2010 Supreme(Kar) 930

High Court of Karnataka (Circuit Bench At Gulbarga)
THE HONORABLE MR. JUSTICE N. KUMAR & THE HONORABLE MR. JUSTICE SUBHASH B. ADI
The Branch Manager The New India Assurance Co Ltd
Versus
Mahadev Pandurang Patil
M.F.A.NO.10993 OF 2007 (MV) C/W M.F.A.NOS. 10990, 10991, 10992 9500 & 11917 OF 2007 (MV)MFA NO. 10993 of 2007
Decided on : 04-10-2010

Headnote:MOTOR VEHICLES ACT, 1988 - Sections 145(2), 146 & 147: [N. Kumar & Subhash B. Adi, JJ] "Whether an occupant/Passenger/Inmate of a private car is a third party as defined under Section 145(g) read with Section 146 of the Act"- Held, Section 2(35) of the Act defines what a public service vehicle means, i.e., any motor vehicle used or adopted to be used for the carriage of passengers for hire or reward and includes a maxi cab, a motor cab, contract carriage and state carriage. Proviso appended thereto categorically states that compulsory coverage in respect of drivers and conductors of public service vehicle and employees carried in a goods vehicle however the liability in so far as they are concerned is limited to the liability under the Workmen’s Compensation Act. It does not speak of any passenger in a `goods carriage’. Therefore, it is cleat that the statutory insurance is confined to the death or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place. Therefore, the passenger of a vehicle which is not meant for public service is not covered under the Section. The passenger in the case of a two wheeler is the pillion rider and in the case of three wheeler and four wheeler the occupants of such vehicle who are not carried in the said vehicle floor hire or reward. Therefore, the insurance policy taken in respect of a vehicle, in which they are travelling as such passengers are not treated as third parties and such passengers are not treated as third parties and such an insurance do not cover the risk of such persons. The reason is Section 147 does not required a policy to cover the risk to passengers who are not carried for hire or reward. The statutory insurance does not cover injuries suffered by occupants of the vehicle who are not carried for hire or reward and the insurer cannot be held liable under the Act. The occupants/passengers/inmates of a private vehicle do not fall within the definition of the word third party. Therefore, the legal obligation arising under Section 147 of the Act cannot be extended to an injury or death of the owner of the vehicle, passengers in such private vehicle or a pillion rider in the case of a two wheeler. Gratuitous passengers who are not carried for hire or reward in a vehicle other than a public service vehicle, cannot be constructed as third parties.

       MOTOR VEHICLES ACT, 1988 - Sections 146 & 147: [N. Kumar & Subhash B. Adi, JJ] Risk of an occupant of a car/Inmate of a vehicle or passenger in a private car -Held, An occupant/passenger in a private car, is not a third party. The finding recorded by the Tribunal that the insurance policy issued covers the risk of such persons and therefore the insurance company is liable to pay compensation amount is illegal and contrary to the law declared by the Apex Court.- If the risk of an occupant of a car, inmate of a vehicle or passenger in a private car, is to be covered, additional premium has to be paid. If no additional premium is paid, their risk is not covered. The statutory liability under Section 146 and 147 of the Act has to be read with the terms of the insurance policy issued under Section 146 of the Act. But that does not prevent an insurer from entering into a contract of insurance covering a risk wider than the minimum requirement of the statute, whereby the risk to gratuitous passengers could also be covered.- In fact, in the policy, no additional premium is received by the insurance company to cover the risk of such persons. It is clear from the terminology used in the policy which fact is not in dispute. In one of the cases, additional premium is collected to loading the risk of third party only, as is clear from the policy that loading was not meant to cover risk of inmates of a private car and therefore, merely because an additional premium is collected under the said policy, it cannot be inferred that the risk of inmates of a car are covered. The words are specific that the loading is done in order to cover only third party risk, it is not a case of additional premium being collected to cover the risk of inmates along with third parties. Therefore, in the facts of the case, as the insured has not paid additional premium and the insurance company has not collected any additional premium, the risk of the occupants of a private can was not covered. Therefore, liability foisted on the insurance company cannot be sustained and accordingly, it is liable to be set-aside.

       MOTOR VEHICLES ACT, 1988 - Chapter XI: [N. Kumar & Subhash B. Adi, JJ] Scheme of the Chapter - Held, from the scheme of Chapter XI, the statutory insurance which is made mandatory is only to protect the interest of third parties. Section 146 deals with the necessity for insurance against third party risks. Section 147 deals with requirements of policies and limits of liability. Sub-Clause (i) of clause (b) of sub-Section 147 speaks of liability which may be incurred by the owner of a damage to any property of a third party caused by or arising out of the use of the vehicle in a public place. Whereas sub-Clause (ii) thereof deals with liability which may be incurred by the owner of a vehicle against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place.