THE HONOURABLE SRI JUSTICE GHULAM MOHAMMED C.M.A.No.935 of 2004 JUDGMENT: The first respondent-claimant and another were travelling in a jeep bearing No.ATA 8970, belonging to the second respondent, on 08.06.2001 from Proddatur to Rayachoty and when they reached near Padigalapalli cross road on Kadapa-Rayachoty main road, the driver of the jeep drove it in a rash and negligent manner with high speed and dashed the bus, as a result of which, the claimant sustained grievous injuries. He spent certain amounts for his treatment, medicines etc. He filed O.P.No.88 of 2002 on the file of the Motor Accidents Claims Tribunal-cum-District Judge, Kadapa, claiming compensation of Rs.2,00,000/-. The application was opposed by the appellant-insurer of the crime vehicle. By the award, dated 24.09.2002, the Court below awarded a sum of Rs.1,98,000/- as compensation payable by the appellant and the second respondent jointly and severally. Disputing its liability, the appellant-insurer preferred the present appeal. 2. Heard the learned counsel for the appellant and the learned counsel for the first respondent. 3. Learned counsel for the appellant contended that as the claimant travelled in the jeep as an unauthorised passenger, the appellant has absolved from the liability of paying compensation and that the Tribunal ought not to have fastened the liability on it. He further contended that for the inmates of the jeep, a separate premium has to be paid by the insured. In support of his contention, he has drawn the attention of this Court to the judgment of the Apex Court in YALLWWA v. NATIONAL INSURANCE COMPANY LIMITED[1] and BRANCH MANAGER, UNITED INDIA INSURANCE COMPANY LIMITED, KAMAREDDY, NIZAMABAD DISTRICT v. KONDAKOTLA SAROJA[2] wherein it was held as under: “The decisions upon which reliance is laid by the learned counsel for the respondents-claimants are contrary to the ratio laid down by the Supreme Court and, therefore, the same cannot be taken into consideration to fix the liability on the insurance company. Further, the Supreme Court in Meena Variyal’s case (12 supra) after interpreting Section 147 of the Act accepted the ratio laid down in Pushpabai Purshottam Udeshi’s case (13 supra). Once the Insurance Company under Ex.A5 cover note has not undertaken the liability by collecting extra premium for the passengers who travelled in the insured vehicle, it cannot be held liable to pay the compensation and it is only the respondent-owner of the vehicle who is liable to satisfy the decree and pay the compensation amount. 4. On the other hand, learned counsel appearing for the first respondent-claimant contended that Ex.B1 policy covers the risk of fare paid passengers including the driver of the jeep and as such, the appellant is liable to pay compensation. He has drawn the attention of this Court to the judgment of the Apex Court in AMRIT LAL SOOD v. KAUSHALYA DEVI THAPAR[3] wherein it was held as under: “A car which was being driven by the brother (first appellant) of its owner (second appellant) collided with a goods carrier as a result of which another person who was travelling in the car sustained injuries and was hospitalised for some time. The car was insured under a comprehensive policy. The relevant clause in the policy regarding liabilities to third parties was “the Company will indemnify the insured in the event of accident caused by or arising out of the use of the motor car against all sums including claimant’s costs and expenses which the insured shall become legally liable to pay in respect of (a) death of or bodily injury to any person but except so far as is necessary to meet the requirements of Section 95 of the Motor Vehicles Act, 1939, the Company shall not be liable where such death or injury arises out of and in the course of the employment of such person by the insured. There was another clause under the heading: “AVOIDANCE OF CERTAIN TERMS AND RIGHT OF RECOVERY” which read thus: “Nothing in this policy or any endorsement hereon shall affect the right of any person indemnified by this policy or any other person to recover an amount under or by virtue of the provisions of the Motor Vehicles Act, 1939, Section 96. But the insured shall repay to the Company all sums paid by the Company which the Company would not have been liable to pay but for the said provisions”. 5. There is no dispute as regards the quantum of compensation awarded by the Tribunal. The dispute is with regard to the liability fastened on the appellant to pay the compensation. A perusal of Ex.B1-policy shows that it is only an Act policy. Section 95 of the Motor Vehicles Act, 1939 requires a policy to cover the risk to passengers who are not carried for hire or reward. The statutory insurance does not cover the injuries sustained by the occupants of the vehicle, who are not carried for hire or reward and therefore, the appellant cannot be held liable to pay compensation, as held by the Apex Court in AMRIT LAL SOOD’s case, cited 3 supra. Further, as per Ex.B1 no extra premium has been collected for the risk coverage pertaining to the passengers, who travelled in the jeep. 6. It was held in BRANCH MANAGER’s case cited (2) supra that whether it is a comprehensive policy or an Act policy, the insurer is not liable where the policy does not cover the risk of even the owner treating him as third party, unless it is specifically agreed that separate premium is paid covering the risk of third parties. 7. In view of the above decisions and since the appellant under Ex.B-1 has not undertaken the liability by collecting extra premium for the passengers, who travelled in the jeep, the appellant cannot be held liable to pay the compensation and it is only the second respondent-owner of the vehicle liable to pay the same. 8. Accordingly, the impugned award is liable to be modified as to the imposition of joint and several liabilities to the appellant to pay compensation to the claimant. In the result, the appellant- insurer is not liable to pay compensation to the claimant and the owner is liable to pay the same. The appellant-insurer is at liberty to take steps to recover the amount, if any paid, from the owner of the vehicle. However, the interest awarded by the Tribunal at 9% per annum is reduced to 7.5% per annum from the date of the petition till realisation. The award of the Tribunal in all other aspects shall remain unaltered. 9. With the above modification, the Civil Miscellaneous Appeal is allowed. No order as to costs. _____________________ GHULAM MOHAMMED, J Date:22.07.2010 sj [1] AIR 2007 SC 2582(1) [2] 2008 ALT-5-246 [3] (1998) 3 SCC 744