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J.R.MIDHA
Yashpal Luthra – Appellant
Versus
United India Insur. Co. Ltd. – Respondent
Question 1? How to determine the liability of insurance companies for occupants of a private car and pillion riders on two-wheelers under comprehensive/package policies in light of TAC/IRDA directives? Question 2? What is the binding effect of TAC and IRDA circulars on insurance companies regarding coverage under package/comprehensive policies for pillion riders and car occupants? Question 3? What steps should insurance companies and tribunals take to withdraw contrary pleas and align with IRDA circulars in pending MACT/High Court/Supreme Court cases?
Key Points: - (!) TAC directives cover occupants in a private car under comprehensive policy w.e.f. 25th March 1977 and pillion riders on two-wheelers under comprehensive policy w.e.f. 2nd June 1986; these directives are binding on insurers. - (!) The court appointed amicus curiae to assist in evaluating whether the issue of pillion rider/car occupant liability is non-existent or requires ongoing dispute. - (!) TAC circulars (18 March 1978 and 2 June 1986) remain valid; insurers are liable under comprehensive/package policy irrespective of policy wording. - (!) TAC instructions continue to apply; comprehensive policy (Package) covers pillion riders and car occupants. - (!) IRDA, via statements, reiterates insurer liability for occupants and pillion riders under respective policies; TAC/IRDA directives are binding. - (!) Insurance company acknowledged erroneous statements; admission of liability for the case. - (!) - (!) IRDA circulars reiterate liability position and reference TAC circulars; general counsel guidance to insurers to comply. - (!) - (!) IRDA Circulars and executive directives emphasize adherence and compliance by insurers. - (!) - (!) IRDA circulars dated 16.11.2009 and 3.12.2009 direct insurers to withdraw pleas and comply; data collection and withdrawal timelines are set. - (!) Court concludes no need for MACT to decide liability questions where comprehensive/package policy exists; compliance with TAC/IRDA directives is required; future/pending claims to be withdrawn as per IRDA circulars.
J.R. Midha, J.
The Court time and resources can be usefully deployed, or they can be unnecessarily consumed or even simply wasted. In the latter case, delays result and there is, apart from injustice by reason thereof, popular dissatisfaction.
2. One of the issues that arose in this appeal gave an indication that the 'issue' was perhaps non-existent. Nevertheless, as an issue, it was consuming extensive Court time. It is in this backdrop that this Court decided to go deeper in an attempt to see if such waste of Court time and resources could be prevented.
3. The issue, and one that appears to be routinely raised by the Insurance Companies in motor accident claims, is:
Whether under a comprehensive/package policy, the insurance company is liable to compensate for the death or injury of a pillion rider on a two-wheeler or the occupants in a private car?
4. The terms and conditions of the insurance policy explicitly covers death of or injury to the pillion rider. The relevant clause of the insurance policy is reproduced hereunder:
1. Subject to the limits of liability as laid down in the Schedule thereto, the Company will indemnify the insured in the event of accident caused by or
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