Himachal Pradesh High Court
The New India Assurance Company Limited vs Nanak Chand And Others on 17 March, 2026
Author: Sushil Kukreja
Bench: Sushil Kukreja
( 2026:HHC:7575 )
IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
FAO No.4207 of 2013
Reserved on: 09.03.2026
Date of decision: 17.03.2026
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_______________________________________________________
The New India Assurance Company Limited
...Appellant
Versus
Nanak Chand and others
...Respondents
________________________________________________________
of
Coram
Hon'ble Mr. Justice Sushil Kukreja, Judge
1 Whether approved for reporting? Yes.
rt ____________________________________________________ For the appellant: Mr. B.M. Chauhan, Senior Advocate, Ms. Kamakshi Tarlokta and Mr.Amit Himalvi, Advocates.
For the respondents: Mr. Maan Singh, Advocate, respondents No.1 & 2.
Mr. Ashwani Kaundal, Advocate, for respondent No.3.
Sushil Kukreja, Judge The instant appeal is maintained by the appellant-The New Indian Assurance Company under Section 173 of the Motor Vehicles Act (for short "MV Act"), against the award dated 08.08.2013, passed by the learned Motor Accidents Claims Tribunal, Kullu, District Kullu, H.P., in Claim Petition No.37/2012, with a prayer to set aside/modify the impugned award.
2. Briefly stated the facts, giving rise to the present appeal, are that the petitioners (respondents No.1 and 2 herein) filed a claim 1 Whether reporters of Local Papers may be allowed to see the judgment?
::: Downloaded on - 18/03/2026 20:31:09 :::CIS2 ( 2026:HHC:7575 ) petition under Section 166 of the Act, whereby they sought compensation to the tune of Rs.15,00,000/- on account of death of Sheweta Thakur, who was wife of petitioner No.1 (respondent No.1 .
herein) and mother of petitioner No.2 (respondent No.2 herein). It was averred by the petitioners that on 25.05.2012, Sheweta Thakur (deceased) was coming to her house on the motorcycle bearing of registration No.HP58A-0361, being driven by respondent No.1 (respondent No.3 herein) and when the said motorcycle reached near Kai Gompa, respondent No.1 lost control over the same due to his rash rt and negligent driving and met with an accident, as a result of which, Sheweta Thakur sustained injuries. She was taken to Regional Hospital, Kullu, where she died due to the injuries sustained by her.
3. As per the petitioners, at the time of her death, the deceased was 28 years old and she was a house wife. She used to grow vegetables and was also selling milk and was earning Rs.6,000/-
per month. The offending vehicle was owned by respondent No.1 and it was insured with respondent No.2/ New India Assurance Company (appellant herein). Hence, the petitioners sought compensation to the tune of Rs.20,70,000/-.
4. The driver/ owner of the offending vehicle, in his reply to the claim petition raised preliminary objection regarding maintainability.
On merits, it has been averred that the accident did not cause due to ::: Downloaded on - 18/03/2026 20:31:09 :::CIS 3 ( 2026:HHC:7575 ) his rash and negligent driving .
5. In the reply filed by respondent No.2/ Insurance Company, preliminary objections were taken that the driver was not having a valid .
and effective driving licence and the vehicle in question was being driven in contravention of terms and conditions of insurance policy. On merits, it was averred that the offending vehicle was being plied in of contravention of the Motor Vehicles Rules and insurance policy, thus, the insurance company was not liable to pay any compensation to the petitioners. rt
6. On the basis of the pleadings of the parties, the learned Tribunal below framed the following issues on 08.11.2012:-
"1. Whether late Smt. Sweta had died in an accident on account of rash and negligent driving of respondent No.1?
OPP
2. If issue No.1 is proved in affirmative, to what amount of compensation the petitioners are entitled and from whom? OPP
3. Whether the vehicle was being plied in breach of terms and conditions of the insurance policy? OPR-2
4. Whether the respondent No.1 was not having valid and effective driving licence? OPR-2
5. Relief."
After parties led their evidence, the claim petition was allowed and the petitioners were granted compensation to the tune of Rs.5,89,068/-
alongwith interest and the insurance company (appellant herein) was directed to indemnify the owner of the motorcycle.
7. Feeling aggrieved/dissatisfied, the appellant/ insurance company preferred the instant appeal against award dated 08.08.2013 ::: Downloaded on - 18/03/2026 20:31:09 :::CIS 4 ( 2026:HHC:7575 ) passed by the learned Tribunal below, with a prayer to set-aside/modify the impugned award.
8. I have heard the learned Senior Counsel for the appellant .
as well as learned counsel for respondents No.1 & 2 and learned counsel for respondent No.3 and also carefully examined the entire record.
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9. Learned Senior Counsel for the appellant/Insurance Company firstly contended that the driver of the motorcycle in question was not in possession of a valid and effective driving licence as rt required under law for driving specific category of vehicle as the driving licence Ext.RW2/B was issued for LMV (NT) only and not for motorcycle. He further contended that the Insurance Policy was an Act Policy which did not cover the risk of death or bodily injuries to the pillion rider. The liability of the Insurance Company can be determined only on the basis of premium collected and in the absence of additional premium, the Insurance Company is not liable to pay any compensation towards claim of the pillion rider.
10. On the other hand, learned counsel for respondent No.3 supported the award passed by the learned Tribunal below and contended that the learned Tribunal below has correctly fastened the liability to pay the compensation on the insurance company.
::: Downloaded on - 18/03/2026 20:31:09 :::CIS5 ( 2026:HHC:7575 )
11. The first contention raised by the learned Senior Counsel for the appellant is that the driver of the motorcycle in question was not in possession of a valid and effective driving licence as required under .
law for driving specific category of vehicle i.e. motorcycle. Perusal of driving licence Ext. RW2/B reveals that it was issued only for LMV (NT) and not for the motorcycle. Learned Senior Counsel for the appellant of vehemently contended that the driving licence produced by respondent No.3-driver himself reveals that the same is in respect to Light Motor Vehicle (LMV). The driving licence has not been issued rt for two-
wheeler, which respondent No.3 was admittedly driving at the time of the accident. The learned Tribunal below has rendered a finding of the accident being caused by the rash and negligent driving of the said two-wheeler by respondent No.1 (respondent No.3 herein). In this situation, it is contended that the learned Tribunal below has wrongly decided Issues No.3 & 4 against the Insurance company.
12. The fact in issue as well as the legal question involved is no more res integra. In Oriental Insurance Co. Ltd. V. Zaharulnisha and others, 2008 ACJ 1928, the scooterist was possessing driving licence for driving HMV, but he was not having driving licence to drive the scooter, the Hon'ble Supreme Court has held that since the driver was driving totally different class of vehicle in violation of Section 10(2) of the MV Act, therefore, the insurance company cannot be held liable to ::: Downloaded on - 18/03/2026 20:31:09 :::CIS 6 ( 2026:HHC:7575 ) pay the amount of compensation. The relevant portion of the judgment reads as under:-
"18. In the light of the above-settled proposition of law, the .
appellant insurance company cannot be held liable to pay the amount of compensation to the claimants for the cause of death of Shukurullah in road accident which had occurred due to rash and negligent driving of scooter by Ram Surat who admittedly had no valid and effective licence to drive the vehicle on the day of accident. The scooterist was possessing driving licence of driving HMV and he was driving totally different class of vehicle which act of his is in violation of Section 10 (2) of the MV Act.
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13. In National Insurance Company Ltd. Vs. Ghanshyam and others, Latest HLJ 2010 (HP) 443, it has been held that licence to rt drive a light motor vehicle cannot be held to be a valid licence for driving a motorcycle. Relevant portions of the judgment read as under:-
"3.A scooter has not been defined under the Motor Vehicles Act and a scooter will fall under the definition of Motor Cycle, as quoted above. In Section 2(21) light motor vehicle has been defined to mean a transport vehicle or omnibus or motor car or tractor or road-roller with a weight of above 7500 kilogram. It is pertinent to note that all the vehicles included are four wheeled vehicles and a motor cycle has not been included in the definition of L.M.V. This stands to reason also. A person who can drive a scooter may not be able to drive a car. Similarly, a person who can drive a car need not necessarily be able to drive a motor cycle. The technique for driving two wheelers is totally different from the technique required for driving four wheeled vehicles.
4.The legislature was obviously aware of the difference between two wheeled and four wheeled vehicles. In section 10 while providing the form and contents of the driving license motor cycle without gear and motor cycle with gear have been taken as a different category vis a vis the light motor vehicle. This is also apparent from a reading of Section 9(6), the proviso to which states that a person who has passed a test of driving a motor cycle with gear shall be deemed to have passed the test of driving motor cycle without gear. This clearly pre-supposes that test for driving motor cycle is different than that prescribed for light motor vehicle which is a four wheeled vehicle. Even the form of the driving license in the rules makes special mention of the motor cycles as a separate category. Therefore, it cannot be said that a motor cycle or a scooter or any other two wheeled ::: Downloaded on - 18/03/2026 20:31:09 :::CIS
7 ( 2026:HHC:7575 ) vehicle will fall in the general category of light motor vehicle.
5.A Division Bench of this court in The New India Assurance Company Vs. Smt. Prem Lata and others Latest HLJ 2001 (HP) 282 (DB) while considering this question has held as follows:-
"6. After the perusal of the relevant provisions of the Act .
and the Rules we have no hesitation to hold that a person holding driving license for light motor vehicle, which has four wheels, is not entitled to drive a motor vehicle having two wheels i.e. motor cycle or the scooter, for which either separate license or endorsement on the license already obtained by him by another class of motor vehicles is required."
The law laid down by the Division Bench is fully applicable in the present case also.
of In view of the above discussion, it is held that the license to drive a light motor vehicle cannot be held to be a valid license for driving a motor cycle. Similarly, a license to drive a motor cycle cannot authorize a person holding such a license to drive a rt four wheeled vehicle."
14. In the instant case also, perusal of the driving licence Ext.RW2/B reveals that it has been issued only for LMV (NT). Since the driver of the motorcycle (respondent No.3 herein) was possessing the driving licence only for LMV (NT) and not for the motorcycle, therefore, the appellant/insurance company could not have been held liable to pay the amount of compensation.
15. Learned Senior Counsel for the appellant/insurance company next contended that the Insurance Policy was an Act Policy and there was no liability on the part of the Insurance Company towards claim of the pillion rider as the Act Policy does not cover the risk of death or bodily injuries to the gratuitous passengers and the liability of the Insurance Company can be determined only on the basis of premium collected and in the absence of additional premium, the ::: Downloaded on - 18/03/2026 20:31:09 :::CIS 8 ( 2026:HHC:7575 ) Insurance Company cannot be made liable to pay any compensation.
16. In National Insurance Co. Ltd. vs. Balakrishnan and Anr., (2013) 1 SCC 731, the Hon'ble Supreme Court while making a .
distinction between an "act only policy" and "Comprehensive/package policy" made following observation:-
"26. In view of the aforesaid factual position, there is no scintilla of doubt that a "comprehensive/package policy" would cover the liability of the insurer for payment of compensation for of the occupant in a car. There is no cavil that an "Act policy"
stands on a different footing from a "comprehensive/package policy". As the circulars have made the position very clear and IRDA, which is presently the statutory authority, has commanded the insurance companies stating that a rt "comprehensive/package policy" covers the liability, there cannot be any dispute in that regard. We may hasten to clarify that the earlier pronouncements were rendered in respect of the "Act policy" which admittedly cannot cover a third-party risk of an occupant in a car. But, if the policy is a "comprehensive/package policy", the liability would be covered. These aspects were not noticed in Bhagyalakshmi [(2009) 7 SCC 148 : (2009) 3 SCC (Civ) 87 : (2009) 3 SCC (Cri) 321] and,therefore, the matter was referred to a larger Bench. We are disposed to think that there is no necessity to refer the present matter to a larger Bench as IRDA, which is presently the statutory authority, has clarified the position by issuing circulars which have been reproduced in the judgment by the Delhi High Court and we have also reproduced the same."
17. It is needless to say that in the instant case, the deceased had been a pillion rider at the time of death and her death was exclusively caused due to the rash and negligent driving of the two wheeler rider.
18. Now, the pertinent question, which requires consideration, is as to whether the pillion rider on the two-wheeler is a third party within the meaning of the MV Act and in case, the pillion rider on two-
wheeler is not treated as third party, if the insurance company is liable ::: Downloaded on - 18/03/2026 20:31:09 :::CIS 9 ( 2026:HHC:7575 ) to indemnify the owner.
19. Respondent No.3/owner has not disputed that the policy issued by the appellant/insurance company is only an Act Policy. It is .
not his case that policy issued by the appellant is comprehensive policy covering both rider and pillion rider of the motorcycle. The learned Tribunal below had fastened the liability on the appellant which finding of is erroneous. It is well settled that in an Act Policy, the pillion rider of the two-wheeler is not covered and Insurance Company is not liable to pay compensation for the bodily injuries or towards the death of pillion rider.
rt Whether the pillion rider is covered under the Act Policy or not was considered by the Hon'ble Apex Court in the Judgment reported in 2006 (4) SCC 404, United India Insurance Co. Ltd. Vs. Tilak Singh and others, wherein the Hon'ble Apex Court has held that the pillion rider is not covered in the Act Policy and the Insurance Company is not liable to pay compensation to the pillion rider, the relevant portion of which is extracted as follows in para-15 & 21 of the judgment as under:-
"15.In Pushpabai Purshottam Udesh and Ors. v. M/s. Ranjit Ginning and Pressing Co. (P) Ltd. and Anr., [1977] 2 SCC 745 the insurance company had raised the contention that the scope of statutory insurance under section 95(1)(a) read with 95(1)(b)(i) of the Motor Vehicles Act, 1939 does not cover the injury suffered by a passenger and, since there was a limited liability under the insurance policy, the risk of the insurance company would be limited to the extent it was specifically covered. After referring to the English Road Traffic Act, 1960, and Halsbury's Laws of England (Third Edition) this Court came to the conclusion that section 95 of the 1930 Act required that the policy of insurance must be policy insuring the insured ::: Downloaded on - 18/03/2026 20:31:09 :::CIS 10 ( 2026:HHC:7575 ) against any liability incurred by him in respect of death or bodily injury to a third party and rejected the contention that the words "third party" were wide enough to cover all persons except the insured and the insurer. This Court held as under :
"Therefore it is not required that a policy of insurance .
should cover risk to the passengers who are not carried for hire or reward. As under Section 95 the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured the plea of the counsel for the insurance company will have to be accepted and the insurance company held not liable under the requirements of the Motor Vehicles Act."
"21.In our view, although the observation made in Asha Rani's case (supra) were in connection with carrying of passengers in a goods vehicle, the same would apply with equal force to gratuitous passengers in any other vehicle also. Thus, we must uphold the contention of the appellant- insurance company that it owed no liability toward the injuries suffered by the deceased Rajinder Singh who was a pillion rt rider, as the insurance policy was a statutory policy, and hence it did not cover the risk of death of or bodily injury to gratuitous passenger."
20. In yet another case of Oriental Insurance Company Limited vs Sudhakaran and Ors. reported in AIR 2008 Supreme Court 2729 the Hon'ble Supreme Court has dealt with the similar issue, the relevant portion of which is extracted as follows:-
"10. The only question which, therefore, arises for our consideration is as to whether the pillion rider on a scooter would be a third party within the meaning of Section 147 of the Act. Indisputably, a distinction has to be made between a contract of insurance in regard to a third party and the owner or the driver of the vehicle.
11. This Court in a catena of decisions has categorically held that a gratuitous passenger in a goods carriage would not be covered by a contract of insurance entered into by and between the insurer and the owner of the vehicle in terms of Section 147 of the Act. [See New India Assurance Co. Ltd. v. Asha Rani (2003) 2 SCC 223]
12. A Division Bench of this Court in United India Insurance Co. Ltd., Shimla v. Tilak Singh and Ors. [(2006) 4 SCC 404] extended the said principle to all other categories of vehicles also, stating as under:
"In our view, although the observations made in Asha Rani case were in connection with carrying passengers in a goods vehicle, the same would apply with equal force ::: Downloaded on - 18/03/2026 20:31:09 :::CIS 11 ( 2026:HHC:7575 ) to gratuitous passengers in any other vehicle also. Thus, we must uphold the contention of the appellant Insurance Company that it owed no liability towards the injuries suffered by the deceased Rajinder Singh who was a pillion rider, as the insurance policy was a statutory policy, .
and hence it did not cover the risk of death of or bodily injury to a gratuitous passenger.
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19.The law which emerges from the said decisions, is:
(i) the liability of the insurance company in a case of this nature is not extended to a pillion rider of the motor vehicle unless the requisite amount of premium is paid for covering his/her risk (ii) the legal obligation arising under Section 147 of the Act cannot be extended to an injury or death of the owner of vehicle or the pillion rider; (iii) the of pillion rider in a two wheeler was not to be treated as a third party when the accident has taken place owing to rash and negligent riding of the scooter and not on the part of the driver of another vehicle."
21. rt In the instant case also, perusal of the insurance policy Ext. RW2/C reveals that it was issued for 'Two Wheeler Liability Policy' i.e. Act Policy, and the deceased was a pillion rider. The policy did not cover the risk of pillion rider as no additional premium was paid to cover the risk of death or bodily injuries to the pillion rider, therefore, the learned Tribunal below ought to have exonerated the Insurance Company from paying the compensation, but the learned Tribunal below has erroneously come to the conclusion that the insurance company is liable to indemnify the owner. In view of principles that emerged in the judgments referred to above, since the pillion rider does not fall within the definition of third party and he is only a gratuitous passenger, as such, the appellant-insurance company is not liable to pay any compensation to the petitioners.
22. The learned counsel for respondent No.3/owner of the ::: Downloaded on - 18/03/2026 20:31:09 :::CIS 12 ( 2026:HHC:7575 ) offending vehicle lastly submitted that since the motorcycle was duly insured with the appellant-New India Assurance Company, the learned Tribunal below has rightly held that the appellant-insurance company, .
being the insurer, would indemnify the owner of the offending motorcycle. In the alternative, he submitted that the insurance company may be directed to pay the compensation in the first instance to the of petitioners (respondents No.1 & 2 herein) and thereafter, it be directed to recover the same from the owner/respondent No.3. In this respect he has also placed reliance upon National Insurance Company Limited rt vs. Baljit Kaur & others, (2004) 2 SCC 1, National Insurance Company vs. Saju P. Paul & another, (2013) 2 SCC 41 and Manuara Khatun & others vs. Rajesh Kumar Singh & others, (2017) 4 SCC
796. However, the perusal of the aforesaid decisions of the Hon'ble Supreme Court shows that the insurance company is not liable to pay compensation for the death of or injury to any gratuitous passenger and, therefore, the insurance company is not liable to indemnify the award. From a close perusal of the aforesaid decisions, it is discernible that the direction of pay and recover made in Baljit Kaur, Saju P. Paul & Manuara Khatun's cases (supra) by the Apex Court was in exercise of its extra-ordinary jurisdiction vested in it under Article 142 of the Constitution of India. However, in National Insurance Company Ltd. vs. Parvathneni, (2018) 9SCC 657, the Hon'ble Supreme court ::: Downloaded on - 18/03/2026 20:31:09 :::CIS 13 ( 2026:HHC:7575 ) has kept the question of law open on the issue whether the Supreme Court in exercise of powers under Article 142 of the Constitution can direct the insurer to pay and recover, where the liability otherwise does .
not arise in case of gratuitous passenger. In such situation, the question that arises in the instant appeal as to whether this court can pass the direction of pay and recover like the directions made by the of Supreme Court in the above referred cases. Since such a power is not available to the High Court, it cannot go against the law settled to the effect that in case of a gratuitous passenger, the insurance company is rt not liable to satisfy an award and the owner is the person who shall be liable to pay the compensation and, as such, any direction to the insurance company to satisfy the award first and to recover the same from the owner of the vehicle is incongruous.. In view of the settled position of the law, the insurance company cannot be held liable to indemnify the insured and the said finding is not legally sustainable and the same is liable to be set aside Consequently, the owner, i.e. respondent No.1 (respondent No.3 herein), is liable to satisfy the award and to pay the compensation to the petitioners (respondents No.1 & 2 herein).
23. In view of what has been discussed hereinabove, the appeal filed by the appellant-insurance company is allowed and the finding of the learned Tribunal below to the extent that the insurance ::: Downloaded on - 18/03/2026 20:31:09 :::CIS 14 ( 2026:HHC:7575 ) company was held liable to indemnify the award is set-aside. The impugned award, dated 08.08.2013, passed by the learned Tribunal below stands modified only to the extent that the appellant-insurance .
company is exonerated from paying the compensation amount. The owner of the motorcycle (respondent No.3 herein), is liable to satisfy the award and to pay the compensation to the petitioners (respondents of No.1 & 2 herein). The remaining terms of the impugned award, shall remain the same.
The appeal stands disposed of in the above terms, so also rt the pending application(s), if any.
( Sushil Kukreja ) Judge March 17, 2026 (V. Himalvi) ::: Downloaded on - 18/03/2026 20:31:09 :::CIS