Gujarat High Court

National Insurance Co Ltd vs Shaikh Mustaq Mohammaed Kureshi on 14 October, 2022

Bench: Ashutosh J. Shastri

     C/FA/2080/2011                                JUDGMENT DATED: 14/10/2022




             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
                     R/FIRST APPEAL NO. 2080 of 2011
                                  With
                     R/FIRST APPEAL NO. 2081 of 2011
                                  With
                     R/FIRST APPEAL NO. 2082 of 2011
                                  With
                     R/FIRST APPEAL NO. 2083 of 2011
                                  With
                     R/FIRST APPEAL NO. 2084 of 2011

FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI
================================================================
1    Whether Reporters of Local Papers may be allowed                    No
     to see the judgment ?

2    To be referred to the Reporter or not ?                             No

3    Whether their Lordships wish to see the fair copy                   No
     of the judgment ?

4    Whether this case involves a substantial question                   No
     of law as to the interpretation of the Constitution
     of India or any order made thereunder ?

================================================================
                               NATIONAL INSURANCE CO LTD
                                             Versus
                   SHAIKH MUSTAQ MOHAMMAED KURESHI & 2 other(s)
==============================================================================
Appearance:
MS LILU K BHAYA(1705) for the Appellant(s) No. 1
MR MTM HAKIM(1190) for the Defendant(s) No. 1
RULE SERVED BY DS for the Defendant(s) No. 2,3
================================================================
    CORAM:HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI
                     Date : 14/10/2022
                 COMMON ORAL JUDGMENT

1. The present group of appeals is arising out of

common judgment and award passed by the Tribunal

below. Hence, upon request of the learned advocates

C/FA/2080/2011 JUDGMENT DATED: 14/10/2022

appearing for the respective parties the group is heard

conjointly and being dealt with by the present common

judgment, and accordingly, First Appeal No.2080 of 2011

is treated as a lead matter for the sake of convenience.

2. First Appeal No.2080 of 2011 is filed by the

appellant-Insurance Company (Original Opponent No.3)

assailing the judgment and award passed by learned Motor

Accident Claims Tribunal, (Aux.) Surat partly allowing the

MACP No.1051 of 1997 and thereby awarded an amount

of Rs.30,600/- by way of compensation with interest at the

rate of 9% per annum from the date of Claim Petition till

realization.

3. The facts in brief are that on 02.05.1997, the

applicant along-with other applicants of other respective

Claim Petitions were going toward the Surat from

Umarpada in tempo bearing Registration No.GJ-7-T-9618

along-with goods and the said tempo was driven by

C/FA/2080/2011 JUDGMENT DATED: 14/10/2022

original opponent No.1 which was owned by opponent

No.2 which was insured with the present appellant-

Insurance Company which is original opponent No.3 in the

Claim Petition. The said tempo when reached Buhada

village in jurisdiction of Mandvi Police Station, since the

tempo was running in a rash and negligent manner, the

driver lost control, and resultantly, turtled, wherein, all

the applicants sustained injuries.

4. So far as this applicant is concerned, he was admitted

in Civil Hospital for treatment, later on, was required to

be shifted in Lokhat Hospital and was treated and on

account of such treatment not only he had incurred huge

medical and other expenses, but has also lost future

income. Hence, has filed a Claim Petition for seeking

compensation of Rs.1,00,000/- (Rupees One Lakh Only)

which was registered as MACP No.1051 of 1997.

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5. So far as First Appeal No.2081 of 2011 is concerned,

the same is arising out of a judgment and order passed in

MACP No.40 of 1998. The background of this Claim

Petition is that the claimants of this MACP were also

traveling in tempo bearing registration No.GJ-7-T-9618

along-with other claimants and the said tempo as stated

above has turtled on account of which the son of the

claimant sustained serious injuries to which he succumbed

and at that relevant point of time the son was aged about

12 years. He was shifted to the hospital for further

treatment but he could not survive and expired. He was

studying in standard 4th and as such on the various heads

an amount of Rs.1,50,000/- was claimed by way of

compensation. The learned Motor Accident Claims Tribunal

(Aux.) Surat was pleased to award only Rs.1,54,000/-

together with interest at the rate of 9% per annum till

realization and since the Insurance Company has been

saddled with liability, the appellant-Insurance Company

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has filed present First Appeal to contend that Insurance

Company cannot be held responsible.

6. So far as the First Appeal No.2082 of 2011 is

concerned, the same is directed against the vary same

judgment and award dated 21.03.2011 passed in MACP

No.59 of 1998 and the facts in brief of this MACP No.59

of 1998 are that applicant was traveling in the aforesaid

tempo along-with other claimants of respective Claim

Petitions and on account of tempo having been turtled all

received injuries and the applicant of this MACP No.59 of

1998 has sustained injuries of multiple fracture in left

hand and also in the left leg on account of such serious

injuries have sustained in addition to medical expenditure

has also took medical treatment and as such by projecting

the different heads, the petition was filed for claiming

compensation of Rs.2,00,000/- (Rupees Two Lakh Only)

and it is the grievance of the Insurance Company that

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though there is no liability of Insurance Company, an

award has been passed to the extent of Rs.1,04,000/- to be

paid with 9% interest from the date of Claim Petition till

realization and as such the Insurance Company has filed

present First Appeal.

7. In so far as First Appeal No.2083 of 2011 is

concerned, this appeal is filed by Insurance Company

against the judgment and award dated 21.03.2011 passed

by learned Motor Accident Claims Tribunal (Aux.) Surat in

MACP No.60 of 1998 whereby, an award is passed to the

extent of Rs.61,600/- together with interest at the rate of

9% from the date of Claim Petition till realization. The

facts of this MACP No.60 of 1998 are that she was also

traveling in the very same tempo along-with other

claimants and she sustained serious injuries on account of

which was admitted in the hospital and had to suffer great

hardship and as such under various heads, a compensation

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of Rs.2,00,000/- was claimed against which an amount of

Rs.61,600/- came to be awarded and since the Insurance

Company is saddled with the liability it has preferred

present First Appeal challenging the said common award.

8. In respect of First Appeal No.2084 of 2011 an appeal

has been filed by the Insurance Company against very

same common judgment and award in so far as it relates

to MACP No.176 of 1998 is concerned. The facts in brief

are that the applicant No.1's husband as well as applicant

Nos.2 to 6's father, named as Mohammedbhai Shaikh was

traveling in the said tempo, sustained serious injuries and

succumbed to the injuries. Said Mohammedbhai Shaikh as

on the date of accident was running a floor mill and was

earning Rs.4,000/- per month but due to such sudden

death, the claimant lost the source of income, love and

affection and had to spend expenditure for medical

treatment who was a bread earner of family hence a claim

C/FA/2080/2011 JUDGMENT DATED: 14/10/2022

was put forth of Rs.4,00,000/- as compensation. The said

Claim Petition was registered as MACP No.176 of 1998 in

which an amount of Rs.2,68,400/- was awarded with 9%

interest from the date of Claim Petition till realization and

it is this common judgment and award is assailed by the

Insurance Company since liability to pay the compensation

was fixed upon it. Hence, this group of appeals.

9. The aforesaid appeals were admitted vide order dated

20.09.2011 and the same has been taken up conjointly for

hearing upon request of learned advocates of respective

sides.

10. Ms. Lilu K. Bhaya, learned advocate appearing on

behalf of the Insurance Company has vehemently

contended that all these Claimants or their respective

relatives were traveling in the goods vehicle as passengers

and in view of the well settled proposition of law the

unauthorized gratuitous passengers of the goods vehicle are

C/FA/2080/2011 JUDGMENT DATED: 14/10/2022

not entitled to claim compensation against the Insurance

Company since by virtue of Policy, the risk is not covered

and as such the Tribunal has seriously erred in passing an

award in so far as it has fixed the liability on Insurance

Company. She has contended that by virtue of amendment,

the Insurance Company is not responsible for such claim of

compensation and it is the owner or the driver to be made

a responsible for such claim and as such central

controversy is that in case of unauthorized passengers in

the goods vehicle whether Insurance Company can be held

responsible or not? Ms. Bhaya, learned advocate has

submitted that it was specifically contended before the

Tribunal and also raised clearly in the written statement

that the person herein was traveling as unauthorized

passenger in the goods vehicle, and as such, in view of

settled principle of law propounded in catena of decisions,

the learned Tribunal could not have fix the liability of

Insurance Company in any manner. It is submitted that the

C/FA/2080/2011 JUDGMENT DATED: 14/10/2022

learned Tribunal has failed to appreciate that even in the

complaint filed by Ms. Qureshi, it has been stated that

there was a marriage in the family of relatives of the

complainant and they were returning from the marriage

and they hired the tempo in question in which the gift

articles as well as Kariavar given to newly married couple

were also being carried in the said tempo and as such the

learned Tribunal has concluded that all persons were

traveling in tempo with their goods. According to Ms.

Bhaya, learned advocate, the articles, which were shown

cannot be said to be goods and as such the persons

traveling in tempo cannot be said to be traveling as the

owner of the goods and by referring to the decision

delivered by this Hon'ble Court reported in 2010 (3) TAC

914 (Guj.) in the case of New India Assurance Company

Limited v. Sahantaben Bava & Others, it is contended that

an error is committed. The conclusion that Insurance

Company is liable in such a situation is a finding which is

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not sustainable in the eyes of law. Ms. Bhaya, learned

advocate by referring to the relevant record has submitted

that while dealing with an issue of liability of Insurance

Company no relevant facts have been considered at all and

simply because the tempo was insured no liability can be

fastened upon. In fact while coming to such erroneous

conclusion, the learned Tribunal has not even examined

properly the relevant documents including Panchnama, the

Policy itself as well as the contents of FIR, and hence,

there is hardly any reason to justify the award. The date

of accident i.e. 02.05.1997, whereas, the amendment has

taken place in the year 1994 and hence even if the tempo

is hired there appears to be a clear violation of Policy and

further since the Kariavar cannot be treated as goods, the

award which has been passed is quite erroneous and not

sustainable in the eyes of law. The record has also

indicated at Exhibit-39 and 51 that the items which were

lying at the relevant point of time in the tempo were

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kariavar articles and as such in view of settled proposition

of law, it is not justified on the part of learned Tribunal

to fix the liability of present Insurance Company. Hence,

qua that, the order be set aside in so far as it relates to

present appellant.

11. It has been contended that this settled position has

well been propounded in a decision delivered by Hon'ble

Apex Court reported in AIR 2009 SC 1999 and further

consistently our Court has also taken a similar view that

once Insurance Company is not responsible the question of

pay and recovery principal cannot be applied and for that

purpose, Ms. Bhaya, learned advocate has relied upon the

decision delivered by co-ordinate bench dated 07.04.2014

in First Appeal No.710 of 2017 and allied matters. And by

referring to the last paragraph of the said judgment

contention is reiterated. Yet another decision which has

been referred to is the decision delivered by co-ordinate

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bench dated 30.04.2020 in case of ICICI Lombard General

Insurance Company Limited reported in 2020 LS (Guj.)

137. In the said decision also a similar view is taken.

However, the view was taken by Tribunal is quite in

conflict with the view taken by a different co-ordinate

bench. And by referring to yet another decision delivered

by co-ordinate bench last in line dated 17.03.2022 in case

of HDFC General Insurance Company Limited a contention

is reiterated that pay and recover order may not be passed

when Insurance Company is not liable at all.

12. As against this, Mr. MTM Hakim, learned advocate

appearing on behalf of opponent contesting claimants has

vehemently contended that here is the case in which

claimants were traveling in a vehicle along-with Kariavar

amounts to goods and has submitted that goods are goods

it cannot be differentiated by the Insurance Company by

referring to Section 2(30) of the Act as well as other

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provisions and submitted that Insurance Company is liable

to make payment. It has been vehemently contended that

since traveling of respective applicants was with goods in

the goods vehicle, the liability of Insurance Company

rightly has been fixed and as such there is a hardly any

reason for Insurance Company to come out from the

responsibility which has already been fixed.

13. Mr. Hakim, learned advocate submitted that on the

contrary, claimants are aggrieved by the awarded quantum

against the reasonable claim which was put forth before

the learned Tribunal and as such on the contrary all

opponents are aggrieved by lessor amount of compensation

awarded but now since the Insurance Company is trying to

even come out from even less amount awarded, the

Hon'ble Court may not allow Insurance Company to take a

hyper technical view.

C/FA/2080/2011 JUDGMENT DATED: 14/10/2022

14. In the alternative, Mr. Hakim, learned advocate has

submitted that even assuming without admitting that

Insurance Company may not be held responsible but in

that case also when the amount has already been

deposited at the relevant point of time by the Insurance

Company, there is hardly any reason for Insurance

Company to agitate even against pay and recovery order.

In fact by referring to the decision delivered by yet

another co-ordinate bench dated 10.05.2019 in a group of

appeal headed by First Appeal No.1975 of 2005, a

submission is reiterated that the same order be passed in

the alternative, to disburse the amount to the claimant

which has been deposited with a liberty that the Insurance

Company can recover the same from owner or driver of

the vehicle in question and by pointing out few other

decisions also the contention is reiterated that such kind of

orders are being passed in a routine manner whenever

such controversy has arisen. Hence, it has vehemently

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contended that the Hon'ble Court may kindly grant even

that request to pay and recover and requested to dispose

of these appeals. Mr. Hakim, learned advocate has relied

upon following decisions:-

I. Judgment dated 10.05.2019 passed in group of appeals led by F.A. No.1975/2005.

II. 2012 (3) GLR 1985 (Full Bench).

III. 2018 (10) SCC 432.

IV. 2018 (5) SCC 762.

V. Decision dated 04.07.2013 passedin group of appeals head by F.A. No.2345/2005 and allied matters and the decision dated 03.04.2013 passed by a co-ordinate bench on 03.04.2013 in group of First Appeal ledby F.A. No.2741/2019.

15. Having heard learned advocates for the parties and

having gone through the material on record, it appears

that in the present case there is no grievance about the

quantum of compensation awarded, to be paid to the

claimants but the appellants have filed appeals only on the

substantial issue that in a situation like this, the Insurance

Company cannot be held responsible for liability to pay. It

is only the owner and driver can be made responsible for

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such payment of compensation, and as such, the Court is

not called upon to deal with the aspect of quantum of

compensation. Hence, the only questions left it to the

Court is that whether in an accident like this on the basis

of undisputed position Insurance Company can be held

responsible or not? and if not whether pay and recovery

order can be passed or not? Before dealing with the

aforesaid central issues raised before the Court the record

has indicated that all respective applicants were traveling

in a vary same tempo bearing registration No.GJ-7-T-9618

and while reaching near village: Buhada on account of

rash and negligent driving, the driver lost the control and

tempo was turtled in which all persons traveling have

sustained serious injuries and some were succumbed to the

injuries which factum is not in dispute.

16. It is also not in dispute that all were returning from

marriage and to attend the said marriage the respective

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applicants had hired tempo and while returning, along-

with them the gift articles i.e. kariavar for the newly

married couple was also being carried on. This fact is also

revealing from the FIR which has been lodged before

Mandavi jurisdictional Police Station and in respect of this,

Panchnama has also been executed which is at Exhibit-33.

It is only the applicant-Insurance Company which has

assailed the order in respect of its own liability and no

other claimants have filed any counter appeals. The Court

need not discuss further issues which are not called upon

to be examined.

17. Now to test the liability of Insurance Company before

dealing with an issue the set principles which are

enunciated by catena of decisions, Court would like to

consider with at this stage. In a decision delivered by a

co-ordinate bench of this Court in a group of appeals led

by F.A. No.710/2007 decided on 07.04.2014 after

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analyzing the relevant statutory provisions and after

considering the series of decisions the bench has clearly

opined that once pointed that in an offending vehicle if

the gratuitous passengers are traveling, the Insurance

Company cannot be held responsible for liability to pay

the compensation. The bench has further gone to opined

clearly that when the Insurance Company itself is not

responsible, the Court had no discretion to issue direction

to first pay to the claimant and than to recover from the

respective owner of the vehicle and as such in short when

Insurance Company is not responsible, such pay and

recover order cannot be passed.

18. Following are the observations made by the co-

ordinate bench of this Court which deem it proper to be

incorporated hereunder:-

"51. In National Insurance Co. Ltd. v. Baljit Kaur (supra), the question before the Supreme Court was as to whether an insurance policy in respect of a goods vehicle would also cover gratuitous passengers,

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in view of the legislative amendment in 1994 to section 147 of the Motor Vehicles Act, 1988. The court after referring to its decision in the case of Asha Rani (supra) held that in place of the insurer, the owner of the vehicle shall be liable to satisfy the decree. The court, however, clarified that the legal position shall have prospective effect. The court was of the opinion that the interest of justice would be subserved if the appellant therein was directed to satisfy the awarded amount in favour of the claimants if not already satisfied and recover the same from the owner of the vehicle. It was further observed that for the purpose of such recovery, it would not be necessary for the insurer to file a separate suit but it could initiate a proceeding before the executing court as if the dispute between the insurer and the owner was subject matter of determination before the Claims Tribunal and the issue was decided against the owner and in favour of the insurer.

52. Thus, in the decisions on which reliance has been placed by the learned counsel for the claimants, majority of the decisions relate to cases wherein third parties were the claimants. In a few cases, the Supreme Court has issued directions to pay and recover even in cases where the victims were not third parties. For the reasons stated hereinabove, this court is of the view that in cases involving third parties, where the Supreme Court, after finding the insurance company not liable, has directed the insurance company to first pay the awarded amount and then recover the same from the insured/owner, such powers are relatable to sub-section (4) and (5) of the Act. Whereas in cases of gratuitous passengers travelling in a goods vehicle or other vehicle, where the Supreme Court after holding that the insurance company is not liable, has directed it to pay the awarded amount and then recover the same from the insured/owner, such powers can be correlated only with Article 142 of the Constitution of India. At this

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stage it may be apposite to refer to the decision of the Supreme Court in the case of Indian Bank v. ABS Marine Products (P) Ltd. (supra), wherein the Supreme Court has observed that many a time, after declaring the law, in the operative part of the judgment, the court gives some directions which may either relax the application of law or exempt the case on hand from the rigour of the law in view of the peculiar facts or in view of the uncertainty of law till then, to do complete justice. While doing so, normally it is not stated that such direction/order is in exercise of power under Article 142. It is not uncommon to find that courts have followed not the law declared, but the exemption/relaxation made while moulding the relief in exercise of power under Article 142. When the High Courts repeatedly follow a direction issued under Article 142, by treating it as the law declared by the Supreme Court, incongruously, the exemption/relaxation granted under Article 142 becomes the law, though at variance with the law declared by the Supreme Court. The courts should, therefore, be careful to ascertain and follow the ratio decidendi and not the relief given on the special facts, exercising power under Article 142.

53. At this juncture, reference may be made to the decision of this court in the case of United India Insurance Co. Ltd. v. Lilaben (supra) wherein a co- ordinate bench of this court after referring to the decisions of the Supreme Court in the case of National Insurance Company Ltd. v. Savitri Devi, United India Insurance Co. Ltd. v. Jyotibala Ghanshyam Joshi, 2012 (2) GLR 1681, National Insurance Co. Ltd. v. Baljit Kaur, Deddappa v. National Insurance Co. Ltd., S. Iyyapan v. M/s. United India Insurance Company Ltd., Manager, National Insurance Co. Ltd. v. Saju P. Paul, National Insurance Co. Ltd. v. Challa Bharathamma (supra) and Oriental Insurance Co. Ltd. v. Sudhakaran K.V.,

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AIR 2008 SC 2729, has held that in the case before it, the victim not being a third party, the insurance company has no liability at all as pointed out in the case of Oriental Insurance Co. Ltd. v. Sudhakaran K.V. (supra). The court referred to the observations made by the Supreme Court in the case of Manager, National Insurance Co. Ltd v. Saju P. Paul (supra) and was of the view that the said observations make it clear that the direction to pay the amount first and then to recover such amount can only be given in exercise of power conferred under Article 142 of the Constitution and the Supreme Court in the peculiar facts of the said case, exercised such power notwithstanding the pendency of reference to the larger bench. The court was of the view that there is no scope of passing such a direction either at the instance of the Claims Tribunal or of this court in the appeal under section 173 of the Act and held that the Claims Tribunal had erred in law in passing a direction upon the insurance company to pay the amount and then recover such amount notwithstanding its finding that the insurance company had no liability to pay the amount as the victims were not third parties within the meaning of the law.

53.2 Thus, the above referred decision had been rendered in the context of gratuitous passengers travelling in a goods vehicle and hence, the provisions of sub-section (4) and (5) of section 149 would not be attracted. Therefore, nonconsideration of the said provisions while rendering the said judgment would not render the said judgment per incuriam, having regard to the fact that this court has also found that in a case where the risk is not covered by the insurance policy and is also not a statutory risk as in the case of gratuitous passengers in a goods vehicle or other vehicle, the provisions of sub-section (4) and (5) would not be attracted and this court or the Claims Tribunal would have no

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power to direct the insurance company to first pay the compensation and then recover the same from the owner. The Supreme Court in the cases where such direction had been issued was exercising powers under Article 142 of the Constitution of India. In these circumstances, this court is in full agreement with the view expressed by a co-ordinate bench of this court in the case of United India Insurance Co. Ltd. v. Lilaben (supra) and does not find any reason to take a different view so as to refer the matter to a larger bench.

54. The Bombay High Court, in the case of New India Assurance Company Ltd. v. Sindhu (supra) was dealing with a case of gratuitous passengers in a goods carrying vehicle wherein the Claims Tribunal had issued a direction to the insurer to satisfy the award and then recover the said amount from the original tortfeasor, that is, the owner of the vehicle. On behalf of the insurance company it was contended that such directions issued by the Supreme Court were in exercise of powers under Article 142 of the Constitution. The court held that the consistent view is that such directions were issued by the Supreme Court on consideration of the relevant provisions of the Motor Vehicles Act and not in exercise of powers under Article 142 of the Constitution. That the view taken by the said court in the case of United India Insurance Co. Ltd. v. Sindhubai Kondiram Darwante, 2010 (4) Bom CR 325, that there is a power vesting in the Claims Tribunal and the High Court depending upon the facts and circumstances of each case to direct the insurer to pay compensation amount and thereafter to recover the same from the insured, holds the field. In United India Insurance Co. Ltd. v. N. Appireddy (supra), the Andhra Pradesh High Court followed the decision of the Supreme Court in the case of Baljit Kaur (supra) and directed the insurance company to first satisfy the award and then recover

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from the owner of the vehicle by initiating a proceeding before the executing court without filing a separate suit for the said purpose. This court for the reasons discussed hereinabove respectfully does not agree with the view taken by the Andhra Pradesh High Court as well as by the Bombay High Court in the above referred decisions. In Oriental Insurance Co. Ltd. v. Chandra Devi (supra) the Allahabad High Court was dealing with a case relating to a third party and, hence, the said decision would not have any applicability insofar as the present case is concerned.

55. In the light of the above discussion, this court is of the view that the Claims Tribunal was not justified in holding the appellant - insurance companies to be jointly and severally liable to pay the compensation awarded to the claimants after coming to the conclusion that the insurance company is not liable to indemnify the owner, in view of the fact that the victims were gratuitous passengers in the offending vehicle. While it is true that the Claims Tribunal has in the body of the judgment permitted the insurance company to recover the amount paid towards compensation from the owner after treating the award as a decree in favour of the insurance company, in view of the fact that the passengers were gratuitous passengers in the offending vehicle, the provisions of sub-section (4) and (5) of section 149 of the Act would not be attracted and, therefore, the Claims Tribunal had no power to issue such directions to the insurance company to first pay and thereafter recover the amount from the owner.

56. For the foregoing reasons, the appeals succeed and are accordingly allowed to the following extent. The impugned awards passed by the Claims Tribunal in all the appeals shall stand modified to the extent that instead of the opponents being jointly and severally liable to pay the compensation awarded

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under the said award, it shall be only the driver and the owner of the vehicle who shall be so liable and the insurance company shall stand exonerated from such liability."

19. The aforesaid proposition has also further been

reiterated by following decisions delivered by various

Courts including High Court of Gujarat. The decision

reported in 2013 Law Suit (Guj.) 1142, wherein, almost

aforesaid similar proposition is made in paragraph Nos. 6

and 7, which reads as under:-

"6. I have heard the learned advocates for the parties. The learned advocate for the appellant - insurance company has mainly submitted that the insurance policy relating to the offending truck bearing registration No. GJ-06-G-201, forthcoming on the record of the tribunal vide exh. 70, is the Act policy.

Referring the same, it is clear that it is the Act policy related to the said truck and when the occupant, as referred above, was there in truck, in that case, the insurance company is not liable, more particularly, when no extra premium was paid by the concerned insured/owner. Because the jawans were being carried in furtherance to their employment i.e. for the work of loading / unloading clay, it cannot be said that the vehicle was used for the purpose it was insured and it

original opponent No. 2, because the concerned truck was insured under the Act Only Policy and when the same has not contained any endorsement on payment of additional premium, then in that circumstances, the

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petitioner, insurance company is not liable, is the submission made by the learned advocate for the petitioner and I find myself in agreement with the same. Moreover, considering the observations made by the Hon ble the Apex Court in General Manager, United India Insurance Co. Ltd. Vs. M. Laxmi and Others, reported in 2009 ACJ 104, if the policy in question is the Act Policy, in that case, the insurance company cannot be held liable for compensation to be paid to the employees, who are travelling in the vehicle in question. The relevant part of the said decision is extracted hereunder:

8. In United India Assurance Co. Ltd. v. Tilak Singh and Ors. (2006 ACJ 1441 (SC), it has been noted as follows :

"(21) 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 a gratuitous passenger."

7. In the considered opinion of this Court, when the controversy involved in the present appeals is squarely covered by the the decisions of the Hon ble the Apex Court, present appeals deserve to be allowed. The same are accordingly allowed and the judgment and award impugned in the present appeals, is modified to the extent that the present appellant New India Assurance Co. Ltd. original opponent No. 3 is not liable to pay any compensation and instead, the respondent No. 7 original opponent No. 2 herein Director General and Inspector, S.R.P. Group 9 is held

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liable to pay the compensation. The Cross Objection Nos. 96 to 104 of 2012 are accordingly rejected."

20. Yet another decision delivered in case of HDFC ERGO

General Insurance Company Limited v. Sharmilaben

Gopalbhai Vasava and 7 other decided on 17.03.2022

reported in 2022 Law Suit (Guj.) 2234 in which also it was

held that Insurance Company cannot be saddled with a

liability in case of "Act Policy" as if the Policy was

comprehensive and in the said case also relying upon the

decision delivered by Hon'ble Apex Court, the Insurance

Company was exonerated.

21. In the recent past also such proposition has been led

by High Court of Madras reported in 2019 SCC Online

(Madras) 16849 para-3.i, ii and para-8, 13 and 14

observed as under:-

"3.The learned counsel for the appellant contended that the Insurance Company has marked the Ex.R.1-

Insurance Policy which is an Act Policy and there is no liability on the part of the Insurance Company

C/FA/2080/2011 JUDGMENT DATED: 14/10/2022

towards claim of the pillion riders. 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 premium collected and in the absence of additional premium, the Insurance Company is not liable to pay compensation. The Tribunal erred in holding that the 1st respondent is third party and failed to note that occupant of the vehicle cannot be treated as third party. Further, the Tribunal failed to take note of the Judgment reported in 2012 (2) TN MAC 637 (SC) and 2012 (2) TN MAC 650 (SC).

Further, in support of his contention, he relied upon the following Judgments:

(i).New India Assurance Co. Ltd., Vs. S.Krishnasamy and others reported in 2015 (1) TN MAC 19 (DB).

"18.In view of the rulings cited above, we are of the considered view that since, the Policy is only an Act Policy issued by the Appellant-Insurance Company to the Insurer and the deceased Palanisamy was only an occupant of the Private Car, cannot be considered as 'Third party' of the vehicle and the Policy is covered risks to the third party alone. Hence, the deceased was only the occupant of the Private Car and the said Policy will not cover the risk of the deceased. The Doctrine of Pay and Recovery cannot be applied to the facts of the case, since the Appellant-Insurance Company is not liable to pay the Compensation. Hence, pay amount to the Claimants and then recover the same from the owner of the vehicle involved in the accident cannot be ordered and in view of the above, the rulings cited on the side of the Respondents 1 to 5/Claimants are not applicable to the facts of the present case."

(ii).National Insurance Co. Ltd., Vs. M.Padmini and others, reported in 2017 (1) TN MAC 566 "5.It is not an easy route that the Tribunal has adopted to

C/FA/2080/2011 JUDGMENT DATED: 14/10/2022

conclude that the Appellant was not liable. It helped itself to be guided by several Authorities commencing from New India Assurance Vs. Asha Rani and Others,2004 (2) TN MAC (SC) 387 : 2003 (2) SCC 223, to United India Insurance Company Limited Vs. Tilak Singh and others, 2006 (1) TN MAC 36 (SC) : 2006 (2) CTC 661, to arrive at its conclusion. I find the said finding is in order and does not call for any interference."

8.From the judgments relied on by the learned counsel appearing for the appellant as well as the 1st respondent, the following principles emerge:

(iii).The owner of the vehicle can pay extra premium to increase the liability of the insurer in respect of third party.

13. As per the judgments referred to above, in an Act Policy, the pillion rider in a two-wheeler is a gratuitous passenger and appellant is not liable to pay compensation to the 1 st respondent. In view of the fact that the appellant is not liable to pay any compensation, the question of pay and recovery does not arise.

14. In view of the Judgments of the Hon'ble Supreme Court, the award of the Tribunal is set aside and the Civil Miscellaneous Appeal is http://www.judis.nic.in allowed. The appellant / Insurance Company is permitted to withdraw the amount deposited in the credit of the claim petition, by filing necessary application before the Tribunal. No costs. Consequently connected miscellaneous petition is closed."

22. So the aforesaid principle that in case of gratuitous

C/FA/2080/2011 JUDGMENT DATED: 14/10/2022

passenger and in absence of any extra payment liability

can be thrust upon Insurance Company and when the

Insurance Company itself is not responsible pay and

recover order cannot be passed. Hence, case is made out

by the appellant - Insurnace Company to interfere with the

order passed by Motor Accident Claims Tribunal (Aux.),

Surat. Hence, the Court is of the opinion that following

order would met the ends of justice.

I. The common impugned order dated 21.03.2011

passed by Motor Accident Claims Tribunal (Aux.) Surat is