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B.N.SRIKRISHNA, LOKESHWAR SINGH PANTA
United India Insurance Co. LTD. , Shimla – Appellant
Versus
Tilak Singh – Respondent
The law laid down in this case establishes that a statutory insurance policy under the Motor Vehicles Act, 1988, is primarily intended to cover the risks to third parties, including liability for death or bodily injury caused by the use of the vehicle in a public place. However, such a policy does not automatically extend coverage to gratuitous passengers, such as pillion riders, unless explicitly specified in the policy. The case clarifies that unless there is specific coverage for gratuitous passengers, the insurer is not liable for injuries or death of such passengers. Additionally, the case emphasizes that the liability of the insurer in cases of transfer of ownership or transfer of the insured vehicle’s policy depends on whether proper notice and transfer procedures are followed, but the primary focus remains on whether the injury or death falls within the scope of coverage provided by the policy. The accident itself, rather than the transfer of ownership, is the key factor in determining the applicable law governing the liability.
JUDGMENT
Srikrishna, J.—The core issue involved in this appeal is : Whether a statutory insurance policy under the Motor Vehicles Act, 1988, intended to cover the risk to life or damage to properties of third parties, would cover the risk of death or injury to a gratuitous passenger carried in a private vehicle.
2. Respondent No.5 Bal Krishan had insured his scooter with the appellant-insurance company for the period 7.3.1989 to 6.3.1990. For covering liability to pillion passengers endorsement of I.M.T. 70 pertaining to accident to unnamed hirer/driver/pillion passenger, is required on the insurance policy, which may be obtained by payment of additional premium. The insurance policy covering the scooter of respondent no.5 did not contain an endorsement of IMT 70.
3. On 23rd March 1989 the scooter was admittedly sold by respondent no.5 to respondent no.1. Tilak Raj. It is also an admitted position that the registration certificate of the scooter was transferred in the name of Tilak Raj but no notice thereto was given by the transferor respondent no.5 to the appellant-insurance company for transfer of the insurance policy and the insurance certificate in the name of the transferee i.e.
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