M.A.C.A.No.1035/2008

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: J.B.Koshy
P.N.Ravindran
Judgment Date: 2008-06-05
Court Decision / Holding: Appeal dismissed.
Final Disposition: Appeal dismissed.

Parties to the Case

Appellants / Petitioners

M/S.ROYAL SUNDARAM ALLIANCE INSURANCE CO.LTD.

Respondents

RAMLA, AGED 26 YEARS, W/O.DECEASED SAJID @ ANWAR SAJI.
M.AHMAD, AGED 60 YEARS, F/O.DECEASED SAJID @ ANWAR SAJI.
BEEVI, AGED 55 YEARS, W/O.M.AHMAD.
MOHAMMED AFNAS (MINOR) AGED 7 YEARS, S/O.DECEASED SAJID @ ANWAR SAJI.
MOHAMMED ANAS (MINOR) AGED 3 YEARS, S/O.DECEASED SAJID @ ANWAR SAJI.
FASALUL ABID, S/O.MAMMUTTY, KOLAMBAN HOUSE, PAZHAMKULANGARA P.O. TIRUR, TIRUR TALUK, MALAPPURAM DISTRICT.
NOUSHAD K.P., S/O.MAMMU, KUNNATH PARAMBIL HOUSE, PAN BAZAR, P.O.TIRUR, TIRUR TALUK, MALAPPURAM DISTRICT.

Legal Representation & Advocates

Counsels for Petitioners

• S. Mammu

Case Synopsis & Summary

This MACA arises from a motor-accident claim where a 30-year-old man died, leaving a 26-year-old widow, two minor children, and parents who sought compensation under the Motor Vehicles Act. The Motor Accident Claims Tribunal held the driver negligent and the insurer liable to pay compensation, rejecting the insurer's contention that no coverage existed for gratuitous passengers. The insurer argued, relying on United India Insurance Co. Ltd. v. Tilak Singh (AIR 2006 SC 1576), that where an occupant is transported as a passenger not employed by the insured, coverage should not extend; it also cited Clause II (1)(i) of Ext.B1 policy, which limits liability by suggesting exceptions in line with requirements of the Motor Vehicles Act. The insurer claimed the amount of premium is decisive for coverage, which the tribunal rejected, holding that policy terms prevail even when ambiguity exists and should be interpreted in favor of the insured. The High Court, in dismissing the appeal, affirmed that the policy contemplates coverage for occupants not carried for hire or reward, and gratuitous passengers are included within the scope of liability. It held that the deceased was squarely covered and the tribunal's liability assignment to the insurer was proper; thus, the appeal lacked merit.

Provisions of Law Cited

Clause II (1) (i) Ext.B1 policyMotor Vehicles ActWorkmen's Compensation Act

Legal Doctrines & Maxims

Ambiguity in insurance policy should be interpreted in favour of the insured

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant/insurance company contends that the policy terms exclude gratuitous passengers; coverage is governed by the policy (Clause II(1)(i)); indemnity is limited to death or bodily injury to persons not carried for hire or reward; reliance on United India Insurance Co. v. Tilak Singh (AIR 2006 SC 1576) that where there is no coverage for passengers, compensation cannot be payable; premium amount is not the determining factor; policy interpretation should be in favour of insured if ambiguous.

Contentions of Respondents

The claimants contend that the policy covers occupants, including gratuitous passengers; the tribunal rightly held the insurer liable; the policy is to be interpreted in favour of insured; gratuitous passengers are covered; the insured's liability arises under policy terms irrespective of premium paid; reliance on the Apex Court interpretation to favour insured.

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
United India Insurance Co. Ltd., Shimla v. Tilak Singh and others	AIR 2006 SC 1576	Positive	Cited to support policy interpretation in favour of insured and coverage of gratuitous passengers; applied by the Kerala High Court.
Amrith Lal Sood and another v. Kaushalya Devi Thapper and others	(1998) 3 SCC 744	Positive	Held that insurance is governed by the terms of the policy; supports interpretation of policy terms in favour of insured.

Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE J.B.KOSHY** **& THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN** **THURSDAY, THE 5TH JUNE 2008 / 15TH JYAISHTA 1930** **MACA.No. 1035 of 2008()** **----------------------OPMV.312/2006 of MOTOR ACCIDENT CLAIMS TRIBUNAL, TIRUR** **.................... APPELLANT/RESPONDENT NO.3:** **--------------------------------------------------** **M/S.ROYAL SUNDARAM ALLIANCE INSURANCE CO.LTD. SUNDARAM TOWERS, 45 & 46 WHITES ROAD, CHENNAI - 600 014 NOW OFFICE AT SORRENTO BUILDING NO.6, IST FLOOR, LATTICO BRIDGE ROAD, ADAYAR, CHENNAI - 6000014.** **BY ADV. SRI.S.MAMMU** ## **RESPONDENTS: PETITIONERS & RESPONDENTS NO.1 AND 2:** **--------------------------------------------------------------------------------------------** **1. RAMLA, AGED 26 YEARS, W/O.DECEASED SAJID @ ANWAR SAJI.** **2. M.AHMAD, AGED 60 YEARS, F/O.DECEASED SAJID @ ANWAR SAJI.** **3. BEEVI, AGED 55 YEARS, W/O.M.AHMAD.** **4. MOHAMMED AFNAS (MINOR) AGED 7 YEARS, S/O.DECEASED SAJID @ ANWAR SAJI.** **5. MOHAMMED ANAS (MINOR) AGED 3 YEARS, S/O.DECEASED SAJID @ ANWAR SAJI. 4TH & 5TH MINOR PETITIONERS ARE REPRESENTED BY NEXT FRIEND & GUARDIAN MOTHER IST PETITIONER RAMLA ALL ARE RESIDING AT MANGATTIRI HOUSE, KOTT.KALLINGAL, P.O.TIRUR, TIRUR TALUK, MALAPPURAM DISTRICT.** **6. FASALUL ABID, S/O.MAMMUTTY, KOLAMBAN HOUSE, PAZHAMKULANGARA P.O. TIRUR, TIRUR TALUK.** **7. NOUSHAD K.P., S/O.MAMMI, KUNNATH PARAMBIL HOUSE, PAN BAZAR, P.O.TIRUR, TIRUR TALUK, MALAPPURAM DISTRICT.** **BY** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING COME UP FOR ADMISSION ON 05/06/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **ORDER ON I.A.NO.1251/2008 IN M.A.C.A.NO.1035/2008** ## **DISMISSED** **5/06/2008 SD/- J.B.KOSHY, JUDGE SD/- P.N.RAVINDRAN, JUDGE** **/TRUE COPY/** **P.S.TO JUDGE** Kss ## **J.B. Koshy & P.N.Ravindran, JJ. -------------------------------------M.A.C.A. No.1035 of 2008 --------------------------------------Dated this the 5th day of June, 2008** ## **Judgment** ## **Koshy,J.** A young man of 30 years died in a motor accident leaving his 26 year old widow, two minor children and parents and they filed an application for compensation. The tribunal found that the accident occurred due to the negligence of the driver of the vehicle insured by the appellant insurance company, The contention of the insurance company is that no contribution was received for personal coverage of the passenger. He was a passenger in a private vehicle and, therefore, compensation is not payable and he relied on the decision of the Supreme Court in United India Insurance Company Ltd., Shimla v.Tilak Singh and others (AIR 2006 SC 1576). In that case, there was no coverage for passengers in the vehicle. Even though the policy was a comprehensive policy, coverage was only for a third party liability for employees under the Workmen's Compensation Act and property damage as well as own damage of the vehicle. In Amrith Lal Sood and another v. Kaushalya Devi Thapper and others ((1998) 3 SCC 2 **M.A.C.A.No.1035/2008** 744) also, it is held that insurance is governed by the terms of the policy whether it is comprehensive or not. The terms of the policy is mentioned in Clause II (1) (i) of Ext.B1 policy which reads as follows: "Subject to the limits of liability as laid down in the schedule hereto the company will indemnify the insured in the event of an accident caused by or arising out of the use of the insured vehicle against all sums which the insured shall become legally liable to pay in respect of:- (i) death of or bodily injury to any person including occupants carried in the vehicle (provided such occupants are not carried for hire or reward) but except so far as it is necessary to meet the requirements of the Motor Vehicles Act, 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." It clearly shows that as per the policy condition, insurance company is liable to pay the compensation for death or bodily injury to any persons including occupants carried in the vehicle provided that such occupants are carried not for hire or reward. Admittedly, deceased was not carried for any reward. He is squarely covered under the provisions of the policy. The amount collected as premium is not the deciding factor. What is provided in the policy is important and it has been held by the Apex Court that even if there is ambiguity in the policy, the policy should be interpreted in 3 ## **M.A.C.A.No.1035/2008** favour of the insured and against the company which made the contract. In this case, there is no dispute regarding the terms of the policy and as per the policy conditions, gratuitous passengers travelling in the vehicle are covered and hence the tribunal was right in imposing liability on the appellant insurance company. We see no merit in the appeal. Appeal dismissed. **J.B.Koshy Judge** **P.N.Ravindran** **Judge** vaa 4 **M.A.C.A.No.1035/2008** **J.B. KOSHY AND P.N.RAVINDRAN,JJ.** ------------------------------------M.A.C.A. No.1035 of 2008 ------------------------------------- **Judgment** Dated:5th June, 2008