An occupant/inmate/passenger in a private car is not considered a third party under the Motor Vehicles Act, and the insurance policy does not cover the risk of such persons.

N. Kumar, J.— MFA Nos. 10993/2007. 10990/2007, 10991/2007. 10992/2007 and 9500/2007 are all appeals preferred by the insurance company challenging the fastening of the liability on them in respect of the death of the occupants of a private car. MFA No. 11917/2007 is an appeal filed by the claimant who is Respondent in MFA No. 9500/2007 seeking enhancement of compensation.

2. The question involved in all these cases is identical. They are taken up for consideration together and disposed of by this common order.

3. In all these cases, the deceased were occupants in a private car. The owner of the car had taken a policy of insurance as stipulated under Section 146 of the Motor Vehicles Act, 1988 (hereinafter referred to as the Act') i.e., 'Liability Only Policy' i.e., the policy under which he sought coverage for third party risk only.

4. In the claim petition, insurance company was made a party. They did not dispute the accident, they also did not dispute the coverage of the vehicle involved in the accident. The specific defence taken was that, they have issued a policy. In terms of the policy they were expected to cover the risk of only third parties. In other words, it is their case that, an occupant in a private car is not a third party. The insured has not paid any additional premium to cover risk of an occupant. Therefore, as the claims are preferred by the legal representatives of the occupants of a private car, the insurance company is under no obligation to indemnify the insured and pay compensation to the claimants in terms of Section 149 of the Act. The Motor Accident Claims Tribunal, without properly appreciating this contention of the insurance company, proceeded on the assumption that, the insurance policy issued covers the risk of an inmate of a car and therefore, insurance company is liable to pay compensation awarded and therefore, it proceeded to pass an award directing the insurance company to pay the amount awarded. Aggrieved by the said award, the insurance company is before this Court.

5. The learned Counsel for the Appellant - insurance company, assailing that portion of the award contends, the insurance policy issued by the insurance company covers the risk of third parties. The occupant of a private car is not a third party as held by the Apex Court. Therefore, they are not liable to pay the compensation awarded in terms of the award passed by the tribunal. The tribunal committed a serious error in mis-interpreting the terms of the insurance policy and in holding that the insurance policy covers the risk of inmates of the car which is factually incorrect and therefore, he contended that, the award of the tribunal in so far as fastening the liability on the insurance company is liable to be set aside.

6. Per contra, learned Counsel appearing for the claimants contended, the word third party' has been defined to mean, it includes the Government. The insured being first party, insurance company being the second party, all other persons fall within the phraseology of third party and therefore, when once a third party risk is covered as contemplated under Sections 146 and 147 of the Act. The insurance company is liable to answer the claim of the claimants who are the legal heirs of the deceased inmates of the private car. He further submitted, in the judgment relied on by the learned Counsel for the insurance company, the Apex Court has not considered the scope of policy as defined in Section 2 of the Tariff for Private Car Regulations and therefore, the judgment of the Apex Court has no application to the facts of this case. He also relies on the terms of the policy, which categorically states the limit of the amount of the company liability under Section (ii)-1(1) in respect of any one accident as per Rules and therefore, he contends, the occupant of a private car is a third party and accordingly, the liability foisted by the tribunal is valid and legal and do not call for any interference.

7. In the light