer to satisfy the award and recover from the vehicle owner.

Legislation cited

Constitution of Indias. Article 136, s. Article 142
Motor Vehicles Act, 1988s. 147, s. 149, s. 2(14), s. 2(44), s. 2(46)

Subjects

Motor Vehicles ActSection 147third party liabilityinsurance coverageagricultural usepassenger in goods carriageArticle 142compensationtractortrolleynegligence

Judgment

ORIENTAL INSURANCE CO.LID. A
v.
BRIJ MOHAN AND ORS.

MAY 15. 2007

[S.B. SINHA AND MARKANDEY KA TJU. JJ.] B

Motor Vehicles Act, 1988-s. 147-Third Party risk-Liability of
insurer-Goods carriage-Earth dug up, carried in a trolley attached to
tractor, to brick klin-Labourer travelling in a trolley suffered grievous
injuries on negligent driving by driver-{;ompensation-.:.Award of. against C
insurer-Held: Tractor was insured for carrying out agricultural work and
tractor not used for the same-Claimant neither owner nor driver but merely
passenger travelling on the trolley thus, claim not sustainable-However
being poor labourer and having suffered grievous injuries, compensation
awarded less-Thus, award lo be satisfied by insurance company which ii D
could realise from owner of the tractor and trolley.

First respondent-labourer was engaged in digging earth from field.
Earth dug was loaded on trolley attached to the tractor and was carried to the
brick klin. Respondent was sitting on the earth loaded on the trolley and the
driver allegedly drove the tractor rashly and negligently and as a result the E
first respondent slipped from the trolley and came under the ~heels thereof
and suffered grievous injuries. The tractor was insured only for the purpose
of carrying out agricultural work. Respondent filed a claim petition. Insurance
Company contended that only tractor alone was insured and it was not used
for agricultural purposes and that the premium was only paid for driver of F
the tractor. MACT awarded compensation in favour of the respondent. High
Court dismissed the appeal of the Insurance Company. Hence, the present
appeal

Allowing the appeal, the Court
G
HELD: 1.1. It does not appear that the contention of the appellant that
the trolley was not insured had been gone into by the Tribunal. There is
nothing on records to show that the owner of the tractor had produced any
insurance cover in respect of the trolley. The tractor was insured only for
the purpose of carrying out agricultural works. The representative of the
843 II
844 SUPREME COURT REPORTS (2007] 6 S.C.R.

A Insurance Company on cross-examination merely accepted the suggestion that
cutting the earth and levelling the field with earth would be an agricultural
....._ ..
work but respondent no.I himself categorically stated in his claim petition
before the Tribunal stating that the earth had been dug and was being carried
in the trolley to the brick-klin. Evidently the earth was meant to be used only
for the purpose of manufacturing bricks. Digging of earth for the purpose of
B manufacture of brick-klin indisputably cannot amount to carrying out of the
agricultural work. !Para 8] 1846-G, H; 847-A·BI

National Insurance Co. Ltd. v. V. Chinnamma & Ors.. 12004] 8 SCC
697, referred to.
fo.
c t .2. Respondent was neither the owner of the tractor nor the driver but
was merely a passenger travelling on the trolley attached to the tractor.
Therefore, his claim petition, could not have been allowed. However, respondent
no. I is a poor labourer. He had suffered grievous injuries and had become
disabled to a great extent The amount of compensation awarded in his favour
D appears to be on a lower side. In the aforementioned situation, although the
other contentions of the respondent are rejected, extraordinary jurisdiction
under Article I 42 of the Constitution oflndia is exercised so as to direct that
the award may be satisfied by the appellant but it would be entitled to realize
the same from the owner of the tractor and the trolley wherefor it would not
be necessary for it to initiate any separate proceedings for recovery of the
E amount as provided for under the Motor Vehicles Act
(Paras 10 and I31 [848-C; 85I-E-F)

New India Assurance Co. Ltd. v. Asha Rani & Ors., (2003) 2 SCC 223;
National Insurance Co. Ltd. v. Bommithi Subhayamma and Ors., (2005) I2
SCC 243; United India Insurance Co Ltd., Shim/av. Tilak Singh, [2006) 4
F SCC 404; National Insurance Co. Ltd. v. Baljit Kaur & Ors., [2004) 2 SCC
I; National Insurance Co. Ltd. v. Laxmi Narain Dhut, (2007) 4 SCALE 36;
Oriental Insurance Company Ltdv. Meena Variyal Ors., (2007) 5 SCALE 269 .,,.
and National Insurance Company Ltd. v. Kusum Rai & Ors., [2006) 4 SCC
250, referred to.
G
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2532 of2007.

From the Final Judgment and Order dated 27.01.2004 of the High Court
of Judicature ofRajasthan at Jaipur Bench, Jaipur in D.B. Civil Appeal (Civil) .... ....,_
No. 57of1999.
H
ORIENTAL INSURANCE CO. LTD. v. BRIJ MOHAN [S.B. SINHA. J.] 845

M.K. Dua and Kishore Rawat for the Appellant. A
Indu Malhotra, Pooja Chandra, Shilpi Kaushik and Kavita Wadia for the
Respondents.

The Judgment of the Court was delivered by
B
S.B. SINHA, J. I. Leave granted.

2. Appellant Insurance Company is before us being aggrieved by and
dissatisfied with the judgrr.ent and order dated 27 .1.2004 passed by a Division
Bench of the High Court of Rajasthan dismissing an appeal from the judgment
and award dated 7.4.1999 passed by Motor Accident Claims Tribunal, Baran C
in the State of Rajasthan.

3. First Respondent Brij Mohan filed the claim petition. He was a
labourer. On or about 11.3.1998 he was travelling on a trolley attached to a
tractor. There exists a dispute as to whether both the tractor and the trol:ey
were insured or not. It may not be necessary to determine the said question. D
He was engaged to dig earth from a place known as Shishwali Ka Rasta. The
earth so dug was loaded on the trolley attached to the tractor. Respondent
and other workers were returning to the Bhatta (brick-klin). He was sitting on
the earth loaded on the trolley. The tractor allegedly was being driven rashly
and negligently by Hemraj, the driver. He slipped down from the trolley, came E
under the wheels thereof injuring his gall-bladder and left thigh, as a result
whereof he suffered grievous injuries.

4. The learned Tribunal noticed the defence raised by the appellant
herein in the said proceedings which, inter alia, were :
F
(i) the trolley was not insured, and only the tractor was insured;
(ii) as the tractor was not being used for agricultural work, the claim
petition was not maintainable.
(ill) issuance of premium having been paid only for one person,
namely, the driver of the tractor; no award could be passed G
against the insurer.

5. The Tribunal, however, by reason of its award, awarded a sum of Rs.
1,96,100/- by way of compensation in favour of the respondent in respect of
the injuries suffered by him as a result of the said accident. An appeal,
preferred thereagainst, as noticed hereinbefore, has been dismissed by the H
846 SUPREME COURT REPORTS (2007] 6 S.C.R.

A High Court by reason of the impugned judgment.
6. Mr. M.K. Dua, learned counsel appearing on behalf of the appellant
submitted that the Tribunal as also the High Court committed manifest errors
in passing the impugned Award and judgment insofar as they failed to take
into consideration :
B
(i) The tractor alone was insured and thus the claim petition was
not maintainable.
(ii) In any event, Respondent no. I was merely a gratuitous passenger
and thus the claim was not covered under Section 147 of the
c Motor Vehicles Act, 1988.
(ill) The tractor having not been used for agricultural purpose there
had been a violation of the conditions of contract of insurance.

7. Ms. Indu Malhotra, learned counsel appearing on behalf of the
D respondent, on the other hand, submitted :

(i). The question as to whether both the tractor and the trolley were
insured or not having not been raised before the Tribunal, this
Court should not permit the appellant to raise the said contention
before this Court. '"f

E (ii) The representative of the appellant in his statement before the
Court admitted that putting the earth and leveling the field
would also be an agricultural work and thus it cannot now be
contended that the tractor was not being used for the said
purpose.
F (iii) In any event, having regard to the grievous injuries suffered by
the respondent, this Court should direct the appellant to pay the
awarded amount and recover the same from the owner of the
tractor and trolley.

8. The Tribunal in its award has, inter alia, noticed that the appellant
G herein had raised a specific defence, namely, the trolley was not insured. It
does not appear that the said contention of the appellant had been gone into.
There is nothing on records to show that the owner of the tractor had
produced any insurance cover in respect of the trolley. It is furthermore not
disputed that the tractor was insured only for the purpose of carrying out
H agricultural works. The representative of the Insurance Company Mr. Hari
Singh Meena on cross-examination merely accepted the suggestion that cutting
ORIENTAL INSURANCE CO. LTD. v. BRIJ MOHAN (S.B. SINHA,J.] 847

the earth and levelling the field with earth would be an agricultural work but A
respondent no. I himself categorically stated in his claim petition before the
Tribunal stating that the earth had been dug and was being carried in the
trolley to the brick-klin. Evidently the earth was meant to be used only for
the purpose of manufacturing bricks. Digging of earth for the purpose of
manufacture of brick-kl in indisputably cannot amount to carrying out of the
agricultural work. B

9. In National Insurance Co. Lid. v. V. Chinnamma & Ors., [2004] 8 SCC
697, this Court held :-
~
"14. An insurance for an owner of the goods or his authorised
representative travelling in a vehicle became compulsory only with c
effect from 14-11-1994 i.e. from the date of coming into force of
amending Act 54 of 1994.

15. Furthermore, a tractor is not even a "goods carriage". The
expression goods carriage has been defined in Section 2(14) to mean
D
"any motor vehicle constructed or adapted for use solely for the
carriage of goods, or any motor vehicle not so constructed or adapted
when used for the carriage of goods"

(emphasis supplied)
E
whereas "tractor" has been defined in Section 2(44) to mean

"a motor vehicle which is not itself constructed to carry any load
(other than equipment used for the purpose of propulsion); but excludes
a roadroller".

"Trailer" has been defined in Section 2(46) to mean F
"any vehicle, other than a semi-trailer and a sidecar, drawn or intended
to be drawn by a motor vehicle".

16. A tractor fitted with a trailer may or may not answer the definition
of goods carriage contained in Section 2( 14) of the Motor Vehicles G
Act. The tractor was meant to be used for agricultural purposes. The
trailer attached to the tractor, thus, necessarily is required to be used
~
;;,._ for agricultural purposes, unless registered otherwise. It may be, as
has been contended by Mrs K. Sharda Devi, that carriage of vegetables
being agricultural produce would lead to an inference that the tractor
H
848 SUPREME COURT REPORTS [20071 6 S.C.R.

A was being used for agricultural purposes but the same by itself would
not be construed to mean that the tractor and trailer can be used for
carriage of goods by another person for his business activities. The
deceased was a businessman. He used to deal in vegetables. After he
purchased the vegetables. he was to transport the same to the market
for the purpose of sale thereof and not for any agricultural purpose.
B The tractor and trailer. therefore. were not being used for agricultural
purposes. However, even if it be assumed that the trailer would answer
the description of "goods carriage" as contained in Section 2(14) of

c
the Motor Vehicles Act, the c&se would be covered by the decisions
of this Court in Asha Rani I and other decisions following the same,
as the accident had taken place on 24-11-1991 i.e. much prior to
coming into force of the 1994 amendment."
-
10. Furthermore, respondent was not the owner of the tractor. He was
also not the driver thereof. He was merely a passenger travelling on the trolley
attached to the tractor. His claim petition, therefore, could not have been
D allowed in view of the decision of this Court in New India Assurance Co. Ltd.
v. Asha Rani & Ors., [2003] 2 SCC 223 wherein the earlier decision of this
Court in New India Assurance Co. v. Satpal Singh, [2000] 1 SCC 237 was
overruled. In Asha Rani (supra) it was, inter a/ia, held:-

"25. Section 147 of the 1988 Act, inter a/ia, prescribes compulsory
E coverage against the death of or bodily injury to any passenger of
"public service vehicle". Proviso appended thereto categorically states
that compulsory coverage in respect of drivers and conductors of
public service vehicle and employees carried in a goods vehicle would
be limited to the liability under the Workmens Compensation Act. It
does not speak of any passenger in a "goods carriage".
F
26. In view of the changes in the relevant provisions in the 1988 Act
vis-a-vis the 1939 Act, we are of the opinion that the meaning of the
words "any person" must also be attributed having regard to the
context in which they have been used i.e. "a third party". Keeping in
view the provisions of the 1988 Act, we are of the opinion that as the
G
provisions thereof do not enjoin any statutory liability on the owner
of a vehicle to get his vehicle insured for any passenger travelling in
a goods vehicle, the insurers would not be liable therefor.

27. Furthermore, sub-clause (i) of clause (b) of sub-section (I) of
H Section 147 speaks of liability which may be incurred by the owner
ORIENTAL INSURANCE CO. LTD. v. BRIJ MOHAN [S.B. SINHA.J.) 849
_,>.
of a vehicle in respect of death of or bodily injury to any person or A
damage to any property of a third party caused by or arising out of
the use of the vehicle in a public place, whereas sub-clause (ii) thereof
deals with liability which may be incurred by the owner of a vehicle
against the death of or bodily injury to any passenger of a public
service vehicle caused by or arising out of the use of the vehicle in
a public place." B

(See also National Insurance Co. ltd. v. Bommithi Subbhayamma and Ors.,
(2005] 12 SCC 243 and United India Insurance Co. ltd., Shim/av. Tilak Singh
~ and Ors., (2006] 4 SCC 404].

11. Although the effect in 1994 amendment in the Motor Vehicles Act c
did not call for consideration in Asha Rani (supra), a 3 Judge Bench of this
Court had the occasion to consider the said question in National Insurance
Co. Ltd. v. Baljit Kaur & Ors., (2004] 2 SCC I] in the following terms :

"17. By reason of the 1994 amendment what was added is "including"
owner of the goods or his authorised representative carried in the D
vehicle. The liability of the owner of the vehicle to insure it
compulsorily, thus, by reason of the aforementioned amendment
included only the owner of the goods or his authorised representative
carried in the vehicle besides the third parties. The intention of
Parliament, therefore, could not have been that the words any person E
occurring in Section 14 7 would cover all persons who were travelling
in a goods carriage in any capacity whatsoever. If such was the
intention, there was no necessity of Parliament to carry out an
amendment inasmuch as the expression any person contained in sub-
clause (i) of clause (b) of sub-section (I) of Section 147 would have
included the owner of the goods or his authorised representative F
besides the passengers who are gratuitous or otherwise.

18. The observations made in this connection by the Court in Asha
Rani case' to which one of us, Sinha, J., was a party, however, bear
repetition: (SCC p. 235, para 26)
G
26. In view of the changes in the relevant provisions in the 1988 Act
vis-a-vis the 1939 Act, we are of the opinion that the meaning of the
~ ,._ words any person must also be attributed having regard to the context
in which they have been used i.e. a third party. Keeping in view the
provisions of the 1988 Act, we are of the opinion that as the provisions
H
850 SUPREME COURT REPORTS [2007] 6 S.C.R.

A thereof do not enjoin any statutory liability on the owner of a vehicle
to get his vehicle insured for any passenger travelling in a goods
vehicle, the insurers would not be liable therefor.

19. In Asha RanF it has been noticed that sub-clause (i) of clause (b)
of sub-section ( l) of Section 147 of the 1988 Act speaks of liability
B which may be incurred by the owner of a vehicle in respect of death
of or bodily injury to any person or damage to any property of a third
party caused by or arising out of the use of the vehicle in a public
place. Furthermore. an owner of a passenger-carrying vehicle must
pay premium for covering the risks of the passengers travelling in the
vehicle. The premium in view of the 1994 amendment would only
c cover a third party as also the owner of the goods or his authorised
representative and not any passenger carried in a goods vehicle
whether for hire or reward or otherwise.

12. Interpretation of the contracts of insurance in terms of Section 147
D and 149 of the Motor Vehicles Act came up for consideration recently before
a Division Bench of this Court in National Insurance Co. Ltd v. Laxmi
Narain Dhut, (2007) 4 SCALE 36, wherein it was held :-

"24. As noted above, there is no contractual relation between the
third party and the insurer. Because of the statutory intervention in
E terms of Section 149, the same becomes operative in essence and
Section 149 provides complete insulation.

25. In the background of the statutory provisions, one thing is crystal
clear i.e. the statute is beneficial one qua the third party. But that
benefit cannot be extended to the owner of the offending vehicle. The
F logic of fake licence has to be considered differently in respect of
third party and in respect of own damage claims."

It was further observed :

"36. It is also well settled that to arrive at the intention of the legislation
G depending on the objects for which the enactment is made, the Court
can resort to historical, contextual and purposive interpretation leaving
textual interpretation aside.

37. Francis Bennion in his book "Statutory Interpretation" described ~ ~
"purposive interpretation" as under:
H
ORIENTAL INSURANCE CO. LTD. v. BRIJ MOHAN [S.B. SINHA.J.) 851

•A purposive construction of an enacunent is one which gives A
effect to the legislative purpose by-

(a) following the literal meaning of the enacunent where that meaning
is in accordance with the legislative purpose. or

(b) applying a strained meaning where the literal meaning is not in B
accordance with the legislative purpose.'

38. More often than not, literal interpretation of a statute or a provision
of a statute results in absurdity. Therefore, while interpreting statutory
provisions, the Courts should keep in mind the objectives or purpose
for which statute has been enacted. Justice Frankfurter of U.S. Supreme C
Court in an article titled as Some Reflections on the Reading of
Statutes (47 Columbia Law Reports 527), observed that, "legislation
-- has an aim, it seeks to obviate some mischief, to supply an adequacy,
to effect a change of policy, to formulate a plan of Government. That
aim, that policy is not drawn, like nitrogen, out of the air; it is evidenced
in the language of the statutes, as read in the light of other external D
manifestations of purpose."

[See also The Oriental Insurance Company Ltd. v. Meena Variyal Ors., (2007)
5 SCALE269]

13. However, respondent no. I is a poor labourer. He had suffered E
grievous injuries. He had become disabled to a great extent. The amount of
compensation awarded in his favour appears to be on a lower side. In the
aforementioned situation, although we reject the other contentions of Ms.
Indu Malhotra, we are inclined to exercise our extraordinary jurisdiction under
Article 142 of the Constitution of India so as to direct that the award may be F
satisfied by the appellant but it would be entitled to realize the same from the
owner of the tractor and the trolley wherefor it would not be necessary for
it to initiate any separate proceedings for recovery of the amount as provided
for under the Motor Vehicles Act.

14. It is well settled that in a situation of this nature this Court in G

- exercise of its jurisdiction under Article 142 of the Constitution of India read
with Article 136 thereof can issue suit directions for doing complete justice
to the parties.

15. In National Insurance Company Ltd. v. Kusum Rai & Ors., [2006]
4 sec 250], this Court observed : H
852 SUPREME COURT REPORTS (2007) 6 S. C.R.

A "19. Thus, although we are of the opinion that the appellant was
not liable to pay the daimed amount as the driver was not possessing
a valid licence and the High Court was in error in holding otherwise,
we decline to interfere with the impugned award. in the peculiar facts
and ciri::umstances of the case, in exercise of our jurisdiction under
Article 136 of the Constitution but we direct that the appellant may
B recover the amount from the owner in the same manner as was directed
in Nanjappan."

16. This appeal is allowed with the aforementioned directions. There
shall, however, be no order as to costs.

c N.J. Appeal allowed.

-