Jammu & Kashmir High Court
National Insurance Co. Ltd vs Sudhakaran K. V on 16 March, 2017
Author: Ramalingam Sudhakar
Bench: Ramalingam Sudhakar
HIGH COURT OF JAMMU AND KASHMIR AT JAMMU CIMA No. 135 OF 2012 National Insurance Co. Ltd Petitioners Shiv Ram & ors. Respondent !Mr. Baldev Singh, Advocate ^Mr. Adarsh Sharma, Advocate. Honble Mr. Justice Ramalingam Sudhakar, Chief Justice (A) Date: 16.03.2017 :J U D G M E N T :
1. Appellant-Insurance Company has filed this appeal challenging the award passed on 16.02.2012 by MACT Kathua.
2. It is a case of fatal accident. Accident in this case happened on 01.10.2009.
3. The deceased Shashi Bala, aged 45 years, was travelling as pillion rider and was going from Hira Nagar to Kathua. The driver of the vehicle who was brother of the insured is said to have driven the vehicle in rash and negligent manner and caused the accident and death of Shashi Bala. There was not other offending vehicle or no other extraneous cause for the accident. This fact is not disputed by respondents-claimants. On her death, husband-Shiv Ram and respondent Nos. 2 and 3 minor children are the claimants who have filed the claim for compensation.
4. Tribunal on the basis of the evidence came to hold that the driver of the two wheeler was rash and negligent and was responsible for accident and death of the pillion rider Shashi Bala. The Tribunal after assessing evidence on record and after fixing the 2 income of deceased at Rs. 3000/- per month and applying 10 multiplier granted for the following amount as compensation:
Loss of dependency Rs. 3,60,000/-
Loss of consortium Rs. 10,000/-
Funeral expenses Rs. 5,000/-
Loss of estate Rs. 10,000/-
Total Rs. 3, 85,000/-
With interest @ 7.5% per annum.
5. The Insurance Company let in evidence and resisted the liability of grant of compensation on the ground that Policy issued in favour of 2-wheeler in question was an Act Policy and deceased was a pillion rider and was travelling as a gratuitous passenger for whom no additional premium was paid, hence the Insurance Company is under no liability.
6. The Tribunal did not, however, accept this plea. It brushed aside this argument by stating that the number of decisions cover the claim, despite the fact that it is an Act Policy and that even if there was no additional premium paid in respect of pillion rider/ gratuitous passenger as in present case.
7. The appeal is now canvassed by Sh. Baldev Singh placing reliance on decision of Supreme Court in Oriental Insurance Co. Ltd. vs. Sudhakaran K. V., 2008 ACJ 2045 (SC) and National Insurance Co. Ltd. v. Balakrishnan, 2013 ACJ 1999 (SC). In these two decisions it has been held as follows:
(vii) In Oriental Insurance Company Ltd. v. Sudhakaran K.V. and others, (2008) 7 SCC 428 : AIR 2008 SC 2729 :
2008 AIR SCW 4549 : 2008 (3) TAC 1 the Hon. Apex Court while dealing with the issue whether a pillion rider on a scooter would be a third party within the meaning of Section 3 147 of the Act, after referring to number of authorities, stated thus:-
"The contract of insurance did not cover the owner of the vehicle, certainly not the pillion-rider. The deceased was traveling as a passenger, stricto sensu may not be as a gratuitous passenger as in a given case she may not (sic) be a member of the family, a friend or other relative. In the sense of the term which is used in common parlance, she might not be even a passenger.
In view of the terms of the contract of insurance, however, she would not be covered thereby. (19) The law which emerges from the said decisions, is: (i) the liability of the insurance company in a case of this nature is not extended to a pillion-rider of the motor vehicle unless the requisite amount of premium is paid for covering his/her risk;
(ii) the legal obligation arising under Section 147 of the Act cannot be extended to an injury or death of the owner of vehicle or the pillion-rider; and (iii) the pillion rider in a twowheeler was not to be treated as a third party when the accident has taken place owing to rash and negligent riding of the scooter and not on the part of the driver of another vehicle.
(ix) However, the aforesaid question dealt with in the case of Bhagyalakshmi and others (supra) was further aptly considered by Hon. Apex Court while commenting in respect of covering third party risk in National Insurance Company Ltd. v. Balakrishnan, AIR 2013 SC 473 : 2013 (1) TAC 1 as under:-
"16. Thus, it is quite vivid that the Bench had made a distinction between the "Act policy" and "comprehensive policy/package policy". The crux of the matter is what would be the liability of the insurer if the policy is a comprehensive/package policy". We are absolutely conscious 4 that the matter has been referred to a larger Bench, but, as is evident, the Bench has also observed that it would depend upon the view of the Tariff Advisory Committee pertaining to enforcement of its decision to cover the liability of an occupant in a vehicle in a comprehensive/package policy"
regard being had to the contract of insurance.
21. In view of the aforesaid factual position, there is no scintilla of doubt that a "comprehensive/package policy"
would cover the liability of the insurer for payment of compensation for the occupant in a car. There is no cavil that an "Act Policy" stands on a different footing from a "Comprehensive/Package Policy". As the circulars have made the position very clear and the IRDA, which is presently the statutory authority, has commanded the insurance companies stating that a "Comprehensive/Package Policy" covers the liability, there cannot be any dispute in that regard. We may hasten to clarify that the earlier pronouncements were rendered in respect of the "Act Policy" which admittedly cannot cover a third party risk of an occupant in a car. But, if the policy is a "Comprehensive/Package Policy", the liability would be covered. These aspects were not noticed in the case of Bhagyalakshmi (2009 AIR SCW 5325) (supra) and, therefore, the matter was referred to a larger Bench. We are disposed to think that there is no necessity to refer the present matter to a larger Bench as the IRDA, which is presently the statutory authority, has clarified the position by issuing circulars which have been reproduced in the judgment by the Delhi High Court and we have also reproduced the same.
22. In view of the aforesaid legal position, the question that emerges for consideration is whether in the case at hand, the policy is an "Act Policy" or "Comprehensive/Package Policy". There has been no discussion either by the tribunal or the 5 High Court in this regard. True it is, before us, Annexure P-1 has been filed which is a policy issued by the insurer. It only mentions the policy to be a "comprehensive policy" but we are inclined to think that there has to be a scanning of the terms of the entire policy to arrive at the conclusion whether it is really a "package policy" to cover the liability of an occupant in a car.
8. In the light of above said decisions of the Supreme Court incase of an Act only policy without extra-premium covering a gratuitous passenger, the Tribunal was in error holding that the liability was on the Insurance Company. In this case, the owner alone is liable to compensate the claimants.
9. Appeal is accordingly allowed on liability. The compensation amount awarded by the Tribunal is confirmed. However, the Insurance Company will first settle the claimants and it will be entitled to recover the same from the owner of vehicle as per law. Claimants will be at liberty to withdraw the amount of compensation awarded by the Tribunal on such deposit. (Ramalingam Sudhakar) Chief Justice (A) Jammu:
16.03.2017