The main legal point established in the judgment is that a 'Statutory Policy' under the Motor Vehicles Act, 1988, only covers death or bodily injury of a third party falling within the sweep of Section 147 of the Act, and additional premium must be paid to cover gratuitous passengers.

JUDGMENT :

Can an Insurance Company be directed to pay compensation to a gratuitous passenger in a vehicle covered by a statutory policy is the point that emanates for consideration in the appeal.

2. The relevant background facts for the determination of the appeal are as follows:-

2.1. The appellant (Insurance Company) was the second respondent in OP (MV) 235/2014 on the file of the Motor Accidents Claims Tribunal, Thrissur. The first respondent was the claimant and the second respondent (driver) was the first respondent in the claim petition. The parties are, wherever the context so requires, referred to as per their status in the claim petition.

2.2. The petitioner had filed the claim petition under Section 166 of the Motor Vehicles Act, 1988 (in short ‘the Act’), claiming compensation on account of the injuries that she allegedly sustained in an accident that occurred on 11.12.2013. The petitioner while travelling in an auto rickshaw bearing registration No.KL-08-F-1761 (vehicle), driven by the first respondent, through the Irinjalakuda ?Thrissur road, when the vehicle reached Madrassa Poochinnipadam, the first respondent recklessly swerved the vehicle and it hit against a compound wall. The petitioner sustained serious injuries. She was admitted and treated at the Sun Medical and Research Centre, Thrissur. The accident occurred due to the rash and negligent driving of the vehicle by the first respondent. The second respondent is the insurance company. The petitioner is entitled to a compensation of Rs.2,10,000/-from the respondents 1 and 2.

2.3. The first respondent did not contest the proceeding.

2.4. The second respondent filed a written statement contending that the insurance policy was only a ‘Limited Liability Policy’. As the petitioner was a gratuitous passenger travelling in a private vehicle, she was not covered by the policy. The second respondent was not informed about the accident and the records of the vehicle were not produced for verification. Hence the claim petition be dismissed.

2.5. The petitioner marked Exhibits A-1 to A-8 in evidence. The second respondent marked Ext B1 ? copy of the insurance policy ? in evidence.

2.6. The Tribunal by the impugned award allowed the claim petition, in part, by ordering the second respondent to pay the petitioner a compensation of Rs.1,34,780/-with interest @ 8% interest per annum from the date of petition till the date of realisation and proportionate costs.

2.7. Aggrieved by the impugned award, the second respondent is in appeal.

3. Heard Sri.George Cherian, the learned Senior Counsel appearing for the appellant and Sri.A.R Nimod, the learned counsel appearing for the first respondent.

4. The learned Senior Counsel appearing for the appellant drew the attention of this Court to Sections 147 and 149 of the Motor Vehicles Act, 1988 and contended that under a ‘Limited Liability Policy/Act Policy/Statutory Policy’, unless additional premium is paid, the Insurance Company is not liable to compensate person(s) falling outside the purview of Section 147 of the Act. Only when there is a violation/breach of the Policy conditions, the Insurance Company can be directed to pay the compensation to the victim and then recover the amount from the insured as provided under Section 149 of the Act. According to him, in the present case, Exhibit B-1 is a ‘Limited Liability Policy’ and no additional premium was paid for carrying the first respondent, who was a gratuitous passenger. Therefore, the impugned award is patently erroneous. He placed reliance on the decisions of the Honourable Supreme Court in New India Assurance Company Ltd vs. Asha Rani and others [2003 (2) SCC 223] and United India Insurance Co. Ltd, Shimla vs. Tilak Singh and others [2006 (4) SCC 404] to fortify his contentions. He prayed that the appeal be allowed and the Insurance Company be exonerated.

5. Sri. Rajan Kaliyath, the learned Counsel appearing for an Insurance Company in an appeal of similar nature, was also heard. He