1. In all these appeals, the main question for consideration is whether passengers of private vehicles carried not for hire or reward (gratuitous passengers) are covered by insurance policies called 'Act policies' which are taken only to meet the minimum requirements of the provisions of the Motor Vehicles Act, 1939 (hereinafter referred to as 'the old Act'). Facts are not disputed. In all these appeals, the accidents took place during the period 17.1.1980 to 10.3.1988, that is, during the period when old Act was in force as the Motor Vehicles Act, 1988 (hereinafter referred to as 'the new Act') came into force only with effect from 1.7.1989. All these appeals except M.F.A. No. 1158 of 1994 were filed by the insurance companies as the Motor Accidents Claims Tribunals fastened the liability on the insurance company. In M.F.A. No. 1158 of 1994 arising out of O.P. (M.V.) No. 116 of 1991, the Tribunal held that under 'Act policy', the insurer is not liable to indemnify the owner of the vehicle for compensation payable on account of the injuries suffered to gratuitous passengers. Claimants are questioning the above finding. The quantum of compensation is also questioned in that appeal. In all these cases, victims of the accidents who were gratuitous passengers were travelling in private jeeps at the time of the accidents. Minimum requirement and risk compulsorily coverable under the insurance are mentioned in S.95 of the old Act.

2. The relevant portion of S.95 of the old Act reads as follows:

"95. Requirement of policies and limits of liability:- (1) In order to comply with the requirement of this Chapter, a policy of insurance must be a policy which

(a) is issued by a person who is an authorised insurer, (or by a co-operative society allowed under S.108 to transact the business of an insurer); and insures the person or classes of persons specified in the policy to the extent specified in sub-s. (2)?

(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place.

(ii) 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:

Provided that a policy shall not be required -

(i) to cover liability in respect of the death, arising out and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment, (other than a liability arising under the Workmen's Compensation Act, 1923 (3 of 1923), in respect of the death of, or bodily injury to, any such employee -

(a) engaged in driving the vehicle; or

(b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle; or

(c) if it is a goods vehicle, being carried in the vehicle; or

(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises, or

(iii) to cover any contractual liability."

3. S.95(1)(b)(i) provided that to meet the requirement of the Statute, insurance company must indemnify the insured against any liability which may be incurred by him in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place. It also covers liability in respect of damage to any property of a third party. S.95(1)(b)(ii) is a special provision dealing with the liability against the death of or bodily injury to any passenger of a public service vehicle. Passenger of a public service vehicle is also compu