Gujarat High Court
Icici vs Gitaben on 20 October, 2008
Author: H.K.Rathod
Bench: H.K.Rathod
Gujarat High Court Case Information System
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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)
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Appearance
:
MS
MEGHA JANI for
Appellant(s) : 1,
None for Defendant(s) : 1 -
4.
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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.
2007AIR 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) Top