National Insurance Co. Ltd vs Ummalimma(*Deceased,Lr'S Recorded)
2025 Latest Caselaw 400 Ker

Kerala High Court

National Insurance Co. Ltd vs Ummalimma(*Deceased,Lr'S Recorded) on 1 July, 2025

                                                       2025:KER:47369
MACA No.1640/2011
                                     ..1..

               IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                PRESENT

            THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN

         TUESDAY, THE 1ST DAY OF JULY 2025 / 10TH ASHADHA, 1947

                         MACA NO. 1640 OF 2011

APPELLANT/3RD RESPONDENT:

             NATIONAL INSURANCE CO. LTD.
             KASARAGOD, REP. BY THE MANAGER, KOCHI REGIONAL OFFICE,
             M.G.ROAD, ERNAKULAM, COCHIN - 35


             BY ADV SRI.E.M.JOSEPH


RESPONDENTS/CLAIMANTS & RESPONDENTS 1&2:

     1       UMMALIMMA               (DECEASED,LR'S RECORDED)
             AGED 52, W/O. U.N.IBRAHIM HAJI, UDDAM HOUSE, NEKRAJE
             VILLAGE AND POST, NEKRAJE - 671544, KASARAGOD TALUK AND
             DISTRICT.

     2       ABDUL KHADER;
             AGED 39, S/O. U.N.IBRAHIM HAJI, UDDAM HOUSE, NEKRAJE
             VILLAGE AND POST, NEKRAJE - 671544, KASARAGOD TALUK AND
             DISTRICT

     3       ABDUL MAJEED;
             AGED 33, S/O.U.N.IBRAHIM HAJI, UDDAM HOUSE, NEKRAJE
             VILLAGE AND POST, NEKRAJE - 671544, KASARAGOD TALUK AND
             DISTRICT

     4       ABDUL BASHEER;
             AGED 30, S/O.U.N.IBRAHIM HAJI, UDDAM HOUSE, NEKRAJE
             VILLAGE AND POST, NEKRAJE - 671544, KASARAGOD TALUK AND
             DISTRICT

     5       SUBAIDA;
             AGED 28, D/O.U.N.IBRAHIM HAJI, UDDAM HOUSE, NEKRAJE
                                                       2025:KER:47369
MACA No.1640/2011
                                 ..2..

            VILLAGE AND POST, NEKRAJE - 671544, KASARAGOD TALUK AND
            DISTRICT

     6      MOHAMMED RAFEEQ;
            AGED 26, S/O.U.N.IBRAHIM HAJI, UDDAM HOUSE, NEKRAJE
            VILLAGE AND POST, NEKRAJE - 671544, KASARAGOD TALUK AND
            DISTRICT

     7      ABDUL MUNEER;
            AGED 25, S/O.U.N.IBRAHIM HAJI, UDDAM HOUSE, NEKRAJE
            VILLAGE AND POST, NEKRAJE - 671544, KASARAGOD TALUK AND
            DISTRICT

     8      MOHAMMED KALANDER;
            AGED 23, S/O.U.N.IBRAHIM HAJI, UDDAM HOUSE, NEKRAJE
            VILLAGE AND POST, NEKRAJE - 671544, KASARAGOD TALUK AND
            DISTRICT

     9      ABDUL LATHIEF;
            S/O.U.N.IBRAHIM HAJI, UDDAM HOUSE, NEKRAJE VILLAGE AND
            POST, NEKRAJE - 671544, KASARAGOD TALUK AND DISTRICT

     0      MOHAMMED B
            S/O.ABDULLA, TALIPADUPPU HOUSE, KIDIJA, BANTWAL
            DISTRICT KARNATAKA, SOUTH CANARA (MANGALORE)

            (RESPONDENTS 2 TO 9 ARE RECORDED AS THE LEGAL
            REPRESENTATIVES OF DECEASED R1 VIDE ORDER DATED
            29/11/2023 IN MACA 1640/2011)



     THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING COME UP FOR HEARING
ON 02.06.2025, THE COURT ON 01.07.2025 DELIVERED THE FOLLOWING:
                                                           2025:KER:47369
MACA No.1640/2011
                                   ..3..




                               JUDGMENT

This appeal has been filed by the third respondent insurer in

OP(MV) No.463 of 2008 on the file of the Motor Accidents Claims

Tribunal, Kasaragod, challenging the liability to pay compensation

awarded to the claimants for the death of the deceased Ibrahim Haji.

The respondents 1 to 8 herein were the claimants; and respondents 9 &

10 herein were the respondents 1 & 2 before the tribunal.

2. The case of the claimants was that on 13.07.2008,

while the deceased along with his family members was travelling in a

car bearing Reg.No.KA-12N-9927 driven by the first respondent in a

rash and negligent manner, the car overturned twice or thrice, whereby

the deceased sustained fatal injuries and succumbed to the injuries on

the way to hospital. The claimants, being the legal heirs of the

deceased, approached the tribunal claiming a total compensation of

₹2,50,000/-.

3. Respondents 1 and 2, the driver and owner of the

offending vehicle respectively, remained ex parte before the tribunal.

The third respondent insurer filed a written statement, admitting the

policy coverage for the offending vehicle, but disputing the liability and 2025:KER:47369

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quantum of compensation claimed. Before the tribunal, PW1 was

examined and Exts.A1 and A2 were marked on the side of the claimants,

and Ext.B1 was marked on the side of the respondent insurer. The

tribunal, after analysing the pleadings and materials on record, held

that the accident took place on account of the negligence of the driver

of the offending vehicle and awarded a sum of ₹1,29,500/- as

compensation under different heads with interest @ 8% per annum from

the date of petition till realization against the third respondent being

the insurer. The respondent insurer has come up in appeal, challenging

its liability to pay compensation.

4. Heard the learned Standing Counsel for the

appellant/insurer and the learned counsel for the respondents 1-

8/claimants.

5. The claimants are the wife and children of the

deceased Ibrahim Haji. The driver of the offending car was the son of

the deceased.

6. The learned Standing Counsel for the insurer

submitted that before the tribunal, a specific contention was taken that

Ext.B1 policy was an "act only" policy and the deceased, being a

gratuitous passenger in the car, was not covered by the policy and the 2025:KER:47369

..5..

insurer is not liable to pay any compensation. The tribunal, however,

found that though the policy was an "act only" policy, the deceased, who

was a gratuitous passenger, was a third party, and accordingly, granted

compensation to the claimants against the insurer. The learned

Standing Counsel for the insurer relied on a catena of decisions such as,

United India Insurance Co. Ltd. v. Tilak Singh [2006 (2) KLT 884 (SC)],

National Insurance Co. Ltd. v. Balakrishnan & Another [(2013) 1 SCC

731], National Insurance Co. Ltd. v. Parvathneni & Another [2009) 8 SCC

785], Oriental Insurance Co. Ltd. v. Sudhakaran [2008 (2) KLT 936 (SC)]

and New India Assurance Co. Ltd. v. Daisy Paul & Another [2021 (2) KHC

449], and argued that since the policy is "act only" policy, there is no

liability for the insurer to indemnify the insured and to pay

compensation to the legal heirs of the deceased.

7. Per contra, the learned counsel for the claimants/legal

heirs of the deceased submitted that since there was a valid policy in

respect of the offending vehicle, the insurer is liable to pay

compensation and then to recover the amount from the owner of the

offending vehicle. To substantiate the said contention, the learned

counsel relied on the judgments of the apex court in National Insurance

Co. Ltd. v. Saju P. Paul & Another [2013 KHC 4013] and Manuara Khatun

and others v. Rajesh Kr. Singh and others [2017 KHC 6151].

2025:KER:47369

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8. The question to be considered is whether any liability

can be thrust upon the insurer to pay compensation to gratuitous

passengers in a private car if the policy issued is an "act only" policy.

9. A perusal of Ext.B1 policy shows that it is an "act only"

policy. Admittedly, the deceased was a passenger in the car driven by

his son. While the deceased along with his family members was

travelling in the car, it overturned resulting in the death of the

deceased. The claim petition was filed under Section 163A of the Motor

Vehicles Act, 1988. Under Section 163A, the liability of the insurer is

only to third parties. It is a settled position that an "act only" policy does

not cover gratuitous passengers in a vehicle, if no additional premium is

paid. In Daisy Paul (supra), this Court elaborately considered the

judgments of the apex court in New India Assurance Co. Ltd. v. Asha

Rani [2003 KHC 22], Jagdev Singh v. Sanjeev Kumar & others [2018 KHC

7138], Tilak Singh (supra) and Saju P. Paul (supra), and found that if the

policy is "act only" policy and no additional premium is paid to cover the

passengers of the vehicle, the policy will not cover the gratuitous

passengers in the said vehicle and the insurer is not liable to pay

compensation.

10. In Balu Krishna Chavan v. Reliance General Insurance 2025:KER:47369

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Co. Ltd. [2023 KHC 5347], the apex court settled the legal position that

if the insurer is not liable to pay compensation, then, there shall not be

a direction to 'pay and recover'. It was further held that on the legal

aspect, it is clear that in all cases, such order of 'pay and recover' would

not arise when the insurance company is not liable but would, in the

facts and circumstances, be considered by this Court to meet the ends

of justice. Thus, the legal principle has been settled by the apex court

that when the insurer is not liable, the order of 'pay and recover' does

not arise. However, in Balu Krishna Chavan (supra), the apex court has

directed the insurer to pay the amount and then recover the same from

the insured, making it clear as follows:

"Therefore, keeping all aspects in view, and not making this case a precedent, but only to serve the ends of justice in the facts of this case..."

11. Therefore, it is clear that in an "act only" policy, the

insurer is liable to pay compensation only to third parties and not to

gratuitous passengers in a vehicle. In this case, admittedly, no

additional premium is paid for the passengers in the car. Hence, I find

that since the insurer is not liable to pay the amount awarded, the policy

being an "act only" policy, the finding of the tribunal that the deceased

was a third party is erroneous. The direction of the tribunal to the 2025:KER:47369

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insurer to pay compensation is legally unsustainable and is liable to be

set aside.

Accordingly, the appeal is allowed. The impugned order of the

tribunal, directing the insurer to pay compensation to the claimants is

set aside.

Sd/-

SHOBA ANNAMMA EAPEN JUDGE

bka/-