1. In the case of an award passed under Section 163A of the Motor Vehicles Act in respect of injuries sustained to a pillion rider of a motor bike as a gratuitous passenger, whether the insurer who had issued a normal 'act only policy' without obtaining any extra premium for coverage of the pillion rider, be mulcted with the liability to compensate the pillion rider who sustained injury out of the use of such motor cycle or to indemnify the registered owner of the said motor bike, is the short question that comes up for consideration here.

2. The petitioner in O.P.(MV) No.1150/2003 of the Motor Accidents Claims Tribunal, Neyyattinkara while travelling as a pillion rider by a motor bike sustained injuries out of the use of a motor bike. He preferred a claim initially under Section 166 which was later amended as one under Section 163A of the Motor Vehicles Act. The Tribunal has passed an award granting an amount of Rs.39,800/- with interest as compensation to the petitioner and ordered the appellant herein, who was the 2nd respondent in the OP, to pay the said amount. The insurer has come up in appeal.

3. Heard the learned counsel for the appellant Sri.V.P.K. Panicker and learned counsel for the 2nd respondent Sri.R.T.Pradeep.

4. The learned counsel for the 2nd respondent has strenuously attempted to canvas an argument that the decision of the Apex court in United India Insurance Company Limited Vs. Tilak Singh and Others [(2006) 4 SCC 404] is per incuriam of a notification issued by the Insurance Tariff Advisory Committee, which came into force with effect from 25.03.1977, wherein it was resolved that death of or bodily injuries to any person, including person conveyed in or on the motor cycle would be covered provided such person is not carried for hire or reward. It has also been contended that the non-obstante clause incorporated in Section 163A of the Motor Vehicles Act takes out the matter from the category of the coverage specified under Section 147(1) of the Motor Vehicles Act.

5. Relating to the first point, it has to be noted that the Insurance Tariff Advisory Committee gets powers to act through Part II-B of the Insurance Act, 1938. As per Section 64-UC(1),

“The Advisory Committee may, from time to time and to the extent it deems expedient, control and regulate the rates, advantages, terms and conditions that may be offered by insurers in respect of any risk or of any class or category of risks, the rates, advantages, terms and conditions of which, in its opinion, it is proper to control and regulate, and any such rates, advantages, terms and conditions shall be binding on all insurers.”

The proviso to Section 64-UC(1) says,

“Provided that the Authority may permit any insurer to offer, during such period being not more than two years but which may be extended by periods of not more than two years at a time and subject to such conditions as may be specified by it, rates, advantages, terms or conditions different from those fixed by the Advisory Committee in respect of any particular category of risks, if it is satisfied that such insurer generally issues policies only to a restricted class of the public or under a restricted category of risks.”

6. According to the learned counsel for the appellant, the said Committee has merely recommendatory powers, and such powers cannot be used to legislate. It is also argued that the decisions that may be taken by such a Committee cannot make any of the provisions of the statute otiose. On going through Section 147(1)b(i) of the Motor Vehicles Act, it is evident that the said provision is applicable to all motor vehicles other than public service vehicles. It is trite law that the term “injury to any person” as contained in Section 147(1)(b)(i) is confined to third parties alone. That is evident from the subsequent wording in the said provision “including owner of the goods or his authorized representative carried in the vehicle”. Therefore, the requirements of the insur