The Oriental Insurance Co. Ltd. v. Daisy George and George (MACA No. 642 of 2011)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P. N. Ravindran
Judgment Date: 2012-12-10
Court Decision / Holding: Appeal allowed; set aside the portion of the MACT award holding the insurer liable to indemnify the insured for a pillion rider. The finding on negligence and the quantified compensation remains intact. The Tribunal is to re-hear the matter with reference to Ext. B1 policy terms after providing opportunity for oral evidence, and to dispose of the claim within four months after notice. The insurer’s deposited amount shall not be disbursed until a revised award is passed; if exonerated, the amount shall be refunded.
Final Disposition: Appeal allowed; indemnity finding set aside; matter remanded for a fresh enquiry on policy terms; negligence and compensation preserved; deposition preserved; four-month window for disposal after notice.

Parties to the Case

Appellants / Petitioners

The Oriental Insurance Co. Ltd.

Respondents

Daisy George
George

Legal Representation & Advocates

Counsels for Petitioners

• Adv. Sri A.R. George

Case Synopsis & Summary

This is a motor accident claims appeal from MACA No. 642 of 2011, heard by a single judge of the Kerala High Court (P. N. Ravindran, J.) on 10 December 2012. It arises from O.P.(MV) No. 1027 of 2004 in the Motor Accidents Claims Tribunal, Thrissur, where the claimant (Daisy George) claimed compensation for injuries as a pillion rider on a motorcycle driven by her husband (the second respondent). The Tribunal found rash and negligent driving by the husband and awarded Rs. 60,572 with interest and costs, but did not resolve a pleaded issue: whether the insurer (the appellant) was liable to indemnify the insured against a pillion rider under the policy. The insurer contended that the policy was an “Act only” coverage and that no premium had been collected to cover pillion riders, thus absolving it of liability. The Tribunal’s award did not address this plea. On appeal, the High Court allowed the insurer’s challenge to the indemnity finding, set aside the award to the extent it held liability to indemnify, and remanded for a fresh enquiry into Ext. B1 policy terms, while leaving the negligence finding and quantum intact. It directed appearance on 10 January 2013 and preservation of deposited amounts pending a revised award, citing the Supreme Court in United India Insurance Co. Ltd. v. Tilak Singh as persuasive authority.

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant insurer contends that although a valid insurance policy existed on the date of the accident, it was a liability-only policy and did not cover pillion riders. No premium was collected to cover such a rider, and the policy terms (Ext. B1) do not extend coverage to pillion passengers. The Tribunal failed to decide this crucial issue and erred in directing payment of the award. Relying on United India Insurance Co. Ltd. v. Tilak Singh (SC), the appellant seeks setting aside of the indemnity finding and a remand for evidence on policy terms to determine indemnity liability.

Contentions of Respondents

The claimant contends that the accident arose from the husband’s rash driving and that the insurer should indemnify in respect of a valid policy; the Tribunal found negligence and awarded compensation. The respondents rely on the policy’s validity and the insured’s liability for the claim, seeking to uphold the award subject to policy coverage, while resisting any creation of an indemnity liability for pillion riders outside the policy terms.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
United India Insurance Co. Ltd. v. Tilak Singh	2006 (2) KLT 884 (SC)	Positive	The High Court cites Tilak Singh as authority to permit re-examination of policy terms and to support exoneration of the insurer from indemnifying a pillion rider, influencing the decision to set aside the indemnity finding.

Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN** ## **MONDAY, THE 10TH DAY OF DECEMBER 2012/19TH AGRAHAYANA 1934** ## **MACA.No. 642 of 2011 ( )** **-----------------------OP(MV)NO.1027/2004 of MOTOR ACCIDENT CLAIMS TRIBUNAL, THRISSUR** **-------------------------------** **APPELLANT(S)/2ND RESPONDENT:** **-------------------------------------------------------** **THE ORIENTAL INSURANCE CO.LTD., DIVISIONAL OFFICE, THRISSUR, REP. BY THE AUTHORISED SIGNATORY, THE ORIENTAL INSURANCE CO.LTD., REGIONAL OFFICE, ERNAKULAM, METRO PALACE, ERNAKULAM NORTH, KOCHI - 18.** **BY ADV. SRI.A.R.GEORGE** ## **RESPONDENT(S)/CLAIMANT & RESPONDENTS 1 & 3:** **-------------------------------------------------------------------------------** **1. DAISY GEORGE, W/O.GEORGE, VADAKKUMPARAMBIL HOUSE, KALLINGALPADAM,** - **P.O. PANNIYANKARA, PALAKKAD DISTRICT - 678 683** **2. GEORGE, S/O.CHAKO @ JAMES, VADAKKUMPARAMBIL HOUSE, KALLINGALPADAM, PANNIYANKARA, ALATHOLOR, PALAKKAD DISTRICT - 678 683** **BY** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 10-12-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **sts** ## **P.N.RAVINDRAN, J. -----------------------------------------** ## **M.A.C.A.No.642 OF 2011** ## **----------------------------------------Dated this the 10[th] day of December, 2012** ## **JUDGMENT** The appellant is the second respondent in O.P.(MV)No.1027 of 2004 on the file of the Motor Accidents Claims Tribunal, Thrissur. The first respondent is the claimant and the second respondent is her husband who was the first respondent in the claim petition. By award passed on 29.12.2010 the Motor Accidents Claims Tribunal awarded the sum of Rs.60,572/- as compensation and directed the appellant to deposit the said amount together with interest and costs. The appellant has aggrieved thereby, filed this appeal. The brief facts of the case are as follows: 2. The first respondent herein, who is the wife of the second respondent, filed O.P.(MV)No.1027 of 2004 in the Motor Accidents Claims Tribunal, Thrissur claiming the sum of Rs.1,00,000/- as compensation from her husband, the second respondent herein, and the appellant, the insurer of the motor bike owned by him. It was contended that on 27.4.2003 while the ## **M.A.C.A.No.642 of 2011** -:2:- claimant was travelling along with the second respondent in a motor bike bearing registration No.KL-9C/9773 as a pillion rider, on account of the rash and negligent driving of the second respondent, her husband, she fell from the motor bike when he suddenly applied the brake and thereby sustained injuries. It was contended that on the date of the accident the vehicle was validly insured with the appellant. The second respondent herein, the husband of the claimant, did not enter appearance. The appellant entered appearance and filed a written statement. In the written statement it was contended that though the vehicle was covered by a valid insurance policy on the date of the accident, it was not liable to indemnify the insured. The relevant averments contained in paragraph 3 thereof are extracted below:- _“Petitioner has stated that she was the pillion rider on the above motorcycle when the alleged accident occurred. The above said “Act only” policy issued by this respondent does not cover the risk of the pillion rider. This respondent has also not collected any premium so as to cover the risk of the pillion rider of the above said motorcycle. Hence this respondent may please be exonerated from the liability to pay any compensation to the petitioner, even if she is found eligible for the same.”_ 3. In the Motor Accidents Claims Tribunal, no oral evidence ## **M.A.C.A.No.642 of 2011** -:3:- was adduced on either side. On the side of the claimant Exts.A1 to A9 series documents were produced and marked. On the side of the appellant a copy of the insurance police was produced and marked as Ext.B1. The Motor Accidents Claims Tribunal considered the rival contentions and held that the accident occurred as a result of the rash and negligent driving of the motor bike by the claimant's husband, the second respondent herein. The Motor Accidents Claims Tribunal did not however notice the contention raised by the appellant in paragraph 3 of the written statement or frame an issue as to whether the insurer is liable to indemnify the insured against the claim of a pillion rider. Without considering that aspect of the matter, the Motor Accidents Claims Tribunal awarded the sum of Rs.60,572/- as compensation and directed the appellant to deposit the said amount with interest and costs. 4. I heard Sri.A.R.George, learned counsel appearing for the appellant. Though the respondents have been served, they have not entered appearance till date. Sri.A.R.George, learned counsel appearing for the appellant contended that notwithstanding the specific plea raised in paragraph 3 of the written statement that under the policy of insurance issued by the ## **M.A.C.A.No.642 of 2011** -:4:- appellant, it is not liable to indemnify the insured against the claims of a pillion rider, notwithstanding the fact that a copy of the policy was produced, the Motor Accidents Claims Tribunal has not adverted to the said contention and has directed the appellant to deposit the amount awarded as compensation. The learned counsel also submitted that having regard to the decision of the Apex Court in _**United India Insurance Co. Ltd. v. Tilak Singh**_ , 2006 (2) KLT 884 (SC), the award of the Motor Accidents Claims Tribunal may be set aside and the appellant afforded an opportunity to establish its contention that under the policy of insurance issued by it, it is not liable to be indemnify the insured against claims by a pillion rider. 5. I have considered the submissions made at the Bar by the learned counsel appearing for the appellant. As noticed earlier, the appellant had even while admitting the existence of a valid insurance policy on the date of the accident, taken up a specific plea that it is not liable to indemnify the insured in respect of the accident for the reason that the claimant was a pillion rider and was not covered under the policy. Though the Motor Accidents Claims Tribunal has in the impugned award taken note of the contention of the appellant that the policy is a “Liability ## **M.A.C.A.No.642 of 2011** -:5:- only” policy, the Motor Accidents Claims Tribunal has not considered the question whether, on the terms of Ext.B1 policy produced by the appellant, the appellant can be held liable to indemnify the insured. In my opinion, having regard to the specific plea raised by the appellant, the Motor Accidents Claims Tribunal ought to have entered a finding on the question whether the appellant is liable to indemnify the insured against claims by the pillion rider. Having regard to the specific contention raised by the appellant, the appellant should, in my opinion, be afforded an opportunity to have the said contention enquired into with reference to the terms and conditions in Ext.B1 policy, after affording the appellant an opportunity to adduce oral evidence in support of its contention. Needless to say, the Motor Accidents Claims Tribunal should also afford the claimant as well as the first respondent, an opportunity to put forward their contentions in that regard. I accordingly allow this appeal, set aside the award dated 29.12.2010 in O.P.(MV).No.1027 of 2004 on the file of the Motor Accidents Claims Tribunal, Thrissur, to the extent it holds the appellant liable to indemnify the insured. The finding regarding negligence and the quantification of the amount to be awarded as -:6:- ## **M.A.C.A.No.642 of 2011** compensation shall stand. The appellant shall appear before the Motor Accidents Claims Tribunal on 10.1.2013. The Motor Accidents Claims Tribunal shall thereupon issue notice to the claimant and the first respondent in the claim petition and dispose of the claim petition within four months from the date fixed for their appearance after service of notice. The amount deposited by the appellant shall not be disbursed until a revised award is passed. Needless to say, if the appellant is exonerated of the liability to pay compensation, the amount deposited by it shall be refunded in full. ## **P.N.RAVINDRAN, Judge.** ## **ahg.** **P.N.RAVINDRAN, J. --------------------------M.A.C.A.No.642 OF 2011 ----------------------------** ## **JUDGMENT** **10[th] December, 2012**