Karnataka High Court
Sanaulla Khan vs Nisammuddin on 24 November, 2023
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NC: 2023:KHC:42494
MFA No. 174 of 2018
C/W MFA No. 6621 of 2018
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF NOVEMBER, 2023 R
BEFORE
THE HON'BLE MR. JUSTICE C.M.JOSHI
MISCELLANEOUS FIRST APPEAL NO. 174 OF 2018 (MV-D)
C/W
MISCELLANEOUS FIRST APPEAL NO. 6621 OF 2018 (MV-D)
IN M.F.A NO. 174 OF 2018
BETWEEN:
THE NATIONAL INSURANCE CO. LTD.,
NEAR KRISHNA KALYANA MANTAPPA,
1ST FLOOR, ADJACENT TO KARNATAKA BANK,
M.G.ROAD, TUMKURU.
NOW REPTD. BY THE REGIONAL MANAGER,
THE NATIONAL INSURANCE CO.LTD.,
NO.144, SUBHARAM COMPLEX,
M.G.ROAD, BENGALURU-560 001.
...APPELLANT
Digitally signed (BY SRI A.N KRISHNA SWAMY, ADVOCATE)
by T S
NAGARATHNA
Location: High AND:
Court of
Karnataka
1. SRI SANAULLA KHAN,
S/O. KAREEM KHAN,
AGED ABOUT 62 YEARS.
2. SMT. AKTHAR UNNISA,
W/O. SANAULLA KHAN,
AGED ABOUT 55 YEARS.
3. SRI SADIQ PASHA, S/O. SANAULLA KHAN,
AGED ABOUT 26 YEARS.
ALL ARE R/O: MALLAGHATTA,
KUNIGAL TOWN-572 130.
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MFA No. 174 of 2018
C/W MFA No. 6621 of 2018
4. SRI NISAMMUDDIN,
S/O. LATE MEHABOOB KHAN,
AGED ABOUT 46 YEARS,
R/AT: NO.23, KAVERINAGAR,
LAGGERE, BENGALURU-58.
...RESPONDENTS
(BY SRI A.K BHAT, ADVOCATE FOR
SRI M.V MAHESHWARAPPA, ADVOCATE FOR R1 TO R3;
NOTICE TO R4 IS HELD SUFFICIENT V/O DATED 13.02.2023)
THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE
JUDGMENT AND AWARD DATED 24.08.2017 PASSED IN MVC
NO.583/2011 ON THE FILE OF THE SENIOR CIVIL JUDGE & JMFC,
KUNIGAL, AWARDING COMPENSATION OF RS.7,27,114/- WITH
INTEREST AT 6% P.A. FROM THE DATE OF PETITION TILL
DEPOSIT.
IN M.F.A NO. 6621 OF 2018
BETWEEN:
1. SANAULLA KHAN, S/O. KAREEM KHAN,
AGED ABOUT 62 YEARS.
2. AKTHAR UNNISA, W/O. SANAULLA KHAN,
AGED ABOUT 55 YEARS.
3. SADIQ PASHA,
S/O. SANAULLA KHAN,
AGED ABOUT 26 YEARS.
ALL ARE R/AT: MALLAGHATTA,
KUNIGAL TOWN,
TUMKUR DISTRICT -586 201.
...APPELLANTS
(BY SRI A.K BHAT, ADVOCATE FOR
SRI M.V MAHESWARAPPA, ADVOCATE)
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MFA No. 174 of 2018
C/W MFA No. 6621 of 2018
AND:
1 . NISAMMUDDIN,
S/O. LATE MEHABOOB KHAN,
AGED ABOUT 46 YEARS,
R/AT: NO.23, KAVERINAGAR,
LAGGERE, BENGALURU-560 058.
2 . DIVISIONAL MANAGER,
NATIONAL INSURANCE CO. LTD.,
NO.911, DASAPPA COMPLEX,
TUMKUR ROAD, T.DASARAHALLI,
BENGALURU-560 057.
REPRESENTED BY THE MANAGER,
NATIONAL INSURANCE CO. LTD.,
1ST FLOOR, ADJACENT TO KARNATAKA BANK,
M G ROAD, TUMKUR-576 201.
...RESPONDENTS
(BY SRI A.N KRISHNASWAMY, ADVOCATE FOR R2;
NOTICE TO R1 IS D/W V/O DATED 08.010.2021
IN MFA NO. 174/2018)
THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE
JUDGMENT AND AWARD DATED 24.08.2017 PASSED IN MVC
NO.583/2011 ON THE FILE OF THE SENIOR CIVIL JUDGE, JMFC,
MACT-XV, KUNIGAL, PARTLY ALLOWING THE CLAIM PETITION
FOR COMPENSATION AND SEEKING ENHANCEMENT OF
COMPENSATION.
THESE APPEALS HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT AND COMING ON FOR PRONOUNCEMENT OF
JUDGMENT THIS DAY THROUGH VIDEO CONFERENCING AT
KALABURAGI, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
Aggrieved by the judgment and award passed in MVC
No.583/2011 by Senior Civil Judge and JMFC and
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MACT-XV, Kunigal dated 24-8-2017, the petitioners as well
as the Insurance Company have approached this Court in
these appeals.
2. MFA No.174/2018 is filed by the Insurance Company
assailing the fastening of the liability on it and MFA
No.6621/2018 is filed by the petitioners seeking
enhancement of the compensation.
3. The brief facts are as below:
That on 24.03.2011 at about 10.30 p.m. deceased
Siddiqullah Khan, was travelling from Kunigal as a pillion
rider on bike No.K.A.04-EA-5134. While so traveling near
weir of Kunigal big tank the rider of Hero Honda Bike rode it
in high speed in rash and negligent manner took his vehicle
in a ditch, as a result fell on right side of the road with the
bike. Due to this accident Siddiqullah Khan sustained fatal
injuries. Immediately, he was shifted to Sridevi Hospital
Tumakuru and then to NIMHANS Bangalore for better
treatment. However, as per the advise of doctors he was
shifted to Mallige hospital Bangalore and was in ICU.
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Unfortunately, he succumbed to the injuries on 26.03.2011
at about 9.30 PM. Thereafter, the petitioners have
performed his last rites by incurring expenses of Rs.40,000-
00. Besides, the petitioners have also incurred expenses of
Rs.80,000-00 towards his medical expenses.
4. Earlier to the accident the deceased was aged about
24 years, bachelor and earning Rs.500-00 per day from
scrap business. The Kunigal police have registered a case
against the offending bike rider in Crime No.79/2011 for the
offences punishable under Section 279 and 304(A) of IPC.
The bike is owned by the respondent No.1 and insured with
respondent No.2. Now, due to his unfortunate death the
petitioners have been put to mental agony and financial loss.
Hence, the petitioners have claimed of compensation of
Rs.15,00,000/- with 12% interest per annum.
5. In response to the notice issued, the respondent
No.1 did not appear and he was placed ex-parte; and the
respondent No.2 has appeared through its counsel. The
respondent No.2 has filed the written statement, contending
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that, there was no rash and negligent riding by the rider of
Hero Honda bike. The alleged accident has happened due to
mechanical failure of the bike and the Kunigal police in
collusion with the petitioners have registered a false case
against the bike rider. Further, it has submitted that, at the
time of accident neither the rider of the bike nor the
deceased wore protective head gear and thereby, the
contributory negligence may be fixed against the deceased
also. The rider of the hero Honda bike bearing No.KA-04-EA-
5134 did not possess valid and effective driving license at
the time of accident, as such, the insurance company is not
liable to pay any compensation. The compensation claimed
is exorbitant for which the petitioners are not entitled. By
denying the age and income of the deceased and also the
expenses incurred for his funeral and treatment, it has
sought for dismissal of petition. Later the Insurance
Company has taken up the contention that the policy issued
was 'Act Only' policy and therefore, the pillion rider is not
covered under the policy.
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6. On the basis of the above pleadings, the Tribunal
framed following issues;
1. Whether the petitioners proved that on
24.03.2011 at about 10.30 p.m. the deceased
Siddiqullah Khan has suffered accident near weir
(Kodi) of Kunigal Big Tank, on Tumakuru-Kunigal
Road, as a result of actionable negligence of rider of
Motorbike with Reg. No.KA-04-EA-5134?
2. Whether the 2nd respondent proves that the
accident has taken place due to mechanical failure of
Hero Honda Motorbike bearing Reg. No. No.KA-04-
EA-5134?
3. Whether the 2nd respondent proves that the rider
of Hero Honda Motorbike bearing Reg.No.KA-04-EA-
5134 was not holding a valid and effective driving
license at the time of the accident?
4. Whether the petitioners are entitled for any
compensation, and if so, at what quantum and from
whom?
5. What order or award?
7. The petitioner No.1 was examined as PW1 and
examined one witness as PW2 and marked Exs.P1 to P16 in
the evidence. Respondent No.2 Insurance Company has
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examined its official as RW1 and got marked Exs.R1 and R2
in the evidence.
8. The Tribunal after hearing both the sides and
answering issue No.1 in the affirmative, issue No.4 partly
in the affirmative and issue Nos. 3 and 4 in the negative,
partly allowed the petition by awarding the compensation of
Rs.7,27,114/- under different heads as below:
Towards loss of Dependency Rs.6,48,000/-
Towards Love and affection
Rs.10,000/- each to petitioners Rs.30,000/-
Towards loss of estate Rs.20,000/-
Funeral expenses Rs.15,000/-
Medical expenditure Rs.14,114/-
Total Rs.7,27,114/-
By the impugned judgment, the Tribunal has fastened
liability on the respondent No.2-Insurance Company.
9. Being aggrieved by the said judgment and award,
the respondent No.2-Insurance Company has approached
this Court in appeal contending that the policy issued by it
was "Act only policy" and therefore, the pillion rider, who
was gratuitous passenger on the two wheeler was not
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covered under the policy and no additional premium was
collected by it to cover the pillion rider.
10. Being aggrieved by the said judgment and award
the petitioners have also approached this Court in appeal
contending that the Tribunal erred in assessing the income
of the deceased and the Tribunal should have deducted
1/3rd towards the personal expenses of the deceased
considering the fact that there are three dependants on the
deceased.
11. In MFA No.174/2018, the respondents No.1 to 3,
who are the petitioners before the Tribunal have appeared
through their counsel. However, respondent No.4 did not
appear despite proper service of notice. In MFA
No.6621/2018, on issuance of notice to respondent No.1
was dispensed with at the risk of the appellant therein and
the respondent No.2 being the Insurance Company has
appeared through its counsel.
12. The arguments by learned counsel Sri A. N. Krishna
Swamy, appearing for the Insurance Company and the
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learned counsel Sri A.K. Bhat, appearing for Sri M.V.
Maheshwarappa, for respondent Nos. 1 to 3 have been
heard.
13. The learned counsel Sri A.N. Krishna Swamy,
appearing for the Insurance Company would submit that the
pillion rider is not covered when it is the 'Act only policy.' He
submits that Ex.R1 which is the copy of the Insurance Policy
clearly shows that the it was 'Act only Policy' and no extra
premium was collected for covering the risk of the pillion
rider. He submits that there are umpteen number of
decisions which postulate that the pillion rider or occupant of
the car cannot come within the purview of the 'third party'.
It is contended that this aspect has been laid down by the
Apex Court in the case of New India Assurance Company
Limited Vs. Asha Rani and others1. He submits that
Section 147 of the Motor Vehicles Act, lay down who are
covered under the compulsory policy and that it is only
applicable for transport vehicles. The inmates of the
passenger car are not covered by way of compulsory
(2003) 2 SCC 223
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insurance and therefore, unless, the owner of the vehicle
pays extra premium to cover the risk of the inmates of the
car or the pillion rider as the case may be, such risk is not
covered. Therefore, it is contended that the occupants of
the car or the pillion rider stand on the same footing and
therefore, the fastening of the liability on the Insurance
Company is not proper and correct. He also clarified that, as
per the Circular issued by the Insurance Regulatory
Authority, the coverage for the pillion rider was extended
only in respect of the comprehensive policy issued even
though there was no specific mention that the pillion rider is
covered for having paid the extra premium. He further
contends that the decision in the case of Oriental
Insurance Company Limited Vs.Sudhakaran K.V.2,
clearly lay down that the inmates of the car are not covered
under the compulsory policy. He also refers to the decision
in the case of New India Assurance Company Limited
Vs. C.M. Jaya and others3 and in the case of Amrit Lal
Sood and another Vs. Kaushalya Devi Thapar and
2008 ACJ 2045
2002 ACJ 271
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others4 to fortify his arguments. He also referred to the
judgment in the case of National Insurance Company
Limited Vs. Jugal Kishore5 which also refers to the duties
of the coverage of the insurance policy. Finally, he submits
that the tariff or premium paid is the criteria as seen from
umpteen number of decisions. The coverage only depend
upon the premium paid and if extra premium is not paid
covering the risk of the pillion rider, then an Act policy
cannot be termed to be covering the risk of the pillion rider.
Hence, he submits that the Tribunal clearly erred in holding
that the respondent No.2-Insurance Company is liable to pay
the compensation.
14. Per contra, learned counsel Sri A.K. Bhat, for Sri
M.V. Maheshwarappa, appearing for the petitioners who are
also appellants in MFA No.6621/2018 contended that,
whatever may be the nomenclature, the conditions of the
policy are to be looked into. He submits that the conditions
of Ex.R2 policy are the basis for the liability. He points to the
1998 ACJ 531
1988 ACJ 270 (SC)
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avoidance clause in Ex.R2 and submits that the pillion rider
may not be covered, but, if extra premium is paid, he is
covered and therefore, the Ex.R2 policy showing basic
premium is Rs.100 and extra premium was paid to the
extent of Rs.200 and therefore, the policy covers the pillion
rider. Therefore, he contends that the in view of conditions
contained in the Ex.R2, an order of pay and recovery may be
passed by this Court.
15. In support of his contentions, he places reliance on
the decision in the case of Amrit Lal Sood and another
Vs. Kaushalya Devi Thapar and others6 and Rikhi
Ram and another Vs. Smt. Sukhrania and others7.
16. In the light of the above submissions by learned
counsels appearing for both the sides, the points that arise
for consideration are:
(i) Whether the pillion rider was covered under the
policy issued at Ex.R1 and in view of the conditions
contained in Ex.R2?
1998 ACJ 531
AIR 2003 SC 1446
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(ii) Whether the petitioners are entitled for
enhancement of the compensation?
17. The fact that there was an accident involving a
motor cycle owned by respondent No.1 (before the Tribunal)
and the deceased who was a pillion rider on the said motor
cycle is not in dispute. So also the fact that the respondent
No.2-Insurance Company had insured the said vehicle
owned by respondent No.1 under the policy issued as per
Ex.R1 is also not in dispute. Obviously, the accident occurred
due to the negligence on the part of respondent No.1, who
was the rider of the motor cycle at the time of the accident
and no other vehicle was involved in the accident.
Therefore, the material question that is to be determined is,
whether the pillion rider is covered under the policy issued
under Ex.R1 or not?
18. A perusal of Ex.R1 discloses that, it is an 'Act only
policy' and the premium of Rs.300/- was recovered in
respect of third party basic even though the minimum
premium was Rs.100/-. Compulsory personal accident to
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owner-cum- driver was also covered with an additional
premium of Rs.50/-. However, the cover for the owner- cum
-driver was limited to Rs.1,00,000/-. It is worth to note that
nowhere, there is any mention that the pillion rider or the
occupant is also covered under the policy. However, it is
mentioned that the seating capacity of the vehicle is '1 + 1',
on the bases of which the Tribunal had fastened the liability
on the Insurance Company.
19. Ex.R2 contains an avoidance clause, wherein, it is
stated as below:
" Nothing in this policy or any endorsement herein
shall affect the right of any person indemnified by
this policy or any other person to recover an amount
under or by virtue of the provisions of the Motor
Vehicles Act. But the Insured shall repay to the
Company all sums paid by the Company which the
Company would not have been liable to pay but for
the said provisions.."
20. The learned counsel appearing for the appellant-
Insurance Company has placed reliance on the decision in
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the case of T.V. Jose (Dr.) Vs. V. Chacko P.M.,8 wherein,
it was held in para 19 as below:
"19. In this case only the first sheet of the policy
is on record. This clearly shows that the policy is a
third-party policy. The terms and conditions
governing this policy are not on record. What was
shown to the Court were terms and conditions of a
comprehensive policy relating to private cars. These
cannot apply to this policy. In the absence of terms
and conditions governing this policy it is not possible
to accept the submission of Mr Iyer that this policy
covered liability to occupants of the car. As has been
set out hereinabove, the law on this subject is clear,
a third-party policy does not cover liability to
gratuitous passengers who are not carried for hire
or reward. The 8th respondent Company will,
therefore, not be liable to reimburse the appellant."
21. Then he relied on the decision in the case of
Oriental Insurance Company Limited Vs. Sudhakaran
K.V9., where, by relying on an earlier decision in the case of
United India Insurance Company Limited Vs. Thilak
Singh10 the Apex Court has held as below:
"16. Indisputably, a distinction has to be made
between a contract of insurance in regard to a third
party and the owner or the driver of the vehicle.
(2001) 8 SCC 748
(2008) 7 SCC 428
(2006) 4 SCC 404
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17. This Court in a catena of decisions has
categorically held that a gratuitous passenger in a
goods carriage would not be covered by a contract of
insurance entered into by and between the insurer
and the owner of the vehicle in terms of Section 147
of the Act. (See New India Assurance Co.
Ltd. v. Asha Rani [(2003) 2 SCC 223 : 2003 SCC
(Cri) 493] .)
18. A Division Bench of this Court in United India
Insurance Co. Ltd. v. Tilak Singh extended the said
principle to all other categories of vehicles also,
stating as under :
"21. In our view, although the observations
made in Asha Rani case 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."
22. Thus, in view of the authoritative decision in the
case of Sudhakaran K.V., it was made clear that the
occupants of the vehicle cannot be the 'third party'. The
gratuitous passengers are held to be the occupants and
obviously, 'An Act Policy' would not cover their risk.
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23. In the case of Amrit Lal Sood and another vs.
Kaushalya Devi Tapar and others referred supra which
was relied by both the sides, it was observed in para 4, 5
and 13 as below:
"4. The liability of the insurer in this case
depends on the terms of the contract between the
insured and the insurer as evident from the policy.
Section 94 of the Motor Vehicles Act, 1939 compels
the owner of a motor vehicle to insure the vehicle in
compliance with the requirements of Chapter VIII of
the Act. Section 95 of the Act provides that a policy
of insurance must be one which insures the person
against any liability which may be incurred by him in
respect of death or bodily injury to any person or
damage to any property of third party caused by or
arising out of the use of the vehicle in a public
place. The section does not however require a policy
to cover the risk to passengers who are not carried
for hire or reward. The statutory insurance does not
cover injury suffered by occupants of the vehicle
who are not carried for hire or reward and the
insurer cannot be held liable under 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.
In such cases where the policy is not merely a
statutory policy, the terms of the policy have to be
considered to determine the liability of the insurer.
5. In the present case, the policy is admittedly a
"comprehensive policy". "Comprehensive insurance"
has been defined in Black's Law Dictionary, 5th Edn.
as "All-risk insurance" which in turn is defined as
follows:
"Type of insurance policy which ordinarily
covers every loss that may happen, except
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by fraudulent acts of the insured.
(Miller v. Boston Ins. Co. [218 A 2d 275, 278
: 420 Pa 566] ) Type of policy which protects
against all risks and perils except those
specifically enumerated."
Xxx
Xxx
Xxx
13. In the policy in the present case also, there
is a clause under the heading: "AVOIDANCE OF CERTAIN
TERMS AND RIGHT OF RECOVERY" which reads thus:
"Nothing in this policy or any
endorsement hereon shall affect the right of
any person indemnified by this policy or any
other person to recover an amount under or
by virtue of the provisions of the Motor
Vehicles Act, 1939, Section 96. But the
insured shall repay to the Company all sums
paid by the Company which the Company
would not have been liable to pay but for the
said provisions."
24. An obvious conflict that was perceived by another
Bench of the Apex Court resulted in referring the matter to a
Larger Bench in the case of New India Assurance
Company Limited vs. C.M. Jaya and others referred
supra. In the said case, it was observed that there was no
such conflict between the two decisions and the cases were
distinguished on the facts. It was observed in para 8 as
below:
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"8. In the light of what is stated above, we do not
find any conflict on the question raised in the order
of reference between the decisions of two Benches of
three learned Judges in Shanti Bai, 1995 ACJ 470
(SC) and Amrit Lal Sood, 1998 ACJ 531 (SC),
aforementioned and, on the other hand, there is
consistency on the point that in case of an insurance
policy not taking any higher liability by accepting a
higher premium, the liability of the insurance
company is neither unlimited nor higher than the
statutory liability fixed under Section 95(2) of the
Act. In Amrit Lal Sood's case, the decision in Shanti
bai is not noticed. However, both these decisions
refer to the case of Jugal Kishore and no contrary
view is expressed."
Obviously, dispute was in respect of the limits of the
liability in a comprehensive policy. It was observed that in
Shanti Bai's case, comprehensive policy is also subject to the
limit as contained in the policy and it is not unlimited.
Obviously, the above decisions do not answer the question
involved in the present case.
25. A decision of the Division Bench of this Court in
the case of Branch Manager, New India Assurance
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Company Limited vs. Mahadev Pandurang Patil11
clarifies the position. In the said decision, this Court had
considered the decisions in the case of Satpal Singh, Asha
Rani, Thilak Singh and others, Dr. T.V. Jose Vs. Chacko and
Sudhakaran K.V., referred supra and ultimately in para 14,
15, 16 and 17 held as below:
"14. From the scheme of Chapter XI, the
statutory insurance which is made mandatory is
only to protect the interest of third parties. Section
146 deals with the necessity for insurance against
third party risks. Section 147 deals with the
requirements of policies and limits of liability. 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. Section 2(35) of the Act defines what
a public service vehicle means, i.e., any motor
vehicle used or adopted to be used for the carriage
of passengers for liire or reward and includes a maxi
cab, a motor cab, contract carriage and stage
carriage. 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 however the
liability in so far as they are concerned is limited to
the liability under the Workmen's Compensation Act.
ILR 2011 KARNATAKA 850
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It does not speak of any passenger in a 'goods
carriage'. Therefore, it is clear the statutory
insurance is confined to the death 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.
15. Therefore, the passenger of a vehicle which
is not meant for public service is not covered under
this Section. The said passenger in the case of a two
wheeler is the pillion rider and in the case of three
wheeler and four wheeler the occupants of such
vehicle who are not carried in the said vehicle for
hire or reward. Therefore, the insurance policy taken
in respect of a vehicle, in which they are travelling
as such passengers are not treated as third parties
and such an insurance do not cover the risk of such
persons. The reason is Section 147 does not require
a policy to cover the risk to passengers who are not
carried for hire or reward. The statutory insurance
does not cover injuries suffered by occupants of the
vehicle who are not carried for hire or reward and
the insurer cannot be held liable under the Act. The
occupants/passengers/inmates of a private vehicle
do not fall within the definition of the word third
party. Therefore, the legal obligation arising under
Section 147 of the Act cannot be extended to an
injury or death of the owner of the vehicle,
passengers in such private vehicle or a pillion rider
in the case of a two wheeler. Gratuitous passengers
who are not carried for hire or reward in a vehicle
other than a public service vehicle, cannot be
construed as third parties.
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
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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 146 only.
17. In view of the authoritative pronouncement
of the Apex Court holding that an
occupant/inmate/passenger in a private car, is not a
third party, the finding recorded by the tribunal that
the insurance policy issued covers the risk of such
persons and therefore the insurance company is
liable to pay compensation amount is illegal and
contrary to the law declared by the Apex Court. In
fact, in the policy, no additional premium is received
by the insurance company to cover the risk of such
persons. It is clear from the terminology used in the
policy which fact is not in dispute. In one of the
cases, additional premium is collected to loading the
risk of third party only, as is clear from the policy
that loading was not meant to cover risk of inmates
of a private car and therefore, merely because an
additional premium is collected under the said
policy, it cannot be inferred that the risk of inmates
of a car are covered. The words are specific that the
loading is done in order to cover only third party
risk, it is not a case of additional premium being
collected to cover the risk of inmates along with
third parties. Therefore, in the facts of this case, we
are satisfied, as the insured has not paid additional
premium and the insurance company has not
collected any additional premium, the risk of the
occupants of a private car was not covered.
Therefore, liability foisted on the insurance company
cannot be sustained and accordingly, it is hereby set
aside.
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26. So also the decision in the case of Rikhi Ram and
another Vs. Smt. Sukhrania and others12 also lays down
that, the compulsory insurance contemplated under statute
only covers third party risk. There cannot be any dispute in
respect of above proposition of law. Obviously, the intent of
the enactment is to protect the interest of the third party.
The decisions in the case of Thilak Singh, Sudhakaran K.V.
and other subsequent decisions lay down that the occupants
of the car or the pillion rider cannot be covered under the
definition of the 'Third party'. This aspect was clarified by the
decision in the case of New India Assurance Company
Limited Vs. Asha Rani others13 also by referring to the
position of a gratuitous passenger. Therefore, it is evident
from the authoritative decisions that the risk of the pillion
rider was not covered under the 'Act only policy'.
27. It is pertinent to note that the decision in the case
of New India Assurance Company Limited Vs. C.M.
AIR 2003 SC 1446
(2003) 2 SCC 223
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Jaya has not overruled the earlier decision in the case of
Amrit Lal Sood Vs. Kaushalya Devi Thapar or New India
Assurance Company Limited Vs. Shanti Bai. It was a case
wherein the extent of the liability of the Insurance Company
was in question and while answering the same, it was held
that the Insurance Company can cover the higher risk by
accepting additional premium. Under these circumstances,
it is clear that the deceased was pillion rider and no extra
premium was collected for the occupant of the vehicle other
than the driver and therefore, the risk of the pillion rider was
not at all covered under the policy. Under these
circumstances, it is evident that the Tribunal had erred by
holding that the policy mentioned about the seating capacity
of 1+1 and that itself would be the coverage of the policy.
Under these circumstances, the finding of the Tribunal that
the liability has to be fastened upon respondent No.2-
Insurance Company is not sustainable under law.
28. Coming to the question as to the pay and recover,
it is relevant to note that the avoidance clause referred
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supra, is concerning the person indemnified by the policy or
any other person to recover an amount under or by virtue of
the provisions of the Motor Vehicles Act. In the case on
hand, the petitioners are not the persons covered under the
Motor Vehicles Act, as the decisions referred supra clearly
and categorically lay down that the pillion rider being the
gratuitous passenger is not a third party. Therefore, the said
clause is not at all applicable to the case on hand. Hence,
the contention of pay and recover is also not maintainable.
29. There is absolutely no argument is canvassed in
respect of the quantum of the compensation. The Tribunal
has considered the fact that the deceased was a bachelor
and therefore, it has deducted 1/3rd towards the personal
expenses of the deceased. Obviously, the said calculation is
in conformity with the Constitution Bench decision of the
Apex Court in the case of National Insurance Company
Limited vs. Pranay Sethi and others14. While coming to
such conclusion, it has considered the notional income at
Rs.4,500/- per month. No arguments are canvassed in this
AIR 2917 SC 5157
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aspect and therefore, no interference or reassessment is
required in same. Under these circumstances, the appeal
filed by the Insurance Company deserves to be allowed and
the appeal filed by the petitioners/claimants deserves to be
dismissed. Hence, the following:
ORDER
(i) The appeal filed by the appellant/Insurance
Company in MFA No.174/2018 is allowed and the liability
fastened upon the appellant/respondent No.2-Insurance
Company is hereby absolved. The petition as against
respondent No.2-Insurance Company stands dismissed.
(ii) Respondent No.1- owner of the offending vehicle is
liable to pay the compensation as determined by the
Tribunal to the petitioners.
(iii) The appeal filed by the petitioners in MFA
No.6621/2018 is dismissed.
(iv) The rest of the order of the Tribunal regarding
apportionment and fixed deposit remain unaltered.
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(v) The amount in deposit in MFA No.174/2018 is
ordered to be refunded to the Insurance Company on proper
identification.
Sd/-
JUDGE
tsn*
