The insurance company is liable to pay compensation under no fault liability in case of gratuitous passengers, but only if the policy covers the particular risk. The burden is on the insurance company to establish that the policy does not cover the risk.

G. RADHAKRISHNA RAO, J.

( 1 ) THIS Letters Patent Appeal is filed by the New India Assurance Company limited aggrieved by the order of the learned single Judge passed in CMA No. 1401 of 1986 on 8-8-1991.

( 2 ) THE facts of the case are that the wife and the children of the deceased one guddi Venkataiah filed O. P. No. 141 of 1983 on the file of the Motor Accidents claims Tribunal (District Judge), Nizamabad under Section 110-A of the Motor vehicles Act claiming a total compensation of Rs. 1,29,900/- on the ground that the deceased, who was travelling in the lorry bearing No. APL 2454, died when the said lorry met with an accident that took place on 19-1-1983 at 12. 30 pm near brahmajiwadi Krishnajiwadi Village, Kamareddi Taluk, due to the rash and negligent driving of the driver of the said lorry.

( 3 ) THE Tribunal awarded a total compensation of Rs. 33,000/ - fixing joint and several liability on the respondents therein to pay the said compensation to the claimants.

( 4 ) ON appeal filed by the appellant herein, the learned single Judge held that the deceased was a gratuitous passenger and that the insurance company is liable in regard to no fault liability under Section 92-A of the Motor Vehicles act and accordingly allowed the appeal in part limiting the liability of the appellant to Rs. 15,000/- and dismissed the cross-objections. Hence this L. P. A. by the Assurance Company.

( 5 ) THE main contention of Sri Kota Subba Rao, the learned Standing Counsel for the appellant, is that as the deceased was a gratuitous passenger, the appellant insurance company is not liable. In support of his contention, he relied on Section 96 of the Motor Vehicles Act, 1939 (corresponding to Section 149 of the Motor Vehicles Act, 1988 ). The said section deals with the duty of the insurers to satisfy the judgments and awards against the persons insured in respect of third party risks.

( 6 ) IN Premier Ins. Co. Ltd. vs. Vaddeswrapu Siramonamma, a Division Bench of this Court held that to decide as to whether a policy covers the liability of the insurer in respect of a gratuitous passenger, it requires a perusal of the policy. As the policy was not filed, the case was remanded to the trial Court.

( 7 ) IN K Ramulu vs. Shaik Khaja, a learned single Judge of this Court found that the Insurance Company is liable to pay compensation under no fault liability in case of hire-paid passengers. The learned Judge further found that even if it is ultimately established that the insurer is not liable in regard to the amount awarded as per Section 110-B, still the insurance company is not entitled to recover the amount paid towards, no fault liability . It follows that to the extent of no fault liability , the insurer is liable even in cases where it is not liable for the amount awarded under Section 110-B.

( 8 ) IN Oriental Fire and General Ins. Co. Ltd. vs. Matta Chandra Rao, a learned single Judge of this Court, after a very elaborate consideration of Sections 95 and 96 of the Old Act, held that the insurance company is not liable to pay compensation in respect of the two policemen who were carried gratuitously in a goods vehicle of whom one died and the other injured, and that the insurance company would have been liable under the Act Policy in respect of passengers carried for hire or reward.

( 9 ) IN Oriental Fire and Genl. Ins. Co. Ltd. vs. M. Bhanumathi, a Division Bench of this Court held that where a passenger is carried for hire or reward in a lorry which is a Goods vehicle, the insurer is not liable for death or bodily injury to such a passenger. Here, Siramonamma s Case (supra) was distinguished and chandra Rao s Case (supra) was dissented from.

( 10 ) IN United India Ins. Co. Ltd. vs. Immam Aminasab Nadab, a Full Bench of the karnataka High Court found that as regards the insurance company, the liability to pay compensation would arise only if the insurance company had issued the policy which was in force on the date of the accident and if,

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