Summary and Analysis of Brij Bihari Gupta vs Mannet & Ors

1. Heading of the Judgement:

• Case Name: Brij Bihari Gupta vs Mannet & Ors.

• Court: Supreme Court of India

• Jurisdiction: Civil Appellate Jurisdiction

• Case Numbers: Civil Appeal Nos. 6338-6339, 6340, 6341 & 6342 of 2024

• Judges: Justice K. Vinod Chandran and Justice N.V. Anjaria

• Decision Date: August 08, 2025

• Citation: 2025 INSC 948

2. Relevant Laws and Sections:

• Motor Vehicles Act, 1988:
  Section 147(1)(b)(i): Mandates insurance policies to cover liability for death/bodily injury to "third parties," including owners of goods or their representatives carried in the vehicle.
  Section 50: Governs the procedure for transferring vehicle ownership. Requires the transferee to report the transfer to the Registering Authority within 14 days.

• Legal Precedent: Naveen Kumar vs. Vijay Kumar & Ors. (2018) 3 SCC 1: Clarifies that the registered owner remains liable to compensate accident victims even after an unregistered transfer, and the insurer must indemnify this liability.

3. Basic Judgment Details:

• Appellant: Brij Bihari Gupta (driver and alleged "ostensible owner" of the vehicle).

• Respondents: Mannet & Ors. (claimants/victims) and the Insurance Company.

• Dispute Origin: Motor vehicle accident involving a goods carrier. Victims (hawkers) died/suffered injuries while traveling with their goods.

• Tribunal Decision: Awarded compensation; held the registered owner, appellant (driver), and insurer jointly liable.

• High Court Decision: Absolved the insurer of liability; made the appellant solely liable to pay compensation.

• Supreme Court Decision: Allowed the appeals. Restored the Tribunal’s order holding both the registered owner and the insurer jointly and severally liable to pay compensation.

4. Explanation of the Judgment:

The Supreme Court reversed the High Court’s decision, reinstating the insurer’s liability and clarifying two key issues:

I. Victims Were Not "Gratuitous Passengers":

• The insurer argued it had no liability because the victims were "gratuitous passengers" in a goods vehicle, excluded under the policy.

• Court’s Finding: The victims were fish/vegetable hawkers transporting their goods in the vehicle. They were traveling as owners of the goods, not as mere passengers.

• Evidence: Claimants testified they were accompanying their goods (fish baskets/vegetables). The insurer’s witness admitted having no knowledge of the victims' status and failed to prove the "gratuitous passenger" claim.

• Legal Application: Under Section 147(1)(b)(i), the insurer is liable for injuries to "any person including owner of the goods or his authorised representative carried in the vehicle." Thus, the insurer was liable.

II. Ownership Remained with the Registered Owner:

• The insurer argued the registered owner (respondent) had transferred ownership to the appellant (driver) via an agreement, absolving the insurer of liability.

• Court’s Finding:
  The agreement showed only possession (not ownership) was transferred to the appellant upon partial payment (₹80,000 of ₹90,000).
  The balance (₹10,000) was unpaid, and the vehicle’s registration was never transferred to the appellant as required under Section 50 of the Motor Vehicles Act.
  The registered owner never reported the transfer to authorities as mandated by law.

• Legal Application: Per Naveen Kumar, the registered owner remains legally liable even after an unregistered transfer. The insurer must indemnify this liability.

Additional Issues:

• Selective Appeals by Insurer: The insurer challenged only 3 out of 11 claim awards. The Court condemned this "pick and choose" approach but noted it became irrelevant since the insurer’s core arguments failed.

• Lok Adalat Settlement: Two appeals (C.A. Nos. 6341 & 6342) were dismissed as the appellant had settled them via Lok Adalat.

• Final Outcome:
  The insurer and registered owner are jointly and severally liable to pay compensation (as originally ordered by the Tribunal).
  The insurer must pay interest: 12% from the claim petition date (Tribunal) + 6% on enhanced amounts (High Court).

Core Ruling: The Supreme Court emphasized that victims traveling as owners of goods are protected under insurance policies. Further, unregistered transfers do not shift liability from the registered owner, and insurers must indemnify such liability to ensure victims are compensated.