Himachal Pradesh High Court
M/S Voluntary Health Association vs The Oriental Insurance Company on 2 August, 2024
Author: Jyotsna Rewal Dua
Bench: Jyotsna Rewal Dua
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
FAO No.237 of 2024
Date of decision: 02.08.2024
.
M/s Voluntary Health Association. ...Appellant.
Versus
The Oriental Insurance Company
Limited & Ors. ...Respondents.
Coram:
Ms. Justice Jyotsna Rewal Dua, Judge.
Whether approved for reporting?1
For the appellants : Mr. Hamender Singh, Advocate.
`
For the respondents : None.
Jyotsna Rewal Dua, Judge
This appeal has been preferred by the owner of
the vehicle against the award dated 30.04.2024, passed by
the learned Motor Accident Claims Tribunal (hereinafter
referred to as 'learned Tribunal'), granting compensation to
the tune of Rs.9,91,375/- along with interest at the rate of
9% per annum from the date of filing of the claim petition in
favor of the claimants (respondents No.2 to 5)
For convenience, parties are being referred to
hereinafter according to their status before the learned
Tribunal.
Whether reporters of Local Papers may be allowed to see the judgment? Yes
2. I have heard learned counsel for the appellant
and considered the case file.
.
3. Facts.
3(i). Respondents No.2 to 5 moved a claim petition
under Section 166 of the Motor Vehicles Act, 1988, seeking
compensation on account of death of Sh. Pratap son of late
Sh. Jamna Dass in a motor accident that took place on
31.07.2017.
3(ii).
r to
The case set up by the claimants (respondents
No.2 to 5) was that Sh. Pratap (husband of claimant No.1
and father of claimant No.2 to 4) was traveling in the vehicle
bearing registration No. HR-20F-3794 on 31.07.2017. The
vehicle met with an accident due to the rash and negligent
driving of Sh. Khem Das, respondent No.3. As a result of the
accident, the deceased, Sh. Pratap, sustained multiple
injuries and was taken for treatment to IGMC, Shimla, where
he succumbed to his injuries. The accident was reported,
and FIR No.105/2017 dated 31.07.2017 was registered at
Police Station Dhalli under Sections 279, 337, and 304-A of
the Indian Penal Code.
The claimants also pleaded that the at the time of
the accident, deceased was 48 years old and earning
.
Rs.20,000/- per month by selling fruits & vegetables and he
was also earning Rs.70-80 thousand per annum by growing
vegetables on his own land; As a consequence of the death of
the deceased, his family had suffered significant monetary
loss, hardships, and inconvenience.Compensation of
3(iii).
r to
Rs.30,00,000/- along with interest was prayed for.
The owner of the vehicle (present appellant)
asserted that: The vehicle had been sold to one Sh. Khem
Das (respondent No.3) prior to the accident, and therefore,
respondent No.2 (present appellant) did not have any control
over the vehicle; That the vehicle was duly insured with
respondent No.1, therefore, liability, if any, for paying the
compensation amount was to be borne by the insurer.
Sh. Khem Das (respondent No.3) denied his
liability, projecting that he was not the registered owner of
the vehicle at the time of the accident and, therefore, the
liability to pay the compensation amount would fall upon
respondent No.2 (present appellant) only.
3(iv). The insurer, respondent No.1, took the stand
that: The insurance policy purchased by the owner (present
.
appellant) was merely a Private Car Liability Only Policy; The
vehicle was not even registered for the purpose of carrying of
passengers. According to the insurance policy, the insurer is
not liable to indemnify the owner (appellant) or to pay any
compensation to the claimants-the legal heirs of deceased
3(v).
r to
(Sh. Pratap-occupant of the car).
The parties led evidence in support of their rival
contentions. After considering the entire case file, the learned
Tribunal held that the Sh. Pratap had succumbed to his
injuries in the accident due to the rash and negligent driving
of the vehicle by Sh. Khem Das (respondent No.3). His
monthly income was assessed at Rs.6,300/- Following
monetary compensation was computed payable to the
claimants along with interest @ 9% per annum:-
Sr. No. Heads Amount
1 Loss of dependency Rs.9,21,375/-
2 Funeral charges, other Rs.15,000/-
ceremony, pain, loss
and suffering.
3 Filial Consortium Rs.40,000/-
4 Loss of estate Rs.15,000/-
Total amount of compensation Rs.9,91,375/-
.
3(vii). The learned Tribunal also took note of the
insurance policy cover produced in the case file (Exhibit RB).
This document described the insurance cover as Private Car
Liability Only Policy, wherein, the premium pertaining to
basic third-party cover had been paid. The policy was not a
comprehensive policy. Therefore, relying on several decisions
of the Hon'ble Apex Court, it was held that occupants of the
vehicle were not covered within the third-party liability
contract with the insurer. As a result, the liability to pay the
compensation amount was not imposed upon the insurer.
The appellant (owner of the vehicle) and Sh. Khem Das, the
driver (respondent No.3), were held jointly and severally
liable to pay the amount of compensation along with interest
in favor of the claimants.
Feeling aggrieved against the aforesaid award, the
owner of the vehicle has instituted this appeal.
4. The only contention urged by the learned counsel
for the owner of the vehicle is that he should not have been
held liable to satisfy the compensation amount. The vehicle
in question was duly insured. It was the liability of the
.
insurer to satisfy the compensation amount assessed by the
learned Tribunal as the Sh. Pratap-the occupant of the
vehicle has to be considered as a third party. Learned
counsel for appellant submits that word 'any person' in
Section 147 of Motor Vehicles Act would also include the
5.
Consideration.
occupants of the private car.
5(i). The contention of the appellant cannot be
countenanced. Admittedly, insurance policy cover note was
produced before the learned Tribunal as Exhibit-RB. This
described the policy as 'Private Car Liability Only Policy'. It is
also not in dispute that only premium paid under this policy
was to cover basic third party risk. Being a Private Car
Liability Only Policy, the occupants of the vehicle were not
covered under the policy. It was not a comprehensive policy.
The policy purchased by the appellant, only covered the risk
towards third parties and not towards the occupants of the
vehicle. In this regard, it will be appropriate to refer to
Yashpal Luthra & Anr. vs. United India Insurance Co.
Ltd. & Anr.2 It was a case where the motorcycle in question
was insured under a package insurance policy. The
.
insurance company contested the claim petition on the
ground that risk of pillion rider on a two-wheeler was not
covered in a comprehensive/package insurance policy. The
Court examined the Deputy Manager of the Tariff Advisory
Committee (TAC) under Section 165 of the Indian Evidence
Act and he deposed that 'all the insurance companies are
liable to pay compensation in respect of occupants in a
private car w.e.f. 25.3.1977 and in respect of a pillion rider
on a two-wheeler w.e.f. 2.6.1986 under the Comprehensive/
Package Policy.' He also deposed that Insurance Company is
not liable in respect of pillion rider on a scooter and
occupant in a car in respect of Act Policy, which only covers
the risk towards third party. Relevant para from the
judgment in this regard is extracted hereinafter:-
"17. On 26th October, 2009, the Deputy Manager of
TAC was examined under Section 165 of the
Indian Evidence Act and he deposed that all the
Insurance Companies are liable to pay
compensation in respect of occupants in a private
car w.e.f. 25th March, 1977 and in respect of a
pillion rider on a two-wheeler w.e.f. 2nd June,
1986 under the comprehensive/ package policy.
2011 ACJ 1415
The relevant statement of the Deputy Manager of
IRDA (Mr. K.O. Antony) is reproduced hereunder:-
"The Insurance Company is not liable in
respect of the pillion rider on a scooter and
occupant in a car in respect of an 'Act Only'
.
policy which only covers the risks towards
the Third Party. In respect of Comprehensive
Policy, the TAC issued a circular dated 18th
March, 1978 instructing all the Insurance
Companies to cover the liability towards the
occupant in a car w.e.f. 25th March, 1977.
There is no change in position since then and
the Insurance Companies are liable in respect
of liability towards the occupant of a private
car under the Comprehensive Policy, which is
now called a Package Policy. On 2nd June,
1986, the TAC issued instructions to all the
Insurance Companies to cover the pillion rider
r on a scooter/motorcycle under the
Comprehensive Policy. This position
continues to be till date. The Comprehensive
Policy is now called a Package Policy. The
instructions/circulars dated 18th March,
1978 and 2nd June, 1986 continue to be
valid and effective till date and all the
Insurance Companies are bound to pay
compensation in respect of the liability
towards a pillion rider on a scooter and
occupant in a car under the Comprehensive
Policy/Package Policy irrespective of the
terms and conditions contained in the policy."
It was thus observed that in case of a
comprehensive/package policy, the occupants of the private
car would be covered and that under the circulars issued by
the TAC, the insurance company will not be liable in respect
of the pillion rider on a scooter or an occupant in a car in
respect of an 'Act Only Policy', which only covers risk
towards the third party.
In National Insurance Co. Ltd. V.
Balakrishnan and Another3, an argument was raised on
.
behalf of the claimants that barring the insurer and insured,
all others are third parties and, therefore, the
deceased/injured has to be deemed to be covered by the
policy. It was also urged that the injured (therein) had
travelled as an occupant in a private car and, therefore, he
has to be treated as third party vis-à-vis the insurer and the
insurer was bound to indemnify the owner in respect of third
party. The precise argument raised on behalf of the claimant
in the judgment is reproduced hereunder:-
"6. ................................. In oppugnation, the
learned counsel for the respondent-claimant has
proponed that barring the insurer and the
insured, all others are third parties and,
therefore, he is covered by the policy. It is also
urged by him that as he had travelled as an
occupant in a private car he is a third party vis-à-
vis the insurer and hence, it is bound to
indemnify the owner as the risk of the third party
is covered."
While answering the arguments advanced by the
parties, the Hon'ble Apex Court considered various
precedents in the timeline. After considering the judgment
passed in Bhagyalakshmi v. United India Insurance Co.
(2013) 1 SCC 731
Ltd.4, in para 15, following was observed in paras 16 and
17:-
.
"16. Thus, it is quite vivid that the Bench had made a
distinction between the "Act policy" and
"comprehensive policy/package policy". We
respectfully concur with the said distinction. The
crux of the matter is what would be the liability
of the insurer if the policy is a "comprehensive/
package policy". We are absolutely conscious
that the matter has been referred to a larger
Bench, but, as is evident, the Bench has also
observed that it would depend upon the view of
the Tariff Advisory Committee pertaining to
enforcement of its decision to cover the liability of
an occupant in a vehicle in a "comprehensive/
package policy" regard being had to the contract
r of insurance.
17. At this stage, it is apposite to note that when the
decision in Bhagyalakshmi, (2009) 7 SCC 148,
was rendered, a decision of High Court of Delhi
dealing with the view of the Tariff Advisory
Committee in respect of "comprehensive/package
policy" had not come into the field. We think it
apt to refer to the same as it deals with certain
factual position which can be of assistance. The
High Court of Delhi in Yashpal Luthra v. United
India Insurance Co. Ltd., 2011 ACJ 1415 (Delhi),
after recording the evidence of the competent
authority of Tariff Advisory Committee (TAC) and
Insurance Regulatory and Development Authority
(IRDA), reproduced a circular dated 16.11.2009
issued by IRDA to CEOs of all the Insurance
Companies restating the factual position relating
to the liability of Insurance companies in respect
of a pillion rider on a two-wheeler and occupants
in a private car under the
comprehensive/package policy. The relevant
portion of the circular which has been reproduced
by the High Court is as
follows................................"
(2009) 7 SCC 148
Further in para 17, the Apex Court considered the
circular, which, inter alia, stated as under:-
.
"IRDA
Ref: IRDA/NL/CIR/F&U/073/11/2009
16.11.2009
To
CEOs of all general insurance companies
Re: Liability of insurance companies in respect of
occupants of a private car and pillion rider on a
two-wheeler under standard motor package
policy (also called comprehensive policy).
Insurers' attention is drawn to wordings of
section II(1)(ii) of standard motor package policy
(also called the comprehensive policy) for private
car and two-wheeler under the (erstwhile) India
Motor Tariff. For convenience the relevant
provisions are reproduced here-under:
...........................................................
(ii) MOT/GEN/10 dated 2.6.1986 (regarding pillion
riders in a two-wheeler) effective from the date of
the circular. The above circulars make it clear
that the insured's liability in respect of
occupant(s) carried in a private car and pillion
rider carried on twowheeler is covered under the
standard motor package policy. A copy each of
the above circulars is enclosed for ready
reference."
In paragraphs 19 and 20, taking note of the
circulars of IRDA and TAC, it was observed that
comprehensive policy is also called as package policy and
that all insurance companies are bound to pay compensation
in respect of liability towards an occupant in a private car
under the comprehensive/package policy irrespective of the
terms and conditions contained in the policy. Following
.
observations of the Apex Court are material in respect of
liability of the insurance company under the Act Policy:-
"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 from a "Comprehensive/
Package Policy". As the circulars have made
the position very clear and the IRDA, which is
r 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, (2009) 7
SCC 148 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 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."
The Apex Court, thus, clearly observed in the
above judgment that Act Policy stands on a different footing
than a comprehensive/package policy. The liability towards
an occupant in a private car under the comprehensive/
package policy would require to be indemnified by the
.
insurance company, but such a situation would not be there
in case the policy is an 'Act Policy'.
5(ii). It is not the case of the appellant that the
insurance policy purchased by it was different than the one
noticed by learned Tribunal. It is not the case of the
appellant that it had paid over and above the basic premium
towards third-party liability or that the policy purchased by
it was comprehensive. It is not the contention of the
appellant that there was any other evidence on record which
had not been noticed by the learned Tribunal pertaining to
fastening of liability to satisfy the award. It is an admitted
position that the policy purchased by the appellant was
'Private Car Liability Only' policy with premium paid only to
cover basic third-party risk. Therefore, and in view of the law
laid down by the Hon'ble Apex Court, the contention of the
counsel for the appellant that insurer should be held liable to
satisfy the award for the death of an occupant of the car is
not tenable. No other point was urged.
In view of above discussion, the present appeal is
dismissed. Pending miscellaneous application(s), if any, also
.
to stand disposed of.
Jyotsna Rewal Dua
2 nd
August, 2024 Judge
(Pardeep)
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