UNITED INDIA INSURANCE COMPANY LTD Vs. LEKSHMI NARAYANAN

JUDGEMENT

(1.) THIS is an appeal preferred against the judgment and decree of the Motor Accidents Claims Tribunal, Neyyattinkara in O.P (MV).No.292 of 2003. A passenger in a private car sustained injuries in a road accident when it collided with another vehicle. The Tribunal apportioned the negligence equally and directed the Insurance Company of the offending vehicle as well as vehicle in which the claimant while travelling and so ordered compensation to be paid equally by both the Insurance Companies. It is against that decision the insurer of the private car in which the person was travelling has preferred this appeal. The learned Tribunal had taken extraordinary decision even after the decision in Tilak Singh's case United India Insurance Company Ltd. v. Tilak Singh, (2006 (2) KLT 884 (SC)) to cover a person travelling in a private car cover on an 'Act only policy' to fix the liability on the Insurance Company. I think it is totally erroneous. It requires to be corrected by this Court Section 147 of Motor Vehicle Act deals with policy relating to third parties. When it is only an 'Act only policy'. The only carved out exception is by virtue of Amendment Act 54 to 94 whereby the legislature covered the liability of an owner of the goods or representative of the owner of the goods travelling in a vehicle. Now so far as this case is concerned, admittedly, the vehicle is a private vehicle, if it is a car. So carved out exception under Section 147 of (1) Motor Vehicle Act does not apply. In the decision reported in 2006 (2) KLT 884 the Hon'ble Supreme Court of India had considered the question regarding the status of a pillion rider carried in a two wheeler. It was contended that he was a third party. The Hon'ble Supreme Court held that he is not a third party and that he is only gratuitous passenger not covered by the policy. In order to arrive at that decision the principle laid down in Asha Rani's case New India Assurance Co.Ltd. v. Asha Rani, (2003 (1) KLT 165 (SC)) was also considered by the Hon'ble Supreme Court. So as the law stands today when a private vehicle is covered only by a statutory policy that is the act only policy, the passengers travelling in such a vehicle are not covered under the terms and conditions of the said policy. When there was some confusion the Insurance Regulatory and Development Authority by virtue of a clarificatory circular made it clear that only persons carried in a two wheeler and person travelling in a private vehicle are covered under the terms and conditions of a standard motor package policy. So had it been a package policy by virtue of the authoritative pronouncement of the Court especially in the decisions reported in New India Assurance Company Limited v. Hydrose, (2008 (3) KLT 778) and Mathew v. Shaji Mathew, (2009 (3) KLT 813) and the claificatory circular, by virtue of the terms and conditions of the policy persons would have been covered. Since the present vehicle is covered by an Act only policy and as no additional premium is received and as there status is that of a gratuitous passenger the insurance policy does not cover the risk of a passenger in a private car and, therefore, the findings of the tribunal that the Insurance Company is bound to indemnify the sixth respondent in the appeal is incorrect and it has to be set aside and I do so.

(2.) IN the result, MACA is partly allowed and the finding that INsurance Company of the car namely the appellant is bound to pay the compensation amount of 50% is set aside and it is made clear that the claimant is at liberty to proceed against the owner namely the sixth respondent in the appeal for realisation of the amount . Appeal is disposed of accordingly.