IN THE HIGH COURT OF KERALA AT ERNAKULAM MACA.No. 1358 of 2008() 1. ROSY, W/O.CHUMMAR, KAVALAKKATT HOUSE Petitioner Vs 1. K.C.ANTO, S/O.K.C.CHUMMAR, KAVALAKKAT Respondent 2. THE ORIENTAL INSURANCE CO.LTD., For Petitioner :SRI.P.V.CHANDRA MOHAN For Respondent :SRI.MATHEWS JACOB (SR.) The Hon'ble MR. Justice [ENTITY] Dated :18/03/2009 O R D E R [ENTITY],J. M.A.C.A NO.1358/2008 &46 OF 2009 Dated this the 18th day of March,2009 JUDGMENT
The petitioner in [CASE NUMBER] on the file of Motor Accidents Claims Tribunal, Thrissur who is a pillion rider who sustained injuries while travelling in scooter KL8/G 7309 on 14.1.2001 is the appellant in [CASE NUMBER]. Third respondent Insurance Company in [CASE NUMBER] on the file of Motor Accidents Claims Tribunal, Muvattupuzha is the appellant in [CASE NUMBER]. First respondent therein a pillion rider is the petitioner before the Tribunal and respondents 2 and 3 are the owner and rider of the scooter. The accident was on 20.8.2004. In [CASE NUMBER] Motor Accidents Claims Tribunal awarded a compensation of Rs.58,250/- and directed the first respondent the owner and [CASE NUMBER] 2 rider of the scooter to pay compensation holding that under Ext.B1 policy which is only an Act policy, second respondent Insurance Company is not liable to indemnify the first respondent. In [CASE NUMBER] Motor Accidents Claims Tribunal awarded a compensation of Rs.61,300/- and directed the appellant Insurance Company to pay compensation holding that eventhough first respondent was a pillion rider, under Ext.B1 policy appellant is to indemnify the owner. Petitioner before the Motor Accident Claims Tribunal filed [CASE NUMBER], contending that the Tribunal should have passed an award directing second respondent Insurance Company to pay the compensation for the injuries sustained by the pillion rider. In [CASE NUMBER] appellant Insurance Company contended that the Motor Accidents Claims Tribunal should not have directed the appellant to pay compensation when Ext.B1 is only an Act policy.
[CASE NUMBER] 3
2. As the question to be settled in both the appeals is the liability of the Insurance Company to indemnify the insured for the injuries sustained by the pillion rider, when the policy issued was an Act policy, the appeals were heard together.
3. Learned counsel appearing for the appellant in both the appeals as well as the learned counsel appearing for the respondents were heard.
4. The argument of learned counsel Sri.[ENTITY] appearing for appellant in [CASE NUMBER] is that though the Apex Court in [PRECEDENT] and in [PRECEDENT] held that the Insurance Company is not liable to indemnify the insured for the injuries sustained by a pillion rider, the circulars issued by the Tariff Advisory Committee considered by the Division Bench of this Court in [PRECEDENT] was not brought to the notice of the [CASE NUMBER] Supreme Court and when under the instructions issued by the Tariff Advisory Committee, which is binding on all the Insurance Companies as provided under [SECTION] of the [ACT] and so the Insurance Company is liable to pay the compensation for the injuries sustained by a pillion rider in a motor accident and therefore the award passed by the Motor Accidents Claims Tribunal in [CASE NUMBER] is to be modified. Learned counsel argued that though the Tariff Committee had issued another circular in 1986 which was considered by the Karnataka High Court in Oriental Insurance Co.Ltd v. Minaxi and others (2000 ACJ
385),it is in respect of a package policy and that does not invalidate the earlier instruction considered by the Division Bench of this Court and therefore it is to be found that the Insurance Company is liable to pay the compensation for the injuries sustained by a pillion rider. Reliance was placed on the decisions of Delhi High Court in [CASE NUMBER] 5 [PRECEDENT] [PRECEDENT], [PRECEDENT] was argued that the award is to be modified directing the Insurance Company to indemnify the first respondent and directing the Insurance Company to deposit the compensation before the Tribunal.
5. Learned counsel appearing for the appellant in [CASE NUMBER] and the learned counsel appearing for the second respondent in [CASE NUMBER] argued that the decisions relied on by the learned counsel all relate to accidents which had taken place prior to the enactment of [ACT] and what was considered is the effect of [SECTION] of [ACT] and not [SECTION] of [ACT] and therefore those decisions have no application to the present case. Learned counsel also pointed out that the circular relied on by the Division Bench [CASE NUMBER] 6 of this Court as well as the Delhi and Karnataka High Courts were issued all prior to the coming into force of [ACT] and after the enactment of 1988 Act, the earlier circulars have no relevance to an accident taken place subsequent to the commencement of 1988 Act and therefore based on the said decisions, it cannot be held that the Insurance Company is liable to indemnify the owner in respect of compensation payable to a pillion rider who sustained the injuries. It is also argued that in the light of the decision of the Apex Court in [PRECEDENT] (supra)(2006(2) KLT 884, it can only be found that the Insurance Company is not liable to pay compensation for the injuries sustained by a pillion rider in a motor accident so long as the policy issued to the injured is only an Act policy.
6. Learned counsel appearing for the first respondent in [CASE NUMBER] argued that in the written statement there was no case for the [CASE NUMBER] 7 appellant that the policy issued to the second respondent is an Act policy and case of Act policy was pressed into service only at the fag end of the trial and therefore appellant is not entitled to raise such a contention. The learned counsel also argued that in any case the Insurance Company is liable to indemnify the insured in respect of the injury sustained by a pillion rider.
7. Though after the enactment of 1988 Act, treating a pillion rider as a third party to the policy Insurance Company was being directed to indemnify the insured for the compensation payable to the pillion rider also, the legal position is settled by the Apex Court in [ENTITY] case (supra) and [PRECEDENT] declaring that the words "injury to any person" would only mean a third party and not a passenger travelling on a goods carriage or a pillion rider in a two wheeler whether gratuitous or otherwise. Holding [CASE NUMBER] that the provisions of [SECTION] of 1988 Act was enacted for the purpose of enforcement the principles of social justice, it was held that it must be kept confined to third party risk and a contract of insurance which is not statutory in nature should be construed like any other contract. It was also held that when a statutory liability has been imposed upon the owner, the same cannot extent the liability of the insurer to indemnify the owner, although in terms of the insurance policy or under the Act it would not be liable thereof. Construing the effect of an Act policy on the liability of the Insurance Company, the Division Bench in [ENTITY] case (supra) held:-
"In our view, although the observations made in [ENTITY] case were in connection with carrying passengers in a goods vehicle, the same [CASE NUMBER] would apply with equal force to gratuitous passengers in any other vehicle also.
Thus, we must uphold the contention of the appellant Insurance Company that it owed no liability towards the injuries suffered by the deceased [ENTITY] who was a pillion rider, as the insurance policy was a statutory policy, and hence it did not cover the risk of death or bodily injury to a gratuitous passenger." The position was followed in [ENTITY] v. Sudhakaran (2008(2) KLT 936(SC) as follows:-
"The contract of insurance did not cover the owner of [CASE NUMBER] 10 the vehicle, certainly not the pillion rider. The deceased was travelling as a passenger, stricto sensu may not be as a gratuitous passenger as in a given case she may not be a member of the family, a friend or other relative. In the sense of the term which is used in common parlance, she might not be even a passenger.
In view of the terms of the contract of insurance, however, she would not be covered thereby.
It is not necessary for us to deal with large number of precedents operating in this [CASE NUMBER] 11 behalf as the question appears to be covered by a few recent decisions of this Court."
The legal position is summarised in para 19 as follows:-
"19. The law which emerges from the said decisions, is:(i) the liability of the insurance company in a case of this nature is not extended to a pillion rider of the motor vehicle unless the requisite amount of premium is paid for covering is/her risk (ii) the legal obligation arising under [SECTION] of the Act cannot be extended to an injury or death of the [CASE NUMBER] 12 owner of vehicle or the pillion rider, (iii) the pillion rider in a two wheeler was not to be treated as a third party when the accident has taken place owing to rash and negligent riding of the scooter and not on the part of the driver of another vehicle."
In view of the decision, it can only be found that when the policy is only an Act policy, the Insurance Company is not liable to indemnify the owner/injured for the injuries sustained by a pillion rider unless additional premium is paid to cover that risk.
8. Though reliance was placed on the decision of the Division Bench of this Court in [PRECEDENT]), where [CASE NUMBER] 13 circular issued by the Tariff Advisory Committee dated 13.3.1978 was relied on and based on [SECTION] of [ACT] the learned counsel appearing for the appellant in [CASE NUMBER] argued that so long as the circular is withdrawn it is binding on all Insurance Companies and therefore the condition to indemnify the insured in respect of any death or bodily injury to any person including the pillion rider is deemed to be there in the policy, the said circular cannot have any application in respect of an accident which took place subsequent to the coming into force of [ACT]. Moreover, even before the 1988 Act, the Tariff Advisory Committee issued a circular dated 2.6.1986 with respect to the package policy, on the liability to indemnify the insured for the compensation payable to a pillion rider. As per the said circular, it was clarified that the standard form for motor cycle, comprehensive policy should cover liability to pillion riders [CASE NUMBER] 14 treating them as occupants in the motor cycle and provide to indemnify such persons, who are not carried for hire or reward. Therefore the said circular itself establishes that in a comprehensive policy Insurance Company has the liability to cover the pillion passengers treating them as occupants and the insurer is to indemnify the insured. But that cannot be applied to an Act only policy. In any case after the coming into force of [ACT] the circular issued by the Tariff Advisory Committee, prior to the coming into force of 1988 Act cannot have any application, inspite of the binding nature of the circular as provided under [SECTION] of the [ACT] In view of the declaration of law by the Apex Court that the Insurance Company is not liable to indemnify the insured, in respect of injuries sustained by a pillion rider, the Insurance Company has no liability to deposit the compensation amount or to indemnify the insured.
[CASE NUMBER] 15
9. Though learned counsel appearing for the first respondent in [CASE NUMBER], the second respondent in the M.A.C.A and the learned counsel appearing for the appellant in [CASE NUMBER] it was argued that the plea that it is an Act policy was not raised in the written statement and therefore the Insurance Company cannot be absolved of the liability, what was pleaded in the written statement that the liability is only to the extent of the conditions provided under the policy issued to the insured. When Ext.B1, the Act policy issued by the Insurance Company to the insured establish that it is only an Act policy and when there is no case that additional premium was paid, the Insurance Company can be burdened with the liability to indemnify the insured. When the policy issued was only an Act policy, the Insurance Company cannot be directed to indemnify the insured the compensation payable to the pillion rider.
[CASE NUMBER] 16
10. [CASE NUMBER] is dismissed confirming the award passed by the Tribunal. [CASE NUMBER] is allowed and the award passed by the Motor Accidents Claims Tribunal, Muvattupuzha is modified to the extent of holding that third respondent Insurance Company is not liable and only respondents 1 and 2 are liable.
[ENTITY] JUDGE tpl/-
[ENTITY], J.
[CASE NUMBER]
JUDGMENT SEPTEMBER,2006