The Oriental Insurance Co.Ltd vs V.Thilakan
2021 Latest Caselaw 14580 Ker

             IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                 PRESENT
             THE HONOURABLE MR. JUSTICE A. BADHARUDEEN
     WEDNESDAY, THE 14TH DAY OF JULY 2021 / 23RD ASHADHA, 1943
                       MACA NO. 1999 OF 2013
    AGAINST THE AWARD IN OPMV 349/2007 OF MOTOR ACCIDENT CLAIMS
                           TRIBUNAL, ALAPPUZHA
APPELLANT:2ND RESPONDENT

           THE ORIENTAL INSURANCE CO.LTD
           ALAPPUZHA REPRESENTED BY THE AUTHORISED SIGNATORY, THE
           ORIENTAL INSURANCE CO. LTD., REGIONAL OFFICE,
           ERNAKULAM, METRO PALACE, ERNAKUJLAM NORTH, KOCHI-18

           BY ADV SRI.A.R.GEORGE



RESPONDENTS:CLAIMANT & 1ST RESPONDENT

    1      V.THILAKAN
           S/O VASU, CHIRAYIL VEETIL, MANNANCHERRY PO.,
           MANNANCHERRY GRAMA PANCHAYAT WARD NO.17, ALAPPUZHA
           DISTRICT-688538.

    2      BHUVANENDRAN TJ.
           THEKKECHIRAYIL HOUSE, MANNANCHERRY PO., MANNANCHERRY
           GRAMA PANCHAYAT WARD NO.18, ALAPPUZHA DISTRICT-688538.

           BY ADVS.
           SRI.A.T.ANILKUMAR
           SMT.V.SHYLAJA




     THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD
ON 29.06.2021, THE COURT ON 14.07.2021 DELIVERED THE FOLLOWING:
 MACA No.1999 OF 2013                          2




                                                                       "C.R"

                                  A.BADHARUDEEN, J.
                          ----------------------------------------
                              M.A.C.A No.1999 of 2013
                       ---------------------------------------------
                        Dated this the 14th day of July, 2021

                                 JUDGMENT

The 2nd respondent/insurance company before the Tribunal, who indemni-

fied the original 1st respondent who is the owner of the vehicle viz. scooter bear-

ing Reg.No.KL-04/D-6454, has preferred this appeal challenging the award dat-

ed 12.01.2012 in O.P(MV) No.349 of 2007 of the Motor Accident Claims Tri-

bunal, Alappuzha.

2. The respondents herein are the original petitioner as well as the 1 st

respondent.

3. The brief facts of the case :

The 1st respondent/petitioner, who was aged 43 years at the time of acci-

dent, claiming to be Proprietor-cum-Worker of a mobile tea shop at Kottayam

earning monthly income of Rs.5,000/- u/s 166 of the MV Act, 1988 (as amended

1994) and r/w Rule 371 of the KMV Rules 1989, had filed the original petition

for grant of compensation of Rs.1,50,000/- for the injuries sustained by him in

the Road Traffic Accident that occurred on 18.07.05 at about 6.15 a.m at the

north of KPMUP School on Alappuzha-Thaneermukkom road while he was

travelling as the pillion on the scooter bearing Reg.No.KL-04/D-6454 insured

with second respondent owned and driven by the 1 st respondent from south to

north in a rash and negligent manner taking a sudden deep turn towards left side

causing the petitioner forcibly to fall down on the road.

4. The Tribunal adjudicated the claim based on evidence and finally

granted Rs.31,350/- with interest @ 7.5% per annum, with direction to pay the

same by the insurer/appellant insurer.

5. The specific contention raised by the appellant/insurance company

is that the policy issued in relation to the vehicle bearing Reg.No.KL-04/D-6454

involved in the accident does not have valid policy to cover risk of a pillion

rider. The learned counsel for the appellant/2 nd respondent zealously argued

that Ext.B1 policy admittedly issued by the insurance company in favour of

the owner of the vehicle is a `statutory policy' covering the risk of third parties

alone. But the Tribunal negatived the contention mainly relying on the fact that

Rs.16/- was collected under the head "extra loading'. The learned counsel for

the appellant/insurance company submitted further that the Tribunal misunder-

stood collection of Rs.16/- under the head `extra loading' as premium to cover

risk of a pillion rider.

6. The learned counsel for the 2nd respondent herein/1st respondent in

O.P(MV) as well as the 1st respondent herein/the petitioner in O.P(MV) support-

ed the verdict of the Tribunal. However, they failed to substantiate entitlement

of compensation under Ext.B1 policy.

7. In this context, 2 questions are, in fact, required to be answered;

(i) whether liability only policy issued by the insurer would cover the risk of a

pillion rider? & (ii) what is meant by `extra loading' stated in Ext.B1 policy?

8. While answering the first question, I am inclined to rely on decision

reported in United India Insurance Co. Ltd. v. Tilak Singh [2006 (2) KLT 884

(SC)] which was highlighted by the learned counsel for the insurance company.

In this decision, the Honourable Supreme Court held that the insurance company

owed no liability towards the injuries suffered by a pillion rider, as the insurance

policy was a statutory one. In another decision of this Court reported in Mathew

Joseph v. Janaki [2007(1) KHC 521], also it was held that gratuitous passen-

gers in transport vehicles including a motor cycle, can have coverage only

when a comprehensive policy or extended policy as might be possible to be is-

sued, has been availed of by the owner of the vehicle. In fact, all the above deci-

sions followed the ratio of the three Bench decision reported in New India As-

surance Co.Ltd. v. Asha Rani & Ors. [2003(1) KLT 165 (SC)].

9. In the decision reported in Francis K.T v. Sabu Augustine

and anr. [2015 (5) KHC 320] a Division Bench of this Court held that compre-

hensive policy only would cover the risk of a pillion rider. This legal position

has been reiterated in the decision reported in Oriental Insurance Co. Ltd. v.

Sudhakaran [2008 (2) KLT 936] by the Hon'ble Supreme Court.

10. Here, as I have already pointed out, the policy marked as Ext.B1 un-

doubtedly is a `liability only policy' otherwise known as `Act only Policy' or

`statutory policy', covering the risk of third parties alone.

11. Coming to the second question, in fact, collection of amount under

the head "extra loading" by the insurance company while issuing policies in-

clusive of statutory policies, created confusion. Therefore, what is meant by

`extra loading' in the insurance law is a matter which requires explanation.

Loading, according to insurers, is an additional cost built into the insurance pol-

icy to cover the losses, which are higher than anticipated for the company arising

from issue, ensuring a person who is prone to a formal risk. Loading as a con-

cept, thus comes into play when an insurance company is dealt with has-

sled candidates and is resorted to by insurance companies in cases where the

risk to the individual is higher than the ordinary circumstances. In this connec-

tion I have perused the circular dated 22.04.2006 issued by the IRDA wherein it

was stated that insurers may `load' the insurers' assessment. If the experience

continues to be bad, then a further loading of 100% on the expiring premium can

be charged. Insurers may not `load' the premium further. Going by the defi-

nition of `extra loading' as explained above, Rs.16/- collected under the head

`extra loading' could not be held as premium collected in addition to cover the

risk of third parties; viz. pillion rider and it might have been collected to com-

pensate the extra amount paid during the previous policy. Therefore, I have no

hesitation to hold that Ext.B1 policy would not cover the risk of the 1 st respon-

dent/the petitioner in O.P(MV) and therefore the Tribunal went wrong in

negativing the contentions raised by the insurance company. Therefore, the Tri-

bunal is not justified in holding that Ext.B1 would cover the premium of pil-

lion riders also, as Rs.16/- under the head `extra loading' was collected in addi-

tion to the premium amount for third party risk.

12. In a recent decision reported in New India Assurance Company

Ltd. v. Daisy Paul and anr. [ILR 2021 (2) KLT Kerala 346], a single Bench of

this Court after analysing various decisions on this point also expressed the

same view. It has been held there in that a `limited liability policy' or a `statuto-

ry policy' only covers death or bodily injury of a third party falling within the

purview of Section 147 of the Act. In such cases, the Insurer is not liable to

compensate a `gratuitous passenger' not covered by the policy.

13. To sum up, I am inclined to interfere with the award under chal-

lenge.

14. In the result:

(i) This appeal is allowed and the appellant/2nd respondent is exonerat-

ed from the liability to meet the award amount. Consequently, the amount of

compensation fixed by the Tribunal as per the award shall be paid by the owner

of the vehicle, who is the 1st respondent before the Tribunal.

(ii) The amount, if any, either deposited or paid by the appellant, shall be

reimbursed to the appellant as per law. The appellant is allowed to proceed

accordingly.

(iii) No order as to costs.

Sd/-

(A.BADHARUDEEN, JUDGE)

rtr/