Ajayakumar S/o Madhavan Achari v. Prasad and The Divisional Manager, New India Assurance Company Limited

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE P.D.RAJAN** **MONDAY, THE 18TH DAY OF SEPTEMBER 2017/27TH BHADRA, 1939** **MACA.NO. 2343 OF 2015 () -------------------------** **AGAINST THE AWARD IN O.P.(M.V) NO.1803/2002 OF THE MOTOR ACCIDENTS CLAIMS TRIBUNAL, ATTINGAL DATED 21-08-2008** **-------------------------** **APPELLANT(S)/IST RESPONDENT:** **---------------------------** **AJAYAKUMAR S/O.MADHAVAN ACHARI, PARAKONATHU PUTHEN VEEDU, PAPPALA, KILIMANOOR.** **BY ADV. SRI.M.DINESH** ## **RESPONDENT(S)/APPELLANT & 2ND RESPONDENT:** **-----------------------------------------** ## **1. PRASAD** **S/O.KUNJAN ASARI, PRAVEENA BHAVAN, CHAKKUDI PAPPALA, PAZHAYAKUNNUMMAL VILLAGE, TRIVANDRUM-695001.** ## **2. THE DIVISIONAL MANAGER** **NEW INDIA ASSURANCE COMPANY LIMITED, DIVISIONAL OFFICE-II, K.N.MATHEW BUILDING, G.A.COIL ROAD, THIRUVANANTHAPURAM-695001.** **R2 BY ADVS. SRI.P.JACOB MATHEW SRI.A.A.ZIYAD RAHMAN** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 18-09-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **NS** ## **P.D. RAJAN, J.** ## **-----------------------M.A.C.A. No.2343 of 2015 ---------------------------------Dated this the 18[th] day of September, 2017** ## **J U D G M E N T** This appeal is preferred against the award in O.P.(M.V.) No.1803 of 2002 of the Motor Accidents Claims Tribunal, Attingal by the owner of the vehicle (1[st] respondent). The 1[st] respondent in this appeal sustained injuries in a motor accident on 17.09.2002 at 10.00 a.m., while he was travelling as a pillion rider in a motorcycle and the learned tribunal awarded a sum of Rs.36,257/with 7.5% interest and cost and directed the appellant to pay compensation. Being aggrieved by that, the owner preferred this appeal. 2. The injured's case in the trial court was that on 17.09.2002 at 10.00 a.m., he was travelling as a pillion rider in KL-01/W-3208, the rider of the motorcycle ridden the vehicle in a rash and negligent manner when he reached at the place of occurrence, the rider applied sudden brake and the pillion rider thrown away and sustained injuries. The owner of the vehicle and insurer ## M.A.C.A. No.2343 of 2015 2 contested the case in the court below. The insurer took a contention that the policy did not cover the risk of a pillion rider. The petitioner did not adduce any oral evidence, but his documents were marked as Exts.A1 to A11. Respondent's evidence consists of documentary evidence of Ext.B1. 3. The learned counsel appearing for the appellant contended that Ext.B1 is a comprehensive policy and the insurer cannot take a contention that a pillion rider is not covered under Ext.B1 policy. 4. In an Act Only Policy pillion rider is not covered but in a comprehensive policy he is covered. The Apex Court in **National Insurance Company** v. **Balakrishnan and Another 2013 (1) Supreme Court Cases 731** correctly held the coverage of comprehensive policy as follows: “ 24. It is extremely important to note here that till 31.12.2006 the Tariff Advisory Committee and, thereafter, from 1.1.2007 IRDA functioned as the statutory regulatory authorities and they are entitled to fix the tariff as well as the terms and conditions of the policies issued by all ## M.A.C.A. No.2343 of 2015 3 Insurance companies. The High Court had issued notice to the Tariff Advisory Committee and IRDA to explain the factual position as regards the liability of the Insurance companies in respect of an occupant in a private car under the “comprehensive/package policy”. Before the High Court, the competent authority of IRDA had stated that on 2.6.1986, the Tariff Advisory Committee had issued instructions to all the insurance companies to cover the pillion rider of a scooter/motorcycle under the “comprehensive policy” and the said position continues to be in vogue till date. It had also admitted that the “comprehensive policy” is presently called a “package policy”. It is the admitted position, as the decision would show, the earlier Circulars dated 18.03.1978 and 2.6.1986 continue to be valid and effective and all insurance companies are bound to pay the compensation in respect of the liability towards an occupant in a car under the “comprehensive/package policy” irrespective of the terms and conditions contained in the policy. The competent authority of IRDA was also examined before the High Court who stated that the Circulars dated 18.03.1978 and 2.06.1986 if the Tariff Advisory Committee were incorporated in the Indian Motor Tariff effective from 1-7-2002 M.A.C.A. No.2343 of 2015 4 and they continue to be operative and binding on the insurance companies. Because of the aforesaid factual position, the Circulars dated 1611-2009 and 3-12-2009, that have been reproduced herein above, were issued. 26. 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 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 Bhagyalakshmi v. United Insurance Co. Ltd. (2009) 7 SCC 148 and, therefore, the matter was referred to a larger Bench. We are ## M.A.C.A. No.2343 of 2015 5 disposed to think that there is no necessity to refer the present matter to a larger Bench as 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. ## 5. This Court in **New India Assurance Co. Ltd.** v. **Hydrose 2008 (3) KLT 778** held as follows: Here it is not an Act only policy. It is a “B” Policy and S.II(1)(i) of the conditions attached to the policy issued in this case shows that as per the terms and conditions of the policy, gratuitous occupants of the vehicle are covered. Insurer has undertaken liability in respect of death or bodily injuries to any person including a person conveyed in or on the motorcycle provided such person is not carried for hire or reward. Here no limitation of liability is mentioned in the Schedule. In fact, specific coverage is provided for the risk of gratuitous passenger as per the conditions of policy regarding the coverage of risk due to the death or bodily injury to any person, provided, the person is not carried for hire or reward. In these circumstances, the insurance company has by contract agreed to ## M.A.C.A. No.2343 of 2015 6 indemnify the insured of the risk of gratuitous passenger in the motor cycle. ## 6. Sec.147 of the Motor Vehicles Act, 1988 ## reads as follows: “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 subsection (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, ## M.A.C.A. No.2343 of 2015 7 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 ## M.A.C.A. No.2343 of 2015 8 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.” 7. Liability of the insurance company is based on the policy issued by them. Ext.B1 shows that the policy was issued from the Kilimanoor office for a period from 29.11.2001 to 28.11.2002 midnight and it is a package policy. The question of package policy or comprehensive policy was considered by the High Court of Chhattisgarh in **Vinay Shaha and Others** v. **Harvilas Hajarilal** M.A.C.A. No.2343 of 2015 9 **Mistri and Another 2012 KHC 2027** in which, it was held that “ by virtue of the Circular dated 16/11/2009 issued by the IRDA, the insurer of the motorcycle has been held liable to pay compensation to the claimant/claimants for the injuries/death of the pillionrider on a two-wheeler if the said two-wheeler is insured under package/comprehensive policy. 8. Considering the facts and circumstance, it is of the view that the insurer is liable to pay compensation. Hence, the direction of the tribunal to satisfy the award by the appellant is set aside and the 2[nd] respondent insurer is directed to satisfy the award within thirty days from the date of receipt of a copy of this judgment, failing which it will carry 12% interest per annum from the date of petition. This appeal is disposed of as above. ## Sd/- **P.D. RAJAN, JUDGE** NS / True Copy / P.A. To Judge M.A.C.A. No.2343 of 2015 10