Victim Travelling Free in Goods Vehicle? Supreme Court Says Insurer Must Pay Compensation

The Supreme Court has held that an insurance company can be directed to first pay compensation and then recover the amount from the vehicle owner if the deceased was travelling as a gratuitous passenger in a goods vehicle.

A Bench of Justices Prashant Kumar Mishra and N V Anjaria allowed an appeal against a high court order that had reversed the Motor Accident Claims Tribunal’s direction asking the insurance company to first pay the compensation to the claimants and later recover it from the owner of the vehicle.

According to the claim petition, the deceased was travelling in a tempo hired during a Ganesh immersion procession and was on the way to immerse the idol in the Narmada river.

It was undisputed that the tempo was a goods vehicle and was insured with the respondent insurance company on the date of the accident.

In 2010, the tribunal held that the claimants were entitled to compensation of Rs 13.23 lakh. It directed the insurance company to deposit the compensation amount and recover the same from the vehicle owner later.

However, the high court set aside the tribunal’s order and held that the insurance company could not be directed to first pay the compensation and then recover it from the owner of the goods vehicle.

Counsel for the appellants relied on Manuara Khatun & Ors vs Rajesh Kumar Singh & Ors (2017), which in turn relied on National Insurance Company Limited vs Saju P Paul & Anr (2013), to argue that even if the deceased was a gratuitous passenger in a goods vehicle, the insurance company could still be directed to pay the compensation first and recover it later from the owner.

On the other hand, counsel for the insurance company relied on Amudhavalli & Ors vs HDFC Ergo General Insurance Company Ltd & Ors (2025), arguing that the Supreme Court had held in such cases that the insurer cannot be made liable even for “pay and recover”.

In the present case, the Bench observed that the deceased was travelling in the tempo along with the Ganesh idol, which was being taken for immersion in the Narmada river.

“The dominant purpose for hiring the vehicle was not for travelling but for carrying the Ganesh idol for immersion. Travelling in the vehicle was only incidental, therefore, at best, the deceased can be treated as gratuitous passenger travelling with his goods (Ganesh idol),” the Bench said.

Court noted that in Manuara Khatun, the Supreme Court had approved the ruling in Saju P Paul and held that where the victim was a gratuitous passenger, the insurer could still be directed to first satisfy the compensation award and then recover the amount from the insured in the same proceedings.

Distinguishing the Amudhavalli case, the Bench said that in that matter, the deceased had hired the goods vehicle primarily for travelling. In the present case, however, the vehicle was hired for carrying the Ganesh idol and travelling was only incidental.

The Bench said the facts of the present case were closer to Saju P Paul and Manuara Khatun.

Court ultimately set aside the high court’s order and restored the award passed by the tribunal. 

Also read| Who pays accident victims — the vehicle owner or the insurance company? Supreme Court clears the air

Case Title: Kaminiben & Ors Vs The Oriental Insurance Company Limited & Ors

Bench: Justices Prashant Kumar Mishra and N V Anjaria

Date of Judgment: February 11, 2026