Case: Dr. T.V. Jose Vs. Chacko P.M. @ Thankachan

payment of an additional premium it is hereby understood and agreed that the Company undertakes to pay the compensation on the scale provided below for bodily injury as hereinafter defined sustained by any passenger............. The scale of compensation is fixed at Rs. 15,000. The insurance company is ready and willing to pay compensation to the extent of Rs. 15,000 according to this endorsement but the learned Counsel for the insured submitted that the liability of the insurance company is unlimited with regard to risk to the passengers. The counsel relied on Section II of the Policy which relates to liability to third parties. The clause relied on is extracted in full : Section II - Liability to Third Parties 1. 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 claimants 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 persons by the insured. It was submitted that the wording of clause 1 is wide enough to cover all risks including injuries to passengers. The clause provides that the Company will indemnify the insured against all sums including claimants costs and expenses which the insured shall become legally liable. This according to the learned Counsel would include legal liability to pay for risk to passengers. The legal liability is restricted to clause 1(a) which states that the indemnity is in relation to the legal liability to pay in respect of death of or bodily injury to any person but except so far as in necessary to meet the requirements of Section 95 of the Motor Vehicles Act, 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. Clauses 1 and 1(a) are not very clearly worded but the words except so far as is necessary to meet the requirements of the Section 95 of the Motor Vehicles Act, 1939. would indicate that the liability is restricted to the liability arising out of the statutory requirements under Section 95. The second part of the clause 1(a) refers to the non-liability for injuries arising in the course of the employment of such person. The meaning of this sub-clause becomes clear when we look to the other clauses of the insurance policy. The policy also provides for insurance of risks which are not covered under Section 95 of the Act by stipulating payment of extra premium. These clauses would themselves indicate that what was intended to be covered under clause 1 and 1(a) is the risk required to be covered under Section 95 of the Motor Vehicles Act. 17. Mr. Vishnu Mehra further pointed out that in Amrit Lal Soods case (supra) also it has been held that the Section 95 of the Motor Vehicles Act does not require a policy to cover the risk to passengers who are not carried for hire or reward. He submitted that in that case the Policy was a comprehensive policy and because of that it was held that the risk passengers was covered. 18. Mr. Vishnu Mehra also relied upon the case of National Insurance Co. Ltd. v. Jugal Kishore reported in 1988(1) SCC 626, wherein it has been held that as the liability under the policy was in excess of the statutory liability the award against the insurance company could only be in accordance with the statutory liability. 19. In this case only the first sheet of the policy is on record. This clearly shows that the policy is a third party policy. The terms and conditions governing this Policy are not on record. What was shown to Court was terms and conditions of a comprehensive policy relating to private cars. These cannot apply to this policy. In the absence of terms and conditions governing this policy it is not possible to accept the submission of Mr. Iyer that this policy covered liability to occupants of the car. As has been set out hereinabove, the law on this subject is clear, a third party policy does not cover liability to gratuitous passengers who are not carried for hire or reward. The 8th Respondent Company will, therefore, not be liable to reimburse the Appellant. 20. Faced with this situation, Mr. Iyer relied upon Jugal Kishores case (supra) and submitted that it was the duty of the Insurance Company to have produced the terms and conditions of the original Policy. He submits that they should even now be called upon to produce the terms and conditions governing this policy. We are unable to accept this submission. It has not been the Appellants case, either before MACT or before the High Court, that the policy contained any term which covered liability to passengers. Before MACT the case was that the Appellant was not the owner and was, therefore, not liable. Before the High Court the case that because of the Circular issued by the Tariff Advisory Committee the Insurance Company was liable. The High Court held that the Circular only dealt with comprehensive policy. That Circular has not been produced before us. Therefore, the finding of the High Court that the Circular only covered comprehensive policies cannot be challenged. Now a new case cannot be allowed to be made out. Section II(1)(a) relied upon is a term which is incorporated pursuant to that Circular. If the Circular only applies to comprehensive policies then this terms also applies to comprehensive policies only. In our view it is now too late in the day to call upon the 8th Respondent to produce the original terms and conditions. 21.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]10. We agree with Mr. Iyer that the High Court was not right in holding that the Appellant continued to be the owner as the name had not been changed in the records of R.T.O. There can be transfer of title by payment of consideration and delivery of the car. The evidence on record shows that ownership of the car had been transferred. However the Appellant still continued to remain liable to third parties as his name continued in the records of R.T.O. as owner. The Appellant could not escape that liability by merely joining Mr. Roy Thomas in these Appeals. Mr. Roy Thomas was not a party either before MACT or the High Court. In these Appeals we cannot and will not go into the question of inter se liability between the Appellant and Mr. Roy Thomas. It will be for the Appellant to adopt appropriate proceedings against the Mr. Roy Thomas if, in law, he is entitled to do so.19. In this case only the first sheet of the policy is on record. This clearly shows that the policy is a third party policy. The terms and conditions governing this Policy are not on record. What was shown to Court was terms and conditions of a comprehensive policy relating to private cars. These cannot apply to this policy. In the absence of terms and conditions governing this policy it is not possible to accept the submission of Mr. Iyer that this policy covered liability to occupants of the car. As has been set out hereinabove, the law on this subject is clear, a third party policy does not cover liability to gratuitous passengers who are not carried for hire or reward. The 8th Respondent Company will, therefore, not be liable to reimburse the Appellant.We are unable to accept this submission. It has not been the Appellants case, either before MACT or before the High Court, that the policy contained any term which covered liability to passengers. Before MACT the case was that the Appellant was not the owner and was, therefore, not liable. Before the High Court the case that because of the Circular issued by the Tariff Advisory Committee the Insurance Company was liable. The High Court held that the Circular only dealt with comprehensive policy. That Circular has not been produced before us. Therefore, the finding of the High Court that the Circular only covered comprehensive policies cannot be challenged. Now a new case cannot be allowed to be made out. Section II(1)(a) relied upon is a term which is incorporated pursuant to that Circular. If the Circular only applies to comprehensive policies then this terms also applies to comprehensive policies only. In our view it is now too late in the day to call upon the 8th Respondent to produce the original terms and conditions.