Royal Sundaram Alliance Insurance Co. Ltd. v. A. Meenakshi & Ors.

Denning in the matter of applying precedents, which have become locusclassicus :"Each case depends on its own facts and a close similaritybetween one case and another is not enough because even a singlesignificant detail may alter the entire aspect. In deciding suchcases, one should avoid the temptation to decide cases (as said byCardozo) by matching the colour of one case against the colour ofanother. To decide, therefore, on which side of the line a casefalls, the broad resemblance to another case is not at all decisive."Precedent should be followed only so far as it marks the path ofjustice, but you must cut the dead wood and trim off the sidebranches else you will find yourself lost in thickets and branches.My plea is to keep the path to justice clear of obstructions whichcould impede it."These words have subsequently been reiterated by various courts in anumber of judgments. So, in a case like this, the decisions whichinvolve an Act Policy, a goods vehicle or a public transport vehiclemay be relevant, but they are not binding.5. Section 95 of the Motor Vehicles Act, 1939 reads as follows :"95. Requirements of policies and limits of liability.- (1) Inorder to comply with the requirements of this Chapter, a policy ofinsurance must be a policy which -- (a) is issued by a person who is an authorised insurer [orby a co-operative society allowed under Section 108 to transact thebusiness of an insurer], and (b) insures the person or classes of persons specified inthe policy to the extent specified in sub-section (2) --(i) against any liability which may be incurred by him in respectof the death of or bodily injury to any person or damage to anyproperty of a third party caused by or arising out of the use of thevehicle in a public place; ...(2) Subject to the proviso to sub-section (1), a policy ofinsurance shall cover any liability incurred in respect of any oneaccident up to the following limits, namely --(a)where the vehicle is a goods vehicle, a limit of [one lakh andfifty thousand rupees] in all, including the liabilities, if any,arising under the Workmen's Compensation Act, 1923 (8 of 1923), in https://hcservices.ecourts.gov.in/hcservices/ respect of the death of, or bodily injury to, employees (other thanthe driver), not exceeding six in number, being carried in thevehicle;](b) where the vehicle is a vehicle in which passengers arecarried for hire or reward or by reason of or in pursuance of acontract of employment, --(i) in respect of persons other than passengers carried forhire or reward, a limit of fifty thousand rupees in all;(ii) in respect of passengers, a limit of fifteen thousandrupees for each individual passenger;];(c) save as provided in clause (d), where the vehicle is avehicle of any other class, the amount of liability incurred;(d) irrespective of the class of the vehicle, a limit of rupees[six thousand] in all in respect of damage to any property of a thirdparty]....(5) Notwithstanding anything elsewhere contained in any law, aperson issuing a policy of insurance under this section shall beliable to indemnify the person or classes of person specified in thepolicy in respect of any liability which the policy purports to coverin the case of that person or those classes of person."The relevant section after the 1988 Act came into force is Section147, and it reads as follows :"147. Requirements of policies and limits of liability.- (1) Inorder to comply with the requirements of this Chapter, a policy ofinsurance 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 thepolicy to the extent specified in sub-section (2)--(i) against any lliability which may be incurred by him inrespect of the death of or bodily injury to any person or damage toany property of a third party caused by or arising out of the use ofthe vehicle in a public place; ... https://hcservices.ecourts.gov.in/hcservices/ (2) Subject to the proviso to sub-section (1), a policy ofinsurance referred to in sub-section (1), shall cover any liabilityincurred in respect of any accident, up to the following limits,namely :-- (a) save as provided in clause (b), the amount of liabilityincurred; (b) in respect of damage to any property of a thirty party, alimit of rupees six thousand:Provided that any policy of insurance issued with any limitedliability and in force, immediately before the commencement of thisAct, shall continue to be effective for a period of four months aftersuch commencement or till the date of expiry of such policy whicheveris earlier...."6. So the law relating to Requirements of Policies and Limits ofLiability is set down in Section 147 of the Motor Vehicles Act, 1988.This corresponds to Section 95 of the Motor Vehicles Act, 1939.Section 147(1)(i) provides that in order to comply with therequirements of the said Chapter, an insurance policy would cover anyliability incurred by the insured in respect of the death of orbodily injury to any person, including owner of the goods etc. Thesection is quite wide in its scope and meaning and the object of thelegislature has to be given the widest, most effective and practicalmeaning so that the net of coverage is extended to as many classes ofpersons relating to as many types of vehicles without exception.Courts are obliged to ensure that as many classes of motor accidentvictims receive the benefit of compensation, unless it isspecifically restricted by the Act or it is specifically restrictedby the contract, without violating the provisions of the Act. Theinsurer can and may contract to cover risks and liabilities which heis not bound to under the Act. To put it in other words, he canexpand his net of coverage far beyond the statute-imposed limits, buthe can not restrict his net of coverage contrary to the statute. Thisis how we must advance the object of the Act. Then again we mustunderstand who is a " third party". A third party is one who isneither the insurer nor the insured. He is simply a third party. Bythe same logic, third party coverage must include all third parties,unless by doing so we breach the covenants of the Policy, or includespecific categories of "third parties" who are excluded by theSection.7. In A.I.R. 1997 J & K 40 [New India Assurance Co. vs. ShakuntlaDevi], a Division Bench of the Jammu and Kashmir High Court held that https://hcservices.ecourts.gov.in/hcservices/ Section 147 of the Act is quite comprehensive in scope and meaning.It has to be given wider, effective and practical meaning so that theobject of the legislature which was faced with divergent views ofvarious courts of the country giving different interpretation to theprovisions of Section 95 of the 1939 Act, causing immense harm tomany categories of persons by disentitling them from claimingcompensation either from the insurer or the insured or both, in thefacts and circumstances of the case, is given effect to. The learnedJudges held that the legislature clearly intended that every policyof insurance is statutorily required to cover the risk of liabilityin respect of classes of persons relating to all types of vehicleswithout exception and with no defence to the insurance companydisclaiming the liability with respect to particular class of personsor particular kind of vehicles. 8. Motor Insurance in India till date is Tariff driven. Section64U of the Insurance Act provides for the establishment of the TariffAdvisory Committee to control and regulate the rates, advantages,terms and conditions that may be offered by insurers. Section 14 ofthe I.R.D.A. Act which deals with the duties, powers and functions ofthe Authority, provides in sub-section (2)(i) that the powers andfunctions include the control and regulation of (rates, advantages,terms and conditions), not so controlled by the Tariff AdvisoryCommittee under Section 64U. General Regulation No.1 of IMT statesthat Motor insurance in India is transacted within the purview of theIMT. The Tariff Advisory Committee has laid down rules andregulations, rates, terms and conditions, advantages for transactionof insurance business in India in accordance with the provisions ofPart-2B of the Insurance Act, 1938. It is stated in the IMT that the2002 Tariff supersedes the provisions of the IMT in existence upto30.6.2002 and that they are binding on all concerned and that therecannot be any breach of the tariff, especially a breach of theprovisions of the Insurance Act, 1938. The insurance companies arealso required to issue policies in accordance with the IMT provisionsonly. 9. The appellant-Insurance Company in the present case, which isa private insurance company, is no exception. Standard forms areprescribed for contracts of insurance which are set down in theinsurance policy. Therefore, our decision in this case whichinvolves the risk or liability to a gratuitous passenger travellingin a private car would apply to a pillion rider carried on a twowheeler gratuitously. According to the claimant, it is only casesinvolving Act Policies that the risk of such victims are not covered.In a Package Policy or a Comprehensive Policy, such gratuitousoccupants are automatically covered and if additional premium isspecifically paid, that is in addition to the compensation payable https://hcservices.ecourts.gov.in/hcservices/ under the Act. Whereas, according to the insurance company, therisks to such victims are not covered by Section 147 of the Act andeven under Package Policies, they are covered only and to the extentof the additional premium paid.10. A copy of the insurance policy in question was producedbefore us. The insured is G. Saravanan who was driving the car onthe fateful day. The policy is a "Carshield Private Car PackagePolicy". The limitations as to use and limits of liability read asfollows :-"Limitations as to use :The Policy covers use of the vehicle for any purpose other than :(a) Hire or Reward, (b) Carriage of goods (other than samples orpersonal luggage), (c) Organised racing, (d) Pace making, (e) Speedtesting, (f) Reliability Trials, (g) Any purpose in connection withMotor Trade.Limits of liability :Under Section II-1(i) of the Policy Death of or bodily injurySuch amount as is necessary to meet the requirements of the MotorVehicles Act, 1988.Under Section II-1(ii) of the Policy Damage to Third PartyProperty Rs.7,50,000/-.PA Cover for Owner Driver under section III CSIRs.2,00,000/-".The package premium paid by the insured is "Own Damage + Liability".Under the head "Liability", it is stated "Basic premium includingpremium for TPPD (Third Party Property Damage)". In addition, theyhad also paid premium under Personal Accident Benefits (Section III).Section II of the Policy deals with liability to third parties and itreads as follows :"1. Subject to the limits of liability as laid down in theSchedule hereto, the Company will indemnify the insured in the eventof an accident caused by or arising out of the use of the Private Caragainst all sums which the Insured shall become legally liable to payin respect of :-(i) death of or bodily injury to any person including occupantscarried in the Private Car (provided such occupants are not carried https://hcservices.ecourts.gov.in/hcservices/ for hire or reward) but except so far as it is necessary to meet therequirements of the Motor Vehicles Act, the Company shall not beliable where such death or injury arises out of and in the course ofthe employment of such person by the Insured...." In the Policy Schedule, we do not see any limits to the liabilitywith regard to third party occupants". 11. To trace the history of risk of gratuitous passengers in aprivate car, 1977 A.C.J. 343 [Pushpabai Purshottam Udeshi vs. RanjitGinning and Pressing Co.] may be taken as a benchmark. In that case,a passenger who was travelling in a car died in the accident. TheSupreme Court held that Section 95 of the Motor Vehicles Act, 1939 asamended by Act 56 of 1969 is based on the English Acts and they didnot require the users of motor vehicles to be insured in respect ofliability for death or injury to passengers except a vehicle in whichpassengers are carried for hire or reward. The English Law developedsubsequently, but the Indian law existing on the date of thisjudgment had not changed. In the above case, the Supreme Courtobserved as follows :"20. Sections 95(a) and 95(b)(i) of the Motor Vehicles Actadopted the provisions of the English Road Traffic Act, 1960, andexcluded the liability of the insurance company regarding the risk tothe passengers. Section 95 provides that a policy of insurance mustbe a policy which insures the persons against any liability which maybe incurred by him in respect of death or bodily injury to any personor damage to any property of a third party caused by or arising outof the use of the vehicle in a public place. The plea that the words"third party" are wide enough to cover all persons except the personand the insurer is negatived as the insurance cover is not availableto the passengers made clear by the proviso to Sub-section whichprovides that a policy shall not be required:(ii) except where the vehicle is a vehicle in which passengersare carried for hire or reward or by reason of or in pursuance of acontract of employment, to cover liability in respect of the death ofor bodily injury to persons being carried in or upon or entering ormounting or alighting from the vehicle at the time of the occurrenceof the event out of which a claim arises.Therefore it is not required that a policy of insurance shouldcover risk to the passengers who are not carried for hire or reward.As under Section 95 the risk to a passenger in a vehicle who is notcarried for hire or reward is not required to be insured the plea of https://hcservices.ecourts.gov.in/hcservices/ the counsel for the insurance company will have to be accepted andthe insurance company held not liable under the requirements of theMotor Vehicles Act.21. The insurer can always take policies covering risks which arenot covered by the requirements of Section 95. In this case theinsurer had insured with the insurance company the risk to thepassengers. By an endorsement to the policy the insurance company hadinsured the liability regarding the accidents to passengers in thefollowing terms:In consideration of the payment of an additional premium it ishereby understood and agreed that the company undertakes to paycompensation on the scale provided below for bodily injury ashereinafter defined sustained by any passenger...The scale of compensation is fixed at Rs. 15.000. The insurancecompany is ready and willing to pay compensation to the extent of Rs.15,000 according to this endorsement but the learned Counsel for theinsured submitted that the liability of the insurance company isunlimited with regard to risk to the passengers. The counsel reliedon Section II of the Policy which relates to liability to thirdparties. The clause relied on is extracted in full : Section II. Liability to Third Parties.1. The Company will indemnify the insured in the event ofaccident caused by or arising out of the use of the Motor Car againstall sums including claimant's costs and expenses which the insuredshall become legally liable to pay in respect of(a) death of or bodily injury to any person but except so far asis necessary to meet the requirements of Section 95 of the MotorVehicles Act, 1939, the Company shall not be liable where such deathor injury arises out of and in the course of the employment of suchperson by the insured.It was submitted that the wording of Clause 1 is wide enough tocover all risks including injuries to passengers. The clause providesthat the Company will indemnify the insured against all sumsincluding claimant's costs and expenses which the insured shallbecome legally liable. This according to the learned Counsel wouldinclude legal liability to pay for risk to passengers. The legalliability is restricted to Clause 1(a) which states that theindemnity is in relation to the legal liability to pay in respect ofdeath of or bodily injury (to any person but except so far as isnecessary to meet the requirements of Section 95 of the Motor https://hcservices.ecourts.gov.in/hcservices/ Vehicles Act, the Company shall not be liable where such death orinjury arises out of and in the course of the employment of suchperson by the insured. Clauses 1 and 1(a) are not Very clearly wordedbut the words "except so far as is necessary to meet the requirementsof Section 95 of the Motor Vehicles Act, 1939", would indicate thatthe liability is restricted to the liability arising out of thestatutory requirements under Section 95. The second part of Clause 1(a) refers to the non-liability for injuries arising in the course ofemployment of such person. The meaning of this Sub-clause becomesclear when we look to the other clauses of the insurance policy. Thepolicy also provides for insurance of risks which are not coveredunder Section 95 of the Act by stipulating payment of extra premiumThese clauses would themselves indicate that what was intended to becovered under Clauses 1 and 1(a) is the risk required to be coveredunder Section 95 of the Motor Vehicles Act.22. On a construction of the insurance policy we accept the pleaof the insurance company that the policy had insured the owner onlyto the extent of Rs. 15,000 regarding the injury to the passenger. Inthe result we hold that the liability of the Insurance company isrestricted to Rs. 15,000. There shall be a decree in favour of theclaimants/appellants to the extent of Rs. 27,500 against therespondents out of which the liability of the insurance company willbe restricted to Rs. 15,000. The appeal is allowed with the costs ofthe appellant which will be paid by the respondents in equal share."This judgment was delivered on 25.3.1977. We specifically note thewords used by the Supreme Court that the insured can always takepolicies covering risks which are not covered by the requirements ofSection 95 of the 1939 Act.12. Soon thereafter, the Tariff Advisory Committee took adecision which is very important for deciding the present issue andwhich also totally altered the effect of the decision in Pushpabai'scase (supra). This is explained in detail by the Gujarat High Courtin 1981 A.C.J. 277 [Harshavardhatiya Rudraditya vs. JyotindraChimanlal Parikh]. There, the deceased was a gratuitous passenger.There, as in the present case, the insurance policy was aComprehensive Policy. At that time, IMT.5 read as follows :"In consideration of the payment of an additional premium, it ishereby understood and agreed that the Company undertakes to paycompensation on the scale provided below for bodily injury ashereinafter defined sustained by any passenger other than the insuredand/or his paid driver attendant or cleaner and/or a person in theemployment of the insured coming within the scope of the Workmen'sCompensation Act, 1923 and subsequent amendments of the said Act andengaged in and upon the service of the insured at the time such https://hcservices.ecourts.gov.in/hcservices/ injury is sustained whilst mounting into dismounting from ortravelling in but not driving the motor car and caused by violentaccidental external and visible means which independently of anyother cause shall within three calendar months of the occurrence ofsuch injury result in : Scale of compensation(1) Death ... Rs. 15,000.00 (2) ......... ... ...... "The counsel for the appellant produced before the Gujarat High Courta communication issued by the Tariff Advisory Committee to theinsurers carrying on general insurance business in the Bombay Region,which is in the following terms :"TARIFF ADVISORY COMMITTEE BOMBAY REGIONAL COMMITTEECircular M.V. No. 1 of 1978 Bombay, 17th March, 1978 Insurance company's liability in respect of gratuitous passengersconveyed in a private car - standard form for private carcomprehensive policy - section ii - liability to third parties. I am directed to inform insurers that advices have been receivedfrom the Tariff Advisory Committee to the effect that since theindustry had all these years been holding the view liability (sic)the same practice should continue. In order to make this intention clear, insurers are requested toamend clause 1(a) of s. II of the Standard Private Car Policy byincorporating the following words after the words 'death of orappearing therein : 'Including occupants carried in the motor car provided that suchoccupants are not carried for hire or reward.' I am accordingly to request insurers to make the necessaryamendment on sheet 38 of the Indian Motor Tariff pending reprintingof the relevant sheet. (Emphasis ours).All existing policies may be deemed to incorporate the above https://hcservices.ecourts.gov.in/hcservices/ amendment automatically as the above decision is being brought intoforce with effect from 25th March, 1977. Sd. Regional Secretary."The Gujarat High Court held as follows :"Taking into consideration the spirit underlying the aforesaidinstructions issued by the Tariff Advisory Committee all the insurerswould be expected to adhere to the policy decision in its truespirit. The policy decision had to be evolved by reson of the factthat for years the insurers were considered to be liable even incases of gratuitous passengers. The situation came to be altered byvirtue of the decision in Pushpabai's case, AIR 1977 SC 1735,rendered on 25th March, 1977. The insurance business having beennationalised it is but reasonable to expect the insurers not to takeadvantage of the altered situation and to continue to discharge theirobligation as hitherto. No doubt, the aforesaid instructions cannotbe enforced in an M.A.C.T. proceeding in the sense that we cannotdirect that the insurance company shall reimburse the insured fullyor that the full decree against the insured may be executed againstthe insurance company as if it was a decree passed against it. We aregiven to understand that the insurance companies are dischargingtheir obligation as hitherto notwithstanding Pushpabai's case, AIR1977 SC 1735. If such is the policy that being followed in othercases no discrimination can be made on principle in the present case.There cannot be a selective application of the policy embodied in theaforesaid resolution. If such a selective application were to becountenanced, it would violate the mandate of art. 14 of theConstitution of India. We have, therefore, no doubt that theinsurance company will follow the same policy uniformly and will notclutch at this defence in the present case if the policy decisioncontained in the aforesaid communication is being adhered to in othercases. In case of necessity, learned counsel for the claimants willbe at liberty to apply to the insurance company and make a requestfor implementing the aforesaid policy decision in the present case.It will be open to him to forward a copy of this judgment in supportof this request."Therefore, the Tariff Advisory Committee had brought theseinstructions into force literally from the date on which the judgmentin Pushpabai's case was delivered by the Supreme Court. The TariffAdvisory committee determines the terms and conditions and the limitsand liabilities of an insurance policy vide Section 64U of theInsurance Act. A reading of the Circular, though intended for theBombay Region, indicates that all along, insurance companies had https://hcservices.ecourts.gov.in/hcservices/ intended that the risk to a gratuitous occupant in a private car wasto be covered and was in fact covered by a Package Policy.13. In 1985 A.C.J. 585 [Sagar Chand Phool Chand Jain vs. SantoshGupta], the Delhi High Court had to consider a similar issue. Beforethe Delhi High Court, again, the judgment in Pushpabai's case waspressed into service and it was contended that the liability of theinsurance company is restricted to the statutory liability underSection 95 of the 1939 Act and no more and that if the risk to thepassenger has to be covered, it is to be done by a special contractand since the contract of insurance did not specify risk to thepassengers, nor any additional payment or premium was received, thepassenger cannot claim to be compensated in an amount exceeding thestatutory liability. On the side of the claimants, it was contendedthat the very concept of a Comprehensive Policy includes the risk toa passenger gratuitously carried. A special contract is necessaryfor limiting the liability of the insurance company and therefore,the liability is all inclusive, unless specifically limited. TheCircular dated 13.3.1978, which has been extracted above, was alsobrought to the notice of the Delhi High Court. The policy inquestion was of the year 1970 and when the case came up for hearingbefore the Tribunal on 31.5.1979, the 1978 Instructions had come intooperation. The Delhi High Court held that, "Apart from theinstructions of the Tariff Advisory Committee, the contract itselfprovided positive indication that the risk of occupants/passengers iscovered by the policy. The contract itself at the top describes itas a contract for 'Private Car (Comprehensive)'. Section 2 of thecontract provides for liability to third party and this paragraphshows that the company will indemnify the insured in the event of anaccident caused by or arising out of the use of the motor car againstall sums including claimant's costs and expenses which the insuredshall become legally liable to pay in respect of death of or bodilyinjury to any person but except so far as is necessary to meet therequirements of Section 95 of the 1939 Act, the company shall not beliable where such death or injury arises out of and in the course ofthe employment of such person with the insured". The Delhi HighCourt also noted that apart from these provisions, the contractitself provides for general exceptions where the company shall not beliable to pay and the exceptions do not include theoccupants/passengers. In fact, at the time of arguments, the DelhiHigh Court was informed that the valuable and important instructionswhich affect the policy holders are not published either by theTariff Advisory Committee or by the National Insurance Company. 14. Before the Delhi High Court, the counsel for the insurancecompany could not produce any material, nor a single policy where ina Comprehensive Policy, special premium was charged to cover the risk https://hcservices.ecourts.gov.in/hcservices/ of occupants/passengers. Therefore, the Delhi High Court rightlyconcluded that this would negatively establish that the nationalisedinsurance companies did not enter into special contract of insuranceto cover occupants/passengers and that the Comprehensive Policycovers all the risks and liabilities to which the insured is liable.The Delhi High Court also held that the 1978 Instructions of theTariff Advisory Committee are in the nature of express clarificationof the legal position already obtaining and therefore, no new rightwas created by the 1978 Circular, but the existing right was onlyclarified. Even the 1978 Circular specifically mentioned, that thisis how it has all along been understood and that in recent times, theinsurance companies were taking a different stand which necessitatedthe Tariff Advisory Committee to come out with explicit instructions.Therefore, these instructions are not declaratory, but onlyclarificatory and as per Section 64U, govern the insurers.15. The provisions relating to motor accidents claims in theMotor Vehicles Act form a self-constituted Code and they are intendedto benefit the unfortunate legal heirs of an accident victim or theunfortunate injured in an accident and if the rights that thesepersons are entitled to are not made known to them, it is possiblethat they are prevented from making the rightful claim or cheatedfrom receiving the rightful compensation. 16. What was then specifically mentioned in the Tariff AdvisoryCommittee Circular in 1978 has now been incorporated in the contractitself in a Package Policy. Therefore, even if the 2002 Tariff regimedoes not specifically mention that in a Comprehensive Policy, thegratuitous occupant's risk is covered since it is a comprehensivepolicy, by its own terminology, it includes any person in the car orany type of vehicle except those that are specifically excluded. 17. The vehicle in this case is a private car. IMT.2 lays downthe tariff for private car, and it includes –(a) Private Car Type Vehicles used for social, domestic andpleasure purposes and also for professional purposes (excluding thecarriage of goods other than samples) of the insured or used by theinsured's employees for such purposes but excluding use for hire orreward, racing, pace making, reliability trial, speed testing and usefor any purpose in connection with the Motor Trade.(b) Motorised three wheeled vehicles (including motorisedrickshaws/cabin body scooters used for private purposes only).As regards limitations, the policy covers the use of the vehicle forany purpose other than – https://hcservices.ecourts.gov.in/hcservices/ a) Hire or rewardb) Carriage of goods (other than samples or personalluggage)c) Organized racingd) Pace makinge) Speed testingf) Reliability trialsg) Use in connection with Motor TradeThe additional premium payable which has been shown separately in thepremium computation table is with regard to the legal liability – (i) to paid drivers/and/or cleaner; (ii) to employees of the insured travelling in and/or driving the employer's vehicle; and (iii) trailers. The premium for gratuitous passenger is not mentioned here. TheStandard Form for private car - Package Policy would show in SectionII with regard to liability to third parties that the insurancecompany will indemnify the insured in the event of an accident causedby or arising out of the use of the vehicle against all sums whichthe insured shall become legally liable to pay in respect of– (i) death of or bodily injury to any person including occupantscarried in the vehicle (provided such occupants are not carried forhire or reward) but except so far as it is necessary to meet therequirements of Motor Vehicles Act, the company shall not be liablewhere such death or injury arises out of and in the course of theemployment of such person by the insured; and (ii) damage to property other than property belonging to theinsured or held in trust or in the custody or control of the insured.Therefore, except occupants who are carried for hire and reward, andin the case of death and injury of a person in the course ofemployment of such person by the insured to the extent necessary tomeet the requirements of the Workmen's Compensation Act, the Insurershall indemnify the insured against all sums he is legally liable topay . The words used in the contract of insurance, extracted above,viz. "Any person including occupants carried in the vehicle providedsuch occupants are not carried for hire or reward" are the words https://hcservices.ecourts.gov.in/hcservices/ exactly used in the Tariff Advisory Committee Circular of the year1978. Therefore, even if the 2002 IMT does not make a specificreference to it cannot dilute the third party liability of theinsurer. General Regulation No.3 states that the policies insuringmotor vehicles are to be issued only as per the Standard Form givenunder Section 6 of the IMT. The present policy and the termscontained therein are in accordance with the Standard Forms andtherefore, the risks of the occupants carried in the motor vehicle solong as they are not carried for hire or reward are automaticallycovered when a Comprehensive Policy is taken. It is difficult tounderstand how the insurance companies can evade their liabilityinspite of having contracted under the policy to cover the risk to anoccupant, or to use the words of the Gujarat High Court "clutch atthis defence" doggedly. 18. We will refer to the decisions of the Supreme Court which arecited by the insurance company.19. The first is 2006 A.C.J. 1441 [United India Insurance Co.Ltd. vs. Tilak Singh]. The deceased a pillion rider,was a gratuitouspassenger. The Supreme Court held that the insurance company was notliable. The policy in that case was a statutory policy which did notcover the result of death or bodily injury to a gratuitous passenger.The Supreme Court referred to 2000 A.C.J. 1 [New India Assurance Co.Ltd. vs. Satpal Singh], where the Supreme Court had held that underthe new Act, an insurance policy covering third party risk is notrequired to exclude gratuitous passenger in a vehicle no matter thatthe vehicle is of any type or class. The Supreme Court in TilakSingh's case (supra), held that since Satpal Singh's case (supra) hasbeen overruled by 2003 A.C.J. 1 [New India Assurance Co. Ltd. vs.Asha Rani], it is no longer necessary to follow Satpal Singh's case.Of course, in Tilak Singh's case, the Supreme Court made certainobservations :"In our view, although the observations made in Asha Rani's case(supra) were in connection with carrying passengers in a. goodsvehicle, the same would apply with equal force to gratuitouspassengers in any other vehicle also. Thus, we must uphold thecontention of the appellant-insurance company that it owed noliability towards the injuries suffered by the deceased RajinderSingh who was a pillion rider, as the insurance policy was astatutory policy, and hence it did not cover the risk of death of orbodily injury to gratuitous passenger",But we have to apply this judgment in the context of the facts of theindividual case. The passengers were gratuitously carried in a goodsvehicle in Asha Rani's case. https://hcservices.ecourts.gov.in/hcservices/

20. In 2008 (8) Supreme 276 [The General Manager, UnitedInsurance Co. Ltd. vs. M. Laxmi], the deceased was a pillion rider.The Policy was an Act Policy. The Supreme Court referred to AshaRani's case where the Supreme Court held thus:"In view of the changes in the relevant provisions in the 1988Act vis-a-vis the 1939 Act, we are of the opinion that the meaning ofthe words "any person" must also be attributed having regard to thecontext in which they have been used i.e. "a third party". Keeping inview the provisions of the 1988 Act, we are of the opinion that asthe provisions thereof do not enjoin any statutory liability on theowner of a vehicle to get his vehicle insured for any passengertravelling in a goods vehicle, the insurers would not be liabletherefor."Two paragraphs in M. Laxmi's Case (supra) are very important :"Learned Counsel for the appellant submitted that the High Courthas misread the Circular of the Tariff Advisory Committee dated2.6.1986. The same referred to compensation payable to pillion ridersin case of comprehensive policy. The Clarification/Circular has norelevance so far as Act Policy Cases are concerned and it related toonly Comprehensive Policy"; and "There is no dispute that the Circular dated 2.6.1986 refers toComprehensive Policy. It categorically states that standard form formotorcycle should cover liability to pillion passengers in case ofComprehensive Policy. As noted by the MACT, the policy in the instantcase was an Act Policy."Therefore, it would be quite proper for us to draw strength fromthese observations that a Comprehensive Policy covers the liabilityof pillion riders. The Supreme Court held in favour of the insurer inM. Laxmi's case only because the policy therein was an Act policy.In this judgment, the Supreme Court has referred both to TilakSingh's case and Asha Rani's case and from the above observations, itis clear that the Supreme Court was of the opinion that while in anAct Policy, the risk to a pillion rider who was a gratuitouspassenger is not covered, it is covered in the case of aComprehensive Policy. 21. In (1998) 3 S.C.C. 744 [Amritlal Sood vs. Kaushalya DeviThapar], the injured was a gratuitous passenger travelling in aprivate car. The High Court held that the insured was not liablesince the claimant was only a passenger. The insurance policy wasextracted by the Supreme Court and we find that it is almost https://hcservices.ecourts.gov.in/hcservices/ identical to the policy in the case before us. The Supreme Courtheld in Amritlal Sood's case as follows :"3. The question to be decided is whether the insurer is liableto satisfy the claim for compensation made by a person travellinggratuitously in the car. The factual findings are not in disputebefore us but for the contention of the appellants that the amount ofcompensation awarded by the Division Bench is excessive. We have nodifficulty in repelling that contention as we find the materials onrecord to be sufficient to support the award of enhanced compensation.4. The liability of the insurer in this case depends on the termsof the contract between the insured and the insurer as evident fromthe policy. Section 94 of the Motor Vehicles Act, 1939 compels theowner of a motor vehicle to insure the vehicle in compliance with therequirements of Chapter VIII of the Act. Section 95 of the Actprovides that a policy of insurance must be one which insures theperson against any liability which may be incurred by him in respectof death or bodily injury to any person or damage to any property ofthird party caused by or arising out of the use of the vehicle in apublic place. The section does not however require a policy to coverthe risk to passengers who are not carried for hire or reward. Thestatutory insurance does not cover injury suffered by occupants ofthe vehicle who are not carried for hire or reward and the insurercannot be held liable under the Act. But that does not prevent aninsurer from entering into a contract of insurance covering a riskwider than the minimum requirement of the statute whereby the risk togratuitous passengers could also be covered. In such cases where thepolicy is not merely a statutory policy, the terms of the policy haveto be considered to determine the liability of the insurer.5. In the present case, the policy is admittedly a “comprehensivepolicy”. “Comprehensive insurance” has been defined in Black’s LawDictionary, 5th Edn. as “All-risk insurance” which in turn is definedas follows:“Type of insurance policy which ordinarily covers every loss thatmay happen, except by fraudulent acts of the insured. (Miller v.Boston Ins. Co., 218 A 2d 275, 278 : 420 Pa 566) Type of policy whichprotects against all risks and perils except those specificallyenumerated.”6. The relevant clauses in the policy before us are found in“Section II — Liability to Third Parties”. They are:“1. The Company will indemnify the insured in the event ofaccident caused by or arising out of the use of the motor car against https://hcservices.ecourts.gov.in/hcservices/ all sums including claimant’s costs and expenses which the insuredshall become legally liable to pay in respect of (a) death of or bodily injury to any person but except so far asis necessary to meet the requirements of Section 95 of the MotorVehicles Act, 1939, the Company shall not be liable where such deathor injury arises out of and in the course of the employment of suchperson by the insured.(b) damage to property other than property belonging to theinsured or held in trust by or in the custody or control of theinsured.2. The Company will pay all costs and expenses incurred with itswritten consent.3. In terms of and subject to the limitations of the indemnitywhich is granted by this section to the insured the company willindemnify any driver who is driving the motor car on the insured’sorder or with his permission provided that such driver(a) is not entitled to indemnity under any other policy(b) shall as though he were the insured observe, fulfil and besubject to the terms, exceptions, conditions and limitations of thispolicy insofar as they can apply.”7. Under the heading General Exceptions, the company’s liabilityis excluded inter alia in respect of any accident occurred whilst thecar is being used otherwise than in accordance with the limitationsas to use or being driven by any person other than a driver. Thelimitations as to use set out in the policy are not relevant in thiscase as it is not the case of the insurer that there is a violationthereof. The term “driver” is expressly defined in the policy as anyof the following:“(a) Any person,(b) The insured may also drive a motor car belonging to him andnot hired to him under a Hire-Purchase Agreement. Provided that theperson driving holds a licence to drive the motor car or has held andis not disqualified for holding or obtaining such a licence.”8. Thus under Section II(1)(a) of the policy the insurer hasagreed to indemnify the insured against all sums which the insuredshall become legally liable to pay in respect of death of or bodilyinjury to “any person”. The expression “any person” would undoubtedly https://hcservices.ecourts.gov.in/hcservices/ include an occupant of the car who is gratuitously travelling in thecar. The remaining part of clause (a) relates to cases of death orinjury arising out of and in the course of employment of such personby the insured. In such cases the liability of the insurer is only tothe extent necessary to meet the requirements of Section 95 of theAct. Insofar as gratuitous passengers are concerned there is nolimitation in the policy as such. Hence under the terms of thepolicy, the insurer is liable to satisfy the award passed in favourof the claimant. We are unable to agree with the view expressed bythe High Court in this case as the terms of the policy areunambiguous....10. The High Court has placed reliance on the judgment of thisCourt in Pushpabai Purshottam Udeshi v. Ranjit Ginning & Pressing Co.(P) Ltd., (1977) 2 SCC 745. That judgment was based upon the relevantclause in the insurance policy in that case which restricted thelegal liability of the insurer to the statutory requirement underSection 95 of the Motor Vehicles Act. That decision will have nobearing in the present case inasmuch as the terms of the policy hereare wide enough to cover a gratuitous occupant of the vehicle."This is the clear exposition on the terms of a Comprehensive policyby a three Judge Bench.22. In (2002) 2 S.C.C. 278 [New India Assurance Co. Ltd. vs. C.M.Jaya], a five Judge Bench of the Supreme Court which was constitutedto decide the conflict between (1995) 2 S.C.C. 539 [New IndiaAssurance Co. Ltd. vs. Shanti Bai] and Amritlal Sood's case (supra),answered that there was really no conflict,and that both laid downthe law correctly and held in paragraph 10 as follows : "Thus, it is clear that the specific clause in the policy beingwider, covering higher risk, made all the difference in KaushalyaDevi's case as to unlimited or higher liability." Therefore, the law laid down in Amritlal Sood's case (or KaushalyaDevi's case) that insofar as gratuitous passengers are concernedthere is no limitation in the policy would squarely apply to thiscase.23. Now, we will look at some of the High Court judgments. In2007 A.C.J. 1676 [United India Insurance Co. Ltd. vs. Bhagyalakshmi],a Division Bench of the Karnataka High Court held that the insurancecompany was not liable. That is to say, when the insured has notpaid any extra premium to cover the risk of death or bodily injury toan occupant of a private car, then the insurer will not be liable.This judgment is dated 19.9.2006. On 25.9.2007, a Division Bench ofthe same High Court, in Bajaj Allianz General Insurance Co. Ltd. vs.Smt. Lakshmamma [C.M.A. No.7493 of 2007], held otherwise with regard https://hcservices.ecourts.gov.in/hcservices/ to the issue whether the policy covered the risk of the pillionrider. There is no reference to any judgment except to look at thepolicy issued by the insurance company. " SECTION II - LIABILITY TO THIRD PARTIES 1. Subject to the limits of liability an laid down in theSchedule hereto the Company will indemnify the insured in the eventof an accident caused by or arising out of the use of the insuredvehicle against all sums which the insured shall become legallyliable to pay in respect of :i) death of or bodily injury to any person including occupantscarried in the insured vehicle (provided such occupants are notcarried for hire or reward) (emphasis supplied) ...................The Division Bench held as follows :"Now, in this background, we have seen the policy produced beforeus. It also says the limits of liability under Section 2(i) of thepolicy. Therefore, the policy issued by the insurance company coversthe risk of a passenger in the vehicle and having issued such apolicy it is not proper for the insurance company to contend thatliability to public risk under the basic premium does not cover therisk of a pillion rider in a two-wheeler. If there was no liabilitytowards the pillion rider in the policy issued by it, the appellant –insurance company should have made it very clear that risk of suchpillion rider is not covered under the policy and more over, in thestandard format produced before us, it includes the coverage ofpillion rider. Therefore, we cannot appreciate the argumentsadvanced by the learned counsel for the appelant on this aspect.Accordingly, this point is answered against the insurance company."24. In 2008 (1) T.A.C. 51 (Cal.) [Amit Bar vs. National InsuranceCo. Ltd.], a Division Bench of the Calcutta High Court held that noadditional premium was paid to cover the risk to pillion rider andthough in that case, it was a Package Policy, the Division Bench heldin favour of the insurance company. They relied on Tilak Singh'scase to arrive at this conclusion. But we have seen that in TilakSingh's case, the policy was an Act policy. 25. In 2008 A.C.J. 554 [Bajaj Allianz General Insurance Co.Ltd. vs. B.M. Niranjan], has referred to the policy and the terms andconditions contained therein which uses the words 'death or bodilyinjury to any person including occupants carried in the insuredvehicle' and held as follows : https://hcservices.ecourts.gov.in/hcservices/ "19. A reading of the aforesaid terms and conditions disclosesthat the Insurance Company issued a policy known as "Package Policy"for two wheelers and collected a premium to cover the risk of notonly own damage, but also third party. The coverage also included thedeath or bodily injury to any person including occupants carried inthe insured vehicle (provided such occupants are not carried for hireor reward). The terms and conditions of the policy and the scheduleof payment cannot but be said to cover claims of the injured pillionrider of the Motor Cycle.20. Although the learned Counsel for the appellant strenuouslycontends that covering the risk of injury or death of a pillion riderof the Motor Cycle is permissible only on payment of additionalpremium, such a contention in my opinion cannot be countenanced. Isay so because, as noticed supra, the Insurance Policy is known as"Package Policy" and not an "Act Policy". An "Act Policy" undoubtedlycovers risks under the statute. The evidence of RW-1 is not in thedirection of establishing that the policy of the insurance was an"Act Policy". The "endorsement 227" in the schedule to the policyremains unexplained and the evidence of RW1 does not make referenceto the said endorsement. RW-1 does not point out to any particularterm in the 'Package Policy' Ex.D 1 or the certificate cum policyschedule, Ex.P3 with regard to non-payment of an additional premiumto cover the risk of pillion rider of the Motor Cycle or that theinsurer was not liable to answer the claim of the pillion rider inthe event of death or injury. In that view of the matter, it cannottherefore be said that the risk under the policy Ex.D1 was limited toclaims of the owner or the rider of the Motor Cycle."25. In 2007 A.C.J. 912 [Mathew Joseph vs. Janaki], a Full Benchof the Kerala High Court held that payment of premium alone casts acorresponding duty on the insurance company for rendering coverage.The matter was referred to the Full Bench since there was a conflictbetween the Full Bench decision in 1999 A.C.J. 1499 (Kerala)[Oriental Insurance Co. Ltd. vs. Ajayakumar] and 2006 A.C.J. 1441(SC) United India Insurance Co. Ltd. vs. Tilak Singh]. The KeralaHigh Court observed as follows :"12. In view of our earlier observations, it cannot be perceivedthat observations in the Full Bench judgment continue to operate.There was available an "Act only" policy to bank upon. Theobservations in paragraph 11 of the judgment in Oriental InsuranceCo.Ltd. v. Ajayakumar 1999 (2) KLT 886 FB reads as following:'Therefore, it has to be taken that the term "any person"referred in Clause (b)(i) would take in all passengers for hire orreward or otherwise. We do not find any merit in the contention https://hcservices.ecourts.gov.in/hcservices/ raised by the learned Counsel for the appellant that if the term "anyperson" in Clause (b)(i) would take in passengers in private vehiclecarried in for hire or reward then it was unnecessary for theLegislature to bring in the amendment under Act 54 of 1994 to includeowner of the goods or his authorised representative carried in thevehicle in Clause (i).'The decision substantially had rested on United India InsuranceCompany Limited v. Appukuttan 1995 (1) KLT 807 Definitely laterdecisions have found that the expression 'any person' can haverelevance only vis-a-vis a third party. So long as the view as aboveprevails, it may not be proper for this Court to hold that theobservations made in the Full Bench judgment are to govern thesituation. Appukuttan's case is to be deemed as wrongly decided.Gratuitous passengers in transport vehicles, including a motor cycle,can have coverage only when a comprehensive policy or extended policyas might be possible to be issued has been availed of by the owner ofthe vehicle. Only in such cases, the Insurance Company is required tocompensate. We hold that the guidelines set by the Supreme Court areunambiguous viz., that payment of premium alone can cast acorresponding duty on the insurer for rendering coverage on any suchgroup, when they are not required to be mandatorily brought underinsurance protection."The Full Bench held, therefore, that gratuitous passengers can havecoverage only when a Comprehensive Policy has been availed of by theowner of the vehicle.26. In 2008 A.C.J. 61 [Naynesh H. Nanavati vs. Dashrath R.Bhagat], again a single Judge of the Gujarat High Court, referred toPushpabai's case and also to 1989 A.C.J. 845 [Kailash Kumar vs.Bhola] of the Punjab and Haryana High Court. Before the Punjab andHaryana High Court, the deceased was a gratuitous passenger. Theinsurance company contended that it was not liable. The Punjab andHaryana High Court disagreed with the view taken by the Tribunal inabsolving the insurance company of its liability and held otherwiseon the basis of the relevant instructions of the Tariff AdvisoryCommittee. The learned Judge observed that after the Tariff AdvisoryCommitee's instructions, the insurance company cannot avoidliability. 27. In Motor Vehicle Laws – 13th Edition, 2008 (Lexis NexisButterworths Wadhwa, Nagpur), which is a critique on motor vehiclelaws by Justice K. Kannan and N. Vijayaraghavan, the learned authorson considering the large scale use of two wheelers with pillionriders and carriage of gratuitous occupants in private car havegiven their opinion, referring to various judgments under the head https://hcservices.ecourts.gov.in/hcservices/ "Liability of insurer for death/injury to gratuitous passengers inprivate car under a Package/Comprehensive Policy", since it is a veryserious and sensitive issue that requires examination, They observeas follows :"Motor TP cover is still governed by Tariff. What TAC haddirected or expressed in 1977 still holds good and their decision toamend the Policy wording which is in use till date, continues to bindthe Insurers.The Insurers cannot ignore the TAC decision and argue as if thePolicy is framed or issued by them independently and there is nocover for occupants.In our opinion, the 'additional premium' argument cannot bestretched too far by the Insurers, ignoring the Policy wording andthe intention to cover as stipulated by TAC."The learned authors also observed as follows :"The liability of insurer to a pillion rider and a gratuitousoccupant would depend upon the cover granted by insurer being ActPolicy or Package Policy. In respoect of an Act Policy such personsare not required to be covered. It is only under a Package Policysuch persons are covered by the contract of insurance. Under theearlier dispenseation in Motor Vehicle Act, this position was thesame. In Pushpabai's case, the Supreme Court had held that theinsurer would not be liable to occupants carried in a private vehicleunder a Policy. In K. Gopalakrishnan vs. Sankaranarayanan, 1969A.C.J. 34 and National Insurance Co. Ltd. vs. V. Vasantha, 1987A.C.J. 887, the High Court, Madras had held that insurer was notliable to pillion riders carried on a 2 wheeler under an Act Policy.Similar decisions were delivered by all courts barring a few."We read in this very exhaustive critique that it is not withoutreason or out of ignorance that insurers were satisfying the awardsall along from 1977, it was on account of the fact that as against anAct Policy, the Comprehensive (now Package) Policy, occupants wereexpressly covered, due to a conscious change in the Policy wordingafter insurers were held not liable by the Supreme Court inPushpabai's case; and that as regards the third party coverage underComprehensive Policy prevailing before 25.3.1977,it is clear that theComprehensive Policy before 25.3.1977 did not use the words"including occupants carried in the motor car provided that suchoccupants are not carried for hire or reward". These are the wordsin the 1978 Circular. They further observe thus : https://hcservices.ecourts.gov.in/hcservices/ "There is no change in the law – Insurers are not required tocover passengers in a private car. The relevant portion of thePolicy has also not changed materially ever since 1977. TAC'sCircular or the amendment has not become inapplicable or irrelevantwhen this portion of the Policy wording is being maintained till dateeven under the 2002 Tariff.When neither the law nor the relevant wording in the Policy haschanged, it would not be open to Insurers to ignore the wording andthe amendment brought about by TAC consciously in 1977 itself toargue that there is no liability for occupants, contrary to what isstated in the Policy document."28. The judgments of the Supreme Court where the insurer was heldnot liable were cases where either the policy was an Act Policy orthe gratuitous passengers were travelling in a goods vehicle or apublic transport vehicle. In none of those cases, the policy was aComprehensive Policy, nor were the passengers travelling in a privatecar, except in Amrit Lal Sood's case, which was approved in C.M. Jaya(supra) by a five Judge Bench. The Supreme Court clearly held thatit will depend on the insurance policy that has been taken. WhenSection II of the Policy as extracted in paragraph 11 above coversthe risk of death of any occupant and when that is the contract towhich the parties have bound themselves, we do not see how theinsurance company can evade their duty to pay the compensation. Infact, as already pointed out, even in M. Laxmi's case(supra), the observations of the Supreme Court clearly indicate thatthe risk of a pillion rider would be covered if it is a ComprehensivePolicy. We have already extracted the relevant clauses of the Policyand we find that there is no limit imposed on the insurer'sliability. By virtue of the wording of Section 147 and also SectionII of the Policy, the death or injury of a gratuitous passenger iscovered. Over and above the premium paid by the insured who hastaken a Comprehensive Policy, if the insured pays additionalpremium, then the insurer's liability arises to the extent agreedupon. In this case the extent is Rs.70,000/-. This is inaddition to, and not the maximum extent of, the third party liabilityalready agreed upon in Section II of the policy. In the context ofrenewal of Mediclaim Policy, the Supreme Court has held that, "(T)heinsurance companies cannot either in the prospectus or in the termsof the policy lay down any condition that would be derogatory to theterms and conditions approved by the Regulatory Authority," and that"regulations guidelines and circulars are binding on the insurancecompanies." - vide (2008) 10 S.C.C. 404 [United India Insurance Co.Ltd. vs. Manubhai Dharmasinhbhai Gajera]. 29. There fore it is clear from the Act itself, the words https://hcservices.ecourts.gov.in/hcservices/ of the policy and the decision in Amritlal Sood's case (supra) that aComprehensive Policy covers the risk of a gratuitous passenger to theextent of the liability incurred. We may imagine what will happen ina case where the owner is driving his car covered by a ComprehensivePolicy. He is accompanied by his wife and children. There is anaccident as in this case. The wife and children are permanentlydisabled by the injuries. If we agree with the appellant InsuranceCompany, those pathetic claimants will not get any compensation. Thelaw never intended this to happen. That is why the TAC explicitlycame out with the clarificatory Circular in 1978. We cannot forgetthat the words used are "third party" and "Comprehensive", so wecannot deny this relief to the third party occupant in a car coveredby a Comprehensive Policy.29. Now, we come to the quantum of compensation. Exhibits P.5 toP.9 are Income Tax Returns of the deceased. The deceased was theDirector of Mourind Automation Private Limited. He was an Income TaxAssessee. On the basis of Exs.P.5 to P.9, which are the SARAL IncomeTax Return Forms, the Motor Accidents Claims Tribunal found that theannual income of the deceased was Rs.1,65,000/- and after deductingone-third of the said amount, arrived at a sum of Rs.1,10,000/- asthe annual contribution of the deceased to his family. The Tribunalmultiplied the said sum by 17 and arrived at a sum of Rs.18,70,000/-.Then, adding the conventional damages, a total sum of Rs.19,10,000/-was arrived at by the Tribunal to be paid as compensation.30. Both the counsel made their submissions. According to thecounsel for the insurance company, the award was on the excessiveside. Under Ex.P.5, the income of the deceased is shown asRs.87,000/-; in Ex.P.6, it is shown as Rs.1,14,396/-; in Ex.P.8, itis shown as Rs.1,22,400/-; and in Ex.P.9, the income is shown asRs.1,08,390/-, as per the evidence of P.W.1. From this, we will takethe income of Rs.1,22,400/- which is most advantageous to theclaimants. Since the deceased was only 36 years old at the time ofthe accident and was receiving income both under the head 'salary'and 'business income', the scope of earning more could not be ruledout. There has been a jump of Rs.40,000/- in the annual income injust two years from Ex.P.2 to Ex.P.8, which works out to aboutRs.7,000/- per month to Rs.10,000/- per month and he was in histhirties. The learned counsel for the respondent submitted that inone year, it was shown as Rs.1,90,000/-, which was misread by theTribunal. 31. Taking into account all these facts, we may reasonably fixRs.2,00,000/- as the annual income of the deceased and afterdeducting one-third, Rs.1,35,000/- would be his contribution to thefamily. Then, adopting a multiplier of 13, the pecuniary loss would https://hcservices.ecourts.gov.in/hcservices/ be Rs.17,55,000/-. The Tribunal arrived at a sum of Rs.17,76,658/-.The insured had taken personal accident benefit cover and under thishead, the maximum amount payable is Rs.70,000/-. So this should beadded, the would be Rs.18,25,000/-. A sum of Rs.25,000/- wasawarded to the wife of the deceased for the loss of consortium. Ifthis is confirmed, it will add up to Rs.18,50,000/-. A sum ofRs.10,000/- was awarded to the mother towards the loss of love andaffection of her son. If this is confirmed, it adds up toRs.18,60,000/-. The award towards funeral expenses as fixed by theTribunal at Rs.10,000/- is confirmed. Then it adds up toRs.18,70,000/-. Usually this Court awards Rs.10,000/- each to thechildren who have lost the parent, whereas the Tribunal has awardedRs.20,000/- each. We do not think we will interfere with this. Thus,the aggregate sum will come to Rs.19,10,000/-. The Tribunal hadawarded the very same amount and therefore, it requires nointerference by this Court. 32. Before the Delhi High Court in Sagar Chand Phool Chand Jain'scase (supra), the counsel for the claimants submitted thatinstructions which affect the policy holders are not published orthey are not brought to the knowledge of the policy holders. We hopethe situation has changed. In Manubhai Dharmasinhbhai Gajera's case(supra), the Supreme Court has referred to Clause-3 of the I.R.D.A.requirements which relates to consideration and review of products,meaning thereby the insurance policy, and they specifically refer tothe following words in Clause-3 :"(ii) All literature relating to the product should be in simplelanguage and easily understandable to the public at large. As far aspossible, a similar sequence of presentation may be followed. Alltechnical terms should be clarified in simple language for thebenefit of the insured."33. The policy holder should know as to whose risk is beingcovered. It should be brought to his knowledge that even his familymembers would be gratuitous passengers travelling in his car and wealso hope that in addition to English and Hindi, the insurancecompanies, both public sector as well as private sector undertakings,would consider publishing the instructions and guidelines in thelanguage of the State. The law governing the insurance policyultimately is a law of contract and so both parties should understandexactly what are the terms of the contract and for exactly whatextent and what type of coverage the policy holder is paying premium. 34. While deciding the claim petition, the Motor Accidents ClaimsTribunal should examine the terms of the Policy produced by theinsurer, and in the event of denial of liability, a finding should be https://hcservices.ecourts.gov.in/hcservices/ rendered with regard to the nature of the Policy as to whether it wasan 'Act Policy' or a 'Package Policy'.35. In this case, we have decided the legal issue relating tocoverage of risk to a gratuitous passenger traveling in a private carin favour of the third party and against the insurer. Though theMotor Accidents Claims Tribunal had given its reasons for rejectingthe case of the Insurance Company that its liability is limited, weconfirm the conclusion of the Tribunal but for the reasons stated byus hereinabove. As regards the quantum, we confirm the award ofcompensation as granted by the Motor Accidents Claims Tribunal. 35. The Civil Miscellaneous Appeal is accordingly dismissed. Nocosts. Consequently, M.P. No.1 of 2009 is closed.Sd/Asst.Registrar/true copy/Sub Asst.RegistrarabTo1.The Additional District-cum-Sessions Court(Fast Track Court No.2),(Motor Accidents Claims Tribunal),Coimbatore.2.The Section Officer, V.R.Section, High Court, Chennai-1041 CC To Mr.M.B.Goplan, Advocate, SR NO.73401 CC To Mrs.Mythili Suresh, Advocate, SR NO.7330`C.M.A. No.312 of 2009gv(co)pmk.9.3.2009.