National Insurance Co. Ltd v. Malligeswari

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED:28.08.2024

CORAM:

THE HONOURABLE MRS.JUSTICE R. HEMALATHA C.M.A.No.153 of 2023 and C.M.P.No.1323 of 2023 National Insurance Co. Ltd., Divisional Office II, 11, Ramakrishna Road, Salem - 7.

... Appellant vs.

1. Malligeswari

2. Sunthararajan

3. Pachiyappan

4. Mani ...

Respondents PRAYER: Civil Miscellaneous Appeal filed under Section 173 of the Motor Vehicles Act, 1988 against the Award dated 13.06.2022 in M.C.O.P.No.680/2018 on the file of the Motor Accident Claims Tribunal, Special District Court, Salem.

For Appellant : Mr.S.Vadivel For Respondents : No appearance 1/12

J U D G M E N T

The appellant, the National Insurance Company Limited is the second respondent in M.C.O.P.680/2018. The respondents 1 and 2 filed the claim petition in M.C.O.P.680/2018 under Section 163 A of the Motor Vehicles Act, seeking compensation of Rs.20,00,000/- for the death of their son Siva in a road accident which happened on 14.03.2018.

2. The brief case of the claimant is as follows : On 14.03.2018, Siva (deceased) was travelling as a Pillion rider in a motor cycle bearing Registration number TN-30-AX-2761 on Omalur - Thindamangalam Road. When he was nearing Ilavaramathur burial ground at 9.00 a.m., the rider of the two wheeler, the third respondent herein drove the vehicle rashly and negligently and hit another two wheeler bearing Registration number TN-30-BV-1032 which was coming in the opposite direction, as a result of which, Siva (deceased) fell down and sustained grievous injuries all over his body. He was immediately rushed to Government Hospital, Omalur from where he was referred to Government Hospital, Salem. However, he succumbed to injuries. 2/12

3. According to the claimants, the accident took place due to the rash and negligent driving of the drivers of both the two wheelers bearing Registration numbers TN-30-AX-2761 and TN-30-BV-1032 belonging to the Respondents 3 and 4 respectively and that since the said vehicles were insured with the present appellant, the National Insurance Company Limited, the owner of the vehicles and insurers are jointly and severally liable to pay compensation to them.

4. In the Tribunal, the owner of the two wheeler bearing Registration number TN-30-AX-2761, the 3rd Respondent, 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 awarded a compensation of Rs.4,05,000/- together with interest at 7.5% per annum from the date of petition till the date of realisation. The Tribunal further directed the appellant and the 3rd respondent to pay 50% of the compensation jointly and severally and also directed the third respondent 3/12

to pay the remaining 50% of the compensation to the claimants.

6. Questioning the liability to pay compensation, the present appeal is filed by the appellant, the National Insurance Company Limited.

7. Heard Mr.S.Vadivel, learned counsel for the appellant. There is no representation for the respondents.

8. Mr.S.Vadivel, 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-30AX-2761 is not entitled to get any compensation from the appellant Insurance Company. He 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. He, 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 4/12

wheeler bearing Registration number TN-30-AX-2761 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, the finding should be recorded with 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 gone into a definite finding in this regard though the Insurance company has taken a specific plea that they are not liable to pay compensation to the claimant since the Policy of the Insurance is only an 'Act Policy'.

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. (c) Standard form for two wheeler package policy. 5/12

(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 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 6/12

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 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 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.

7/12

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 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.

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 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 9/12

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 Registration number TN-30-AX-2761 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. iii. The third respondent, the owner of the two wheeler is directed to deposit the entire compensation amount of Rs.4,05,000/- together with interest at the rate of 7.5% per annum from the date of claim petition till the date of realisation, within a period of four weeks 10/12

from the date of receipt of a copy of this order / uploading of this Order to the credit of M.C.O.P.No.680/2018 on the file of the Motor Accident Claims Tribunal, Special District Judge, Salem. iv. On such deposit being made, the respondents 1 and 2 / claimants are at liberty to withdraw the same as per the orders passed by the Tribunal after following due process of law. The ratio of apportionment made by the Tribunal shall be kept intact. v. The appellant, Insurance Company can withdraw the compensation amount, if any, deposited by them in the Court. 28.08.2024 Index : Yes/No Speaking/Non-speaking order vum To 1.The Motor Accident Claims Tribunal, Special District Judge, Salem.

2.The Section Officer, VR Section, Madras High Court, Chennai.

11/12

R.HEMALATHA, J.

vum C.M.A.No.153 of 2023 and C.M.P.No.1323 of 2023 28.08.2024 12/12