1. The claimants have challenged the judgment dated 31.7.2018 passed by the MACT (Aux), in MACP no.969/2003. Ground raised is to the effect that the learned Tribunal has erred in exonerating the insurance company, where the claimants as appellants are third parties to the contract of insurance and the risk of third party is statutorily and mandatorily covering the policy. Further ground has been raised that it is a package policy and therefore, the Tribunal ought to have directed the insurance company to pay the compensation and recover the same from the owner of the vehicle if at all there has been any breach of terms and conditions of the policy.

2. Advocate Mr. Nishit Bhalodi for the claimants has submitted that only a copy of insurance policy of jeep bearing registration no. GJ-2 K-689 was produced on record at Exh.29, while no officer had been examined to prove the breach or violation of any terms and conditions of the policy. Mr. Bhalodi submitted that the claimants being the third parties to the contract would not get effected by any of the terms and conditions agreed upon by the insured and the insurer. Relying on the judgment in the case of Manuara Khatun & Ors. v. Rajesh Kumar Singh & Ors., 2017 ACJ 1031 [LQ/SC/2017/278] by the Hon'ble Apex Court, Mr. Bhalodi submitted that in a case where the claimant’s appeal seeking fixation of the liability on the insurance company of the jeep was dismissed by the Appellate Court on the ground that the deceased persons were gratuitous passengers in the private vehicle, it was directed by the Hon'ble Apex Court to the insurance company to make payment of the award amount and to recover the amount from the insured in execution proceedings following the judgment, in the case of Manager, National Insurance Company Ltd. v. Saju P. Paul, 2013 ACJ 554 (SC).

3. Countering the arguments, Advocate Ms. Rahever vehemently contended that the insurance policy which was produced on record is of private car and therefore, prima facie, it could be considered that the jeep had been used by the claimant as passenger by hiring it and therefore, the policy condition is apparently found to be breached and therefore, the Tribunal has rightly exonerated the insurance company.

4. The facts of the case as was pleaded before the Tribunal was that on 31.3.2003, son of the claimants was going in a jeep bearing registration no.GJ-2 K-869 and owing to the excessive speed, near Katu Chokdi to Ghoghamba road, the jeep turned turtle and the son of the claimants was flung out of the jeep and has sustained grievous injuries and succumbed to death. The claimants have alleged that it was because of the rash and negligent driving on the part of the opponent no.1 – driver of the jeep.

5. The deposition of the claimant - appellant no.1 was filed at Exh.22 reiterating the fact as stated in the claim petition which was moved under Section 166 of the Motor Vehicles Act, 1988. In support of the evidence, a copy of the FIR, panchnama, inquest panchnama, postmortem note and charge-sheet were placed on record.

6. The learned Tribunal, on observing the oral evidence in the form of affidavit and police papers, found that jeep bearing registration no. GJ-2 K-689 and one tractor was involved in the vehicular accident. Panchnama of the jeep was produced on record. However, the opponents failed to enter into witness box and had not examined any witness to contradict the issue of negligence. The learned Tribunal therefore held the driver of both the vehicles liable by answering issue no.1 in affirmative.

7. The evidence was given by the claimants to prove the fact that the deceased was doing centring work and was also working in agricultural field and thereby, was earning Rs.10,000/- per month. The learned Tribunal assessed the monthly income of the deceased at Rs.2,100/- per month. The accident is of the year 2003. Thus, the income as assessed is just and reasonable as the learned Tribunal has also granted 40% prospective rise. Therefore, the net amount was assessed at Rs.2,940/- per month. Though challenge has been given to the compensation granted of Rs.3,47,520/-, which includes Rs.3,17,520/- as dependency loss and Rs.15,000/- under the head of loss of estate and Rs.15,000/- under the head of funeral expenses.

8. The Tribunal has dealt with the liability issue considering both vehicles jointly liable. However, the contention was raised about the jeep being a private vehicle and the policy produced on record reflects the same. Therefore, considering the ratio laid down in the case of New India Insurance Company Limited v. Ramanbhai Manubhai Patel rendered in First Appeal no.2717 of 2004 and New India Insurance Company Limited v. Swami Narayandasji Priyadashji rendered in First Appeal no.2424/2008, the Tribunal on considering breach of terms of the policy, the vehicle in question used was registered as a private vehicle and was employed for carrying passengers for hire and reward, observing so, it was concluded that no liability can be fastened on the insurance company. The learned Tribunal thus concluded that the insurance policy is for the private car. Considering the complaint, jeep bearing registration no. GJ-2 K-689 had been used for the passenger for hire and reward and therefore, the Tribunal found breach of condition in context of policy produced at Exh.29 and Mark 36/1, observing that the deceased was not employee of owner of the jeep - opponent no.2, not registered as a passenger vehicle and therefore, while exonerating the insurance company, the Tribunal made opponents no.1 and 2, driver and owner of the offending jeep no. GJ-2 K-689 liable to pay the compensation to the claimants. In the case of Manuara Khatun (supra), where the case was of head on collision between Tata Sumo and truck and the deceased was found traveling in Tata Sumo as passenger. The Hon'ble Supreme Court while dealing with the principle of “pay and recover’ following the judgment in the case of Saju P. Paul (supra) observed in Paragraphs 16, 19, 20, 21 and 22 as under:-

“16. With reference to the accident that took place on 24.12.1993 (prior to 1994 amendment) in SLP(C) Nos. 7241-43/2003, this Court in Cholleti Bharatamma in paragraphs 17,18,19,20 and 21 (Pgs. 430-431) held as under :

“17. In the aforementioned case, accident took place on 24-12- 1993. The respondents herein filed a claim petition claiming compensation for the death of one Kota Venkatarao who had allegedly paid a sum of Rs 20 for travelling in the lorry. The Tribunal held:

“In the absence of rebuttal evidence from the deceased and some others who travelled in the said vehicle in the capacity of owner of the luggage which was carried by them at the time of accident, it cannot be said that it is a violation of the policy, since it is not fundamental breach so as to afford to the insurer to eschew the liability altogether as per the decision in B.V. Nagaraju v. Oriental Insurance Co. Ltd. [(1996) 4 SCC 647 [LQ/SC/1996/1021] : AIR 1996 SC 2054 [LQ/SC/1996/1021] ]”

18. The High Court, however, relying upon Satpal Singh [(2000) 1 SCC 237] [LQ/SC/1999/1177] opined:

“This issue raised in this appeal is covered by the decision of the Supreme Court in New India Assurance Co. Ltd. v. Satpal Singh wherein Their Lordships held that under the Motor Vehicles Act, 1988 all insurance policies covering thirdparty risks are not required to exclude gratuitous passengers in the vehicles though the vehicle is of any type or class. Following the same, the appeal is dismissed. No order as to costs.”

19. It is now well settled that the owner of the goods means only the person who travels in the cabin of the vehicle.

20. In this case, the High Court had proceeded on the basis that they were gratuitous passengers. The admitted plea of the respondents themselves was that the deceased had boarded the lorry and paid an amount of Rs 20 as transport charges. It has not been proved that the deceased was travelling in the lorry along with the driver or the cleaner as the owner of the goods. Travelling with the goods itself does not entitle anyone to protection under Section 147 of the Motor Vehicles Act.

21. For the reasons aforementioned, this appeal is allowed.”

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19. The impugned judgment is founded on misconstruction of Section 147. The High Court was wrong in holding that the insurance company shall be liable to indemnify the owner of the vehicle and pay the compensation to the claimant as directed in the award by the Tribunal.

20. The next question that arises for consideration is whether in the peculiar facts of this case a direction could be issued to the insurance company to first satisfy the awarded amount in favour of the claimant and recover the same from the owner of the vehicle (respondent no. 2 herein).

21. In National Insurance Co. Ltd. v. Baljit Kaur and others, this Court was confronted with a similar situation. A three-Judge Bench of this Court in paragraph 21 of the Report (Pg. 8) held as under :

“21. The upshot of the aforementioned discussions is that instead and in place of the insurer the owner of the vehicle shall be liable to satisfy the decree. The question, however, would be as to whether keeping in view the fact that the law was not clear so long such a direction would be fair and equitable. We do not think so. We, therefore, clarify the legal position which shall have prospective effect. The Tribunal as also the High Court had proceeded in terms of the decision of this Court in Satpal Singh. The said decision has been overruled only in Asha Rani. We, therefore, are of the opinion that the interest of justice will be subserved if the appellant herein is directed to satisfy the awarded amount in favour of the claimant, if not already satisfied, and recover the same from the owner of the vehicle. For the purpose of such recovery, it would not be necessary for the insurer to file a separate suit but it may initiate a proceeding before the executing court as if the dispute between the insurer and the owner was the subject-matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer. We have issued the aforementioned directions having regard to the scope and purport of Section 168 of the Motor Vehicles Act, 1988, in terms whereof, it is not only entitled to determine the amount of claim as put forth by the claimant for recovery thereof from the insurer, owner or driver of the vehicle jointly or severally but also the dispute between the insurer on the one hand and the owner or driver of the vehicle involved in the accident inasmuch as can be resolved by the Tribunal in such a proceeding.”

21. The above position has been followed by this Court in National Insurance Co. Ltd. v. Challa Bharathamma & Ors., wherein this Court in paragraph 13 (Pg. 523) observed as under:

“13. The residual question is what would be the appropriate direction. Considering the beneficial object of the Act, it would be proper for the insurer to satisfy the award, though in law it has no liability. In some cases the insurer has been given the option and liberty to recover the amount from the insured. For the purpose of recovering the amount paid from the owner, the insurer shall not be required to file a suit. It may initiate a proceeding before the executing court concerned as if the dispute between the insurer and the owner was the subject- matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer. Before release of the amount to the claimants, owner of the offending vehicle shall furnish security for the entire amount which the insurer will pay to the claimants. The offending vehicle shall be attached, as a part of the security. If necessity arises the executing court shall take assistance of the Regional Transport Authority concerned. The executing court shall pass appropriate orders in accordance with law as to the manner in which the owner of the vehicle shall make payment to the insurer. In case there is any default it shall be open to the executing court to direct realisation by disposal of the securities to be furnished or from any other property or properties of the owner of the vehicle i.e. the insured. In the instant case, considering the quantum involved, we leave it to the discretion of the insurer to decide whether it would take steps for recovery of the amount from the insured.”

9. Here in the case on hand, the claimants were made entitled to recover an amount of Rs.3,47,520/- from opponents no.1 and 2 jointly and severally with interest at the rate of 9% per annum from the date of filing of the claim petition till its realization. The claimants would be third persons to the contract between the insured and the insurer. The deceased traveling in the jeep as a gratuitous passenger in a private vehicle. In Manuara Khatun’s case (supra), it would be just and reasonable to follow the principles so laid down and adopted by the Hon'ble Apex Court by directing the insurance company to pay the award amount along with the interest as per the order and thereafter, to recover the same from opponents no.1 and 2 by filing an execution petition.

10. In the result, the appeal is partly allowed. The insurance company is thus directed to deposit the award amount with interest within a period of eight weeks and the insurance company is entitled to recover the same from opponents no.1 and 2 by filing execution petition in connection with MACP no.969/2003. Upon deposit, total amount be given to both the claimants in equal proportion. Registry is directed to send back the record and proceedings, if received.