The Oriental Insurance Company Limited v. (M.A.C.M.A.No.1503 of 2005)

Counsel for the respondents: Counsel for the respondents None The Court made the following: The Court made the following: 2 BSB, J M.A.C.M.A.No.1503_1518_2005 COMMON JUDGMENT: M.A.C.M.A.No.1503 of 2005 is filed under Section 173 of the Motor Vehicles Act, 1988, challenging the award and the decree, dated

07.04.2005, in M.V.O.P.No.105 of 2002 before the Chairman, Motor Accidents Claims Tribunal-cum-VII Additional District Judge, Madanapalle. M.A.C.M.A.No.1518 of 2005 is filed under Section 173 of the Motor Vehicles Act, 1988, challenging the award and the decree, dated

07.04.2005, in M.V.O.P.No.103 of 2002 before the Chairman, Motor Accidents Claims Tribunal-cum-VII Additional District Judge, Madanapalle. The appellant herein is the 2nd respondent / insurance company. 2. The respondent No.1 is the claimant before the Tribunal. The 2nd respondent is the owner of the jeep bearing No.KA 19 6429. a. In M.A.C.M.A.No.1503 of 2005, notice sent to the respondent No.1 / claimant was not returned though it was sent to the same address as given before the Tribunal. In M.A.C.M.A.No.1518 of 2005, in spite of service of notice on the respondent No.1 / claimant, there has been no appearance. b. The appeal against the 2nd respondent was dismissed for default vide order, dated 03.01.2012, of this Court.

3. a. The case of the claimant, in brief, is as follows: On 05.12.2001, the claimant, along with the respondent No.1 and others, was travelling in a jeep bearing No.KA 19 M 6429 to attend a party meeting. While the jeep was proceeding near Sugalimitta, at 3 BSB, J M.A.C.M.A.No.1503_1518_2005 about 09.45 a.m., the driver drove the vehicle in high speed and could not control it. As a result, the vehicle turned turtle and the inmates of the jeep, including the claimant, sustained grievous injuries. The claimant received injuries all over the body and fracture of left clavicle which are permanent in nature. The claimant was shifted to the Government Hospital, Madanapalle. He was quite hale and healthy prior to the accident. On account of the disability, the claimant was unable to attend any sort of work and facing too many problems. The respondent No.1 insured his vehicle with the respondent No.2 and the policy was in force at the time of the accident. The respondents Nos.1 and 2 are jointly and severally liable to pay compensation. The claimant sought compensation of Rs.1,00,000/-. b. The respondent No.1 remained ex parte. c. The respondent No.2 filed a written statement denying the allegations and the injuries sustained by the claimant, treatment, expenses and the disability suffered by him. The respondent No.1 obtained the policy in respect of the vehicle KA 19 M 6429 for the period from 19.09.2001 to 18.09.2002 under the category of private car (zone A) policy-A act only to cover the risk of third parties alone and no premium was paid to cover the risk of inmates of the jeep. The risk of the claimant (in both the O.Ps.) who was one of the inmates of the jeep was not covered under the policy issued to the respondent No.1. The claimant(s) travelled in the jeep as unauthorised and gratuituous passenger and such risk is also not covered under the policy issued to the respondent No.1. Contrary to the terms and conditions of the policy, the respondent No.1 used the vehicle for commercial purpose and violated the terms and conditions of the policy. The insurance company 4 BSB, J M.A.C.M.A.No.1503_1518_2005 is not liable to indemnify the respondent No.1 as he violated the terms and conditions of the policy and prayed to dismiss the petition.

4. On behalf of the claimant in M.V.O.P.No.105 of 2002, P.Ws 1 and 2 were examined and exhibits A1 to A16 were marked. On behalf of the respondents, R.W.1 was examined and exhibit B1 was marked. b. On behalf of the claimant in M.V.O.P.No.103 of 2002, P.Ws 1 and 2 were examined and exhibits A1 to A6 were marked. On behalf of the respondents, R.W.1 was examined and exhibit B1 was marked. Exhibit A1 is the FIR in Crime No.176 of 2001 of Punganur P.S., exhibit A2 is the wound certificate; exhibit A3 is the certified copy of charge sheet in C.C.No.15 of 2002; exhibit A4 is the medical bills (10) in number; exhibit A5 is the certificate issued by Dr. Thippa Reddy; and exhibit A6 is the Hospital bills (numbering four). Exhibit B1 is the true copy of policy.

5. The Tribunal awarded a sum of Rs.31,000/- to the claimant in M.V.O.P.No.105 of 2002 and a sum of Rs.34,000/- to the claimant in M.V.O.P.No.103 of 2002 along with interest at 9% per annum from the date of the petition till the date of deposit and also costs of the petition. The respondents Nos.1 and 2 are jointly and severally liable to pay the above compensation.

6. The quantum of compensation awarded is not questioned in these two appeals.

7. The main contention of the appellant is that the appellant has no liability to pay compensation as no premium was paid to cover the passengers in the insured vehicle as the policy is an Act policy and not a comprehensive policy. In support of the said contention, the learned counsel for the appellant placed reliance on the decision of the 5 BSB, J M.A.C.M.A.No.1503_1518_2005 Supreme Court Insurance Company Limited Vs. Balakrishnan and another1, wherein it was held at paragraphs Nos.24 in National & 26 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 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 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 18-3-1978 and 2-6- 1986 continue to be valid and effective and all insurance companies are bound to pay the compensation in respect of liability towards an occupant in a car under “comprehensive / package policy” irrespective of the terms and conditions contained in the policy. The competent 1 (2013) 1 Supreme Court Cases 731 6 BSB, J M.A.C.M.A.No.1503_1518_2005 authority of IRDA was also examined before the High Court who stated that the Circulars dated 18-3-1978 and 2-6-1986 of the Tariff Advisory Committee were incorporated in the Indian Motor Tariff effective from 1-7-2002 and they continue to be operative and binding on the insurance companies. Because of the aforesaid factual position, the Circulars dated 16-11-2009 and 3-12-2009, that have been reproduced hereinabove, 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 [(2009) 7 SCC 148 : (2009) 3 SCC (Civ) 87 : (2009) 3 SCC (Cri) 321] 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 IRDA, which is presently the statutory authority, has clarified the position by issuing circulars which have been 7 BSB, J M.A.C.M.A.No.1503_1518_2005 reproduced in the judgment by the Delhi High Court and we have also reproduced the same.”

8. As can be seen from the record, admittedly, no premium was collected for the inmates of the jeep and the policy of insurance is only an ‘Act policy’ and not a comprehensive policy to cover the inmates. As such, the Tribunal erred in fastening the liability on the insurance company with joint and several liability of the insured. Therefore, the appellant is entitled to be absolved of the liability.

9. Accordingly, both the appeals are partly allowed and the awards and the decrees, dated 07.04.2005, in M.V.O.P.No.105 of 2002 and M.V.O.P.No.103 of 2002 on the file the Chairman, Motor Accidents Claims Tribunal-cum-VII Additional District Judge, Madanapalle, ordering joint and several liability, are modified by dismissing the claim against the respondent No.2 and retaining the liability against the respondent No.1 alone. The rest of the awards shall remain intact.

10. As could be seen from the record, a sum of Rs.25,000/- was deposited in M.A.C.M.A.No.1503 of 2005 and half of the award amount, i.e., Rs.17,000/- was awarded in M.A.C.M.A.No.1518 of 2005. The awarded amount, if any, is withdrawn by the claimant M.A.C.M.A.No.1518 of 2005, the appellant is entitled to recover the same from the insured. There shall be no order as to costs. Pending miscellaneous petitions, if any, shall stand closed. __________________ B.S.BHANUMATHI, J 28-10-2025 RAR