Point of Law: Passengers in a private car, which is not used for carrying passengers for hire or reward are not third parties vis-a-vis said vehicle.

JUDGMENT :

P. KRISHNA BHAT, J.

1. These two appeals are at the instance of insurance company calling in question the legality and correctness of judgment and award dated 19.03.2010 passed in MVC Nos. 136/2010 and MVC No. 19/2010 by the District Judge, Addl. MACT-II, I Fast Track Court, Shimoga.

2. The claim petitions proceeded on the allegation that, among others deceased Puttappa and claimant Rathnamma were proceeding from Bangalore to Shikaripura on 10.01.2005 in motor vehicle bearing Registration No. KA-27-M-1570 and at about at 3.30 a.m. and when the vehicle reached near Sadhana Theatre, Arasikere, on account of rash and negligent driving of the driver control over the vehicle was lost and said vehicle dashed against a big tree resulting in death of Puttappa and injuries to Rathnamma and several others.

3. Before claims Tribunal, respondent Nos. 1 and 2 - driver and owner of the offending vehicle remained ex-parte. Respondent No. 3-insurance company filed a detailed written statement denying the material averments made in the claim petition.

4. During the trial, PW-1 and PW-2 were examined and Exs.P-1 to P-11 were marked on behalf of claimants. One of the officials of insurance company was examined as RW1 and policy of insurance was marked as Ex.R-1.

5. Learned Tribunal upon appreciation of evidence and hearing the learned counsel on both sides allowed the claim petitions in part and awarded compensation.

6. Learned counsel appearing for the insurance company in both the appeals assailed the impugned judgment and award on the solitary ground that offending vehicle was a private car being not used for carrying passengers on hire and reward and it was covered with the Act policy and therefore, insurance company is not liable to reimburse the compensation awarded and direction to the contrary made by the learned Tribunal is illegal and therefore, it is liable to be set aside. He therefore submits that appeal is entitled to be allowed.

7. Learned counsel for the respondents-claimants per contra, submits that upon appreciation of entire evidence including the policy of insurance Ex.R-1, learned Tribunal rightly allowed the claim petitions and therefore, there is no good ground to interfere with the same and as such he prays for appeal being dismissed.

8. There is no dispute about the fact that insured vehicle was a private omni car bearing Registration No. KA-27-M-1570 and it is not a passenger vehicle for carrying passengers for hire or reward. Ex.R-1 - policy of the insurance shows that an Act policy was issued and no additional premium was paid to cover the risk of passengers in the insured vehicle.

9. It is well settled that passengers in a private car, which is not used for carrying passengers for hire or reward are not third parties vis-a-vis said vehicle. When an Act policy is issued without collecting additional premium to cover the risk of inmates in a private car, there is no liability on the part of the insurance company to pay compensation for personal injury or death due to accident to such inmates. In this behalf, it is apt to refer to the observation of a Division Bench of this Court in Branch Manager, New India Assurance Co. Ltd. vs. Mahadev Pandurang Patil and Another, ILR 2011 Kar. 850, which is as follows:

“14. 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 the requirement of policies and limits of liability. Sub-Clause (i) of Clause (b) of sub-section (1) of Section 147 speaks of liability which may be incurred by the owner of a vehicle in respect of death of or bodily injury to any person of 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