Case: Oriental Insurance Co.Ltd Vs. Sudhakaran K.V

1. This appeal is directed against a judgment and order dated 22.3.2006 passed by the High Court of Kerala at Ernakulam in M.F.A. No. 536 of 1999 whereby and whereunder the appeal preferred by the appellant herein from the judgment and award dated 31.10.1998 passed by the Motor Accident Claims Tribunal, Perumbavoor awarding a sum of Rs.1,18,900/-(Rupees One lakh eighteen thousand and nine hundred only) together with interest thereon at the rate of 12% p.a. from the date of the filing of the claim petition till date of realization of the amount against the appellant as also against the owners of the vehicle was dismissed.2. The basic fact of the matter is not in dispute. Thankamani (hereinafter referred to as the deceased) was travelling as a pillion rider on a scooter on 20.10.1993. She fell down from the scooter and succumbed to the injuries sustained by her. In regard to the said accident, a claim petition was filed. Appellant having been served with a notice, in its written statement, inter alia, raised a contention that she being a pillion rider and, thus, a gratuitous passenger, the insurance policy did not cover the risk of injury or death of such a passenger and, thus, it was not liable to reimburse the owner of the scooter therefor. It was, furthermore, contended that the accident had taken place at a private place. By reason of the impugned award, the tribunal, however, opined:(i) The accident had taken place due to rash and negligent riding of the scooter by Sebastian P.V.- respondent No.1 to the claim petition;(ii) Keeping in view the monthly income of the deceased which was estimated at Rs. 1200/- per month as also age of the deceased assessed at 50 years; claimants were entitled to compensation for a sum of Rs.1,05,600/-. A sum of Rs.5,000/- was allowed towards compensation for pain and suffering; a sum of Rs.100/- was allowed towards damage of clothing and articles, a sum of Rs.5,000/- was allowed towards loss of love and affection and a sum of Rs.1,000/- was allowed towards mental shock and agony.3. As regards liability of the appellant it was held as the existence of the insurance policy in respect of the offending scooter is admitted, it was also liable.4. Aggrieved by the said award, the appellant filed an appeal before the High Court of Kerala under Section 173 of the Motor Vehicles Act, 1988 (for short "the Act"). On the question as to whether the Insurance Company would be liable in a case of this nature, the Division Bench opined asThe appellant is the third respondent in O.P.(MV) 119/94 on the file of the motor Accident Claims Tribunal, Perumbavoor. Appellant was directed to pay compensation for the death of the pillion rider of a motor cycle. The vehicle was insured with the appellant.2. It was contended that the pillion rider would not come within the coverage of the Act policy. The Tribunal repelled thatthis appeal.3. The question whether the pillion rider is covered by an Act policy stands settled by the decision of the Full Bench of this Court in Oriental Insurance Co.Ltd. Vs. Ajay Kumar (1999 (2) KLT 886). Hence the appellant cannot successfully take up a contention contrary to the above proposition in this

Court's reasoning:
17. In a given case, the statutory liability of an insurance company, therefore, either may be nil or a sum lower than the amount specified under Section 140 of the Act. Thus, when a separate application is filed in terms of Section 140 of the Act, in terms of Section 168 thereof, an insurer has to be given a notice in which event, it goes without saying, it would be open to the insurance company to plead and prove that it is not liable at all.Furthermore, it is not in dispute that there can be more than one award particularly when a sum paid may have to be adjusted from the final award. Keeping in view the provisions of Section 168 of the Act, there cannot be any doubt whatsoever that an award for enforcing the right under Section 140 of the Act is also required to be passed under Section 168 only after the parties concerned have filed their pleadings and have been given a reasonable opportunity of being heard. A Claims Tribunal, thus, must be satisfied that the conditions precedent specified in Section 140 of the Act have been substantiated, which is the basis for making an award.19. Furthermore, evidently, the amount directed to be paid even in terms of Chapter-X of the Act must as of necessity, in the event of non-compliance of directions has to be recovered in terms of Section 174 of the Act. There is no other provision in the Act which takes care of such a situation. We, therefore, are of the opinion that even when objections are raised by the insurance company in regard to it liability, the Tribunal is required to render a decision upon the issue, which would attain finality and, thus, the same would be any award within the meaning of Section 173 of thewas furthermore held asSo far as the question of liability regarding labourers travelling in trollies is concerned, the matter was considered by this Court in Oriental Insurance Company Ltd. Vs. Brij Mohan and Ors. (2007) 7 SCALE 753  and it was held that the Insurance Company has no liability...Yet again in Ghulam Mohammad Dar v. State of J&K and Ors. [(2008) 1 SCC 422] , this Court opined that the words "injury to any person" as inserted by reason of the 1994 Amendment would only mean a third party and not a passenger travelling on a goods carriage whether gratuitous or otherwise. [See also The New India Insurance Company v. Darshana Devi & Ors. 2008 (2) SCALE 432 ].19. The law which emerges from the said decisions, is: (i) the liability of the insurance company in a case of this nature is not extended to a pillion rider of the motor vehicle unless the requisite amount of premium is paid for covering his/her risk (ii) the legal obligation arising under Section 147 of the Act cannot be extended to an injury or death of the owner of vehicle or the pillion rider; (iii) the pillion rider in a two wheeler was not to be treated as a third party when the accident has taken place owing to rash and negligent riding of the scooter and not on the part of the driver of another vehicle.20. For the views we have taken, it is not necessary to refer to a large number of decisions cited at the Bar as they are not applicable in a case of this nature.