HON’BLE SRI JUSTICE A. GOPAL REDDY AND HON’BLE SRI JUSTICE RAJA ELANGO CIVIL MISCELLANEOUS APPEAL Nos. 2926 & 2928 of 2003 COMMON JUDGMENT: (Per Hon’ble Sri Justice A. Gopal Reddy) These two appeals are filed by the appellant-Insurance Company, challenging the common order and decrees, dated 05.04.2003, passed by the Chairman, Motor Accidents Claims Tribunal-cum-Additional District Judge at Adilabad, in O.P.Nos.221 and 271 of 2002. 2. The facts, which give rise to filing of these appeals, which are not in dispute, are briefly stated as under: i) On 16.07.2001 the deceased, P. Susheel Kumar, along with others including the petitioner in O.P.No.271 of 2002, was proceeding to Pohampad in a Jeep bearing No.MH 26C 1471 from Adilabad along with note books and other material pertaining to a school. When the Jeep reached near Kupti-ghat turning on National Highway No.7 at about 17.00 hours, the driver of the Jeep drove it with high speed and in rash and negligent manner and, thereby, the jeep went out of his control and fell into a small ditch, due to which, the deceased sustained a grievous head injury and died instantaneously and the petitioner in O.P.No.271 of 2002 sustained grievous injuries and, later, he was shifted to the Government Hospital, Boath, for treatment. ii) For the death of the deceased, P. Susheel Kumar, his wife, daughters and parents filed O.P.No.221 of 2002, under Section 166 (1) (c) of the Motor Vehicles Act, 1988 (for short “the Act”) claiming compensation of Rs.16 lakh, stating that the deceased, aged 37 years, was working as Superintendent in the Office of the A. P. Social Welfare Residential School (Girls) at Left Pochampad and was receiving a monthly salary of Rs.8,051/-, against the 1st respondent, owner of the Jeep, and the 2nd respondent, Insurance Company, with which the Jeep was insured. Similarly, the injured, Garepally Purnachander Rao, filed O.P.No.271 of 2002, under Section 166 (1) (a) of the Act, claiming compensation of Rs.3 lakh for the injuries he received in the same accident, stating that at the time of the accident, he was working as Junior Assistant in the Office of the A. P. Social Welfare Residential School (Girls) at Left Pochampad and was receiving a monthly salary of Rs.5,500/-. 3. The 1st respondent-owner filed counters in both the petitions and contended that the averments made by the petitioners are false and baseless and that the vehicle was insured with the Insurance Company. Hence, he is not liable to pay any compensation to the petitioners and the compensation claimed by them is excessive and exorbitant. 4. The 2nd respondent-Insurance Company also filed counters in both the petitions contending that the Jeep was used in gross violation of the limitations as to use and in violation of the Provisions of the Act and policy conditions. Even if the policy is issued, the Jeep having been plied against the provisions of the Act and in violation of the policy conditions, the Insurance Company is not liable to pay any compensation. In para 6, it is specifically pleaded that the Jeep was insured with them, under Policy No.2001/6700181, commencing from 30.04.2001 to 29.04.2002, but the said policy is issued subject to the conditions of the policy and also the provisions of Sections 147, 149 and 166 of the Act. The said policy is issued only for coverage of risk of third party-driver and it does not cover any type of passenger or occupant of the Jeep, as no extra premium is paid under the said policy. Even if the petitioners are entitled to any compensation, they are entitled to claim compensation only against the owner of the Jeep. 5. On the basis of the above pleadings, the lower Court settled the following issues for trial: 1) Whether the deceased in O.P.No.221 of 2002 viz., P.Susheel Kumar died in the accident occurred on 16.7.2001 and the petitioner in O.P.No.271 of 2002 sustained injuries in the accident occurred on 16.7.2001 due to rash and negligent driving of Jeep No.MH 26C 1417 by its driver? 2) Whether the petitioners are entitled to any compensation, if so, to what amount and against whom? 3) To what relief? 6. In order to prove the accident and the claim of compensation, the wife of the deceased and the injured petitioner in O.P.No.271 of 2002 examined themselves as P.Ws.1 and 2 respectively and got marked Exs.A.1 to A.22, on behalf of the claimants. On behalf of the Insurance Company, R.W.1 was examined and Ex.B.1 was marked. 7. On the evidence adduced by the parties, the lower Court, by the impugned common order, awarded compensation of Rs.12,00,464/- to the petitioners-claimants in O.P.No.221 of 2002 and Rs.2,58,548/- to the injured petitioner in O.P.No.271 of 2002, payable by the owner and the Insurance company jointly and severally, together with interest at 9% p.a. from the date of petition till realization with proportionate costs and further directed that the owner and the Insurance company shall deposit the compensation amount within one month from the date of the order. Questioning the same, the present appeals are preferred by the Insurance Company. 8. Learned counsel for the Insurance Company has mainly contended that on the date of the accident, the deceased and the injured travelled in a private jeep insured under an Act Policy and, therefore, the occupants and inmates of the said vehicle are not third parties to make the Insurance Company liable for payment of the compensation. In support of his contention, the learned counsel relied on a judgment of this Court in Branch Manager, United India Insurance Co. Ltd., Kamareddy, Nizamabad District V Kondakotla Saroja and others[1]. 9. On the other hand, learned counsel for the claimants-petitioners submitted that in the absence of any plea taken by the Insurance company about non-payment of extra premium and the Act Policy does not cover the passengers travelling in a private Jeep, the Insurance Company cannot raise such plea, for the first time, in these appeals. Further, the evidence of R.W.1 shows that the third parties like the deceased and the injured petitioner, who travelled in the Jeep, are entitled to claim compensation and the Insurance company is liable to pay the same. 10. Now, the point that arises for consideration is: “Whether the Insurance Company is liable to pay the compensation for the passengers who travelled in the Jeep which is covered by an Act Policy?” 11. Though the Insurance Company, in its counter, has specifically denied its liability pleading that an Act Policy has been issued to the Jeep and that no extra premium has been paid by the owner of the Jeep to cover the risk of third parties who travel in the Jeep, the trial Court has not taken into consideration the said plea. 12. Sri Kota Subbarao, learned counsel for the Insurance Company, brought to our notice that once the policy has been marked as Ex.B.1, in the light of Rule 476 (7)(ii) of the A.P. Motor Vehicles Rules 1989, the Claims Tribunal shall proceed to award the claim on the basis of the insurance certificate or policy relating to the insurance of the motor vehicle against the third party risk. Therefore, it is incumbent upon the Tribunal to verify as to whether it is only an Act Policy and whether third party risk is covered under the policy by collecting extra premium or not. In the absence of the same, the Insurance Company cannot be fastened with the liability. 13. This Court in Kondakotla Saroja’s case (supra), after discussing various decisions of this Court as well as the Apex Court, held that once the Insurance Company under policy/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 1st respondent-owner of the vehicle who is liable to satisfy the decree and pay the compensation amount and, accordingly, allowed the appeal preferred by the Insurance Company. The said decision is squarely applicable to the case on hand, since the facts in both the cases are one and the same. 14. Further, the Apex Court in United India Insurance Co.Ltd., Shimla V Tilak Singh and others[2], after referring to the provisions of 147 of 1998 Act, categorically held that “in our view though the observations made in New India Assurance Company V Asha Rani and others[3] were in connection with carrying passengers in a goods vehicle, the same would apply with equal force to gratuitous passengers in any other vehicle also and, thus, we must uphold the contention of the appellant-Insurance Company that it owned no liability towards the injuries suffered by the deceased, 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 gratuitous passenger” and, accordingly, allowed the appeal setting aside the award passed by the trial Court holding that the Insurance Company is not liable to pay the compensation awarded to the claimants. 15. Keeping the above in view, it is not necessary for us to discuss the entire evidence adduced by the parties with regard to quantum of compensation to which the petitioners are entitled. When once the policy issued by the Insurance Company is an Act Policy and no extra premium is collected for the passengers who travelled in the insured vehicle and the said policy is marked as Ex.B.1, it is incumbent upon the trial Court, in the light of Rule 476 (7) (ii) of the A.P. Motor Vehicles Rules 1989, to restrict the liability, as per the policy undertaken by the Insurance Company. Since it is an admitted fact that the deceased and the injured had travelled in the insured vehicle as gratuitous passengers, the Insurance Company is not liable to pay the compensation and it is only the owner of the vehicle who has to satisfy the decree passed by the trial Court. 16. We, accordingly, allow both the Civil Miscellaneous Appeals setting aside the common order and the decrees passed against the Insurance Company. Since the Insurance Company has already deposited 50% of the compensation amount, as per the interim orders of this Court, which was already withdrawn by the claimants, the same cannot be recovered from them, but, it is left open for the Insurance Company to recover the same from the owner of the Jeep involved in the accident by initiating separate proceedings. There shall be no order as to costs. ____________________ A. GOPAL REDDY, J __________________ RAJA ELANGO, J 28th June, 2011 cbs HON’BLE SRI JUSTICE A. GOPAL REDDY AND HON’BLE SRI JUSTICE RAJA ELANGO CIVIL MISCELLANEOUS APPEAL Nos.2926 & 2928 of 2003 (Judgment delivered by Hon’ble Sri Justice A.Gopal Reddy) 28th June, 2011 cbs HON’BLE SRI JUSTICE A. GOPAL REDDY AND HON’BLE SRI JUSTICE RAJA ELANGO CIVIL MISCELLANEOUS APPEAL Nos.2926 & 2928 of 2003 Dated:28.06.2011 C.M.A.No.2926 of 2003 Between: National Insurance Co.Ltd., rep. By its Branch Manager, Branch Office, Adilabad. … Appellant/R.2 And Garepally Purnachander Rao and another … Respondents/ Petitioner & R.1 C.M.A.No.2928 of 2003 Between: National Insurance Co.Ltd., rep. By its Branch Manager, Branch Office, Adilabad. … Appellant/R.2 And Smt. Pulluri Rama Devi and five others … Respondents/ Petitioners & R.1 THIS COURT MADE THE FOLLOWING: [1] 2008(5) ALD 288 (DB) [2] 2006 (4) SCC 404 [3] J.T. 2002(10) S.C. 162