Madras High Court

The New India Assurance Co. Ltd vs S.Pushpa on 11 September, 2024

Author: R.Hemalatha

Bench: R. Hemalatha

                                                                                   CMA.No.220 of 2024


                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                  DATED:11.09.2024

                                                       CORAM:

                                  THE HONOURABLE MRS.JUSTICE R. HEMALATHA

                                               C.M.A.No.220 of 2024 and
                                                C.M.P.No.2259 of 2024

                     The New India Assurance Co. Ltd.,
                     City Branch 1090,
                     Poonamallee High Road,
                     Periyamet, Chennai 600 084.                                   ... Appellant

                                                            vs.
                     1. S.Pushpa
                     2. P.Subramani @ Subramaniyam
                     3. R.Manivannan                                              ... Respondents

                     PRAYER: Civil Miscellaneous Appeal filed under Section 173 of the
                     Motor Vehicles Act, 1988 against the Award dated 15.12.2022 in
                     M.C.O.P.No.70/2017 on the file of the Motor Accident Claims Tribunal,
                     Subordinate Court, Attur.

                                            For Appellant    : Ms.A.Salomi

                                            For R1 and R2    : Mr.R.Nalliyappan


                                                   JUDGMENT

The appellant, the New India Assurance Company Limited is

the second respondent in M.C.O.P.70/2017. The respondents 1 and 2

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filed the claim petition under Section 166 of the Motor Vehicles Act,

seeking compensation of Rs.25,00,000/- for the death of their son

S.Gowtham in a road accident which happened on 14.01.2017.

2. The brief case of the claimants is as follows :

On 14.01.2017, S.Gowtham (deceased) was travelling as a

Pillion rider in a motor cycle bearing Registration number TN-77-D-4080

on Thedvavur - Krishnapuram road. When he was nearing National

School, Anaiyampatti at about 2.40 p.m., the rider of the two wheeler,

drove the vehicle rashly and negligently and hit a tamarind tree on the left

hand side of the road, as a result of which, S.Gowtham (deceased) fell

down and sustained grievous injuries all over his body. He was

immediately rushed to Government Hospital, Attur, from where he was

referred to Government Mohan Kumaramangalam Medical College

Hospital, Salem. However, he succumbed to injuries.

3. According to the claimants, the accident took place due to the

rash and negligent driving of the rider of the two wheeler and that since

the said vehicle was insured with the present appellant, the New India

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Assurance Company Limited, the owner and the insurer are jointly and

severally liable to pay compensation to her.

4. In the Tribunal, the owner of the vehicle remained absent and

was set exparte. The appellant, Insurance Company resisted the claim

petition on all grounds available to the insurer under Section 170 of the

Motor vehicles Act.

5. The Tribunal, after analysing the evidence on record

fastened negligence on the part of the rider of the two wheeler and

awarded compensation of Rs.9,40,320/- together with interest @ 7.5%

per annum from the date of petition till the date of realisation, vide its

orders dated 15.12.2022. Since the rider of the two wheeler did not have a

valid driving licence, the Tribunal fastened 20% of contributory

negligence on the part of the rider of the two wheeler.

6. Questioning the liability to pay compensation, the present

appeal is filed by the appellant, the New India Assurance Company

Limited.

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7. Heard Ms.A.Salomi, learned counsel for the appellant and

Mr.R.Nalliyappan, learned counsel appearing for the respondents 1 and 2.

8. Ms.A.Salomi, learned counsel for the appellant would

contend that since the Insurance Company had issued only an 'Act Policy',

the pillion rider of the two wheeler bearing Registration number TN-77-

D-4080 is not entitled to get any compensation from the appellant

Insurance Company. She also relied on the decision of the Division Bench

of this Court in M/s.New India Assurance Co. Ltd., Vrs Meenakshi and

others in CMA No.3658 of 2014, dated 24.03.2023 and contended that

the Act Policy cannot cover a third party risk of a pillion rider in a two

wheeler. She, therefore prayed for setting aside the order of the Tribunal.

9. A perusal of the FIR (Ex.P1) shows that the rider of the Two

wheeler bearing Registration number TN-77-D-4080 in which the present

claimant travelled as a pillion rider, was the wrong doer. It is pertinent to

point out that the Tribunal while deciding the claim petition under Motor

vehicles Act should examine the terms of Policy, produced by the Insurer

and in the event of denial of liability, a finding should be recorded with

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regard to the nature of Policy, as to whether it was 'Act Policy' or 'Package

Policy'.

10. In the instant case, the Tribunal has not given a definite

finding with regard to the liability of the Insurance company through such

a plea was taken.

11. Under the Indian Motor Tariff (IMT), different types of

policies are issued and they are contained in IMT section 7 (page 107 of

IMT). They are,

(a) Standard form for liability only policy.

(b) Standard form for private car package policy.

(d) Standard form for commercial vehicles package

policy.

(e) Standard form for motor trade package policy and the

like. Each policy is split into different sections to deal

with different contingencies and the parties bind

themselves to the terms of the clause contained in

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each section of the policy. For example, the package

policy for a private car which is applicable to the

present case contains:-

Section I Loss of or damage to the vehicle insured,

Section II Liability to third parties, Section III Personal

accident cover for owner-driver there are other conditions and

limits. In this appeal, we are concerned with the liability of the

insurance company in respect of a gratuitous

passengers/occupants in a private vehicle (car).

The first policy in Section 6 of IMT is liability only

policy or an act only policy. In that the liability to third parties

is set out as hereunder:-

LIABILITY TO THIRD PARTIES:

i] Subject to the Limit of liability as laid down in the

schedule hereto, the Company will indemnify the insured in the

event of accident caused by or arising out of the use of the

Motor Vehicle anywhere in India against all sums including

claimant's costs and expenses which the insured shall become

legally liable to pay in respect of death of or bodily injury to

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any person so far as it is necessary to meet the requirements of

the Motor Vehicles Act.

ii] damage to property other than property belonging

to the insured or held in trust or in the custody of control of the

insured up to the limit specified in the schedule (emphasis

supplied).

12. In the instant case, the specific contention of the insurance

company is that the Insurance Policy is an “Act policy” and therefore, the

same would not cover the pillion rider of the two-wheeler. A perusal of

the insurance policy (Ex.R1) clearly shows that it is only an Act policy.

Only a comprehensive/package policy would cover the liability of the

inmates of the car or a pillion rider in a scooter and hence the insurance

company is not liable to pay compensation.

13. In the decision in M/s.New India Assurance Co. Ltd., Vrs

Meenakshi and others in CMA No.3658 of 2014, dated 24.03.2023 the

Division bench of this Court had also held that the 'Act Policy' cannot

cover a third party risk of an inmates of the Car or a Pillion rider of a two

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wheeler. The relevant portion of the said decision as extracted hereunder:

"(32) In Bhagyalakshmi and Others V. United Insurance Company Limited and Another reported in 2009 [7] SCC 148, the Hon'ble Supreme Court noticed conflicting views on the question as to whether gratuitous passengers travelling in a private car or pillion riders carried on two wheelers are automatically covered under a package policy.

The Hon'ble Supreme Court opined that the matter requires consideration by a Larger Bench. However, there is no divergent view as regards a case which is similar to the present case where the policy is a statutory policy or an Act only Policy. The uniform view expressed in all other judgments is that the gratuitous passenger in a private vehicle would not be covered for a bodily injury or death under the policy insurance which is an Act Policy. In respect of a package policy for private cars, the Hon'ble Supreme Court expressed its view that the matter requires consideration by a Larger Bench. The scope of reference to a Larger Bench was in fact considered by the Hon'ble Supreme Court in National Insurance Company Limited V. Balakrishnan and Another reported in 2013 [1] SCC 731, wherein the Hon'ble Supreme Court has held as follows:-

''20. Thus, it is quite vivid that the Bench in Bhagyalakshmi case [(2009) 7 SCC 148 : (2009) 3 SCC (Civ) 87 : (2009) 3 SCC (Cri) 321] had

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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 of insurance.''

(33)The position reiterated by the Hon'ble Supreme Court in various other decisions in cases of Act Policy is also reiterated in the case of Balakrishnan's case [cited supra], to the effect that an Act Policy cannot cover a third party risk of an occupant in a car.

14. The Insurance Company has not questioned the quantum of

compensation in this appeal. Therefore, the compensation awarded by the

Tribunal is upheld. However, the owner of the two wheeler bearing

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Registration number TN-77-D-4080 is liable to pay the entire

compensation amount to the claimant. The Insurance Company can

withdraw the compensation amount, if any deposited by them in the

Court.

15. In the result,

i. The Civil Miscellaneous Appeal is allowed. No costs.

Consequently, the connected Miscellaneous Petition is closed.

ii. The quantum of compensation awarded by the Tribunal is upheld.