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FA/5007/2008 1/ 53 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
FIRST
APPEAL No. 5007 of 2008
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1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To be
referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
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ICICI
LOMBARD GENERAL INSURANCE CO LTD - Appellant(s)
Versus
GITABEN
RAMESHBHAI GOHEL & 3 - Defendant(s)
=========================================================
Appearance
:
MS
MEGHA JANI for
Appellant(s) : 1,
None for Defendant(s) : 1 -
4.
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE H.K.RATHOD
Date
: 20/10/2008
ORAL
ORDER
1. Heard
learned advocate Ms.Megha Jani for the appellant ? Insurance Co.
2. In
the present appeal, the appellant ? Insurance Co. has challenged
the award passed by MAC Tribunal (Main), Kheda at Nadiad in MACP
No.475 of 2007 dated 19.6.2008 whereby the claims Tribunal has
awarded Rs.2,75,800/- with 9% interest in favour of respondents
claimants.
3. Learned
advocate Ms.Megha Jani has raised contention that claims Tribunal has
committed gross error in not considering fact that deceased was
travelling as a pillion rider on the motor-cycle at the time of
accident and also not appreciated policy which was not covering the
risk of pillion rider. She also submitted that additional premium was
not paid to cover the risk of pillion rider and therefore, appellant
? Insurance Co. is not liable to pay compensation. She also
submitted that appellant ? Insurance Co. is not liable when risk is
not covered in the policy. She has placed reliance on the decision of
Apex Court in case of United India Assurance Co. Ltd. v. Tilak Singh
and others reported in 2006 (4) SCC 404 and also in case of Oriental
Insurance Co. Ltd. v. Sudhakaran K.V. And others reported in 2008 (7)
SCC 428. She further pointed out from the policy that risk of pillion
rider is not covered as only Rs.300/- basic premium was paid by
insured. Therefore, she submitted that claims Tribunal has committed
gross error in awarding compensation in favour of respondents
claimants.
4. This
aspect has been examined by the claims Tribunal in Para.10, 11 and 12
in the award which is quoted as under :
?S10. So
far as the liability is concerned, it is an admitted fact that the
deceased Rameshbhai Shivabhai Gohel was pillion rider on the vehicle
bike bearing No.GH.7.Q.5945. The Ld. Advocate appearing on behalf of
the insurer has vehemently contended that in the case of the pillion
rider the Insurance Co. is not liable to satisfy the awarded amount
and prayed for dismissal of the claim petition as against the
insurer. As regards this, if we consider the policy produced by the
claimant at mark-5/6 it would reveal that the policy has been taken
in comprehensive nature, therefore, insurer is liable to indemnify
the insured of the vehicle.
11. Furthermore,
in case of ?SNaynesh H. Nanavati v. Dashrath R. Bhagat & Ors??
reported in ‘2007 (1) GLR Page No.567??, wherein, it has been
observed that the passenger in private car took note of direction of
tariff advisory committee to all the insurer that the tariff advisory
committee has taken a decision relating to clause-1 of Section-II(a)
of the Motor Car comprehensive policy. As per the said ratio all the
insurer were asked to add the following words, ?Safter the words
death or bodily injury to any person including motor car providing
that such occupants are not carried for hire or reward. When this is
the position within the risk of gratuitous passenger travelling in
private vehicle stand adequately covered??. Thus, considering this
pronouncement of the Hon’ble High Court the pillion rider is also one
of the occupant in the motor cycle bearing No.GJ.7.Q.5945. It is also
admitted fact that the pillion rider is not carried in the vehicle
for hire or reward, then in that case if the policy of the vehicle is
in nature of the comprehensive one, then the insurer is liable to
satisfy the occupant of the vehicle, thus I do not agree with the
submission advanced by the ld. Advocate appearing on behalf of the
insurer.
12. Thus,
as per the policy particulars Mark-5/6 the commencement of the policy
is from 13.4.2007 and expired on 12.4.08 while the accident was
occurred on 29.10.2007, meaning thereby the policy was in force
at the time of the accident, therefore, all the opponents, jointly
and severally liable to satisfy the awarded amount with proportionate
cost and interest at the rate of 9% per annum as per the ratio laid
in the case of ?SKAUSHNUMA BEGUM V. NEW INDIA ASSURANCE COMPANY
LTD.?? reported in 2001 (1) Supreme-5, and I pass the following
final order.??
5. The
claims Tribunal has considered the decision of this Court in case of
Naynesh H. Nanavati v. Dashrath R. Bhagat & Ors?? reported in
‘2007 (1) GLR Page No.567. The aforesaid aspect has been considered
by Division Bench of this Court in case of Harshvardhatiya
Rudraditya (by his next friend and guardian) Govindbhai D. Parmar &
Ors. v. Jyotindra Chimanlal Parikh & anr. Reported in 1981 GLR
(22) 555. The aforesaid decision of Division Bench of this Court, has
been considered in FA No.2019 of 1982 with FA No.131 of 1983 dated
19.4.1995.
6. The
question is that in comprehensive policy, the Tariff Advisory
Committee has directed to all the insurer that Tariff Advisory
Committee has taken a decision relating to clause-1 of Section-II(a)
of the motor car comprehensive policy and as per said ratio, after
the words death or bodily injury to any person including motor car
providing that such occupants are not carried for hire or reward.
When this is the position within the risk of gratuitous passenger
travelling in private vehicle stand adequately covered. Learned
advocate Ms.Megha Jani submitted that additional premium was not paid
and therefore, risk of pillion rider is no covered. The pillion rider
is not the third patty within the meaning of Section 147 of the MV
act and also is not included in ‘ any person’ and therefore, the risk
of pillion rider is not covered under the policy and therefore,
Insurance Co. is not duty bound to pay compensation to claimant.
7. This
aspect has been considered by Division Bench of this Court in case of
Harshvardhatiya Rudraditya (by his next friend and guardian)
Govindbhai D. Parmar & Ors. v. Jyotindra Chimanlal Parikh &
anr. reported in 1981 GLR (22) 555. Relevant observations of the said
decision are in Para.10 and 11 which is quoted as under :
?S10. The
question that arises for consideration now is regarding the extent of
liability of the Insurance Company. The Insurance Company has filed a
joint written statement and has adopted the defence raised by the car
owner and has not pleaded any special defence. It is, however,
contended by learned counsel for the Insurance Company that
notwithstanding the fact that there is no pleading, the Insurance
Company should be permitted to raise the defence that Ranvir was a
gratuitous passenger and in view of the decision of the Supreme Court
in Pushpabai Parshottam Udeshi and Others v. M/s. Ranjit Ginning &
Pressing Co. Pvt. Ltd. and Another, A.I.R.
1977 SC 1735 the Insurance Company was not liable in regard to this
claim. The learned Counsel for the claimants as also learned Counsel
for the car owner have opposed the request made by the Counsel for
the Insurance Company in this behalf. The point sought to be raised
by learned Counsel for the Insurance Company does not involved any
mixed question of law and facts. On admitted facts it is established
that Ranvir was travelling in the Car in his capacity as a friend of
Jyotindra. It is therefore, clear that he was a gratuitous
passenger. Since the law on the point has been settled, it would not
be proper on our part to refuse the permission sought by the
Insurance Company to raise this point. Of course this plea was not
raised in the trial Court and it does not arise out of the pleadings.
But then there is no point in insisting on a formal amendment of the
plaint in view of the fact that admittedly Ranvir was a gratuitous
passenger and the legal position is also not in dispute. Under the
circumstances, we are of the opinion that the Insurance Company
cannot be prevented from advancing this point at the stage of appeal.
It, however, does not mean that the Insurance Company is wholly
absolved of the liability. Learned Counsel for the claimants and
learned Counsel for the car owner have relied on Oriental
Fire & General Insurance Co. Ltd. v. Ganchi Ramanlal Kantilal and
Ors, 20 G.L.R. 134, in support
of their contention that the case would be covered by sec.95 (2) (c)
of the Motor Vehicles Act and the liability of the Insurance Company
to the extent of Rs.15,000/- as stipulated in the Policy of Insurance
would remain. The Insurance Policy is a comprehensive policy as per
Ex.145. Clause I M.T.5 provides –
?SIn
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 herein after defined
sustained by any passenger other than the insured and/or his paid
driver attendant 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 travelling in but not driving the
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-
Scale of compensation Death ........ Rs.15,000.00 ...... ........ ?S ...... ........ ............. 11. The
aforesaid clause is precisely in the same terms as the policy in the
case of the Oriental Fire & General Insurance Co. Ltd.
(supra) and in view of the ratio of the said decision the
liability of the Insurance Company to this extent cannot be disputed.
Under the circumstances we hold the Insurance Company liable to the
extent of Rs.15,000/-. But the mater does not rest there. The
learned Counsel for the claimants has placed on record a
communication issued by the Tariff Advisory Committee, Bombay
Regional Committee, to the Insurers carrying on General Insurance
Business in the Bombay Region only. It is in the following terms-
TARIFF
ADVISORY COMMITTEE
BOMBAY
REGIONAL COMMITTEE
Circular
M.V. No.1 of 1978. Bombay 17th March 1978.
INSURANCE
COMPANY’S LIABILITY IN RESPECT OF GRATUITOUS PASSENGERS CONVEYED IN A
PRIVATE CAR ? STANDARD FORM FOR PRIVATE CAR COMPREHENSIVE POLICY ?
SECTION II ? LIABILITY TO THIRD PARTIES.
I
am directed to inform Insurers that advices have been received from
the Tariff Advisory Committee to the effect that since the industry
had all these years been holding the view liability the same
practical shall continue.
In
order to make this intention clear, Insurers are requested to amend
clause 1 (a) of section II of the Standard Private Car Policy by
incorporating the following words after the words ?Sdeath of or
bodily injury to any person?? appearing therein:
Including
occupants contained in the motor car provided that such occupants are
not carried for hire or reward.??
I
am accordingly to request Insurer to make the necessary amendment on
sheet 38 of the Indian Motor Tariff pending reprinting of the
relevant sheet.
All
existing policies may be deemed to incorporate the above amendment
automatically as the above decision is being brought in to force with
effect from 25th March 1977.
Sd/-
Regional
Secretary.
It
is argued by Counsel that in view of this policy decision the
Insurance should make full payment in the present case also, in
disregard of the fact that the deceased a gratuitous passenger.
Taking into consideration the spirit underlying the aforesaid
instruction issued by the Tariff Advisory Committee, all the insurers
would be expected to adhere to the policy decision in its true
spirit. The policy decision had to be evolved by reason of the fact
that for year the insurers were considered to be liable even in case
of gratuitous passengers. The situation came to be altered by virtue
of the decision in Pushpabai’s case (supra) rendered on 25th
March 1977. The Insurance business having been nationalized ? it is
but reasonable to expect the Insurers not to take advantage of the
alter situation and to continue to discharge their obligation as
hitherto. No doubt, the aforesaid instructions cannot be enforced in
a MACT proceedings in the sense that we cannot direct that the
insurance company shall reimburse the insured fully or that the full
decree against the insured may be executed against the insurance
company as if it was a decree passed against it. We are given to
understand that the insurance company are discharging their
obligations as hitherto notwithstanding Pushpabai’s case. If such is
the policy that is being followed in other cases, no discrimination
can be made on principle in the present case. There cannot be a
selective application of the policy embodied in the aforesaid
resolution. If such a selective application were to be countenanced,
it would violate the mandate of article 14 of the Constitution of
India. We have, therefore, no doubt that the insurance company will
follow the same policy uniformly and will not clutch at this defence
in the present case if the policy decision contained in the aforesaid
communication is being adhered to in other cases. In case of
necessity, learned counsel for the claimants will be at liberty to
apply to the insurance company and make a request for implementing
the aforesaid policy decision in present case. It will be open to him
to forward a copy of this judgment in support of this request.??
8. The
aforesaid decision in case of Harshvardhatiya Rudraditya (Supra) has
been relied upon by Division Bench in FA No.2019 of 1082 with FA
No.131 of 1983 decided on 19.4.1995. The relevant observations of
said decision is in Para.13, 14, 15 and 16 which are quoted as under
:
?S13.
For this purpose it is necessary to refer to the
provisions of sec.95 of the Act and the decision of the
Supreme Court in the case of Pushpahai Parshottam Udshi
vs. Ranjit Ginning & Pressing Co. Pvt. Ltd., reported
in AIR 1977 SC 1735. In that case interpreting the
provisions of sec.95(1)(d)(1) of the Act the Supreme
Court held that there was no requirement of statutory
provision that the policy of insurance should cover the
risk of passengers who were not carried for hire or
reward. The plea that the words “third party” are wide
enough to cover all persons except the insured and the
insurer. After referring to the provisions of sub-clause
(ii) the Supreme Court held as follows :
“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
sec.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.”
14. In that case it was further contended that the
insurer can always issue policies covering risks which
are not covered by the requirements of sec.95. In that
light the Supreme Court considered sec.II of the policy
relating to liability to third parties. It was contended
that clause (a) of sec.II of the policy provided coverage
in respect of “death of or bodily injury to any person”,
and it was submitted that the wording was wide enough to
cover all the risks including injuries to passengers, on
the construction of clause (a) which reads as follows :
“(a) death of or bodily injury to any person
but except so far as is necessary to meet the
requirements of sec.95 of the Motor Vehicles Act,
1939, the Company shall not be liable where such
death or injury arises out of and in the course
of the employment of such person by the insured.”
The Supreme Court held that the insurance policy had
insured the owner only to the limited extent of
Rs.15,000/-.
15. After the judgment of the Supreme Court in the
case of Pushpabai (supra) dated 25th march 1977 on 17th
March 1978 the Tariff Advisory Committee issued Circular
MV. No.1 of 1978 which reads as follows :
“TARIFF ADVISORY COMMITTEE
BOMBAY REGIONAL COMMITTEE
Circular M.V. No.1 of 1978 Bombay
17th March 1978
INSURANCE COMPANY’S LIABILITY IN RESPECT OF
GRATUITOUS PASSENGERS CONVEYED IN A PRIVATE CAR
STANDARD FROM FOR PRIVATE CAR COMPREHENSIVE
POLICY – SECTION II – LIABILITY TO THIRD PARTIES.
I am directed to inform Insurers that advices
have been received from the Tariff Advisory
Committee to the effect that since the industry
had all these years been holding the view
liability the same practice should continue.
In order to make this intention clear, Insurers
are requested to amend clause 1(a) of section II
of the Standard Private Car Policy by
incorporating the following words after the words
“death of or bodily injury to any person”
appearing therein:
Including occupants carried in the motor car
provided that such occupants are not carried for
hire or reward.
I am accordingly to request Insurers to make the
necessary amendment on sheet 38 of the Indian
Motor Tariff pending reprinting of the relevant
sheet.
All existing policies may be deemed to
incorporate the above amendment automatically as
the above decision is being brought into force
with effect from 25th March 1977.
Sd/-
Regional Secretary
This circular came to be considered by Division Bench of
this Court in the case of Harshvardhatiya vs. Jyotindra,
reported in 1981 (22) GLR 555 and this Court observed as
follows :
“It is argued by counsel that in view of this
policy decision the Insurance Company should make
full payment in the present case also, in
disregard of the fact that the deceased was a
gratuitous passenger. Taking into consideration
the spirit underlying the aforesaid instructions
issued by the Tariff Advisory Committee, all the
insurers would be expected to adhere to the
policy decision in its true spirit. The policy
decision had to be evolved by reason of the fact
that for years the insurers were considered to be
liable even in cases of gratuitous passengers.
The situation came to be altered by virtue of the
decision in Pushpabai’s case (supra) rendered on
25th March 1977. The insurance business having
been nationalised – it is but reasonable to
expect the Insurers not to take advantage of the
altered situation and to continue to discharge
their obligation as hitherto.”
In the present case, the policy is issued after, and in
the light of this circular on 5.12.1978 and section II
liability of third parties. The amendment suggested by
the Tariff Advisory Committee is incorporated and given
effect to by the words “including occupants carried in
the motor car provided that such occupants are not
carried for hire or reward” after the words ‘in section
II 1(a). It is thus clear that the insurer has not only
continued his practice of providing insurance coverage to
third parties including all occupants but it has been
made clear in spite of Supreme Court’s judgment in
Pushpabhai’s case by issuing circular for giving coverage
even under the existing policies but also by making
specific amendment in the new policies. In the present
case the policy which has been issued after the circular
incorporated the amendment giving express coverage to
gratuitous occupants. In view of this additional and
express coverage given to the occupants, the insurance
company is liable to satisfy the award against the
insured.
16. Learned counsel for the insurer submitted that
for additional coverage additional premium is necessary
and without such additional premium there cannot be any
additional coverage. Reliance is placed on the judgment
of the Supreme Court in the case of National Insurance
Co. Ltd. Jyotindra. Jugal Kishore, reported in AIR
1988 SC 719. In that case the contention was that the
insurer had given additional coverage. It was
ascertained whether the rules permit such coverage and
whether any additional premium was paid. It was in the
context of ascertaining whether additional coverage is
given or not that the question of additional premium was
considered. The Supreme Court came to the conclusion
that there was no additional premium. But this judgment
cannot be said to have laid down that no additional
coverage can be given in absence of any additional
premium. In fact no additional coverage has been given
in the present case because whatever coverage given prior
to Pushpabai’s case has been continued by the insurers
without charging any extra premium. This so called extra
coverage is in fact the same coverage which was being
given by all the insurers under the Act and the Policy.
It is only because of the restricted interpretation in
Pushpabai’s case that the Tariff Advisory Committee laid
down the same coverage be continued to be given
notwithstanding the judgment in Pushpabai’s case and all
future policies were directed to be amended so as to give
coverage to gratuitous passengers by specifically
incorporating the words “including occupants” after the
words “any person.” Therefore, merely because the words
‘any person’ is made more explicit by amendment, it
cannot be said that any additional premium was called
for. Therefore, this contention raised by the insurer
has no merit and it must fail.
9. This Court has examined the very question in case of Naynesh H. Nanavati v. Dashrath R. Bhagat and Ors. Reported in 2007 (1) GLR 135. Relevant observations are in Para.7 and 7.1 which are quoted as under :
?S7. The second aspect of it is that the Tribunal has placed reliance on the judgment of the Apex Court rendered in the case of Pushpabai [supra] and has held that even if the appellant is considered to be passenger in a private vehicle without hire or reward i.e., a gratuitous passenger, the Insurance Company would be absolved from its liability to pay the compensation. In the said decision the Apex Court has turned down the contention advanced on behalf of the original claimant that a gratuitous passenger travelling in a private vehicle would be considered as a third party and the Insurance Company would be liable to cover such risk. In para. 20 of the said judgment the Apex Court has held as under :-
?S20. It
is unnecessary to refer to the subsequent development of the English
law and as the subsequent charges have not been adopted in the Indian
statute. Suffice it to say that the Motor Vehicles [Passenger
Insurance] Act, 1971, made insurance cover for passenger liability
compulsory by repealing paragraph (a) and the proviso of sub-section
203 (4). But this Act was repealed by Road Traffic Act, 1972 though
under section 145 of 1972 Act the coming into force of the provisions
of Act 1971 covering passenger liability was delayed under December
1, 1972.??
Thus,
according to the Apex Court, when the passenger, who is not
travelling in the private vehicle for hire or reward, his risk is not
covered. However, the Apex Court has said that the Insurance Company
is always at liberty to cover such risk by way of contract with the
insured. In that case, the Apex Court directed the Insurance Company
to satisfy the liability to the extent of Rs.15,000/- since that was
the amount agreed to be covered by the Insurance Company with the
insured. The Tribunal, however, has not considered the development
which has taken place after the rendition of this judgment by the
Apex Court. Had that development been taken into consideration, on
this issue the conclusion of the Tribunal would have been different.
7.1. The
Tariff Advisory Committee has taken a decision relating to clause 1
of section II (a) of Motor Car Comprehensive Policy. As per the said
decision all the insurers were asked to add the following words
after the words ‘death of or bodily injury to any person’,
?Sincluding occupants carried in the motor car provided that such
occupants are not carried for hire or reward.?? The direction of
the Tariff Advisory Committee to all the insurers was that said
amendment would come into force automatically from 17/2/1978. The
present accident took place on 16/6/1980. Therefore, due to the
retrospective effect given to this amendment, the present accident
would also stand covered in the amended clause. In the case of
Oriental Insurance Co. Ltd. V/s.
Renu Acharya the High Court of Himachal Pradesh at Simla has dealt
with this aspect. The decision is reported in 1996 ACJ at page 746.
Whether
the effect of the amendment is retrospective is also considered by
the said High Court in this decision by referring to the decisions of
various other High Courts. In para. 21 it has said as under :-
?S21. This
question came up before a Bench of five Judges of the Gauhati High
Court in New India Assurance Co. Ltd. v. Satyanath Hazarika, 1989 ACJ
685 (Gauhati), in which the above instructions of the Tariff
Advisory Committee were considered and it was held that this clause
will have a retrospective effect in all cases pending before the
Claims Tribunals or the appellate authorities on or before 25/3/1977.
We are in respectful agreement with the above law laid down. The same
view was also expressed by the learned single Judge of the Orissa
High Court in Oriental Fire & General Insu. Co. Ltd. v. Sanatan
Pradhan, 1988 ACJ 792 (Orissa) and also by the learned single Judge
of the Delhi High Court in Sagar Chand Phool Chand Jain v. Santosh
Gupta, 1985 ACJ 585 (Delhi).??
Unfortunately,
the learned Single Judge of Karnataka High Court in the case of
United India Insurance Co. Ltd. V/s. P V Lakshmanan reported in
1997 ACJ p. 107 has taken the
same view. The learned Judge has placed reliance on the decision
rendered by Punjab & Haryana High Court in the case of Kailash
Kumar v. Bhola, 1989 ACJ 845. It has observed in paras. 11 and 12 as
under :-
?S11. The
identical point came up for consideration in appeal before the High
Court of Punjab and Haryana in Kailash Kumar v. Bhola, 1989 ACJ 845
(P&H). In the case of Kailash Kumar the claimants therein were
granted compensation by the Tribunal on the death of the deceased
bread-winner of their family who died in a motor accident. In that
case also the deceased was travelling in a private car as a
gratuitous passenger when it met with the accident resulting in his
death. The insurance company which had issued the policy in respect
of the said car therein was not held liable by the Tribunal to pay
compensation to the claimants on the ground that the said policy did
not cover the risk to gratuitous passenger travelling in a private
car. In appeal the High Court of Punjab and Haryana disagreed with
the view taken by the Tribunal in absolving the insurance company of
its liability and held otherwise on the basis of the relevant
instructions of the Tariff Advisory Committee issued to all insurance
companies subsequent to the Supreme Court decision in Pushpabai
Purshottam Udeshi’s case, 1977 ACJ 343 (SC). In the case of Kailash
Kumar v. Bhola, 1989 ACJ 845 (P&H), the High Court of Punjab and
Haryana made the following material observation :
?SLearned
counsel for the respondents placed reliance on Pushpabai Purshottam
Udeshi v. Ranjit Ginning & Pressing Co., 1977 ACJ 343 (SC), in
support of the proposition that the insurance company is not liable
when the passenger is carried without hire or reward. This judgment
does not render any assistance to the learned counsel. The decision
of the Apex Court makes it clear that although there is no statutory
liability of the insurance company to pay compensation to a
passenger, a contract of insurance can provide otherwise. The
instructions of the Tariff Advisory Committee which is a statutory
body will be deemed to have been incorporated in every contract of
insurance. Even if it is not expressly mentioned in the contract by
the deeming provisions, the court will so read it in the insurance
policy that the directions given by the Tariff Advisory Committee
were incorporated in the insurance policy. After reading the
directions in the insurance policy, the court will give effect to it.
The judgment of the Supreme Court was rendered on the same date, when
the instructions of the Tariff Advisory Committee came into force.
Moreover, in the Supreme Court case, the accident had taken place on
18/12/1960 prior to the issuance of the directions of the said
Committee.??
So,
concluding, the learned Judge has further proceeded to observe :
?S……
after issuance of the instructions of the Tariff Advisory Committee,
the insurance company cannot avoid liability. The owner of the
vehicle can legitimately say that under the policy, the insurance
company was bound to pay to the claimants for the death of the
passenger. The insurance company has not let any evidence on record
that its liability is limited. In the absence of any evidence, it has
to be held that the liability of the insurance company is unlimited.??
12. The
fact that the Tariff Advisory Committee has issued the said relevant
instructions dated 13/3/1978 is not disputed by Mr. O. Mahesh,
learned counsel for the appellant insurance company. As such I am in
respectful agreement with the aforesaid observations of the learned
Judge of the Punjab & Haryana High Court made in Kailash Kumar’s
case, 1989 ACJ 845 (P&H), to the effect that the said
instructions of the Tariff Advisory Committee must be deemed to have
been incorporated in all the existing policies of the insurance
company on and with effect from 13/3/1978. These instructions will
have the statutory force. By virtue of the said Tariff Advisory
Committee instructions it logically follows that the Act policy also
governs the risk to the gratuitous passengers travelling in a private
motor car at the time of accident. Therefore, the finding of the
Tribunal holding the appellant insurance company also liable to pay
the compensation to the respondent-claimant cannot be held illegal or
invalid. On the other hand, I find the Tribunal legally justified in
its said finding.??
When this is the position after amendment has been brought about in the policy by the Tariff Advisory Committee, risk of gratuitous passenger travelling in a private vehicle stands adequately covered. On that count also the decision of the Tribunal is not proper and it is required to be quashed and set aside. In my opinion, on facts as well as on law, the conclusion has to be against the Insurance Company. In other words, there is no breach of conditions of the policy since in the present case the vehicle was not given for hire or reward and by virtue of the recommendation of the Tariff Advisory Committee and the amendment brought in the policy, the Insurance Company is now required to recover the risk of even the passengers travelling not for hire or reward in a private car. In view of the same, the decision of the Tribunal on both these counts is required to be quashed and set aside.??
10. This Court has examined similar aspect in FA No.1161 of 2008 with allied matters decided on 14.5.2008. Relevant observations of the said decision are in Para.8 to 11 which are quoted as under :
?S8. 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. M/s.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. [1998 ACJ 531], 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. [2002 ACJ 271], 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 [1998 ACJ 531],
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 & Ors. [AIR 2008 MP 1 (FB)] 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. [2008 ACJ 554], 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. [AIR 1988 SC 719], 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 emphasized 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 emphasize 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-emphasized”.
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.??
11. This
Court had an occasion to consider very question in FA No.2030 of 2007
decided on 25.8.2008 in case of National Insurance Co. v. Shabbir
Mohmad Kunjada and others. In case of Narmadaben Sureshbhai Rathawa
v. Rajesh Kanchanlal Panchal reported in 2008 (3) GLH 98 and in ICICI
Lombard General Insurance Co. Lt. v. Uday Khengarbhai Sanesara in FA
No.4832/07 with CA No.12733/07 decided on 11.2.2008.
12. It
is necessary to have some help from a good article written by Shri S.
Srinivasa Raghavan, Advocate, Madurai published in (2008) 5 MLJ 38
where title suggests the anxiety of lawyer who written this article
?SThe insured, no doubt, are they assured ??? and while question
has been discussed in article including persons those who are
travelling in private car and pillion rider and what would be the
effect of circular and various decisions on the issue. Relevant
observations are in Para.12, 13, 14 and 15 which are quoted as under
:
12. Interpretation
of the word ?Sany Person??
It
is also now settled that the words ?Sany person?? occurring in
Section 147 does not bring within their fold an occupant of a private
car or a pillion rider, and that the risk in respect of such persons
is not required to be covered by an insurer in order to meet the
requirements of Section 147(1). The reference to the term ?Sany
person?? in the verdict of the Apex Court in Amritlal Sood’s case
1998 ACJ 531 SC is that of the term employed in Section II(1)(a) of
the Comprehensive policy and not that of the term employed in Section
147 of the M.V.Act. In fact the same view has subsequently been taken
by the Supreme Court in T.V.Jose (Dr.) V.Chacko P.M.2001 ACJ 2059 SC.
The
non-payment of premium of such persons, or the premium structure
being the same for all policies as far as third party liability is
concerned, become insignificant when the fact that the cover was
granted free of cost from 1978 is viewed in the proper perspective.
The
expression ?Sany person?? occurring in Section 147 has been
interpreted by various Courts to be of wide connotation to include
even an occupant and the expression ?Sthird party?? has been
interpreted to mean any person other than the insurer and the
insured.
The
Karnataka High Court in National Insurance Co.Ltd. V.Rasheeda 1998
ACJ 404 has held that these expressions used in Section 147 includes
even a person travelling in a private car. This view may not be
correct in the light of the repeated assertion of the apex Court in
Tilak Singh’s case and K.V.Suthakaran’s case that the occupants of a
vehicle cannot be construed as a third party under the Act Policy.
Thus,
an interpretation of the expression ?Sany person?? occurring in
Section 147 would be governed by the law as lay down by the apex
Court, but the Courts could take a different view of the matter if
they were to interpret the words ?Sany person?? occurring in
Section II of a comprehensive/package policy. There is nothing that
could stop an insurer from contending that the risk is not covered
had not the TAC brought forth the amendment in 1978.
13. Position
of law
The
issue relating to the liability of the insurer under the
comprehensive policy was dealt with by a three member Bench of the
Apex Court in 1998 in Amritlal Sood V.Kausalya Devi 1998 ACJ 531 SC.
Though the judgment was delivered much after the issuance of the said
circular by the TAC, the policy in dispute in the said case was
issued prior to the amendment to the said policy wordings.
The
Apex Court has brought such occupants within the ambit of the term
?Sany person?? in Section II(1)(a) of the comprehensive Policy (and
not in Section 147 of the MV Act) in its ruling above said Amritlal
Sood V.Kausalya Devi 1998 ACJ 531 SC and has accordingly held that
under the comprehensive policy the insurer is liable to compensate
the occupants of private vehicles.
The
Andhra Pradesh High Court has held in Oriental Insurance Co.Ltd.
V.Nakirikanti Narendra Babu and Others 2007 ACJ 2069 that the insurer
is liable under comprehensive policy in the light of the specific
wordings contained in Section II of the policy.
14. Applicability
of the circular and decisions
The
TAC circular is however applicable only to comprehensive policies
only. An impression is gaining ground in the minds of insured persons
and MACTs that the insurer would be liable even in a statutory policy
in the light of the judgment of the Gujarat High Court in Naymesh H.
Nanavati v. Dashrath R. Bhagat and Others 2008 ACJ 61 and in the
judgment of the Delhi High Court in Ramesh Chand Tripathi v. Lily
Joshi 2008 ACJ 785, where the TAC circular is referred to hold the
insurer liable in the case of a gratuitous passenger in a private
vehicle. The discussion in paragraph 7.1 of the judgment in Naymesh
Nanavati’s case mentions that the decision of the TAC relates to
clause(1) of Section II(a) of a Motor Car Comprehensive policy. Such
a view is incorrect since the said wordings were added only to a
comprehensive policy and no such addition can be attributed to a
statutory policy.
The
judgment of the Madras High Court in National Insurance Co. Ltd., v.
Komalam and Others (2008) 2 MLJ 736 has given raise to an impression
that unless additional premium is paid to cover the risk of
passengers in the vehicle, the insurer cannot be saddled with
liability to pay compensation in respect of an occupant of a private
car. In fact there is no provision in the IMT that enables the owner
of a private vehicle to take an unlimited cover in respect of
occupants/pillion rider, and hence the question of paying additional
premium to cover the risk in respect of an occupant does not arise at
all. The liability of the insurer in respect of such occupants arises
not on account of the collection of premium, but on account of the
wordings in Section II of a comprehensive/ package policy.
Occupants
of a private car/pillion riders in two-wheelers do not fall within
the expression ‘any person’ occurring in Section 147. In the absence
of a tariff structure to cover their risk, non payment of premium
cannot be a ground to allow the insurer to wriggle out of the
commitment granted under Section II(1)(a) of a comprehensive/package
policy. The cover however, is not available where the death or bodily
injury arises out of and in the course of the employment under the
insured except to the cases required to be covered under Motor
Vehicles Act. That is to say not all employees of the insured who
happen to travel as occupants in the insured’s vehicle would be
covered under Section II(1)(a).
The
only category of employee who would be covered to meet the
requirement of the proviso (i) to Section 147(1)(b)(ii) is the
employee engaged in driving the vehicle. So long as the words that
presently occur in Section II(1)(a) of a standard package policy
remain as they are, it would not be open to an insurer to take
advantage of non-payment of premium to contend that the risk in
respect of occupants of a private car and a pillion rider traveling
on a two-wheeler is not covered under a comprehensive/package policy.
The
dispute in Mathew Joseph case, and Bhagyalakshmi case rendered by
Kerala and Karnataka High Courts respectively and the verdict in
Kulandai Theresa and Others v. P.Ramalingam and Others (unreported
case of Madras High Court in CMA No.1137 of 1990 by Hom’ble Mrs.
Chitra Venkataraman) and National Insurance Company Limited v.
Komalam decided by Hon’ble Ms. Justice R. Banumathi (2008) 2 MLJ 736
have been decided in favour of insurers holding that without payment
of special or additional premium no liability can be fastened upon
them.
The
type of policy under consideration in Kulandai Theresa’s case is not
mentioned therein The finding of the Madras High Court in National
Insurance Company Limited v. Komalam (2008) 2 MLJ 736 that the
insurer is not liable in this case is however justifiable on the
grounds that the deceased was not just an occupant, but an employee
of the insured whose risk is, even otherwise, not required to be
covered under the MV Act.
15. Conclusion
The
occupants of private vehicles are thus third parties in the eyes of
law and death or bodily injury to such person or class of persons
would entitle them or their dependents, as the case may be, to claim
compensation from the insurers even without any additional premium by
the owners of the private vehicles.
From
the foregoing it may inevitably be concluded that the decision in
favour of the insurers would be justifiable only if the policy of
insurance under consideration were a statutory policy and not
otherwise. Such of those decisions which have held that the insurers
are not liable under comprehensive policy to cover such occupants of
private vehicles and pillion passengers without additional premium
may be considered in the light of what is stated above.??
13. In
view of the aforesaid law as referred by this Court and relied upon
by learned advocate Ms.Megha Jani, the question is that whether
pillion rider in private vehicle covered by definition of ‘any person
/ third party/ occupant, so Insurance Co. is held to be liable for
payment of compensation to the claimants. The decision which has
been relied upon by her where nowhere direction of the Tariff
Advisory Committee has been considered by Apex Court. In the decision
of Sudhakaran K.V. (supra) also, Apex Court has examined issue
whether pillion rider is covered as a third party or any person under
Section 147 of the MV Act. In decision of Tilak Singh (supra), Apex
Court has considered Section 147 of the MV Act and terms of
insurance policy where risk of pillion rider is not covered because
additional premium was not paid by insured. But before Apex Court,
direction of Tariff Advisory Committee issued to all the insurer that
Tariff Advisory Committee has taken the decision relating to clause-1
of Section-II(a) is to be substituted by way of amendment in respect
of ‘any person’ such occupants is to be included.
14. In
this matter, this court has examined whether insurance company is
liable to pay compensation to claimant or not in case of an accident
wherein pillion rider has received injury or has expired in such an
accident. In decision of apex court which has been relied upon by
learned Advocate Ms. Megha Jani, apex court has considered only scope
of section 147 of Motor Vehicles Act and in light of that fact,
whether pillion rider is to be considered third party or not, only
that question has been examined by Hon’ble Supreme Court in decision
referred to and relied upon by learned Advocate Ms.Megha Jani. The
Apex Court has come to conclusion that pillion rider is not
considered to be third party, therefore, insurance company is not
liable to pay compensation to claimant. Owner is not a third party.
If motor cycle is driven by owner and his wife is sitting on motor
cycle as pillion rider and accident occurs, then, though owner has
paid premium for obtaining insurance, then also, as per
interpretation of section 147 made by apex court, result is that
owner of motor cycle and his wife both are not considered to be third
party when accident occurred without involvement of opposite vehicle.
Therefore, owner is not third party, pillion rider is also not a
third party, then, for whom insurance was taken by owner and for what
and why amount of insurance was paid by owner to insurance company.
According to my opinion, insurance company plays trick with its
customers by not giving total details which are necessary and in the
interest of insured while entering into contract of insurance with
owner of vehicle. According to my opinion, owner who is purchasing
and owning motor cycle worth Rs.40,000/- to Rs.50,000/- would be
having no problem to make payment of additional premium of petty
amount of Rs.100.00 or so while getting vehicle insured to cover risk
in all respects. But complete details are not given to owner whether
his risk is covered in all respects or not by insurance company and
insurance company while entering into contract of insurance, not
providing complete details that for covering risks in all respects,
this much additional premium is necessary so as to cover risk of
owner/person driving motor cycle and pillion rider. This is the
business approach or trick which is being played by insurance
companies with customers who are approaching insurance company for
getting their motor cycle insured in all respects. Initially,
insurance company will get business by playing such tricks and then,
when claim is lodged, insurance company will defend such claim by
teeth and nail and in such a situation, ultimate suffer is injured
and pillion rider. It cannot be presumed that in motor cycle,
pillion rider is taken by driver or owner of motor cycle on hire or
reward. This is impossible even to imagine and pillion rider of
motor cycle would ordinarily be a friend or relative or it would be a
social service rendered by owner/driver of motor cycle. Therefore,
according to my opinion, while getting business, insurance company
must disclose true and correct picture before owner of motor cycle
but unfortunately being business tactics, these facts are not being
disclosed by insurance company before owner of motor cycle who is
approaching insurance company for getting their vehicle insured in
all respects. Normally persons would not be aware about such tactics
which are being adopted by insurance company, so, ultimately,
insurance company will deny responsibility and ultimate suffer will
be pillion rider. According to my opinion, such type of approach and
business tactics adopted by insurance company is required to be
condemned. This Court has gathered facts from number of such
instances where such type of defences are always being raised by
insurance company by placing reliance upon decision of apex court
wherein apex court has interpreted only section 147 of Motor Vehicles
Act. Considering whether insurance company is statutorily liable to
pay compensation to claimant in respect of claim of pillion rider and
owner, answer given by apex court in negative but according to my
opinion, in said decision relied upon by learned Advocate Ms.Megha
Jani, the Apex Court has considered only statutory liability of
insurance company in above said decisions. However, I am considering
whether this liability of insurance company is arising from
contractual liability means as per terms and conditions incorporated
in insurance policy or not. If insurance company is contractually
liable to cover risk of pillion rider, then, insurance company is
liable to discharge liability on the basis of terms and conditions
incorporated in insurance policy, therefore, I am examining this
matter only on the basis of fact whether insurance company is
contractually liable or not in respect of pillion rider, to pay
compensation to claimant of pillion rider. For that, I am relying
upon Tariff Advisory Committee which had issued Circular dated 2nd
June, 1986 which is relating to compensation to pillion riders. By
said circular dated 2nd June, 1986, Insurer’s attention
was invited to section II (1) (a) of standard form for motor
cycle, comprehensive policy, sheet 59 of the IMT. Under said
Circular, it was decided that the standard motor cycle
comprehensive policy should cover liability to pillion passengers
treating them as occupants in the motor cycle and provide
indemnity to such persons who are not carried for hire or reward.
Accordingly, the extra benefit No.2 granting legal liability
to cover side car passengers was deleted and the standard cover
under section 2(1) (a) of the policy was worded like ?SDeath
or bodily injury to any person including any person conveyed in or
on the motor cycle provided such person is not carried for hire
or reward.?? And thereafter, Insurers are requested to issue
necessary instructions to their Divisional / Branch offices
accordingly. Said Circular dated 2nd June, 1986 is also
applicable in Gujarat State, Ahmedabad. According to my opinion,
said direction or circular issued by Tariff Advisory Committee is
having statutory binding force upon the insurance companies but
insurance companies are not amending their terms and conditions
incorporated in policy of insurance in respect to motor cycle and
that is how ultimate suffer is claimant of pillion rider, therefore,
according to my opinion, considering aforesaid directions and
circular dated 2nd June, 1986 issued by Tariff Advisory
Committee, risk of pillion rider is covered being contractual
liability of insurance company and insurance company cannot deny such
contractual liability by merely placing reliance upon apex court
decision wherein apex court has considered only sec. 147 of Motor
Vehicles Act, therefore according to my opinion, said decisions of
apex court referred to and relied upon by learned Advocate Ms. Megha
Jani are not applicable to facts of this case. This aspect has been
considered by Karnataka High Court in case of Oriental Insurance Co.
Ltd. Versus Minaxi and others reported in 2000 ACJ 385 while relying
upon earlier decision of Karnataka High Court in case of Kashmir D.
Gudinho v. Kulkarni reported in 1998 ACJ 1427. In said decision,
Karnataka High Court has, after examining entire matter with all
relevant decisions on issue, observed as under in para 12 to 20:
?S12.
When the matter was heard by me, I have also noticed that Sri C. K.
Kambeyananda, one of the Senior Advocates on the panel of the
Insurance Company present before Court, and therefore, I thought his
assistance to decide the issue before me. It is his submission that
on 2-6-1986, a circular came to be issued to cover the risk of
pillion riders and with the issuance of that circular the amendment
in the clause of the Insurance Policy very well covered the third
party risk including the death or bodily injury to any person
including person conveyed in or on the Motor Cycle provided such
person is not carried for hire or reward. He specifically placed
reliance on the reported decision of the learned single Judge of
this Court reported in ILR 1996 Kant 3041 : (AIR 1996 Kant 396) and
ILR 1997 Kant 1491 : (1997 AIHC 2159). The other decisions Sri
Kambeyananda cited before me are :
1.
ILR 1997 Kant 2697 : (1997 AIHC 4104) (National Insurance Co. Ltd. v.
Smt. Rasheeda).
2.
ILR 1995 Kant 1637 (Shanthabai v. Shekappa).
3.
ILR 1991 Kant 2045 : (AIR 1992 Kant 3) (FB).
4.
AIR 1977 SC 1735.
5.
ILR 1996 Kar 3041 : (AIR 1996 Kant 396) (New India Assurance Co. Ltd.
v. Nagarathna)
6.
Unreported judgment of the learned single Judge of this Court in MFA
2263/94 (DD 201.1998).
13.
It is relevant to point out here that the Tariff Advisory Committee
had issued the Circular dated 2-6-1986 to cover the third party risk.
In this context, I feel it appropriate to quote the said circular
that came to be issued by the Tariff Advisory Committee, a copy
thereof had been supplied to the Court by the learned counsel for the
appellant in the first appeal, the same reads as hereunder :
“(PRIVATE
and CONFIDENTIAL : ISSUED FOR THE USE OF INSURERS CARRYING ON GENERAL
INSURANCE BUSINESS IN INDIA).
TARIFF
ADVISORY COMMITTEE
BOMBAY
Ador
House, 1st floor,
6,
K. Dubash Marg,
Bombay-400
023.
MOT/GEN/10
2nd
June, 1986.
To
:
All
Regional Offices of :
1.
National Insurance Co. Ltd., Calcutta.
2.
The New India Assurance Co.. Ltd., Bombay.
3.
The Oriental Insurance Co. Ltd., Delhi.
4.
United India Insurance Co. Ltd., Madras.
Govt.
Insc. Funds : 1. Maharashtra State, Bombay.
2.
Gujarat State-Ahmedabad.
3.
Kerala State-Trivandrum.
4.
Karnataka State-Bangalore.
Re
: Compensation to Pillion Riders.
Insurer’s
attention is invited to Section II(1)(a) of Standard Form for Motor
Cycle, Comprehensive Policy, Sheet 59 of the IMT.
It
has now been decided that the Standard Motor Cycle Comprehensive
Policy should cover liability to Pillion Passengers treating them as
occupants in the Motor Cycle and provide indemnity to such persons
who are not carried for hire or reward.
Accordingly,
Extra Benefit No. 2 granting legal liability to cover side car
passengers will stand deleted and Standard Cover under Section
2(1)(a) of the Policy are worded as under:-
“Death
or bodily injury to any person including person conveyed in or on the
Motor Cycle provided such person is not carried for hire or reward.”
Insurers
are requested to issue necessary instructions to their
Divisional/Branch offices accordingly.
sd/-
(Y.D.
PATIL)
SECRETARY
C.C.to:Head
Office of New India/ National/ Oriental/United India,
Bombay/Calcutta/Delhi Madras Regional Committees, General Insurance
Corporation of India, Technical Department, Bombay, Govt. Audit
Depts, Bombay/ Calcutta/ Delhi/Madras.”
14.
Both the two accidents involved in these three appeals had taken
place after coming into force of the Motor Vehicles Act, 1988, when
the accident in the first two appeals had taken place on 27-9-1991,
the accident in the third appeal had taken on 16-12-1990. Therefore,
I feel it appropriate to advert to Section 147 of the Motor Vehicles
Act, 1988 (Henceforth referred to in brief as ‘ACT’). The said
Section deals with the requirements of the policies and limits of
liability. To quote the same, the same reads as hereunder :
“147.
Requirements of policies and limits of liability.- (1) In order to
comply with the requirements of this Chapter, a policy of insurance
must be a policy which-
(a)
is issued by a person who is an authorised insurer; and
(b)
insures the person or classes of persons specified in the policy to
the extent specified in sub-section (2)-
(i)
against any liability which may be incurred by him in respect of the
death of or bodily injury to any person [including owner of the goods
or his authorised representative carried in the vehicle] or damage to
any property of a third party caused by or arising out of the use of
the vehicle in a public place;
(ii)
against the death of or bodily injury to any passenger of a public
service vehicle caused by or arising out of the use of the vehicle in
a public place :
Provided
that a policy shall not be required-
(i)
to cover liability in respect of the death, arising out of and in the
course of his employment, of the employee of a person insured by the
policy or in respect of bodily injury sustained by such an employee
arising out of and in the course of his employment other than a
liability arising under the Workmen’s Compensation Act, 1923 (8 of
1923), in respect of the death of, or bodily injury to, any such
employee-
(a)
engaged in driving the vehicle, or
(b)
if it is a public service vehicle engaged as a conductor of the
vehicle or in examining tickets on the vehicle, or
(c)
If it is a goods carriage, being carried in the vehicle, or
(ii)
to cover any contractual liability.
Explanation.-
For the removal of doubts, it is hereby declared that the death of or
bodily injury to any person or damage to any property of a third
party shall be deemed to have been caused by or to have arisen out
of, the use of a vehicle in a public place notwithstanding that the
person who is dead or injured or the property which is damaged was
not in a public place at the time of the accident, if the act or
omission which led to the accident occurred in a public place.
(2)
Subject to the proviso to sub-section (1), a policy of insurance
referred to in sub-section (1), shall cover any liability incurred in
respect of any accident, up to the following limits, namely :-
a)
save as provided in clause (b), the amount of liability incurred;
b)
in respect of damage to any property of a third party, a limit of
rupees six thousand :
Provided
that any policy of insurance issued with any limited liability and in
force immediately before the commencement of this Act, shall continue
to be effective for a period of four months after such commencement
or till the date of expiry of such policy whichever is earlier.
(3)
A policy shall be of no effect for the purposes of this Chapter
unless and until there is issued by the insurer in favour of the
person by whom the policy is effected a certificate of insurance in
the prescribed form and containing the prescribed particulars of any
condition subject to which the policy is issued and of any other
prescribed matters; and different forms, particulars and matters may
be prescribed in different cases.
(4)
Where a cover note issued by the insurer under the provisions of this
Chapter or the rules made thereunder is not followed by a policy of
insurance within the prescribed time, the insurer shall, within seven
days of the expiry of the period of the validity of the cover note,
notify the fact to the registering authority in whose records the
vehicle to which the cover note relates has been registered or to
such other authority as the State Government may prescribe.
(5)
Notwithstanding anything contained in any law for the time being in
force, an insurer issuing a policy of insurance under this section
shall be liable to indemnify the 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 those classes of
persons.
15.
By reading the provision in Section 147(1)(i), it appears to me that
the policy one issuable by the Insurance Company must cover as
against any liability which may be incurred by the owner of the
vehicle in respect of the death or bodily injury to any person and
must include the death or bodily injury or injuries likely to be
suffered by the third parties too. It further appears to me that the
term ‘any person’ used in the above Section also covers the pillion
rider, for in the Explanation below the proviso thereto, it is
clarified that the death or bodily injury to any person or damage to
any property of a third person shall be deemed to have been caused by
or to have arisen out of the use of the vehicle in a public place at
the point of time of accident that occurred in a public place.
Therefore, it is obvious that Section 147 of the Act contemplates
coverage of risk of the third parties too, who suffered either bodily
injury or death as the case may be. This interpretation of mine has
got support in the decision of the learned single Judge reported in
ILR 1997 Kant 2697 : (1997 AIHC 4104). In the said decision, at para
(9) thereof, the learned single Judge had observed as hereunder :
“9.
A perusal of these observations per se reveals that in order to
reject the plea raised therein that the expression third party is
wide enough to cover all persons except, person and the insurer, the
basis provided has been by the proviso to clause (ii) to Section
95(i) of the Act of 1939. No doubt under M.V. Act of 1939 proviso
clearly says that policy is not required to cover the liability in
respect of death or bodily injury to persons being carried in or upon
entering or mounting or alighting from the vehicle at the time of
occurrence of the event out of which the claim arises, subject to the
exception which is indicated and provided by the expression ‘except
where the vehicle is a vehicle in which passengers are carried for
hire or reward or by reason of or in pursuance of contract of
employment’. The Section 95 of Act of 1939 very clearly provides by
virtue of proviso II inserted therein, with exception to the
passengers for hire or reward taken in the vehicles in which
passengers are taken for hire or reward or who are taken by reason of
contract, Insurance Policy will not be required to cover the risk of
any person travelling in the vehicle who are not carried for hire or
reward. This Clause II to the proviso to Section 95 of Old Act has
been omitted from the new Act. The legislature has completely omitted
to enact this clause in proviso to Section 147(1) when it enacted
Motor Vehicles Act 1988. It is to be assumed and presumed that
Legislature when enacting the new Act and when enacting Section 147
knowingly changed the tenor of language and omitted proviso two to
Section 95 of Act of 1939 and did not incorporate that in Section 147
of Act of 1988. It intended to provide something different and
modified from the Scheme of Section 95 of Old Act under Section 147
to that extent. It is well settled principles of law that if under
subsequent Act, the legislature changes the tenor of language, omits
certain provisions from being incorporated which existed at the time
of enactment of New Act replacing Old Act and the subject-matter, the
intention emerging therefrom i.e., the change has got to be given
effect to. The effect of change of language is revelation of
legislative intent that expression ‘Any person’ and the third party
used in the Act will also include any person even travelling in the
vehicle without paying any hire etc. If the Legislature would not
have different intents in enacting Section 147 of Act of 1988 than
revealed by Section 95 of Old Act into, it would have incorporated in
extenso Section 95 of the Act of 1939 in the Act of 1988 as it did
exist in Act of 1939. The Parliament would not have omitted Clause II
to proviso to Section 95(1) when it enacted Section 147. Therefore,
in my opinion the expression ‘Third Party’ or ‘Any Person’ used in
Section 147 of Act of 1988 includes in itself even a person
travelling in a private car. When I so opine, I find support from the
single Judge decision of High Court of Jammu and Kashmir in the case
of National Insurance Co. v. Faqir Chandra, (1996) 1 Acc CJ 111, as
well as the decision of this Court in the case of United Insurance
Company v. P.B. Laxman, ILR 1996 Kant 2224 and the decision of this
Court in the case of Shantabai v. Shekappa, (ILR 1995 Kant 1637).
Thus considered in my opinion the appeal has got no merits and I do
find that the Tribunal has not committed any error of law or
jurisdiction in holding that Insurance Co. is liable to pay that
amount as the liability of the Insurance Co. runs with the liability
of the owner of the vehicle and so liability fastened under Section
140 will also be covered by the policy. The appeal as such is to be
hereby dismissed. It has been brought to my notice that the main
claim is pending for decision. It is expected that Tribunal will
expeditiously decide the matter as the occurrence had taken place
some time in 1992. The appeal is thus dismissed and finally disposed
of and the Tribunal is directed to decide the petition within a
period of six months from the date of receipt of this order.”
16.
It is an admitted fact that after the Apex Court decided Shanthabai’s
case (ILR 1995 Kant 1637), the Tariff Advisory Committee, Bombay, had
issued a circular to cover the risk of third parties, who are
gratuitous travellers and it is also an admitted fact that the Tariff
Advisory Committee in that circular issued on 2-6-1986 stated that
the comprehensive policy should cover liability to pillion passengers
treating them as occupants in the motor cycle. The learned counsel
for the appellant had also produced before me a copy of the circular
dated 2-6-1986 that came to be issued by the Tariff Advisory
Committee, Bombay. As a matter of fact, in the first two appeals, the
appellant-Insurance Company had also issued Ex. R1-Policy in respect
of the Yezdi motor cycle bearing registration No. CNL 2338 and in one
of the terms and conditions under the heading “Liability to
third parties”. It is set down therein as hereunder :
“Subject
to the Limit of Liability as laid down in the Motor Vehicles Act the
Company will indemnify the Insured in the event of accident caused by
or arising out of the use of Motor Vehicle anywhere in India against
all sums including claimant’s cost and expenses which the Insured
shall become legally liable to pay in respect of death of or bodily
injury to any person and/or damage to any property of Third Party.”
17.
Similarly the third appeal before the Tribunal, the
appellant-Insurance Company had also produced Ex. R1-Insurance Policy
in respect of the vehicle in question before the Tribunal below and
in page No. 1 of the said Insurance Policy, I find the similar term
in the said policy.
18.
In all the cases, therefore it is clear that the Insurance Companies
in question had issued Act policies but to cover the risk of the
third parties too. That being so, I have got no hesitation to hold
that the appellants Insurance Companies could be saddled with the
liabilities of compensating the respondents-owners in both the sets
of appeals.
19.
If the above term as at para (6) supra under the liability to third
parties read along with the provision in Section 147 of the Act in my
considered view, it is clear that the appellant-Insurance Company had
covered the third party risk and that risk also included the risk
caused by death or injury of pillion riders. Therefore, I have got no
reservation to uphold the impugned judgment and awards passed by the
Tribunal in two sets of appeals. As a matter of fact, in yet another
decision reported in ILR 1997 Kant 1491 : (1997 AIHC 2159), the
learned single Judge of this Court had also held similar view and in
the said decision, the learned single Judge held as hereunder :
“In
the present case, insurance policy was effective from 6-1-87 for one
year i.e., 5-1-88, occurrence or incident causing injuries and death
of Gudinho, did take place on 27-2-87 i.e., all dates noted above
were subsequent to 2-6-86 i.e., date of circular therefore, in the
present case in view of amendment being applicable, it must be held
that the policy covers the risk of pillion rider in the present case.
That amendment in the clause of the policy covers the third party
risk including death or bodily injury causes to any person including
the person conveyed in or on the Motor-cycle and it is provided that
such person should not have been carried on for hire or reward, it
may not cover that risk, but if a person is not carried on for hire
or reward, then company has undertaken the liability to compensate or
indemnify the insured for whatever sum it is required to pay as
compensation to the claimant including the costs and the interest.”
20.
Therefore, I am inclined to dismiss the two sets of appeals by
confirming the impugned judgments and awards of the Tribunals below
in following the view taken by the learned single Judges of this
Court in two different appeals referred to in paras (15) and (19)
supra.??
15. By
making observations as aforesaid, Karnataka High Court has made clear
picture establishing contractual liability of insurance company by
relying upon Circular dated 2nd June, 1986 issued by
Tariff Advisory Committee and issue decided by Karnataka High Court
is squarely covering the matter at issue in case before hand and
according to my opinion, that aspect has been rightly examined by
claims tribunal in this case and has rightly relied upon circular
issued by Tariff Advisory Committee in respect to motor car by
relying upon decision of this Court reported in 2007 (1) GLR page 567
in case of Naynesh H. Nanavati v. Dashrath R. Bhagat. Therefore,
though there are recent decisions of apex court that pillion rider
and owner or driver of motor cycle are not third party, according to
my opinion, those decisions are interpreting section 147 of Motor
Vehicles Act alone and in those decisions, apex court has not
considered Circular dated 2nd June, 1986 issued by Tariff
Advisory Committee for motor cycle and another circular relating to
motor car and, therefore, in view of these facts involved in case
before hand wherein claims tribunal has considered said circular,
therefore, those decisions of apex court are not applicable to facts
of this case as contractual obligation accepted by insurance company
as per Tariff Advisory Committee Circular dated 2nd June,
1986 and, therefore, now, insurance company cannot deny
responsibility or liability to pay compensation to claimants by
relying upon apex court decisions as referred to above, therefore,
contentions raised by learned Advocate Ms. Megha Jani cannot be
accepted and same are, therefore, rejected.
16. Similar
to the view taken by Karnataka High Court as referred to above,
Gujarat High Court has also considered similar question about
contractual obligation on the part of insurance company on the basis
of Circular dated 2nd June, 1986 issued by Tariff Advisory
Committee covering risk of pillion rider in case of Oriental
Insurance Co. Ltd. Versus Aayeshaben Wd/o Suleman Patel in First
Appeal No. 7157 of 1999 dated 4th September, 2000. In said
matter, note for speaking to minutes was filed and this Court passed
order thereon on 20.4.2001. Relevant observations made by Division
Bench of this Court in said decision after considering said Circular
of Tariff Advisory Committee dated 2nd June, 1986 are
reproduced as under:
?SPursuant
to the Note for Speaking to Minutes filed by
Mr.K.K.Nair, learned advocate for the appellant, we have
taken up this matter. There is consensus that, in para 9
from line 6 starting from “Undoubtedly” till “or any two
wheelers”, and whole of para 10 in our judgment dated
4.9.2000 in First Appeal No.7157 of 1999, unfortunately,
apparent and glaring factual mistakes have crept in and,
it is, rightly, jointly, submitted that in view of
reference of two decisions rendered by us, in First
Appeal No.1400 of 2000 and 1706 of 2000, both decided by
our Bench, typographical mistakes have crept in due to
misconception and instead of mentioning correct facts,
apparent wrong facts, about the date etc. have been,
mistakenly, stated. It is, therefore, submitted that the
apparent and glaring factual mistakes may be corrected
and rectified by allowing the speaking to minutes.
We are, in complete, agreement with the consensual
statement. Accordingly, para 9, as stated above, and
para 10 of the judgment shall stand deleted and shall
stand substituted by the following paragraphs:
“9. The date of accident in the present case
is 20.4.89, whereas, the Motor Vehicles Act, 1988
came into force from 1.7.89. It is relevant, to
point out here that the Tariff Advisory Committee
had issued the circular dated 2.6.1986 to cover
the third party risk. In this context, we feel
it appropriate to quote the said circular that
came to be issued by the Tariff Advisory
Committee, a copy thereof had been supplied to
the court by the learned counsel for the
appellant, in the first appeal, the same reads as
under:
“(Private & Confidential: Issued for the use of
insurers carrying on General Insurance Business
in India).
Tariff Advisory Committee
Bombay
Ador House, 1st Floor,
6, K. Dubash Marg,
Bombay 400 023.
MOT/GEN/10 2nd June, 1986
To:
All Regional Offices of:
(1) National Insurance Co. Ltd.
Calcutta.
(2)New India Assurance Co. Ltd.
Bombay.
(3) Oriental Insurance Co. Ltd., Delhi.
(4) United India Insurance Co. Ltd.
Madras
Govt. Insc. Funds:
(1) Maharashtra State, Bombay
(2) Gujarat State, Ahmedabad.
(3) Kerala State, Trivandrum.
(4) Karnataka State, Bangalore.
Re: Compensation to pillion riders.
Insurer’s attention is invited to section
II(1)(a) of standard form for motor cycle,
comprehensive policy, sheet 59 of the IMT.
It has now been decided that the standard
motorcycle comprehensive policy should cover
liability to pillion passengers treating them as
occupants in the motor cycle and provide
indemnity to such persons who are not carried for
hire or reward.
Accordingly, the extra benefit No.2 granting
legal liability to cover side car passengers will
stand deleted and the standard cover under
section 2(1)(a) of the policy is worded as under:
Death or bodily injury to any person including
person conveyed in or on the motor cycle provided
such person is not carried for hire or reward.
Insurers are requested to issue necessary
instructions to their Divisional/Branch offices
accordingly.
Sd/-
(Y.D.Patel)
Secretary.
C.C. to: Head Office of New India/National/
Oriental/United India, Delhi/Bombay/Calcutta/
Madras Regional Committees, General Insurance
Corporation of India, Technical Department,
Bombay. Govt. Audit Depts. Bombay/Calcutta/
Delhi/Madras.”
10. But the position has, completely, been
changed when the New Motor Vehicles, 1988, came
into force. In section 147 of the new Act which
corresponds to section 95 of the old Act there is
no limit in certain cases as contained in clause
(ii) of the old Act. The corresponding proviso
in the old Act contained three clauses whereas
now there are only two clauses. What was dropped
in the new Act is the clause which excluded the
coverage for death or bodily injury to persons
carried in or upon the vehicle. That means such
liability cannot now be excluded from the policy.
The result is, when a policy of insurance ‘is an
Act policy’, it does not necessarily mean that
the insurance company will stand absolved from
the liability in respect of the pillion rider of
a motor cycle.”
Office is directed to make necessary corrections as
indicated hereinabove in the original judgment. This
note for Speaking to Mintues shall stand disposed of
accordingly.??
17. Similarly,
Division Bench of this Court in case of United India Insurance
Company Ltd. Versus Shashikant R. Dhah Decd. Through Heirs Shardaben
S.Shah & 6., in First Appeal NO. 3532 of 1996, examined same
question on 5.2.2003. Relevant observations made by Division Bench of
this Court in said decision are reproduced as under:
?S In
the appeal the impugned award has been
challenged on the ground that the deceased was a pillion
rider and the pillion rider would not be a third party
and, not covered under the contract of insurance and,
therefore, the appellant – Insurance Company would not be
liable to pay the compensation on account of death of the
pillion rider on a scooter.
3. Tariff Advisory Committee of the General
Insurance issued a circular dated 2.6.1986. Same reads as
follows :-
Tariff Advisory Committee
Bombay
Ador House, 1st Floor,
5, K. Dubash Marg,
Bombay-400 023.
2nd June, 1986.
MOT/GEN.10
To:
All Regional Office of:
(1) National Insurance Co. Ltd.
Calcutta
(2) New India Assurance Co. Ltd.
Bombay
(3) Oriental Insurance Co. Ltd.
United India Insurance Co. Ltd.
Madras.
Govt. Insc. Funds:
(1) Maharashtra State, Bombay
(2) Gujarat State, Ahmedabad
(3) Kerala State, Trivandrum
(4) Karnataka State, Bangalore
Re: Compensation to pillion riders
Insurer’s attention is invited to section II (1)
(a) of standard form for motor cycle, comprehensive
policy, sheet 59 of the IMT.
It has now been decided that the standard motor
cycle comprehensive policy should cover liability to
pillion passengers treating them as occupants in the
motor cycle and provide indemnity to such persons who are
not carried for hire or reward.
Accordingly, the extra benefit No.2 granting
legal liability to cover side car passengers will stand
deleted and the standard cover under section 2(1) (a) of
the policy is worded as under :
Death or bodily injury to any person including
any person conveyed in or on the motor cycle provided
such person is not carried for hire or reward.
Insurers are requested to issue necessary
instructions to their Divisional / Branch offices
accordingly.
Sd/-
(Y.D.Patil)
Secretary.
C.C. to : Head Office of New India / National /
Oriental / United India. Delhi/ Bombay/ Calcutta /
Madras Regional Committees. General Insurance
Corporation of India, Technical Department, Bombay.
Govt. Audit Depts. Bombay /Calcutta / Delhi / Madras.”
It will be seen that the circular issued by the
Tariff Advisory Committee of the General Insurance is
binding to the appellant – Insurance Company. As per the
circular the pillion rider would be a third party and,
therefore, covered under the contract of insurance as
“any person and the risk of the pillion rider also stands
covered under the insurance policy as per the above
reproduced circular. It cannot be said that the deceased
who was a pillion rider on the scooter involved in the
accident would not be covered under the contract of
insurance, and the dependents of the deceased pillion
rider would be entitled to claim compensation.
4. In the memo of appeal it has been contended that
the quantum of compensation awarded is liable to be set
aside considering the prospective income in view of the
Exh.53 to 59 viz. Income-Tax Assessment Returns.
5. It is not disputed that no application under
Section 170 of the Act was preferred by the Insurance
Company before the claims Tribunal. In view of the
judgement in the case of Shankarayya and Anr Vs. United
India Insurance Co. Ltd. and Anr., AIR 1998 SC 2968,
this ground is not available to the appellant – Insurance
Company in absence of any application filed under Section
170 of the Act before the claims Tribunal.
6. In view of the above, we do not find any
substance in the appeal and the impugned award does not
call for any interference for the reasons aforestated.??
18. Therefore,
considering aforesaid two decisions of Division Bench of this Court,
according to my opinion, submissions made by learned Advocate Ms.
Megha Jani cannot be accepted and therefore, same are rejected.
19. The
present case is squarely covered by direction issued by Tariff
Advisory Committee. The direction issued by Tariff Advisory
Committee applied to private vehicle including private car and two
wheelers. The direction of Tariff Advisory Committee of 1978 gives
mandate to Insurance Co. to amend terms and conditions of policy, if
it is not amended accordingly, then same is having statutory force
binding to Insurance Co. and terms and conditions is not amended
accordingly, then to take advantage denying liability of compensation
in case of pillion rider, cannot be accepted by this Court, because
this aspect was not before Apex Court. But this very aspect has been
examined by the Division Bench of this Court in case of
Harshvardhatiya Rudraditya (supra) and in case of Naynesh H. Nanavati
(supra).
20. Following
observations of Apex Court are very relevant and useful in respect to
the subject examined by this Court. Therefore, lastly it is quoted as
under. The observations made by Apex Court in National Insurance Co.
Ltd. v. Abhaysing Pratapsing Waghela & ors. Reported in 2008 AIR
SCW 6178 arising from judgment of the Gujarat High Court reported in
AIR 2007 (NOC) 750 (Guj.).
?SA
contract of insurance is to be governed by the terms thereof, but a
distinction must be borne in mind between a contract of insurance
which has been entered into for the purpose of giving effect to the
object and purport of the statute and one which provides for
reimbursement of the liability of the owner of the vehicle strictly
in terms thereof. In that limited sense, a contract of insurance
entered into for the purpose of covering a third party risk would not
be purely contractual. And ordinary contract of insurance does not
have a statutory flavour. The Motor Vehicles Act merely imposes an
obligation on the part of the Insurance Co. to reimburse the claimant
both in terms of the Act as also the contract. So far as the
liability of the insurance co. which comes within the purview of
Sections 146 and 147 is concerned, the same sub-serves a
constitutional goal, namely, social justice. A contract of insurance
covering the third party sick must, therefore, be viewed differently
vis-a-vis a contract of insurance qua contract.
2007
AIR SCW 2279, 2007 AIR SCW 2362, AIR SCW 4549, 1998 AIR SCW 183 AND
2007 AIR SCW 7948, (Rel. onl).??
21. Therefore,
according to my opinion, decision which has been relied upon by
learned advocate Ms.Megha Jani is not applicable to the facts of this
case because in this case, this Court has considered terms and
conditions of insurance policy after having implementation of
direction of Tariff Advisory Committee which include as an occupant
in private vehicle pillion rider and that is how the Insurance Co. is
liable to pay compensation to claimants. Therefore, the reliance
placed by learned advocate Ms.Jani in case of Sudhakaran K. V.
(supra) and Tilak Singh (supra) is not applicable to exact facts of
this case, because claims Tribunal has relied upon decision of this
Court reported in 2007 (1) GLR 567, therefore, this Court has to
consider aforesaid decision which is based on direction issued by
Tariff Advisory Committee. Therefore, this Court cannot simply
consider policy as it is without amendment as per direction issued by
Tariff Advisory committee. The policy which was considered by Apex
Court in case of Sudhakaran K. V. (supra) and Tilak Singh (supra)
without amendment as per direction issued by Tariff Advisory
committee which is binding to Insurance Co., having statutory force,
deeming fiction and also having retrospective effect. These are
observations made by Division Bench of this Court in case of
Harshvardhatiya Rudraditya (supra). Therefore, I am considering this
First Appeal where award passed by claims Tribunal is under
consideration and the claims Tribunal has relied upon the decision
of this Court reported in 2007 (1) GLR 567 where direction of Tariff
Advisory Committee was taken into account. Therefore, this Court has
also considered same direction issued by Tariff Advisory Committee to
each Insurance Co. and on that ground, this Court is examining
whether view taken by claims Tribunal is right or wrong or any error
committed by claims Tribunal or not. And on that ground, this Court
is considering award passed by claims Tribunal and according to my
opinion, claims Tribunal has not committed any error in deciding
issue relying upon decision of 2007 (1) GLR 567. Therefore, the
submissions made by learned advocate Ms.Jani cannot be accepted and
same are rejected. Therefore, there is no substance in the present
appeal. Accordingly, present appeal is dismissed.
22. The
amount, if any, deposited with this Court for the purpose of appeal
shall be transmitted to the Tribunal concerned.
23. As the First Appeal No.5007 of 2008 is dismissed, no order is necessitated in Civil Application No.12523 of 2008. Accordingly, Civil Application No.12523 of 2008 is disposed of.
(H.K.RATHOD,J.)
(vipul)
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