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2008(4) Supreme 329
SUPREME COURT OF INDIA
S.B.Sinha and Lokeshwar Singh Panta, JJ.
Oriental Insurance Co. Ltd. — Appellant
versus
Sudhakaran K.V. & Ors. — Respondent
Civil Appeal No. 3634 of 2008
Decided on : 16-05-08
Motor Vehicles Act, 1988 – Section 147 – In terms of Section 147 of the Act only in regard to reimbursement of the claim to a third party, a contract of insurance must be taken by the owners of the vehicle – It is imperative in nature – When, however, an owner of a vehicle intends to cover himself from other risks – It is permissible to enter into a contract of insurance in which event the Insurer would be bound to reimburse the owner of the vehicle strictly in terms thereof – The liability of the insurer to reimburse the owner in respect of a claim made by the third party, thus, is statutory whereas other claims are not. (Paras 8, 9)
Facts of the Case :
Issue in consideration in present case was whether the pillion rider on a scooter would be a third party within the meaning of Section 147 of the Act?
Findings of the Court :
Liability of the insurance company is not extended to a pillion rider of the motor vehicle unless the requisite amount of premium is paid for covering his/her risk. 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. Pillion rider in a two wheeler is not to be treated as a third party when accident has taken place owing to rash and negligent riding of scooter and not on part of driver of another vehicle. Impugned judgment being unsustainable set aside accordingly.
Result : Appeal allowed.
If the insurance policy is a full cover policy that explicitly includes coverage for the owner and pillion riders, then their claims would generally be covered under the terms of that policy. A full cover policy typically provides comprehensive protection, including injuries or death of the owner and pillion riders, provided such coverage is clearly specified in the policy documents (!) .
However, if the policy explicitly states that coverage is limited to third-party liability or does not specify coverage for the owner or pillion riders, then their claims may still not be covered, even under a full cover policy. The scope and terms of coverage are critical, and without explicit inclusion, coverage cannot be assumed (!) .
In summary, whether the owner's claim is covered under a full cover policy depends on the specific terms and inclusions detailed within the policy. If the policy explicitly covers the owner and pillion riders, then their claims would generally be recognized. If not, the claims may still be denied despite the policy being termed "full cover."
JUDGMENT
S.B. Sinha, J. —
Leave granted.
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 as under:
“1. The 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 that contention. Hence this 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 appeal...”
5. Ms. Aanchal Jain, learned counsel appearing on behalf of the appellant, submits that as the deceased was in a vehicle which was not covered by the contract of insurance must be held to be a gratuitous passenger and as such the impugned judgment cannot be sustained.
Strong reliance, in this behalf, has been placed on United India Insurance Co. Ltd.,Shimla v. Tilak Singh and Ors.,1 [(2006) 4 SCC 404].
6. Mrs. Purnima Bhat and Mrs. K.Sarada Devi, learned counsel appearing on behalf of the respondents, on the other hand, would urge:
(i) the principles of law deduced by this Court as regards gratuitous passenger should not apply in a case of this nature;
(ii) in any event this Court should exercise its jurisd
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