Judgment :-

S.B. Sinha, J.

Leave granted.

1. Liability of an insurance company for death of a person travelling in a private car arises for consideration in this appeal.

2. Before, however, adverting to the said question, we may notice the fact of the matter.

M.N. Lingappa (hereinafter referred to as `the deceased) while travelling in a private car owned by one Shri K.N. Narayanajoshi, respondent No.7 herein met with an accident and succumbed to the resulting injuries. Appellants are his heirs and legal representatives.

They filed an application for grant of compensation of Rs.1,50,00,000/- (Rupees one crore fifty lakhs) before the Motor Accident Claims Tribunal, Tumkur (for short `the Tribunal) in terms of Section 166 of the Motor Vehicles Act, 1988 (for short `the Act).

3. The learned Tribunal by its order, awarded a compensation of Rs.98,64,428/-.

4. Respondent No. 1 preferred an appeal there against before the High Court of Karnataka at Bangalore. The claimants also filed cross-objections.

5. The core question that arose for consideration before the High Court was as to whether the insurance policy covered the risk of the passenger travelling in the car. The High Court by its impugned judgment answered the said question in favour of the 1st respondent.

6. Mr. P.S. Patwalia, learned senior counsel appearing on behalf of the appellants would contend:-

i) The insurance policy being a comprehensive one, the High Court committed a serious error in opining that the risk of a passenger travelling in the car was not covered thereunder.

ii) Having regard to the fact that the second proviso appended to Section 95(1)(b) of the Motor Vehicles Act, 1939 was deleted by the Parliament in the 1988 Act, the liability of a passenger in a private vehicle must also be included in the policy in terms of the provisions of the 1988 Act.

7. Mr. P.R. Sikka, learned counsel on behalf of respondent No.1-Insurance Company would contend that the respondent having not paid the requisite amount of premium, the High Court judgment is unassailable.

1. 8. The policy in question was in respect of a private car. It was valid for the period 6.10.1995 and 5.10.1996, the relevant clauses whereof are as under:

"SECTION II - LIABILITY TO THIRD PARTIES

1. Subject to the limits of liability as laid down in the schedule hereto the company will indemnify the insured in the event of an accident caused by or arising out of the use of the vehicle against all sums which the insured shall become legally liable to pay in respect of:

i) death of or bodily injury to any person including occupants carried in the vehicle (provided such occupants are not carried for hire or reward) but except so far as it is necessary to meet the requirements of 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.

(ii) Damage to property other than property belonging to the insured or held in trust or in the custody or control of the insured."

9. We may notice the nature of the policy, which is Private Car `B Policy:

"PRIVATE CAR `B POLICY

Whereas the insured by a proposal and declaration dated as stated in the Schedule which shall be the basis of this contract and is deemed to be incorporated herein has applied to the Company for the insurance contained and has paid the premium mentioned in the schedule as consideration for such insurance in respect of accidental loss or damage occurring during the period of insurance.

NOW THIS POLICY WITNESSETH:

That subject to the Terms Exceptions and Conditions contained herein or endorsed or expressed hereon;

SECTION I. LOSS OR DAMAGE

The Company will indemnify the insured against loss or damage to the vehicle insured hereunder and / or its accessories whilst thereon

a. By fire explosion self ignition or lightning.

b. By burglary housebreaking or theft.

c. By riot and strike.

d. By earthquake (fire and shock damage).

e. By Flood, Typhoon, Te