An insurance company under an 'act only' policy is not liable for passenger injuries, only for the personal accident cover amount.

ORDER

1. Nobody has put in appearance on behalf of the respondent Nos. 2 and 3 despite service.

2. With the consent of the learned counsel for the parties, the matter is being heard finally and decided today itself.

3. The present appeal has been preferred by the appellant -insurance company against the Judgment and Award dated 16.02.2018 passed by the Judge, Motor Accident Claims Tribunal, Banswara in M.A.C. Case No. 165/2011 vide which a sum of Rs. 1,59,860/- along with interest @ 9% per annum was awarded as compensation in favour of the respondent-claimant - Panchu on account of injuries suffered by him in the accident which occurred on 12.07.2005, with a direction to the appellant-insurance company to firstly pay the compensation and thereafter, recover the same from the owner of the offending vehicle.

4. The Tribunal after framing the issues, evaluating the evidence available on record and hearing the learned counsel for the parties, partly allowed the claim petition awarding a total sum of 1,59,860/- as compensation under various heads in favour of the respondent-claimant.

5. Heard learned counsel for the parties.

6. Learned counsel for the appellant-insurance company submits that though, the Tribunal recorded the finding that the offending vehicle was being used for the commercial purpose at the time of accident, thus, there was no liability of insurance company to pay the compensation, however, it directed the insurance company to firstly pay the amount of compensation to the respondent-claimant and thereafter, recover the same from the owner. Learned counsel further submits that there was no liability of paying the compensation on the insurance company in the present case as the vehicle was covered by 'act only' policy (liability only policy). The insurance policy was placed on record as Ex.P/9. He further submits that in view of the judgments of the Hon'ble Supreme Court in the cases of National Insurance Company Limited Vs. Balkrishnan & anr. reported in (2013) 1 SCC 731 as well as Oriental Insurance Co. Ltd. Vs. Meena Variyal reported in (2007) 7 SCC 425 and the judgments rendered by the Coordinate Bench of this Court in the cases of National Insurance Company Ltd. Vs. Smt. Sahidan Bano reported in 2015(2) R.A.R. 892 (Raj.) as well as The Oriental Insurance Company Limited Vs. Smt. Sharda Devi & ors.(S.B. Civil Misc. Appeal No. 696/2003) decided on 04.08.2016, the insurance company cannot be fastened with the liability to pay the compensation in case of vehicle having been insured under the 'Act only' policy. He, therefore, prays that the appellant-insurance company may be exonerated from the liability of paying the compensation.

7. Per contra, learned counsel for the respondent-claimant submits that the Tribunal rightly decided the claim petition after evaluation of the evidence on record and fastened the liability on the insurance company to firstly pay the amount of compensation and thereafter, recover the same from the owner. Learned counsel further submits that the insurance company has received the premium to cover the risk of only 10 passengers towards the personal accident liability upto the extent of Rs. 40,000/- and therefore, the insurance company is liable to pay at least the amount of Rs. 40,000/- towards the compensation awarded in the present case.

8. I have considered the submissions made at the Bar and gone through the judgment and award impugned dated 16.02.2018 as well as relevant record of the case.

9. The Tribunal while deciding the Issue No. 3 did not take into consideration the fact that the insurance policy in the present case was 'act only' policy (liability only policy) and therefore, the premium for the same was paid by the owner covering the risk in terms of the policy i.e. 'act only' policy. Therefore, as per the 'act only' policy, the risk of passengers travelling in the vehicle whether gratuitous or otherwise is not covered and hence, the liability to pay the compensation cannot be fastened on