Insurer not Liable to Pay Compensation to Passengers Travelling in Non-Passenger Vehicles- Madras High Court

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November 12, 2018

In a recent verdict, the Division Bench of High Court of Madras made a landmark observation by holding that Insurance Companies are not liable to compensate for the death and injury met by unauthorized passengers in goods/ transport vehicles.

While pronouncing the verdict, the Division Bench of the Madras High Court noted that pursuant to amendment of Motor Vehicle Act, 1988 in 1994, section 147 of the Act limits the insurer’s liability to third party, owner of the goods or his authorized representative carried in goods vehicle and the passenger of a public service vehicle only. Hence, the High Court of Madras in the case concluded that the Insurance Company namely Bharathi AXA General Insurance Company was not liable to pay compensation to passengers travelling in non-passenger vehicles.