Compulsory motor insurance does not cover passengers in a goods carriage unless the statute expressly requires it.

Compulsory motor insurance under the Motor Vehicles Act, 1988 does not extend to passengers travelling in a goods carriage unless the statute expressly provides for such coverage. The scheme of the 1988 Act, read with the definition of goods carriage and Section 147, limits mandatory indemnity to third-party risk, specified passenger categories, and employees only to the extent of liability under the Workmen's Compensation Act, 1923. A broader reading would also undermine the insurer's statutory defences under Section 149(2). The earlier contrary view treating such passenger risk as covered by policy was held to be incorrect and overruled.

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Issues: Whether, under the Motor Vehicles Act, 1988, an insurer is statutorily liable to indemnify risks arising from passengers travelling in a goods carriage, and whether the earlier view holding such liability covered by the policy was correct.

Analysis: The relevant scheme under the Motor Vehicles Act, 1988 was contrasted with the Motor Vehicles Act, 1939. The definition of goods carriage under the 1988 Act excludes passenger carriage, and Section 147 does not contain the provision corresponding to the omitted clause in Section 95 of the 1939 Act which had extended coverage in certain situations. The compulsory insurance requirement under the 1988 Act is directed to third-party risk and specified categories of passengers, while employees in a goods carriage are covered only to the extent of liability under the Workmen's Compensation Act, 1923. On that construction, a passenger travelling in a goods carriage is not a person whose risk is compulsorily required to be covered under the policy. The contrary reading would also deprive the insurer of statutory defences under Section 149(2).

Conclusion: The insurer is not liable for passengers travelling in a goods carriage under the Motor Vehicles Act, 1988, and the earlier contrary view was held to be incorrect and was overruled.

Ratio Decidendi: Under the Motor Vehicles Act, 1988, compulsory motor insurance does not extend to passengers in a goods carriage unless the statute expressly so provides; statutory coverage must be confined to the liability mandated by the Act, and the insurer's defences cannot be defeated by expanding the policy beyond the legislative scheme.

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