JUDGMENT
D.H. Waghela, J.
1. All these appeals under Section 173 of the Motor Vehicles Act, 1988 (“the Act” for short), having raised a common issue, they are heard and disposed by this common judgment. The appeals are preferred from the orders made by Motor Accident Claims Tribunals in applications all of which were filed under Section 140 of the Act and were allowed. The appellant-insurer has raised the sole common issue and objection that the injured victim of the accident in each case was a pillion rider of the motorcycle involved in the accident and, therefore, the insurer was not legally liable to indemnify the insured and pay compensation. In each case, the accident had happened in the year 2006 or 2007 and, therefore, the new India Motor Tariff which superseded the India Motor Tariff in force upto 30.6.2002 was applicable.
2. Learned Counsel for the appellant, relying upon recent judgment in Yallwwa and Ors. v. National Insurance Co. Ltd. AIR 2007 617, submitted that the insurer was entitled to avail of the defences prescribed under Section 147 of the Act, even in the applications made under Section 140 of the Act. There being no controversy on that count and the issue of compulsory or contractual coverage of risk of pillion rider being a basic issue striking at the root of liability of the insurer and being a purely legal issue, it was permitted to be agitated and it is resolved as under.
3. There was no dispute about the facts that, in each case, the motorcycle involved in the accident was insured by “Two Wheelers Package Policy” and that the policies had to be issued only in the forms prescribed in the India Motor Tariff by the Tariff Advisory Committee (“TAC” for short) and that the Rules, Regulations, Rates, Advantages, Terms and Conditions as contained in the India Motor Tariff (IMT) were binding on all concerned as breach thereof would amount to breach of the provisions of the Insurance Act, 1938. It is prescribed in General Regulation 1 (GR.1) of IMT that motor insurance in India cannot be transacted outside the purview of IMT unless specifically authorized by the TAC; and policies insuring motor vehicles are to be issued only as per the Standard Forms given in Section 6 of IMT. It is further prescribed in GR.3 that there were two types of policies viz. (i) Liability Only Policy, covering thirty party liability for bodily injury and/or death and property damage in which personal accident cover for owner-driver is also included and (ii) Package Policy, which covers loss or damage to the vehicle insured in addition to the liability covered in the earlier clause. It is clarified in GR.3 as under:
GR.3…Restricting the scope of cover under Section-I (loss of or damage to the vehicle insured) of the package policy without any reduction in Tariff rates is permitted. Excepting this, no alteration or extension of any of the covers, terms, conditions, exclusions, etc. of any of the policies/endorsements laid down in this tariff is permitted without prior approval of the TAC.
Thus, the sole issue is as to whether “Two Wheeler Package Policy” prescribed under the IMT would cover the risk of pillion rider.
4. Section 3 of IMT entitled “TARIFF FOR MOTORISED TWO WHEELERS REGULATIONS” describes its scope in Clause 1 as under:
1. Scope:
This tariff is applicable to motorized two wheelers (with or without side car) used for social, domestic and pleasure purposes and for professional purposes (excluding the carriage of goods other than samples) of the insured or used by the insured’s employees for such purposes but excluding use for hire or reward, racing, pace making, reliability trial, speed testing and use for any purpose in connection with the Motor Trade.
Clause 6 of Section-3 of IMT prescribes limits of liability for third party, as under:
6. Limits of liability for third party:
(a) Under Section II-1(i) : As per requirements of the
Package policy : of Motor Vehicle
(Under Section 1 (i) : Act, 1988.
of the Liability Only
Policy)
(b) Under Section II-1(ii) : Rs.1 lakh
of the Package policy : or
(Under Section 1 (ii) : Rs. 6,000/-where the
of the Liability Only : proposer/
Policy) : insured opts to limit the TPPD
liability to the
statutory limit of
Rs. 6,000/-
Endorsement IMT-20
is to be used.
Section 6 of IMT entitled “STANDARD WORDINGS IN RESPECT OF POLICY INCLUDING PREMIUM COMPUTATION TABLE, CERTIFICATE OF INSURANCE AND COVER NOTE” prescribes the clauses for liability to third parties, as under, in the “Standard Form for Liability Only Policy”:
i) Liability to third parties
1. 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,
i. 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 or control of the insured to the limit specified in the schedule.
2. …
3. In terms of and subject to the limitations of the indemnity which is granted by this policy to the insured, the Company will indemnify any driver who is driving the motor vehicle on the insured’s order or with insured’s permission provided that such driver shall as though he/she were the insured observe fulfill and be subject to the terms, exceptions and conditions of this policy in so far as they apply.
4. …
5. …
Avoidance of certain terms and right of recovery.
Nothing in this Policy or any endorsement hereon shall affect the right of any person indemnified by this Policy or any other person to recover an amount under or by virtue of the provisions of the Motor Vehicles Act.
But the insured shall repay to the Company all sums paid by the Company which the Company would not have been liable to pay but for the said provisions.
Application of limits of indemnity
In the event of any accident involving indemnity to more than one person any limitation by the terms of this Policy and/or of any Endorsement thereon of the amount of any indemnity shall apply to the aggregate amount of indemnity to all persons indemnified and such indemnity shall apply in priority to the insured.
General exceptions
1. …
2. …
3. …
4. Except so far as is necessary to meet the requirements of the Motor Vehicles Act, the Company shall not be liable in respect of death or bodily injury to any person (other than a passenger carried by reason of or in pursuance of a contract of employment) being carried in or upon or entering or mounting or alighting from the motor vehicle at the time of the occurrence of the event out of which any claim arises.
5. As against the above “Standard Form for Liability Only Policy”, the “Standard Form for Two Wheeler Package Policy” prescribes “Liability to third parties”, as under:
(only relevant parts are reproduced)
Section 1: Loss of or damage to the vehicle insured
The Company will indemnify the insured against loss or damage to the vehicle insured hereunder and/or its accessories whilst thereon
(i) to (x) …
Sum Insured….
Section II-Liability to third parties
1. Subject to the limits of liability as laid down in the Schedule hereto the Company will indemnify the insured in the event of an accident caused by or arising out of the use of the insured vehicle against all sums which the insured shall become legally liable to pay in respect of
i) death or bodily injury to any person including occupants carried in the insured vehicle (provided such occupants are not carried for hire or reward) but except so far as it is necessary to meet the requirements of Motor Vehicles Act, the Company shall not be liable where such death or injury arises out of and in the course of employment of such person by the insured.
ii) damage to property other than property belonging to the insured or held in trust or in the custody or control of the insured.
Provided….
2. …
3. …
4. …
5. …
Avoidance of certain terms and right of recovery
…(same as in Standard Form)
Application of limits of indemnity
…(same as in Standard Form)
Section III – Personal Accident Cover for Owner-Driver….
General Exceptions
…
(Note: General exception No. 4 as found in the “Standard Form for Liability Only Policy” reproduced hereinabove is NOT found in this Form)
Deductibles
…
Conditions
This Policy and the Schedule shall be read together and any word or expression to which a specific meaning has been attached in any part of this Policy or of the Schedule shall bear the same meaning wherever it may appear.
1 to 9 …
SCHEDULE
Policy No.
The Company
The Insured
Period of Insurance
Geographical Area
The Vehicle
Limitations as to use
Driver
Limits of liability Under Section II-1 (i) of the Policy – Death of or bodily injury – such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1988.
Under Section II-1 (ii) of the Policy – Damage to Third Party – Rs. …/-*
* Insert Rs. 6000/- Rs. 1 lakh as the case may be.
P.A. cover for owner – driver under Section III (CSI) – Rs. …
Deductible under Section 1: Rs. …
No Claim Bonus
Premium Computation Table….
6. Section 7 of IMT prescribes “Endorsements”, out of which the relevant endorsement, relied upon for the insurer, is reproduced hereunder for convenient reference.
IMT.18 Personal accident to unnamed hirer and unnamed pillion passengers. ((Applicable to motorized two wheelers with or without side car)
In consideration of the payment of an additional premium, it is hereby understood and agreed that the insurer undertakes to pay compensation to any unnamed hirer/driver/any unnamed pillion/side car passenger* on the scale provided below for bodily injury caused by violent, accidental, external and visible means whilst mounting into/onto and/or dismounting from or traveling in/on the vehicle insured which independently of any other cause shall within three calendar months of the occurrence of such injury results in:
Details of Injury Scale of Compensation i) Death 100% ii) Loss of two limbs or sight of two eyes or 100% one limb and sight of one eye iii)Loss of one limb or sight of one eye 50% iv) Permanent Total Disablement from injuries other than named above 100% Provided always that:
(1) compensation shall be payable under only one of the items (i) to (iv) above in respect of any such person arising out of any one occurrence and total liability of the insurer shall not in the aggregate exceed the sum of Rs. ….** during any one period of insurance in respect of any such person.
(2) (3) (4) …
Subject otherwise to the terms exceptions, conditions and limitations of this policy.
* Delete if P.A. cover for unnamed pillion/side care passenger is not taken.
** The Capital Sum Insured (CSI) per passenger is to be inserted….
7. Against the backdrop of above statutorily prescribed form and language of the insurance policy, it was argued for the appellant-insurer that a conjoint reading of Section II-1 (i) entitled “Liability to Third Parties” can lead to only one conclusion that insurer is liable to pay compensation in respect of death of or bodily injury to any person, including occupants carried in a vehicle, provided it is so stated in the Schedule. And the Schedule mentions that the limits of liability of insurance company under Section II-1 (i) to the Policy is: “Such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1988”. The provisions of Section 147 of the Act do not require covering the risk of an occupant carried in a scooter as per decision of the Supreme Court in United India Insurance Co. Ltd. v. Tilak Singh and Ors. and, therefore, the risk of pillion rider is not covered even under the Package Policy, according to the submission. It was further submitted that, while taking insurance cover, the insured was required, according to the “Motor Package Policy Proposal Form”, to exercise his option and state as to whether he desired to include personal accident cover for unnamed persons/hirer/pillion passenger and pay extra premium, if such extra cover were proposed to be provided. In support of that argument, emphasis was laid upon GR.36 of Section I of IMT which reads as under:
GR.36 Personal Accident (PA) Cover under Motor Policy (not applicable…. Commercial Vehicles)
A. Compulsory Personal Accident Cover for Owner-Driver.
Compulsory Personal Accident Cover shall be applicable under both Liability Only and Package policies. The owner of insured vehicle holding an “effective” driving license is termed as Owner-Driver for the purposes of this section.
Cover is provided to the Owner-Driver whilst driving the vehicle including mounting into/ dismounting from or traveling in the insured vehicle as a co-driver.
NB. …(not applicable)
The scope of the cover, Capital Sum Insured (CSI) and the annual premium payable under this section are as under:
…
B. Optional Personal Accident Cover for persons other than Owner-Driver.
The cover under this section is limited to maximum Capital Sum Insured (CSI) of Rs. 2 lacs per person.
Cover is available only in respect of the following persons:
1. Private cars including three wheelers rated as private cars and motorized two wheelers with or without side car (not for hire or reward): For insured or any named person other than the paid driver and cleaner.
Endorsement IMT-15 is to be used.
2. Private cars, three wheelers rated as private cars and motorized two wheelers (not used for hire or reward) with or without side car: For unnamed passengers limited to the registered carrying capacity of the vehicle other than the insured, his paid driver and cleaner.
Endorsement IMT-16 is to be used.
3. In respect of all classes of vehicles: For paid drivers, cleaners and conductors.
Endorsement IMT-17 is to be used.
4. Motorized two wheelers with or without side car (used for hire or reward): For unnamed hirer/driver.
Endorsement IMT-18 is to be used.
The scope of the cover, Capital Sum Insured and the annual premium payable under this section would be as under:
…
IMT 16. Personal Accident to Unnamed Passengers other than Insured and the Paid Driver and Cleaner.
[For vehicles rated as private cars and motorized two wheelers (not for hire or reward) with or without side car]
In consideration of the payment of an additional premium, it is hereby understood and agreed that the insurer undertakes to pay compensation on the scale provided below for bodily injuries hereinafter defined sustained by any passenger other than the insured and/or the paid driver, attendant or cleaner and/or a person in the employ of the insured coming within the scope of the Workmen’s Compensation Act, 1923 and subsequent amendments of the said Act and engaged in and upon the service of the insured at the time such injury is sustained whilst mounting into, dismounting from or traveling in but not driving the insured motor car and caused by violent, accidental, external and visible means which independently of any other cause shall within three calendar months of the occurrence of such injury result in:
Details of Injury Scale of Compensation i) ... ii) ... iii) ... iv) ...
8. As against the above arguments for the appellant, it was submitted on behalf of the original claimants that a “Comprehensive Policy” or “Motorcycle/Scooter Policy (B) Comprehensive” or a “Two Wheeler Package Policy” was essentially different from an “Act Only or Statutory Policy” or “Liability Only Policy”. Although it is true that additional cover can be provided by paying extra premium for different IMT endorsements, absence of any IMT endorsement on the policy cannot derogate from the liability to third parties as couched in Section II of the standard form for “Two Wheeler Package Policy”. When that section of the policy clearly and expressly provides for indemnifying the insured against all sums payable by him “to any person including occupants carried in the insured vehicle”, the insurer cannot contend that any particular endorsement was required for covering that liability. Even as the words “any person” would take its colour from the context in which they are used, they were given the widest meaning in Section II of the Policy to include third parties as well as occupants carried in the insured vehicle, according to the submission. Even in Tilak Singh (supra), it is clarified by the Supreme Court in para 21 as follows:
21. …Thus, we must uphold the contention of the appellant insurance company that it owned no liability towards the injuries suffered by the deceased Rajinder Singh who was a pillion rider, as the insurance policy was a statutory policy and hence it did not cover the risk of death of or bodily injury to gratuitous passenger.
It was, on that basis, submitted that the present batch of cases being based on package policy, they were clearly distinguishable from the case of Tilak Singh (supra) and the arguments based on that case must fail.
9. However, learned Counsel for the appellant insisted that “Section II-Liability to Third Parties” in the policy was expressly subject to limits of liability as laid down in the Schedule and the Schedule limited the liability to such amount as was necessary to meet the requirements of the Motor Vehicles Act, 1988 and as the Act did not require compulsory insurance for a pillion rider as a third party, the insurance company should not be held to be liable to indemnify the insured against the risk of occupants carried in the insured vehicle. Following observations in various judgments were discussed at the bar in that context:
(a) In Pushpabai Purshottam Udeshi and Ors. v. Ranjit Ginning and Pressing Co. and Anr. 1977 ACJ 343, it was observed as under:
22. Therefore, it is not required that a policy of insurance should cover risk to the passengers who are not carried for hire or reward. As under Section 95 the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured, the plea of the counsel for the insurance company will have to be accepted and the insurance company held not liable under the requirements of the Motor Vehicles Act.
23. The insurer can always take policies covering risks which are not covered by the requirements of Section 95. In this case, the insurer had insured with the insurance company the risk to the passengers. By an endorsement to the policy, the insurance company had insured the liability regarding the accidents to passengers in the following terms:`
In consideration of the payment of an additional premium,it is hereby understood and agreed that the Company undertakes to pay, compensation on the scale provided below for bodily injury as hereinafter defined sustained by any passenger….
24. The scale of compensation is fixed at Rs. 15,000. The insurance company is ready and willing to pay compensation to the extent of Rs. 15,000 according to this endorsement but the learned Counsel for the insured submitted that the liability of the insurance company is unlimited with regard to risk to the passengers….
26. On a construction of the insurance policy, we accept the plea of the insurance company that the policy had insured the owner only to the extent of Rs. 15,000 regarding the injury to the passengers….
(b) In Amrit Lal Sood and Anr. v. Kaushalya Devi Thapar and Ors. , the question before Three Judge Bench of the Supreme Court was: “whether the insurer is liable to satisfy the claim for compensation made by a person traveling gratuitously in the car”. After holding that Sections 94 and 95 of the Motor Vehicles Act, 1939 did not require a policy to cover the risk to passengers who were not carried for hire or reward and statutory insurance did not cover injury suffered by occupants of the vehicle who were not carried for hire or reward, the Supreme Court noticed that, in facts of that case, the policy was admittedly a “comprehensive policy”. After adverting to the relevant clause in the policy in “Section II – Liability to Third parties”, the Supreme Court held in para 8 as under:
8. Thus, under Section II-1 (a) of the policy, the insurer has agreed to indemnify the insured against all sums which the insured shall become legally liable to pay in respect of death of or bodily injury to ‘any person’. The expression ‘any person’ would undoubtedly include an occupant of the car who is gratuitously traveling in the car…. In so far as gratuitous passengers are concerned, there is no limitation in the policy as such. Hence, under the terms of the policy, the insurer is liable to satisfy the award passed in favour of the claimant….
(c) In Constitution Bench judgment of the Supreme Court in New India Assurance Co. Ltd. v. C.M. Jaya and Ors. , the issue was whether in a case of insurance company not taking any higher liability by accepting a higher premium, in case of payment of compensation to a third party, the insurer would be liable to the extent limited under Section 95 (2) or whether the insurer would be liable to pay the entire amount which he may recover from the insured. After reference to the earlier decisions in National Insurance Co. Ltd. v. Jugal Kishore 1988 ACJ 270 and in Amrit Lal Sood v. Kaushalya Devi Thapar , the Constitution Bench observed as under:
5. Thus, a careful reading of these decisions clearly shows that the liability of the insurer is limited, as indicated in Section 95 of the Act, but it is open to the insured to make payment of additional higher premium and get higher risk covered in respect of third party also. But in absence of any such clause in the insurance policy, the liability of the insurer cannot be unlimited in respect of third party and it is limited only to the statutory liability. This view has been consistently taken in the other decisions of this Court.
It is further observed in para 7 as under:
7. …Hence, the court after noticing the relevant clauses in the policy, on facts found that under Section II (1) (a) of the policy, the insurer has agreed to indemnify the insured against all sums which the insured shall become legally liable to pay in respect of death of or bodily injury to ‘any person’. The expression ‘any person’ would undoubtedly include an occupant of the car who is gratuitously traveling in it…. The liability could be statutory or contractual. A statutory liability cannot be more than what is required under the statute itself. However, there is nothing in Section 95 of the Act prohibiting the parties from contracting to create unlimited or higher liability to cover wider risk. In such an event, the insurer is bound by the terms of the contract as specified in the policy in regard to unlimited or higher liability as the case may be. In the absence of such a term or clause in the policy, pursuant to the contract of insurance, a limited statutory liability cannot be expanded to make it unlimited or higher. If it is so done, it amounts to rewriting the statute or the contract of insurance which is not permissible.
11. In the premise, we hold that the view expressed by the Bench of the three learned Judges in the case of Shanti Bai 1995 ACJ 470 (S) is correct and answer the question set out in the order of reference in the beginning as under:
In the case of insurance company not taking any higher liability by accepting a higher premium for payment of compensation to a third party, the insurer would be liable to the extent limited under Section 95 (2) of the Act and would not be liable to pay the entire amount.
12. In these appeals presently before us, the judgment and order of Delhi High Court are under challenge. The deceased was riding the pillion seat of a two wheeler when it met with accident with a truck insured by the appellant…. It is not in dispute from the admitted copy of the insurance policy produced before the court that the liability of the appellant is limited to Rs. 50,000 in regard to the claim in question…. It is also not the case that any additional or higher premium was paid to cover unlimited or higher liability than the statutory liability fixed as found in the term of the policy extracted above…. In Shanti Bai’s case, 1995 ACJ 470 (SC), this Court has clearly expressed the opinion that a comprehensive policy issued on the basis of the estimated value of the vehicle does not automatically result in covering the liability with regard to third party risk for an amount higher than the statutory limit in the absence of specific agreement and payment of separate premium to cover third party risk for an amount higher than the statutory limit….
13. In the circumstances, we hold that the liability of the appellant insurance company is limited to Rs. 50,000, as held by the Tribunal….
(d) Recently, the issue of the expression “third party” covering a passenger came up for consideration, upon a reference before Full Bench of Madhya Pradesh High Court, in Bhav Singh v. Smt. Savirani and Ors. and the Court made the following observations in the context of Section 147 of the Act:
8. …Section 147 (1) (b) of the Act provides that in order to comply with the requirements of Chapter XI of the Act, a policy of insurance must be a policy which insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2) against the liabilities mentioned in Clauses (i) and (ii) thereunder. The proviso to Sub-section (1) of Section 147 of the Act, however, states that a policy shall not be required to cover liability other than the liability arising under the Workmen’s Compensation Act, 1923 in respect of the death of or bodily injury to any of the three categories of employees mentioned in Sub-clauses (1), (b) and (c) of Clause (i) of the proviso to Sub-section (1) of Section 147 of the Act. Hence, even if an employee is a passenger or a person traveling in a motor vehicle which is insured as per the requirements of Sub-section (1) of Section 147 of the Act, the insurer will not be liable to cover any liability in respect of death or bodily injury of such employee unless such employee falls in one of the categories mentioned in Sub-clauses (a), (b) and (c) of Clause (i) of the proviso to Sub-section (1) of Section 147 of the Act and further in cases where such employees fall under categories mentioned in Sub-clauses (1), (b) and (c) of Clause (i) of the proviso to Sub-section (1) of Section 147 of the Act, the insurer is liable only for the liability under the Workmen’s Compensation Act, 1923….
9. …
10. Sub-section (5) of Section 147 of the Act, however, provides that notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under Section 147 of the Act shall be liable to indemnify a person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or classes of persons. Thus, if the policy of insurance covers any liability in addition to the liability under Section 147 (1) of the Act, the insurer will be liable to indemnify the insured in case of any liability not because of the provisions of Sub-section (1) of Section 147 but because of the terms and conditions of contract of insurance between the insurer and the insured. Therefore, if the contract of insurance provides for a liability to a passenger or to an employee other than the liabilities provided under Sub-section (1) of Section 147 of the Act, the insurer would be liable to indemnify the insured against such liability.
(e) The High Court of Karnataka has, recently in an appeal by the same appellant and based on the same arguments in the same context of facts and type of policy, in Bajaj Allianz General Insurance Co. Ltd. v. B.M. Niranjan and Anr. , held as under:
19. A reading of the aforesaid terms and conditions discloses that the insurance company issued a policy known as a ‘package policy’ for two-wheeler and collected a premium to cover the risk of not only own damage, but also third party. The coverage also included the death or bodily injury to any person including occupants carried in the insured vehicle (provided such occupants are not carried for hire or reward). The terms and conditions of the policy and the schedule of payment cannot but be said to cover claims of the injured pillion rider of the motor cycle.
10. The above opinions expressed in several judgments would clearly show, (i) that the phrase ‘Limits of Liability for Third Party” refers to pecuniary limits of the liability of the insurer and does not refer to liability of insurer towards third party qua third party, and (ii) that even if a pillion rider or a gratuitous passenger were not covered by the expression ‘third party’ or ‘any person’, liability of the insurer could arise under special conditions of the policy to cover any risk by way of contractual liability. Even otherwise, the condition contained in Section II of Two Wheeler Package Policy to indemnify the insured against all liabilities in respect of death of or bodily injury to occupants carried in the insured vehicle cannot be read as having been cancelled or excluded on account of the occupant not being treated as a “third party”. In other words, the Schedule to the Policy cannot be read, interpreted or applied so as to put to naught the essential conditions described in detail in the prescribed form of the policy. Therefore, the argument that while undertaking the liability to indemnify the insured in respect of the liability arising out of death of or bodily injury to occupant is subject to limits of liability to third party under the Act and a gratuitous passenger was not a third party has to be rejected as disingenuous and circuitous. That condition of the policy and the mention of Motor Vehicles Act, 1988 against the column “Limits of Liability” in the Schedule to the Policy has to be read in the context of the provisions of Section 147 of the Act, more particularly Sub-section (2) of Section 147. That Sub-section requires cover of liability upto the amount of liability incurred and the only pecuniary limit is in respect of damage to any property of a third party. Therefore, by necessary implication, the insurer undertakes to indemnify the insured to the extent of liability incurred by him in respect of death of or bodily injury to the occupants carried in the insured vehicle. The scope for limiting the liability is only in respect of the liability arising in respect of damage to property. Addition of any endorsement or IMT numbers could redefine or expand the liability of the insurer; but the absence of any endorsement cannot derogate from the liability essentially undertaken by the insurer under the express terms of the policy. Therefore, the factual issue as to whether premium was charged or paid in respect of any particular IMT endorsement would be extraneous and irrelevant in applying the essential conditions of the “Two Wheeler Package Policy”. The language of the clauses for liability to third parties and the exceptions as prescribed in the Standard Form for “Liability Only Policy” and in the Standard Form for “Two Wheeler Package Policy” also clearly show that a wider coverage to include the risk of occupants of the vehicle is clearly intended and envisaged by law and the wider coverage is not made subject to any restrictive clauses or endorsements of IMTs.
11. The Supreme Court has, in the year 1988 in National Insurance Co. Ltd. v. Jugal Kishore and Ors. , made the following pertinent observations, but the situation on the ground does not appear to have improved at all.
10. Before parting with the case, we consider it necessary to refer to the attitude often adopted by the Insurance Companies, as was adopted even in this case, of not filing a copy of the policy before the Tribunal and even before the High Court in appeal. In this connection what is of significance is that the claimants for compensation under the Act are invariably not possessed of either the policy or a copy thereof. This Court has consistently emphasised that it is the duty of the party which is in possession of a document which would be helpful in doing justice in the cause to produce the said document and such party should not be permitted to take shelter behind the abstract doctrine of burden of proof. This duty is greater in the case of instrumentalities of the State such as the appellant who are under an obligation to act fairly. In many cases even the owner of the vehicle for reasons known to him does not choose to produce the policy or a copy thereof. We accordingly wish to emphasise that in all such cases where the Insurance Company concerned wishes to take a defence in claim petition that its liability is not in excess of the statutory liability it should file a copy of the insurance policy along with its defence. Even in the instant case had it been done so at the appropriate stage necessity of approaching this Court in Civil Appeal would in all probability have been avoided. Filing a copy of the policy, therefore, not only cuts short avoidable litigation but also helps the Court in doing justice between the parties. The obligation on the part of the State or its instrumentalities to act fairly can never be over-emphasised.
Therefore, relevant parts of the prescribed forms of the policies are reproduced hereinabove to obviate the difficulties and confusion arising out of suppression of the entire documents of insurance policy.
12. In above view of legal implications of the conditions of Two Wheeler Package Policy, the appellant insurer is held to be liable to indemnify the insured in respect of the claim of compensation arising out of the death of or bodily injury to the occupants carried in the vehicle, including the pillion rider. Accordingly, the appeals are dismissed with costs. Civil Applications for stay do not survive and stand disposed as rejected.