G.M., United India Insurance Co.Ltd vs M. Laxmi & Ors

The General Manager, United Insurance Co. Ltd. ....Appellant

Versus

M. Laxmi and Ors. ....Respondents

JUDGMENT

Dr. ARIJIT PASAYAT, J.

1. Leave granted.

2. Challenge in this appeal is to the judgment of a learned Single

Judge of the Andhra Pradesh High Court allowing the appeal filed by

respondent Nos. 1 to 3.

1 3. Background facts in a nutshell are as follows:

One Ramulu (hereinafter referred to as the `deceased') died in a

vehicular accident on 8.10.1996. Respondents 1 to 3 are his widow, son

and father respectively. A claim petition was filed under Section 166 of the

Motor Vehicles Act, 1988 (in short `the Act') claiming compensation of

Rs.3,00,000/-. The claimants averred in the claim petition that the deceased

and one Mohd. Mohsin were going on a scooter belonging to M. Yadireddy,

respondent no.4 in the present appeal. The scooter was being driven by

Mohd. Mohsin. At about 7.00 p.m. the scooter hit a bullock cart which was

going in the same direction because of rash and negligent driving of the

scooter, the deceased fell down and sustained fatal injuries. At the time of

his death, he was 29 years of age. Compensation was claimed from the

owner of the scooter. Present appellant was the insurer which had insured

the vehicle in question. The insured remained ex-parte. The present

appellant filed its counter-affidavit denying all the material allegations. It

was pointed out that admittedly, the policy of insurance was an Act policy

and the deceased was a pillion rider and also gratuitous passenger and

hence, not a third party, and he cannot claim compensation from the

2 insurance company which insured the vehicle. The learned Additional

Special Judge for SPE and ACB Cases-cum-V Additional Chief Judge, City

Civil Court, Hyderabad (hereinafter referred to as `MACT') who adjudicated

the claim petition, held that the policy was an Act policy in respect of the

Scooter on the date of accident, therefore, the insurer had no liability. It was

categorically held that unless the policy in question covers even a gratuitous

passenger, such person, who met with an accident while going in the vehicle

in question and received injuries or his legal heirs, in case of his death

following such accident, cannot proceed against the concerned insurance

company for any compensation. The compensation payable was fixed at

Rs.1,07,436/- with 12% interest per annum. It was held that the sum was to

be realized from the insured and not from the present appellant.

An appeal was preferred by the claimants before the High Court,

which, by the impugned judgment relying on a Circular of the Tariff

Advisory Committee held that the liability of the insurer was there. The

appeal was, accordingly, allowed.

4. Learned counsel for the appellant submitted that the High Court

3 has misread the Circular of the Tariff Advisory Committee dated 2.6.1986.

The same referred to compensation payable to pillion riders in case of

comprehensive policy. The Clarification/Circular has no relevance so far as

Act Policy Cases are concerned and it related to only Comprehensive Policy.

5. Learned counsel for respondent Nos. 1 to 3, on the other hand,

supported the judgment of the High Court.

6. There is no dispute that the Circular dated 2.6.1986 refers to

Comprehensive Policy. It categorically states that standard form for

motorcycle should cover liability to pillion passengers in case of

Comprehensive Policy. As noted by the MACT, the policy in the instant

case was an Act Policy.

7. In New India Assurance Co. Ltd. v. Asha Rani and Ors. (2003

(2) SCC 223), it has been noted as follows:

"Section 147 of the 1988 Act, inter alia, prescribes compulsory coverage against the death of or bodily injury to any passenger of "public service vehicle". Proviso ap- pended thereto categorically states that compulsory cover- age in respect of drivers and conductors of public service vehicle and employees carried in a goods vehicle would be limited to the liability under the Workmen's Compensa-

4 tion Act. It does not speak of any passenger in a "goods carriage".

In view of the changes in the relevant provisions in the 1988 Act vis-`-vis the 1939 Act, we are of the opinion that the meaning of the words "any person" must also be attributed having regard to the context in which they have been used i.e. "a third party". Keeping in view the provi- sions of the 1988 Act, we are of the opinion that as the provisions thereof do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger travelling in a goods vehicle, the insurers would not be liable therefor.

Furthermore, sub-clause (i) of clause (b) of sub-sec- tion (1) of Section 147 speaks of liability which may be incurred by the owner of a vehicle in respect of death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehi- cle in a public place, whereas sub-clause (ii) thereof deals with liability which may be incurred by the owner of a ve- hicle 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."

8. In United India Assurance Co. Ltd., Shimla v. Tilak Singh and

Ors. (2006 (4) SCC 404), it has been noted as follows:

"In our view, although the observations made in Asha Rani case (supra) were in connection with carrying passengers in a goods vehicle, the same would apply with equal force to gratuitous passengers in any other vehicle also. Thus, we must uphold the contention of the appel- lant Insurance Company that it owed 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 a gratuitous passenger."

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9. In view of what has been stated by this Court in Asha Rani and

Tilak Singh cases (supra), the order of the High Court is clearly

unsustainable and is set aside and that of the MACT is restored.

10. The appeal is disposed of accordingly.

........................................J. (Dr. ARIJIT PASAYAT)

........................................J. (Dr. MUKUNDAKAM SHARMA) New Delhi, November 14, 2008

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