An insurance policy covering only third-party risk does not automatically cover the risk of passengers unless additional premium is paid, as per Section 147 of the Motor Vehicles Act.

1. The National Insurance Company Limited has filed this appeal challenging the legality and correctness of the judgment and award dated 22.12.2008 passed in MVC No. 5189/2005 by the Motor Accident Claims Tribunal, Bangalore (hereinafter referred to as "the Tribunal" for short) fastening liability on them to compensate the claimant.

2. The facts leading to the filing of this appeal are:

The first Respondent herein filed a claim petition contending that, on 15.10.2004 while he was proceeding in a car bearing Registration No. CKR 8485 on NH-4 near L. Mallappa Shetty Lake, Hosakote at about 1.00 a.m. within the jurisdiction of Hosakote Police Station, due to the rash and negligent driving of the said Car, it dashed against an unknown lorry. Due to that the claimant sustained injuries. Immediately after accident, he was shifted to the Government Hospital, Hosakote, thereafter he took treatment in B.R. Ambedkar Medical College Hospital. Prior to the accident, he was doing the work of ironing the clothes and earning Rs. 6,000/- p.m. In view of the injuries he had sustained he cannot do the work which he was doing prior to the accident. Hence sought for compensation of Rs. 6,00,000/-.

3. In response to the notice issued by the Tribunal, the second respondent-insurance company filed written statement denying the entire averments made in the claim petition and also contended that as on the date of accident, the driver of the offending car was not holding the valid and effective driving license. Further the insurance policy is an Act policy which covers the risk of 3rd party and the gratuitous passenger traveling in the car is not covered by the policy. Hence the insurance company is not liable to compensate the claimant and sought for dismissal of the claim petition.

4. The first respondent in the written statement had denied the occurrence of the accident, injuries sustained. As on the date of accident, the insurance policy was in force. Hence the insurance company is liable to compensate the claimant.

5. On the basis of pleadings of the parties, the Tribunal framed necessary issues.

6. In order to prove his case, the claimant got examined himself as PW-1 and the doctor who treated the claimant was examined as PW-2 and got marked the documents as Ex.P1 to Ex.P9. On behalf of the respondents, the Deputy General Manager of the insurance company was examined as RW-1 and got marked the documents as Ex.R1 to Ex.R7.

7. The Tribunal, after appreciating the oral and documentary evidence let in by the parties held that due to the actionable negligence on the part of driver of the offending car, the accident occurred and the claimant has sustained injuries. Hence he is entitled to compensation. In the accident the claimant has sustained (i) fracture of spinous process of right scapula (ii) fracture of lateral margin of right scapula and (iii) fracture of 3rd rib of right chest. Taking into consideration the injuries sustained and suffering undergone, the Tribunal has awarded compensation in a sum of Rs. 1,76,200/- with interest at the rate of 6% p.a. The liability was fastened on the insurance company to compensate the claimant.

8. The insurance company being aggrieved by the said judgment and award fastening liability on them to compensate the claimant has filed this appeal mainly contending that the policy issued to the offending car is an Act policy and it covers the risk of 3rd party only. The person traveling in the car as a gratuitous passenger is not covered by the insurance policy. Hence, the insurance company is not liable to compensate the claimant and the judgment and award passed by the Tribunal cannot be sustained. In support of his contention, learned counsel for the appellant relied upon the judgment reported in ILR 2012 Kar 1841 in the case of The Branch Manager, New India Insurance Company Limited vs. Mahadev Pandurang Patil and Another; 2009 ACJ 104 in the case of Oriental Insurance Company vs. M. Lakshmi; AIR 2008 SC 2729 i