Interpretation of Act policy coverage for pillion riders under the Motor Vehicles Act.

K. SREEDHAR RAO, J.

( 1 ) THESE two appeals arise out of the judgment and award dated 4. 8. 2003 passed in M. V. C. No. 3429 of 2001. M. F. A. No. 6637 of 2003 is filed by the insurer. M. F. A. No. 7934 of 2003 is filed by the claimant seeking enhancement of the compensation awarded.

( 2 ) THE claimant-appellant while travelling as a pillion rider of a motor cycle, met with an accident on 16. 7. 2001 and sustained personal injuries. Accident occurred on account of the negligence of rider of the motor cycle. In respect of the motor cycle in question, the insurer had issued an Act policy which is marked at Exh. R1. The Claims Tribunal has awarded a compensation of Rs. 1,41,992 payable with interest at 8 per cent per annum from the date of petition till the date of payment and directed the insurer to pay the compensation. Hence, the insurer is in appeal seeking exoneration of the liability on the ground that the statutory Act policy issued at Exh. R1 does not cover the risk of a pillion rider. Per contra, the claimant contends that the compensation awarded by the Tribunal is low and hence, seeks enhancement of the compensation.

( 3 ) LEARNED counsel for the claimant-appellant relied on the rulings of this court in Dr. S. Jayaram Shetty v. National insurance Co. Ltd. , 2002 ACJ 2054 (Karnataka); new India Assurance Co. Ltd. v. Rajendra Singh, 2000 ACJ 1039 (Karnataka)the Division Bench decision of andhra Pradesh High Court in United India insurance Co. Ltd. v. Parpudi Krishna kumari, 2004 ACJ 624 (AP), to contend that first and second party to a contract of insurance constitute the insured and the insurer. Beneficiary of the insurance and not a party to the contract of insurance is a third party.

( 4 ) THE beneficiaries of the contract of insurance who constitute third party are specifically envisaged in section 147 of the Motor Vehicles Act, 1988. In respect of goods vehicle, the owner of goods or his authorised representative travelling in the goods vehicle, the employees within the definition of workman employed in connection with the motor vehicle, driver of the vehicle irrespective of whether it is a public service vehicle or private vehicle, the conductor of a public service vehicle, carrying passengers and the passengers in the public service vehicle are to be compulsorily covered under the Act policy. The insurer is vested with the discretion to cover the risk of persons by a contract as envisaged under the tariff regulations by collecting additional premium. The insurer is given option to cover the risk of a pillion rider of the two-wheeler and passengers of a private vehicle to cover the risk by a contract on the payment of additional premium. The pedestrians and the aforesaid beneficiaries whose risk is to be covered under Act policy and beneficiaries whose risk can be optionally covered under the contract by collecting additional premium constitute third party.

( 5 ) THE appellant insurer relied on the decision of the Supreme Court in Road transport Company v. Bhan Singh, 1998 acj 1101 (SC), wherein it is held that liability of the insurer under section 95 (1) (b) (ii) would arise only in respect of passengers in a public service vehicle and not the inmates of private vehicle. The division Bench of this court in Ningusa v. Basavaraj, M. F. A. No. 925 of 1995; decided on 17. 6. 2002, has held that the risk of a pillion rider is not covered under the Act policy.

( 6 ) THE insurance policy marked at Exh. Rl clearly discloses that Exh. Rl is an Act policy. There is no special coverage by a contract to cover the risk of a pillion rider. In view of the decisions of the Supreme court and the Division Bench of this court, it is to be held that a pillion rider would not come within the meaning of a third party unless by a contract on payment of additional premium. In that view, award against the insurer by the Claims Tribunal is bad in law. Accordingly, the judgment and award passed against the insurer is set aside. The a

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