1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 29.06.2011 CORAM: THE HONOURABLE MS.JUSTICE K.B.K.VASUKI C.M.A.No.71 of 2011 and MP(MD)No.1 of 2011 United India Insurance Company Limited, rep. by its Branch Manager, M.P.S. Complex, R.F.Road, Palani, Dindigul District. ... Appellant/2nd respondent Vs. 1.N.Shanmugam ... 1st respondent/Claimant 2.The New India Assurance Company Limited, 594, Obli Towers, D.B.Road, R.S.Puram, Coimbatore. ... 2nd respondent/1st respondent PRAYER: Civil Miscellaneous Appeal filed under Section 173 of the Motor Vehicles Act, against the award dated 30.04.2009 made in M.C.O.P.No.522 of 2007, on the file of the Motor Accident Claims Tribunal/Additional Subordinate Court, Dindigul. For Appellant : Mr.R.Srinivasan For 1st respondent : Mr.D.Selvaraj For 2nd respondent : Mr.J.S.Murali JUDGMENT The appeal is filed by the insurer against the award of compensation made in favour of the claimant/ injured in the accident occurred at 02.45 p.m. on 14.09.2007, while he was travelling in Maruthi Car, due to rash and negligent driving of Maruthi Car driver. 2.The date, time, place and manner of the accident as due to rash and negligent driving of Maruthi Car owned by the first respondent and insured with the second respondent/insurance company, nature and extent of injuries sustained by the occupant of the car nature and duration of treatment undergone by him, nature and percentage of permanent disability sustained by him and impact of the same upon his day today activities are not so seriously denied before this appellate tribunal. 3. The Tribunal has, on the strength of Exs.R1 & R2, insurance policy and its terms and conditions relating to the vehicle in question, found that the vehicle involved is a private car and the policy in question was a private car package policy and there is coverage of third party risk and there is coverage for four passengers and one employee and the insurance company is, as per the https://hcservices.ecourts.gov.in/hcservices/ 2 policy condition, liable to indemnify the insured in respect of the risk of passenger cum employee and passed award of compensation of Rs.45,000/- payable with interest at 7.5%p.a. payable by the insurer. Hence this appeal before this Court by the insurer. 4.In this appeal, the insurer has sought to deny both its liability to indemnify the insured and also quantum of the compensation. The liability is denied on the ground that the occupants of the car was not covered under the policy. The quantum of compensation is disputed on the ground that the claimant is not entitled to claim compensation under the heading of permanent disability as he is continuing in the employment. 5. As far as the first objection is concerned, it is not in dispute that the vehicle in question during the relevant point of time belonged to the first respondent and insured with the second respondent and the injured was on the date of the accident employed under the first respondent/owner. Though the circumstances under and the capacity in which the injured travelled in the vehicle is not specifically stated in the claim statement, PW1, injured in the course of his cross-examination admitted that the vehicle on the date of the accident stood in the name of the first respondent/company and the injured travelled in the vehicle in his capacity as Divisional Manager, that too for official purpose and the vehicle was driven by the Branch Manager by name Veeraragavan. The second respondent/insurer vehemently contended that the claimant/injured and the other officers of the first respondent were travelling in the vehicle belonging to it only in the capacity as employees of the first respondent/company and there is no additional premium is paid to cover the employee's risk. 6. Heard both sides. 7. In this case, the learned counsel for the appellant has reiterated the same stand as taken before the Tribunal by taking this Court to various clauses of the India Motor Tariff (shortly referred to as IMT). The learned counsel for the appellant relied upon clause IMT 15 and 16 which provide for Personal accident cover to the insured or any named person and unnamed passenger other than paid driver or cleaner, and clause IMT 29 - pertaining to the legal liability towards employees of the insured other than paid driver and/or conductor and/or cleaner who may be travelling or driving in the employer's car. It is seriously argued that the insurer shall undertake to pay compensation to the injury sustained by any unnamed passenger and other employee of the insured i.e, other than paid, driver, conductor or cleaner only on payment of additional premium and unless and until the additional premium is paid, there is no insurance coverage for the employee and the insurance company is not liable to pay any compensation. 8. The issue as raised herein came up for consideration before the Division Bench of Our High Court in the judgment reported in 2009 (I) TNMAC 249 (DB) (Royal Sundaram Alliance Insurance Company Limited Vs. Meenakshi and others) and our High Court has https://hcservices.ecourts.gov.in/hcservices/ 3 after tracing out the entire history regarding the liability to answer the risk of named or unnamed passengers travelling in a private car and after referring to law as it was then and amended one and after taking into account the evaluation of policy decision by virtue of decision in Pushpabai Purshottam Udeshi Vs. Ranjit Ginning and Pressing Company case reported in AIR 1977 ACJ 343 (SC) and after noticing the difference in the terms and conditions in Act policy and comprehensive policy and by following the judgments of Amrit Lal Sood Vs. Kaushalya Devi Thapar case reported in 1998 (3) SCC 744 held that the liability of the insurer depends upon the nature of the insurance policy taken and when the terms and conditions of the policy covers the risk of any occupants and when that is the contract to which the parties are bound themselves, the insurance company cannot evade their duty to pay compensation. 9. The Division Bench of our High Court has also by applying the ratio laid down in the judgment reported in 2008 (10) SCC 404 (United India Insurance Company Limited Vs. Manubhai Dharmasinhbhai Gajera) held that the insured under the package policy paid basic premium for third party property damage and premium for personal accidental benefits and that the insured can always take policies covering risk not covered by the requirements of Section 95 of 1939 Act and the clarificatory circular dated 17.03.1978 issued by Tariff Advisory Committee under Section 64-U of Insurance Act covers the risk of gratuitous occupants in a private car under comprehensive policy and the clarificatory circular is also incorporated in contract itself in package policy and when the policy is comprehensive one, the same by its own terminology includes any person in car except those are specifically excluded and as per terms and conditions of the policy taken by the insured in accordance with standard form, risks of occupants carried in motor vehicle so long they are not carried for hire or reward, are automatically covered and the insurer cannot evade their liability, in-spite of having contracted under policy to cover the risk of occupants. 10. The same view is also followed by our High Court in the judgment reported in 2011 ACJ 557 in (Royal Sundaram Alliance Insurance Company Limited Vs. A.Pappathi and others) wherein our High Court has, following the earliest judgment of Supreme Court in AIR 1977 ACJ 343 (SC) Pushpabai's Case and latest 1998 (3) SCC 744 Amrit Lal Sood case Division Bench of our High Court in 2009 (I) TNMAC 249 (DB) Meenakshi's case, taken the view that the terms and conditions of the policy which is comprehensive in nature and which covers the risk of occupants of the car not carried for hire or reward is very specific and contains a clause with regard to liability and risk to cover the case of occupants/passengers. 11. The other authority cited herein is AIR 1985 SC 1281 (Narchinva V.Kamat and another Vs. Alfredo Antonio Doe Martins and others) and the ratio laid down in the case cited is that the insurance company cannot evade its liability if (a) the insured himself was driving the vehicle or (b) the driver is in the employment of the insurer and is driving on the order of the insurer https://hcservices.ecourts.gov.in/hcservices/ 4 or any other person with the insurer permission and (c) when it was driven by a partner or a owner of a firm, it is taken to be driven with the permission of the owner or can be said to be driven by owner/driven by the insured and the burden is upon the insurance company to prove that there was breach of terms of policy. 12. Here in this case, the claim is made by the injured in his capacity as occupant of the car Exs.R1 & R2, insurance policy contains Section I dealing with loss or damage to the property other than the property belonging to the insured or held in trust or in the custody or control of the insured. Section 2 clause 1 of the policy says : (i) liability to third party includes the legal liability in respect of death or bodily injured to any persons, occupants carried in the vehicle not for hire or reward. If that is so, the liability in respect of the occupant/Divisional Manager who travelled in the vehicle not for hire or reward but for official purpose is covered under the policy and the insure cannot be now permitted to resile from its liability arising out of the contract entered into between the parties on mutual terms and the objection raised herein is devoid of any merits and is hence liable to be rejected. 13. Regarding the quantum of compensation, the same is not at all seriously questioned. Further the same, having regard to the nature of the injuries sustained, resultant nature and extent of permanent disability, medical expenses incurred and pain and suffering of the injured as evident from the documents adduced on the side of the claimant, cannot be said to be excessive. Viewing from any angle, the award of the Tribunal deserves no interference 14. In the result, the appeal stands dismissed and the award dated 30.04.2009 made in M.C.O.P.No.552 of 2007 on the file of the Motor Accident Claims Tribunal/ Additional Subordinate Court, Dindigul is confirmed. Consequently, connected miscellaneous petition is also dismissed. No costs. Sd/- Assistant Registrar /True Copy/ Sub Assistant Registrar To 1.The Motor Accident Claims Tribunal/Additional Subordinate Judge, Dindigul. +1cc to Mr.D.Selvaraj, Advocate in SR.20949 C.M.A.(MD)No.71 Of 2011 29.06.2011 gcg PBK :05.06.2012 ::4P-3C:: https://hcservices.ecourts.gov.in/hcservices/