[Cites 5, Cited by 0]
Madhya Pradesh High Court
New India Assurance Company Ltd. vs Smt. Trivedi Bai on 15 December, 2025
NEUTRAL CITATION NO. 2025:MPHC-JBP:67646
1 MA-3137-2012
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE PRADEEP MITTAL
ON THE 15th OF DECEMBER, 2025
MISC. APPEAL No. 3137 of 2012
NEW INDIA ASSURANCE COMPANY LTD.
Versus
SMT. TRIVEDI BAI AND OTHERS
Appearance:
Shri K.K.Singh - Advocate for appellant.
ORDER
The appellant / Insurance Company has preferred the present appeal
under Section 174(1) of the Motor Vehicles Act, 1988 against the award
dated 03.09.2012 passed in MACT No. 08/2012 by the Member, First
Additional Claims Tribunal, Bhopal, whereby the liability fastened to the
respondent / appellant to pay compensation of Rs. 4,70,800/- to the
claimants.
2. The facts relating to the occurrence of the accident, the time of incident,
and the death of the deceased during the course of treatment are not in
dispute. Learned counsel for the appellant submits that the appellant /
Insurance Company has been wrongly fastened with liability to pay
compensation, contending that the premium paid by the insured did not cover
the risk of a passenger, namely the deceased Ram Kishore Vishwakarma,
who was traveling in the jeep at the time of the accident. On this ground, it is
argued that the Insurance Company is not liable to indemnify the award.
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Reliance has been placed upon the judgment of the Hon'ble Supreme Court
in United India Insurance Co. Ltd., Shimla vs. Tilak Singh & Others,
reported in AIR 2006 SC 1578.
3. It is admitted that Policy No. 45200131090200205116 was an Act Policy,
which commenced on 12.03.2010 and expired on 11.03.2011. The Tribunal
recorded a finding that vehicle No. MP-18-D-0326 was being driven by
Respondent No. 1 and that the deceased was travelling in the offending
vehicle. The Tribunal further held that the passenger travelling in the vehicle
was covered as a third party under the Act Policy, which finding is under
challenge in the present appeal.
4. The Tribunal, in paragraph 13, recorded an absurd finding that at the
relevant time the deceased was covered as a third party because he was not a
driver of the offending vehicle.
5. It has further been found that Tribunal held that the vehicle was not being
used in violation of the terms and conditions of the insurance policy, nor was
it being driven for any prohibited or unauthorized purpose at the relevant
time. That finding is also not relevant to decide the liability of Insurance
Company. Main controversy was that whether the passenger is covered as a
third party in act policy?
6. Tribunal has also recorded the finding there is no evidence on record to
establish that the deceased was a gratuitous passenger. The Insurance
Company has failed to discharge its burden of proving that the deceased was
traveling in the vehicle in contravention of the policy conditions. That
finding is also contrary of evidence because evidence is available that
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deceased was travelled in the jeep, therefore he was a gracious passenger in
the jeep and policy was only act policy not comprehensive.
7. Counsel for the appellant argued that under an 'Act Only Policy' for a
private car, occupants are not considered 'third parties' as defined under the
Motor Vehicles Act, 1988 (the Act). He relied on Supreme Court judgments,
including NIC vs. Balakrishnan and Oriental Ins.Co.Ltd. v/s Meena
Variyal, to support their contention that Chapter XI of the Act provides
protection only against third-party risks. The vehicle was a private Jeep
insured under an 'Act Only Policy. The Supreme Court's distinction between
'Act Only policy' and 'Comprehensive / package policy' in National
Insurance Co. Ltd. v. Balakrishnan . This judgment clarified that while
comprehensive policies cover occupants; 'Act Policy' does not cover the
third-party risk of an occupant in a car. In United India Insurance Co. Ltd. v.
Tilak Singh , where the Supreme Court extended the principle from New
India Assurance Co. Ltd. v. Asha Rani (regarding passengers in goods
vehicles) to gratuitous passengers in any other vehicle, holding that statutory
policies do not cover such risk. There is no statutory requirement to cover the
risk of occupants in a private car under an 'Act Only Policy', and that the
deceased in such a case cannot be termed a third party.
8. In view of the aforesaid facts and the settled principles of law, the
contention raised by the appellant/Insurance Company has merit. The
Tribunal failed to consider the settled position of law; therefore, the liability
fastened upon the Insurance Company is bad in law. The Insurance
Company is not liable to indemnify the award.
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9. Accordingly, the appeal is allowed , and the Insurance Company is
exonerated from the liability to indemnify the award.
(PRADEEP MITTAL)
JUDGE
Praveen
