The interpretation of the policy terms and relevant legal provisions to determine the insurer's liability and coverage of the pillion rider.

S. VENKATARAMAN, J.

( 1 ) IN this appeal the insurer has questioned the correctness of the judgment and award of the tribunal fastening the liability to pay the compensation on the insurer.

( 2 ) THE claimant-first respondent sustained injuries in an accident when he was travelling on the pillion of the motor cycle belonging to the second respondent and driven by the third respondent on 17. 1. 1982 at 11. 15 p. m. The respondent Nos. 2 and 3 did not contest the claim, only the appellant insurer contested the claim. The Tribunal having found that the accident took place due to the rash or negligent driving of the motor cycle has awarded a compensation of Rs. 50,000/towards injuries, pain and suffering, Rs. 2,000/- towards expenses, Rs. 1,000/- towards future expenses, Rs. 6,732. 42 towards loss of earnings during the period of treatment and Rs. 20,000/towards loss of future income, in all a sum of Rs. 81,232/ -. The Tribunal has further held that as under the policy the seating capacity of the vehicle had been shown as 1+1, the policy covers the risk of even the pillion rider and has, therefore, directed the insurer to pay the compensation in the first instance.

( 3 ) THE learned counsel for the appellant sought to contend that as the petitioner (the first respondent) had admitted in his evidence that the third respondent, who was driving the motor cycle, had purchased the vehicle, the policy has lapsed and that as such the insurer could not have been made liable. The appellant has nowhere taken up a plea that the vehicle had been transferred by the second respondent who was the insured in favour of the third respondent and that as such their policy has lapsed. Merely because in the course of the cross-examination of the petitioner it is brought out that the third respondent had purchased the vehicle, the appellant cannot seek to avoid its liability under the terms of the policy. That apart, the petitioner, who was examined in court long after the accident, has stated that he does not know when the third respondent purchased the vehicle. As such there is no clear material on record to show that the second respondent had sold the vehicle to third respondent even before the accident.

( 4 ) THE learned counsel for the appellant next strenuously contended that the policy is an Act policy and that the risk of the pillion rider is not covered under the terms of the policy. The reasoning given by the Tribunal for holding that the policy covers the risk of the passenger also does not appear to be correct. He has pointed out that in the policy under the column 'carrying capacity' it is mentioned as two and that this necessarily means that the policy covers even the risk of the pillion rider. The Tribunal has not taken note of Section II of the terms of the policy. Section II-1 (a) reads as hereunder:

1. Subject to the limits of liability the company will indemnify the insured in the event of accident caused by or arising out of the use of the motor cycle against all sums including claimant's cost and expenses which the insured shall become legally liable to pay in respect of: (a) death of or bodily injury to any person but except so far as is necessary to meet the requirements of Section 95 of the Motor Vehicles Act, 1939, 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 and excluding liability to pay any person being conveyed in or on the motor cycle unless such person is being conveyed by reason of or in pursuance of a contract of employment. The above provision shows that under certain circumstances the insurer is liable to cover the risk of persons carried on the pillion also. An Act policy does not cover the risk of a pillion rider of a motor cycle has been made clear by this court in New India Assurance Co. Ltd. v. Mayappa bhima Nanappagol M. F. A. No. 1709 of 1979. It may be mentioned here that that was the position prevailing before a c

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