1 ssp IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELATE JURISDICTION FIRST APPEAL NO.661 OF 1999 The New India Assurance Co.Ltd. ...Appellants vs. 1 Shantabai Bhalchandra Nawale 2 Sunita Bharat Nawale 3 Sagar Bharat Nawale 4 Sonal Bharat Nawale 5 Ajay Bharat Nawale 6 Shivanand Keshav Bhat 7 Deepak @ Vithal Shripad Raikar ...Respondents Mr.S.S.Vidyarthi for the appellants Mr.Shekhar S. Ingawale for respondent nos.1 to 5 Mr.Amit Borkar for respondent Nos. 6 & 7 CORAM :A.S.OKA,J. DATE : AUGUST 23, 2010 ORAL JUDGMENT: 1 The appellant New India Assurance Company has taken an exception to the Judgment and Award dated 17th December 1999 passed by the learned Member of the Motor Accident Claims Tribunal in a claim petition filed by the 1st to 5th respondents under section 166 of the Motor Vehicles Act,1988. The 6th respondent appears to be owner of the offending vehicle and the 7th respondent is the driver. 2 The appellant resisted the claim petition by filing a written statement. The appellant admitted that on the date of the accident, the offending vehicle was insured with it. However, it was contended that the policy of insurance is Act only policy which does not cover the risk of the occupants carrying in the said vehicle. While dealing with the said contention, the learned Member of the Tribunal relied upon the decision of 2 Rajasthan High Court which holds that any party other than contracting parties to the contract of the insurance becomes a third party. The Tribunal held that as the deceased was travelling in the vehicle, he was a third party and hence the appellant insurance company was liable to indemnify the owner of the offending vehicle and therefore, the appellant was held jointly and severally liable. 3 The learned counsel for the appellant pointed out that the policy was Act only policy. He pointed out that there is no endorsement as regards payment of any additional premium for covering the liability of the occupants. He relied upon the decision of the Apex Court in the case of United India Insurance Co.Ltd. Vs. Tilak Singh and others (2006 SC 1441). He relied upon the decision of learned Single Judge of this Court in case of National Insurance Co. Ltd. Vs. Anand Sawant and others (2010 ACJ 216). He submitted that this decision holds that under the Act only insurance policy, the insurer is not liable to indemnify the insured against the liability of the passengers in the vehicle. He submitted that the finding on this aspect recorded by the Tribunal is completely contrary to the settled law. The learned counsel for the 1st to 5th respondents supported the impugned Judgment and Award. He submitted that admittedly the deceased was a passenger travelling by Ambassador car which was admittedly insured with the appellant and the deceased being a third party, the appellant is liable. He submitted that in any event, even if it is held that the appellant is not liable, a direction be issued to the appellant to pay and to recover the compensation amount from the owner of the car. The learned counsel for the 6th and 7th respondents also supported the impugned Award to the extent that the appellant has been 3 held liable. 4 I have given careful consideration to the submissions. A true copy of the policy of insurance has been produced by the appellant which has been marked as Exhibit 67-C. The policy is clearly Act only policy. There is no endorsement on the policy as regards the payment of any additional premium. In the case of United India Insurance Co. Ltd. (supra), the Apex Court held that in absence of any endorsement on the policy as regards payment of additional premium covering the gratuitous passengers by the Act only policy, the insurer is not liable to indemnify the insured against the liability of gratuitous Passengers. The said view has been reiterated by this Court in case of National Insurance Co. Ltd. (supra) 5 The widow of the deceased stepped into the witness box who stated that the deceased was proceeding to Kolhapur (Karvirnagar) by the said car to attend the engagement ceremony of his friend Deepak Raikwar. The said Deepak was driving the car on the way back which met with an accident. The deposition itself makes it clear that the deceased was a gratuitous Passenger in the car at the relevant time. Thus, in view of the settled law, the appellant was not liable to indemnify the insured against the liability arising on account of death of the gratuitous Passenger as the car was insured with the appellant under `Act only policy. There is no evidence of any extra premium paid to cover the liability of a gratuitous passenger. Thus, the learned Member of the Tribunal has committed a gross error by holding that the appellant was liable on the ground that the deceased was a third party. The said finding is required to be set aside. 4 6 In law, the appellant is not liable and therefore, this is not a case where the appellant can be directed to recover compensation amount from the insured. At this stage, it must be noted that this Court had granted stay subject to the appellant depositing entire compensation amount and claimants were permitted to withdraw 50% amount without security and remaining 50% with security to the satisfaction of the Tribunal. Statutory amount of Rs.25,000/- deposited by the appellant has been transferred to the Tribunal. Writ was duly certified by the Tribunal on 19th April 2001. The said amount of Rs. 25,000/- has been invested in the fixed deposit after the same was transferred by this Court to the Tribunal. The compensation amount has been withdrawn by the claimants as noted in the said writ. 7 Hence, the appeal must succeed. Hence, I pass the following order : i) Impugned Judgment and Award is modified. MACT application no.264 of 1995 stands dismissed as against the appellant. ii)Rest of the award stands confirmed. iii)The Tribunal will permit the appellant to withdraw a sum of Rs.25,000/- with interest accrued thereon. iv)The appeal is partly applowed. There will be no order as to costs. JUDGE 5