The Oriental Insurance Company is the appellant before this Court and the common judgment and decree passed in M.C.O.P.Nos.20, 21 and 22 of 2013 are under challenge in these present appeals.

2.The accident occurred on 06.08.2009 at about 4.50 p.m at Pidagam Bridge, the deceased and other two injured persons were travelling in Tata India Car. The deceased died in the Government Hospital and other persons were discharged after taking treatment.

3.The claim petitions were filed and the Tribunal adjudicated the issues with reference to the documents as well as the evidences produced by the respondent parties. The factum regarding the accident was established by the claimants and with reference to the policy, it was contended by the Insurance Company that it is an Act policy and therefore, there is no coverage with reference to the passengers, who were travelling in the insured vehicle.

http://www.judis.nic.in C.M.A.Nos.1982 to 1984 of 2016 Admittedly, in the present case insured vehicle is Tata India Car and all the claimants were admittedly travelling in the said car. The evidence placed before the Tribunal reveals that all the claimants were passengers travelling in the said car, which met with an accident. The appellant Insurance Company is able to establish the fact that it is an Act policy and in an Act Policy, there is no coverage with reference to the passengers travelling in the insured vehicle and they have to be treated as gratuitous passengers.

4.The learned counsel for the appellant in support of the said contentions, relied on the judgment of the Hon’ble Supreme Court in the case of General Manager, United India Insurance Co. Ltd., Vs. M.Laxmi and others reported in 2009 ACJ 104, wherein the relevant paragraph Nos.3,6 and 9 are extracted here under :

Present appellant was the insurer which had insured the vehicle in question. The insured remained ex parte. The present appellant filed its counter-affidavit denying all the material allegations. It was pointed out that admittedly, the policy of insurance was an Act policy and the deceased was a pillion rider and also gratuitous passenger and hence, not a third party and he cannot claim compensation from the insurance company which insured the vehicle. The learned Additional Special Judge for SPE and ACB Cases-cum-Fifth Additional Chief Judge, City Civil Court, Hyderabad (hereinafter referred to as 'the M.A.C.T.') who adjudicated the claim petition, held that the policy was an Act policy in respect of the scooter on the date of the accident, therefore, the insurer had no liability. It was categorically held that unless the policy in question covers even a gratuitous passenger, such person, who met with an accident while going in the vehicle in question and received injuries or his legal heirs, in case of his death following such accident, cannot proceed against the concerned insurance company for any compensation. The compensation payable was fixed at Rs.1,07,436 with 12 per cent interest per annum. It was held that the sum was to be realised from the insured and not from the present appellant.

http://www.judis.nic.in C.M.A.Nos.1982 to 1984 of 2016 An appeal was preferred by the claimants before the High Court, which, by the impugned judgment relying on a circular of the Tariff Advisory Committee held that the liability of the insurer was there. The appeal was, accordingly, allowed.

6.There is no dispute that the circular dated 2.6.1986 refers to comprehensive policy. It categorically states that standard form for motor cycle should cover liability to pillion passengers in case of comprehensive policy. As noted by the M.A.C.T., the policy in the instant case was an Act policy.

9.In view of what has been stated by this court in Asha Rani and Tilak Singh cases, the order of the High Court is clearly unsustainable and is set aside and that of the M.A.C.T is restored.

5. In the case of National Insurance Co., Ltd., V. Balakrishnan and another reported in 2013 ACJ 199, the Apex Court held as follows :

6. In the case of United India Insurance Co. Ltd., vs. Tilak Singh and others , reported in 2006 ACJ 1441, the Hon’ble Supreme Court made the following observations as under :

Ltd., v. Satpal Singh , 2000 ACJ 1 (SC), where after contrasting the language of section 95(1) of the 1939 Act with the provisions of section 147(1) of the 1988 Act this Court held :

(27) Furthermore, sub-clause (i) of clause

(b) of sub-section (1) of section 147 speaks of liability which may be incurred by the owner of a vehicle in respect of death of or bodily injury to any person or damage to any property of a third 8/12 http://www.judis.nic.in C.M.A.Nos.1982 to 1984 of 2016 party caused by or arising out of the use of the vehicle in a public place, whereas sub-clause (ii) thereof deals with liability which may be incurred by the owner of a vehicle against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place.”

21. In our view, although the observations made in Asha Rani's case, 2003 ACJ 1 (SC), 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. Thus, we must uphold the contention of the appellant insurance company that it owned no liability towards the injuries suffered by the deceased Rajinder Singh who was a pillion rider, as the insurance policy was a statutory policy and hence it did not cover the risk of death of or bodily injury to gratuitous passenger.”

7. Citing the above judgments, the learned counsel for the appellant reiterated that the policy was marked as a document before the Tribunal. The Tribunal also found that it is an Act policy and however, passed an order of pay and recovery. The Tribunal found that in the said accident a lorry was also involved and therefore, fixed 50% of liability on the appellant Insurance Company and accordingly, pay and recovery is ordered.

8. This Court is of the considered opinion that in an Act policy liability of the Insurance Company cannot be fixed. The Policy being a contract, the 9/12 http://www.judis.nic.in C.M.A.Nos.1982 to 1984 of 2016 terms and conditions are binding on the parties that the claimants were travelling in the insured car, which met with an accident, then there is no reason to pass an order of pay and recovery against the Insurance Company.

In all such cases the owner may be held liable and contrarily, as per the terms and conditions of the Act policy, the Insurance Company cannot be held liable. Then, the Tribunal committed an error in granting compensation in favour of the claimants and passing an order of pay and recovery and compensation is to be granted only against the owner of the vehicle and certainly not against the Insurance Company.

9. In the present case, considering the facts and circumstances, the common judgment and decree passed on 06.02.2016 passed in M.C.O.P.Nos.20, 21 and 22 of 2013 are set aside and the Civil Miscellaneous Appeal Nos.1982, 1983 and 1984 of 2016 are allowed. However, the claimants are at liberty to execute the award of compensation against the owner of the vehicle by following the procedures contemplated. The award amount already been deposited by the appellant Insurance Company is 10/12 http://www.judis.nic.in C.M.A.Nos.1982 to 1984 of 2016 permitted to withdraw the amount with accrued interest by filing an appropriate application. No costs. Consequently, connected miscellaneous petitions are closed.

17.03.2020 Index : Yes Speaking order ms To

1.The Special District Judge, Motor Accident Claims Tribunal, Villupuram.

2.The Section Officer, V.R Section, High Court, Madras.

http://www.judis.nic.in C.M.A.Nos.1982 to 1984 of 2016 S.M.SUBRAMANIAM, J., ms C.M.A.Nos.1982 to 1984 of 2016 and C.M.P.Nos.14321 to 14323 of 2016 and 20793 to 20795 of 2016 17.03.2020 12/12 http://www.judis.nic.in