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
.
_______________________________________________________
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.
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____________________________________________________
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
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Whether reporters of Local Papers may be allowed to see the judgment?
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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
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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
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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
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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
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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.
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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
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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
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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 thevehicle 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
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drive a light motor vehicle cannot be held to be a valid licence fordriving 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 beendefined 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 thedefinition 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, aperson 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
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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 thelicense 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
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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
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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 forof
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
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“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
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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
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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
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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.
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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 apassenger 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 beaccepted 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 carryingof
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
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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 orthe 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.
— — — — — —-
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) theof
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.
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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
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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
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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
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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
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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
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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
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the pending application(s), if any.
( Sushil Kukreja )
Judge
March 17, 2026
(V. Himalvi)
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