Insurance policies covering third-party liability do not extend to gratuitous passengers; however, the doctrine of 'pay and recover' allows insurers to compensate claimants and recover from the vehicle owner.

JUDGMENT :

This Appeal, under Section 173 of the Motor Vehicles Act, 1988, is filed by the insurance company assailing the award dated 25.08.2012 of the learned Chairman, Motor Accidents Claims Tribunal-cum-District Judge, Chittoor (hereinafter referred to as ‘the Claims Tribunal’) in M.V.O.P.No.37 of 2009.

2. Heard arguments of Smt. Medida Manimma, the learned counsel for the appellant-Insurance Company and Ms. C.Jhansi Rani, the learned counsel for respondents/claimants.

3. The following facts are required to be noticed:

A tractor and trailer bearing registration Nos.AP-03-T-3802 and AP-03-T-3803 meant for agricultural operations was carrying coolies in it to attend the agricultural works of groundnut crop which reached Mukkalathur in Chittoor District on 10.10.2007 at 10:30 A.M., but the driver of it failed to take reasonable care and caution and his negligent resulted in accident leading to death of one of the coolies Sri Subramanyam @ Subbaiah. As against the driver of the offending tractor and trailer, Crime No.84 of 2007 was registered by police and a charge sheet was laid before the learned IV Additional Judicial Magistrate of First Class, Chittoor where it was registered as C.C.No.1100 of 2007. The deceased was aged 30 years. His monthly income was found to be Rs.3,000/-. The multiplier ‘17’ was found relevant. Wife, children and parents of the deceased made a claim under Section 166 of the Motor Vehicles Act for compensation of Rs.5,00,000/-. The owner of the offending vehicle was respondent No.1 and the insurance company which insured the offending vehicle was respondent No.2. After considering the rival contentions, the learned Claims Tribunal granted compensation under the following heads:

It passed the award in the following terms:

“In the result, the MVOP is partly allowed with proportionate costs awarding total compensation of Rs.4.85,000-00 (Rs. Four Lakhs eighty five thousand only) as against the claim for Rs.5,00,000-00, with interest at the rate of 7.5% p.a. from the date of petition till the date of deposit/realization against the respondents 1 and 2 jointly and severally.

The respondents 1 and 2 are directed to deposit the awarded compensation with accrued interest and costs allowed within two months from the date of the Award, failing which the petitioners are entitled to claim interest at the rate of 9% p.a. from the date of expiry of above said period of two months in the following manner:

1st Petitioner/wife : Rs.1,85,000/- + entire interest & costs

Minor petitioners 2 & 3 : Rs.1,00,000/- each

Petitioner No.4/Mother : Rs. 50,000/-

Petitioner No.5/Father : Rs. 50,000/-

On such deposit, the first petitioner/wife is permitted to withdraw Rs.85,000/- (Rupees eighty five thousand only) along with entire interest and costs and the balance amount of Rs.1,00,000/- shall be deposited by way of FDR in any Nationalized Bank for a period of 3 years and on maturity entitled to receive the same along with accrued interest. Rs.1,00,000/- (Rupees one lakh) each of the minor petitioners 2 and 3 shall be deposited by way of FDR in any Nationalized Bank initially for a period of 3 years renewable from time to time till they attain age of majority and on such event they are entitled to receive their respective share of amount with accrued interest. Petitioners 4 and 5 the parents of the deceased are permitted to withdraw their share of Rs.50,000/- each.

Advocate fee is fixed at Rs.1000-00 (Rs. One thousand only).

Rest of the MVOP claim, is dismissed, but without costs.”

4. Aggrieved of the above award, the insurance company preferred this appeal.

5. The vehement contention of the learned counsel for the appellant-insurance company is that Ex.B.1-insurance policy is “liability only”/“Act only policy” and it covers the claims of third parties and not those of the grat