THE HON’BLE SRI JUSTICE N.V. RAMANA AND THE HON’BLE SRI JUSTICE P. DURGA PRASAD M.A.C.M.A. No. 778 of 2007 Oral order: (Per N.V. Ramana, J.) M/s. National Insurance Company Limited, represented by its Manager, has filed this M.A.C.M.A. against the award dated 06.06.2006, passed by the IV Additional Metropolitan Sessions Judge- cum-XVIII Additional Chief Judge, Hyderabad, in O.P. No. 1302 of 2002, awarding compensation of Rs. 10,16,500/- to the respondents-claimants as against their claim for Rs. 15,00,000/- contending that the same is on the higher side and needs to be reduced. At about 12.00 A.M. of 12.12.2001, one Bala Krishna along with his friends was going in a Maruti car bearing No. AP 11H 7101 and on reaching RTC M.D. Office, they met with an accident when the car, driven by its driver in a rash and negligent manner rammed into a stationed DCM lorry. As a result of the accident, the deceased succumbed to his injuries while being shifted to Gandhi Hospital. A case of rash and negligent driving was registered against the car driver. On account of his death, respondent Nos. 1 and 2-claimants, filed O.P. claiming compensation of Rs.15,00,000/- stating that the deceased at the time of his death in the accident was aged 26 years, was doing cloth business and was earning around Rs.2,00,000/- per annum, that they are dependent upon his income and that due to his sudden death, they have their dependency. Respondent No.3-owner and driver of the car filed counter disputing the age and income of the deceased. He denied that the car was driven in a rash and negligent manner and contended that he himself sustained injuries in the accident. He contended that in order to save the life of a scooterist who was coming in the wrong direction, he swerved the vehicle to the right side and it resulted in the accident. The appellant also filed counter disputing the age and income of the deceased. He contended that the accident occurred due to drunken driving of the vehicle by respondent No.3. That as respondent No.3 violated the terms of the policy, they are not liable to pay any compensation. The compensation claimed by respondent Nos.1 and 2-claimants is excessive and exorbitant. Respondent Nos. 4 and 5, who are father and mother of the deceased also filed counter stating that the deceased at the time of his death in the accident was earning Rs.16,000/- per annum and that they being the parents of the deceased are his legal heirs. That they were dependent on the income of the deceased and that they are also entitled to share in the compensation. The Tribunal considering the rival contentions framed two issues, namely whether the accident in which the deceased died occurred due to the rash and negligent driving of the car by its driver and to what compensation the claimants are entitled to. Before the Tribunal, respondent Nos.1, who is the wife of the deceased examined herself as P.W.1 and marked documents Exs. A1 to A12, while respondent No.4, who is the father of the deceased examined himself as R.W.1 and marked Ex.B1. No evidence, either oral or documentary, was let in by the appellant in support of their case. The Tribunal having considered the issues in the light of the evidence adduced by the parties, by reason of the judgment under appeal held that the accident occurred due to the rash and negligent driving of the car by its driver, who drove the same under drunken condition and that respondent Nos. 1 and 2 and respondent Nos. 4 and 5 are entitled to Rs.10,16,500/-, which the appellant and respondent No.3 are jointly and severally liable to pay. Heard the learned counsel for appellant-Insurance Company and the learned counsel for the respondents-claimants. The learned counsel for the appellant submitted that under Section 147 of the Motor Vehicles Act, a passenger is not a third party, and since the deceased was traveling in the car as a passenger, the Tribunal committed an error in treating the deceased as a third party, and thereby, making the appellant liable for payment of the compensation to respondent Nos. 1 and 2 and respondent Nos. 4 and 5. This contention of the appellant cannot be accepted. The deceased was traveling in the private car belonging to his friend for free. He was not traveling in the private car as a fare paying passenger or for hire or reward. The liability of the Insurance Company, as contained in Section II(1)(i) of the Standard Motor Package Policy, in respect of a occupant of a private car and pillion rider in a two-wheeler under the Standard Motor Package Policy, was clarified by the Insurance Regulatory and Development Authority, vide circular issued in Ref: IRDA/NL/COR/F&U/073/11/2009, dated 16.11.2009. As per the said circular, the insured’s liability in respect of occupant(s) carried in a private car and pillion rider carried on two- wheeler is covered under the Standard Motor Package Policy. Since the deceased was traveling in the private car as an occupant and not for hire or reward, he should be treated as a third party, thereby making the appellant liable to pay the compensation. Hence, no exception can be taken to the order passed by the Tribunal treating the deceased as a third party and fixing the liability of paying compensation for his death to the claimants on the appellant. So far as quantum of compensation is concerned, even though respondent Nos. 1 and 2-claimants claimed that the deceased was earning Rs.2,00,000/- per annum, the fact remains, the Tribunal took into account the income mentioned by the deceased in Ex.A6-Income Tax returns for the year 2001-02, wherein he has mentioned his income as Rs.88,855/- per annum, for the purpose of computing the compensation. From out of the said sum, the Tribunal deducted one- third towards his personal expenses (Rs.88,855/- minus Rs. 29,618/-), and worked out his contribution to the family at Rs.59,237/- per annum. As the deceased was aged 25 years, as is evident from Ex. A6, the Tribunal applied the multiplier 17 (Rs.59,237/- x 17) and worked out the compensation payable to the claimants at Rs.10,07,029/-. Apart from the said amount, the Tribunal awarded Rs.2,000/- towards funeral expenses, Rs.2,500/- towards loss of estate and another Rs.5,000/- to respondent No.1-wife towards loss of consortium. Thus, in all the Tribunal awarded compensation of Rs.10,16,529/-. As respondent Nos. 4 and 5 being the parents of the deceased are his legal heirs, the Tribunal apportioned the compensation amongst respondent Nos. 1 and 2 and 3 and 4. The compensation awarded by the Tribunal, as discussed above, being just compensation, needs no reduction by this Court in appeal. However, the compensation awarded by the Tribunal, as confirmed by this Court, shall carry interest at the rate of 6% per annum and not at the rate of 7.5% awarded by the Tribunal. Accordingly, the M.A.C.M.A. is partly allowed. No costs. ________________ N.V. RAMANA, J. ____________________ P. DURGA PRASAD, J. Dated: 22nd December, 2011 KSR