Gauhati High Court
M/S New India Assurance Co. Ltd vs Shri Mantu Kr. Daimary And Anr on 11 January, 2024
Author: Malasri Nandi
Bench: Malasri Nandi
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GAHC010005622014
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : MACApp./46/2014
M/S NEW INDIA ASSURANCE CO. LTD.,
HAVING REGD. OFFICE AT NEW ASSURANCE BUILDING 87, MAHATMA
GANDHI ROAD, MUMBAI AND ONE OF THE REGIONAL IFFICE AT
G.S.ROAD, BHANGAGARH, GUWAHATI, ASSAM.
VERSUS
SHRI MANTU KR. DAIMARY and ANR,
S/O LT. MATIRAM DAIMARY, R/O VILL. MATIKHUNDA GAON, PS.
DHEKIAJULI, DIST. SONITPUR, ASSAM.
2:BIPIN DAIMARY
S/O LT. M. DAIMARY
R/O MATIKUNDA PAHAR
GARMARA
PS. DHEKIAJULI
DIST. SONITPUR
ASSA
Advocate for the Petitioner : MR. K K BHATTACHARYYA
Advocate for the Respondent : MS. J GOSWAMI
BEFORE
HONOURABLE MRS. JUSTICE MALASRI NANDI
JUDGMENT
Date : 11-01-2024
The insurance company is on appeal against the judgment and order, dated
27.08.2013 passed by the learned Member, MACT No.2 Kamrup, Guwahati in MAC Case No.
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800/2009.
2. The case of the claimant is that on 03.09.2005, the claimant was travelling in a motor
cycle bearing No. AS-12B-0396 from Tezpur side towards Dhekiajuli as a pillion rider. When
the said vehicle reached Gotonga over NH -52, the driver lost his control and as a result of
which the motorcycle knocked a lamb. Due to the alleged accident, the motorcycle fell down
and the claimant sustained grievous injuries on his person. The allegation of the claimant is
that the accident occurred due to rash and negligent driving by the driver of the offending
motorcycle. After the accident, the injured was shifted to Kanaklata Civil Hospital, Tezpur for
treatment and thereafter he had undergone treatment in different hospitals of Assam and
Patna.
3. The learned tribunal after recording evidence of witnesses and considering other
documents available in the records, awarded compensation to the claimant/ respondent No. 1
amounting to Rs.1,16,000/.
4. Learned counsel for the appellant has argued that admittedly the claimant had traveled
as a pillion rider in a motorcycle and policy of the said motorcycle was an Act policy and no
additional premium was paid by the owner /insured for the coverage of a pillion rider and as
such the award is bad in law and is liable to be set aside.
5. It is also the submission of learned counsel for the appellant that insurance company
has proved the insurance policy vide Exhibit -A before the tribunal which is an Act policy and
there is no liability on the part of the insurance company towards the claim of the pillion rider.
The Act policy does not cover the risk of death or bodily injuries to the gratuitous
passengers. The liability of the insurance company can be determined only on the basis of
the premium collected and in the absence of additional premium, the insurance company is
not liable to pay compensation. |The tribunal erred in holding that respondent No.1 i.e. the
clamant is the third party and failed to note that the occupant of the vehicle cannot be
treated as third party.
6. Learned counsel for the appellant also submitted that the learned Member, MACT did
not consider the evidence of Tarun Azad Narzary who was examined as DW-1 before the
Tribunal and who categorically stated that the insurance policy of the motorcycle was an Act
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policy and in the said policy, there was no coverage for the pillion rider.
7. Learned counsel for the appellant also submitted that the learned tribunal proceeded
to hold the appellant insurer responsible to pay the compensation merely because as the
policy was issued and the same was in force on the date of the accident, by completely
overlooking that the claimant was nothing but a gratuitous passenger and he was not covered
under the policy.
8. In support of his submission, learned counsel relied on the following case laws:
1. United India Insurance Company Ltd., Shimla-vs- Tilak Singh & Ors,
reported in 2006 (4) SCC 404.
2. New India Assurance Company Ltd. -vs- Manasha Barman & Ors
reported in MAC Appeal No. 274/2006, of this court, dated 28.09.2012.
9. None appears for the respondent No.1/ claimant. As the matter is pending in this court
since 2014, after hearing the learned counsel for the appellant, the case was fixed for
delivery of judgment without further allowing time to the respondent's side to argue in the
case.
10. The only question involved in this appeal is that whether the claimant is entitled for
compensation though he was travelling as pillion rider and the policy of the vehicle was an
Act policy!
11. In New India Assurance Company Ltd. -vs- Asha Rani 2003 ACJ 1 (SC), it has been
noted as follows:-
" Section 147 of 1988 Act, inter alia, prescribes compulsory coverage against
the death of or bodily injury to any passenger of 'public service vehicle'. Proviso
appended thereto categorically states that compulsory coverage in respect of
drivers and conductors of public service vehicle and employees carried in a
goods vehicle would be limited to the liability under the
Workmen's Compensation Act. It does not speak of any passenger in a 'goods
carriage'. In view of the changes in the relevant provisions in 1988 Act vis-a-vis
1939 Act, we are of the opinion that the meaning of the words 'any person'
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must also be attributed having regard to the context in which they have been
used, i.e., 'a third party'. Keeping in view the provisions of the 1988 Act, we are
of the opinion that as the provisions thereof do not enjoin any statutory liability
on the owner of a vehicle to get his vehicle insured for any passenger travelling
in a goods vehicle, the insurers would not be liable therefor. Furthermore, sub-
clause (i) of clause (b) of sub- section (1) of Section 147 speaks of liability
which may be incurred by the owner of a vehicle in respect of death of or bodily
injury to any person or damage to any property of a third party caused by or
arising out of the use of the vehicle in a public place, whereas sub- clause (ii)
thereof deals with liability which may be incurred by the owner of a vehicle
against the death of or bodily injury to any passenger of a public service vehicle
caused by or arising out of the use of the vehicle in a public place."
12. In the judgment of the Supreme Court in 2006 ACJ 1441, it has been held as follows:-
"In our view, although the observations made in Asha Rani's case, 2003 ACJ 1
(SC), were in connection with carrying passengers in a goods vehicle, the same
would apply with equal force to gratuitous passengers in any other vehicle also.
Thus, we must uphold the contention of the appellant insurance company that
it owed no liability towards the injuries suffered by the deceased Rajinder Singh
who was a pillion rider, as the insurance policy was a statutory policy and hence
it did not cover the risk of death of or bodily injury to gratuitous passenger.
The dictum laid down therein applies to the facts of the present case, as the
policy marked on the side of the appellant shows that it is only an Act policy,
the Tribunal ought to have exonerated the Insurance Company from paying the
compensation, but the Tribunal has erroneously come to the conclusion that
since the proposal form is not filed along with the in insurance policy copy, the
insurance company is liable to pay the compensation. The said finding is not
legally sustainable and the same is liable to be set aside. Accordingly, the said
finding is set aside and consequently, the appellant is exonerated from paying
the compensation amount."
13. In another case, Oriental Insurance Company Pvt. Ltd.-VS- Surendra Nath Loomba &
Ors reported in 2012 ( 2 ) TN MAC 650 (SC) , it has been held as follows:
"13. Recently this Bench in National Insurance Company Ltd. v. Balakrishnan &
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Another[10], after referring to various decisions and copiously to the decision in
Bhagyalakshmi (supra), held that there is a distinction between "Act Policy" and
"Comprehensive/Package Policy". Thereafter, the Bench took note of a decision
rendered by Delhi High Court in Yashpal Luthra and Anr. V. United India
Insurance Co. Ltd. and Another wherein the High Court had referred to the
circulars issued by the Tariff Advisory Committee (TAC) and Insurance
Regulatory and Development Authority (IRDA). This Court referred to the
portion of circulars dated 16.11.2009 and 3.12.2009 which had been
reproduced by the High Court and eventually held as follows: -
"19. It is extremely important to note here that till 31st December, 2006 Tariff
Advisory Committee and thereafter from 1st January, 2007, IRDA functioned as
the statutory regulatory authorities and they are entitled to fix the tariff as well
as the terms and conditions of the policies by all insurance companies. The High
Court had issued notice to the Tariff Advisory Committee and the IRDA to
explain the factual position as regards the liability of the insurance companies in
respect of an occupant in a private car under the "comprehensive/ package
policy". Before the High Court the Competent Authority of IRDA had stated that
on 2nd June, 1986 the Tariff Advisory Committee had issued instructions to all
the insurance companies to cover the pillion rider of a scooter/motorcycle under
the "comprehensive policy" and the said position continues to be in vogue till
date. He had also admitted that the comprehensive policy is presently called a
package policy. It is the admitted position, as the decision would show, the
earlier circulars dated 18th March, 1978 and 2nd June, 1986 continue to be
valid and effective and all insurance companies are bound to pay the
compensation in respect of the liability towards an occupant in a car under the
"comprehensive/package policy" irrespective of the terms and conditions
contained in the policy. The competent authority of the IRDA was also
examined before the High Court who stated that the circulars dated 18th
March, 1978 and 2nd June, 1986 of the Tariff Advisory Committee were
incorporated in the Indian Motor Tariff effective from 1st July, 2002 and they
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continue to be operative and binding on the insurance companies. Because of
the aforesaid factual position the circulars dated 16th November 2009 and 3rd
December, 2009, that have been reproduced hereinabove, were issued.
20. It is also worthy to note that the High Court after referring to individual
circulars issued by various insurance companies and eventually stated thus:- "In
view of the aforesaid, it is clear that the comprehensive/package policy of a two
wheeler covers a pillion rider and comprehensive/ package policy of a private
car covers the occupants and where the vehicle is covered under a
comprehensive/package policy, there is no need for Motor Accident Claims
Tribunal to go into the question whether the Insurance Company is liable to
compensate for the death or injury of a pillion rider on a two-wheeler or the
occupants in a private car. In fact, in view of the TAC's directives and those of
the IRDA, such a plea was not permissible and ought not to have been raised
as, for instance, it was done in the present case.
21. In view of the aforesaid factual position there is no scintilla of doubt that
a "comprehensive/package policy" would cover the liability of the insurer for
payment of compensation for the occupant in a car. There is no cavil that an
"Act Policy" stands on a different footing than a "Comprehensive/Package
Policy". As the circulars have made the position very clear and the IRDA,
which is presently the statutory authority, has commanded the insurance
companies stating that a "Comprehensive/Package Policy" covers the liability,
there cannot be any dispute in that regard. We may hasten to clarify that
the earlier pronouncements were rendered in respect of the "Act Policy"
which admittedly cannot cover a third party risk of an occupant in a car. But,
if the policy is a "Comprehensive/Package Policy", the liability would be
covered. These aspects were not noticed in the case of Bhagyalakshmi
(supra) and, therefore, the matter was referred to a larger Bench. We are
disposed to think that there is no necessity to refer the present matter to a
larger Bench as the IRDA, which is presently the statutory authority, has
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clarified the position by issuing circulars which have been reproduced in the
judgment by the Delhi High Court and we have also reproduced the same."
14. In view of the aforesaid legal proposition, it is clear that the comprehensive/ package
policy of a two wheeler covers a pillion rider and comprehensive/ package policy of a private
car covers the occupant and where the vehicle is covered under the comprehensive/ package
policy there is no need for motor accident claims tribunal to go into the question when the
insurance company is liable to compensation for the death of a pillion rider on a two wheeler
or occupant of a private car.
15. In National Insurance Company Limited -vs- Srinivasa & Ors. reported in CDJ 2017
Karnataka, 1513 it was held as under:
"16. If the risk of an occupant of a car, inmate of a vehicle or passenger in a
private car, is to be covered, additional premium has to be paid. If no additional
premium is paid, their risk is not covered. The statutory liability under Sections
146 and 147 of the Act has to be read with the terms of the insurance policy
issued under Section 146 of the Act. But that does not prevent an insurer from
entering into a contract of insurance covering a risk wider than the minimum
requirement of the statute, whereby the risk to gratuitous passengers could
also be covered. A third party policy does not cover liability to gratuitous
passengers who are not carried for hire or reward. If a liability other than the
limited liability provided for under the Act is to be enhanced under an insurance
policy, additional premium is required to be paid. The liability is restricted to the
liability arising out of the statutory requirements under Section 14 only."
16. In the Oriental Insurance company -vs- K.V. Sudhakaran & Ors reported in CDA 2008
SC 1040, it has been held as follows:-
"19. The law which emerges from the said decisions, is:
(i) the liability of the insurance company in a case of this nature is not extended
to a pillion rider of the motor vehicle unless the requisite amount of premium is
paid for covering his/her risk (ii) the legal obligation arising under Section
147 of the Act cannot be extended to an injury or death of the owner of vehicle
or the pillion rider; (iii) the pillion rider in a two wheeler was not to be treated
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as a third party when the accident has taken place owing to rash and negligent
riding of the scooter and not on the part of the driver of another in vehicle."
17. In Tilak Singh and Ors. (supra), it has been noted as follows:
"In our view, although the observations made in Asha Rani' s case (supra) were
in connection with carrying passengers in a goods vehicle, the same would
apply with equal force to gratuitous passengers in any other vehicle also. Thus,
we must uphold the contention of the appellant Insurance Company that it
owed no liability towards the injuries suffered by the deceased Rajinder Singh
who was a pillion rider, as the insurance policy was a statutory policy, and
hence it did not cover the risk of death of or bodily injury to a gratuitous
passenger."
18. In the case of United India Insurance Co.Ltd.-vs- M.V.Rajendran and another, reported
in CDA 2017 MHC 430, it was observed as follows:
"5.Considering the facts and circumstances of the case and the submissions
made on either side, this Court is of the view that Act policy covers the losses
arising out of the persons stipulated in Section 147of the Motor Vehicles Act,
1988 and the said provision of the Motor Vehicles Act will not cover a pillion
rider in a Motor Cycle and therefore, the Insurance Company is not liable to pay
compensation and the Civil Miscellaneous Appeal is to be allowed."
19. From the judgments relied on by the learned counsel appearing for the appellant as
well as the aforesaid legal proposition, the following principles emerged;
(i).The policy which the owner of the vehicle takes under Section 147 of the Motor Vehicles
Act is 'Statutory Policy', also known as 'the Act Policy'.
(ii)It covers the liability of the owner in respect of third party only. After amendment of the
Section in the year 1994 by Act 54 of 1994 which came into force with effect from
14.11.1994, it covers owner of the goods or his authorized representative carried in the
goods vehicle.
(iii).The owner of the vehicle can pay extra premium to increase the liability of the insurer in
respect of third party.
(iv).The rider, pillion rider of a two-wheeler and occupant of a four-wheeler are not third
parties and they are not covered by Act Policy issued by the Insurance Company.
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(v).The owner of the vehicle can pay extra premium to cover personal accident claim, the
rider, pillion rider and occupant of a four-wheeler. The policy issued by the Insurance
Company after receiving extra premium to cover rider and pillion rider of a two-wheeler and
occupants of a four-wheeler is called 'Comprehensive Policy'.
(vi).Only when the owner of the vehicle takes Comprehensive Policy by paying extra
premium, the pillion rider in a two-wheeler can claim compensation from the Insurance
Company. If the policy is Act only Policy, the rider, the pillion rider in a two-wheeler and
occupant of a four-wheeler are not third parties as per Section 147 of the Motor Vehicles Act
and they are not entitled to claim compensation from the Insurance Company.
20. In the present case, the respondent No.1/claimant was travelling in the motorcycle as
a pillion rider driven by the respondent No.2. According to the respondent No.1/ claimant,
due to rash and negligent driving by the respondent No.2, respondent No.1 fell down from
the motorcycle and sustained multiple injuries.
21. The contention of the appellant is that the policy in question is only an Act policy and it
covers the risk and liability in respect of the third parties only and it does not cover the rider
and pillion rider of the motorcycle. The respondent No. 1 has not disputed that the policy
issued by the appellant is only Act policy. It is not the case of the Respondent No.1 that
policy issued by the appellant is comprehensive policy covering both the rider and pillion rider
of the motorcycle. The Tribunal fastened the liability of the appellant on the ground that as
the insurer of the vehicle had issued the policy, they had to pay the compensation. Such
finding is erroneous. It is well settled that in an Act policy the rider and the pillion rider of the
two wheeler are not covered and the insurance company is not liable to pay compensation for
the bodily injuries or death. Whether the pillion rider is covered under the Act policy or not
was considered by the Hon'ble Apex Court in the case of Tilak Singh (supra) wherein the
Hon'ble Apex Court has held that the pillion rider is not covered in Act policy and the
insurance company is not liable to pay the compensation to the pillion rider.
22. As per the judgments referred to above, in an Act policy, the pillion rider in two
wheeler is a gratuitous passenger and the appellant is not liable to pay compensation to the
respondent No.1/ claimant.
23. In the result, appeal is allowed. The award of the tribunal passed in MAC Case No.
800/2009 dated 27.08.2013 is hereby set aside.
24. The appellant insurance company is permitted to withdraw the amount if deposited in
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connection with claim petition by filing necessary application before the tribunal.
25. No costs.
Send back the LCR.
The statutory amount in deposit be refunded accordingly.
JUDGE
Comparing Assistant
