Insurance companies are not liable to cover occupant risks under 'Act Only' policies as per the Motor Vehicles Act, and cannot be ordered to pay and recover in such cases.

JUDGMENT

1. The instant appeal under Section 173 of the Motor Vehicles Act, 1988 (Afterwards referred as 'the Act') has been filed by the appellant - Insurance Company being aggrieved against the impugned order dated 26.12.2021 passed by the Motor Accident Claims Tribunal, Bikaner (Afterwards referred as 'Tribunal') in MAC No.434/2013, whereby, learned Tribunal after exonerating the appellant - Insurance Company from liability to pay compensation directed the Insurance Company to first pay the amount of compensation awarded and then recover the same from driver & owner of the vehicle.

2. Brief facts of the case are that deceased Madan Singh was occupant in a car being registration No. RJ07-CA-0237. On account of rash and negligent driving by the driver of the Car, the car turned turtle; Madan Singh and another occupant Narsingh sustained injuries. Madan Singh succumbed to the injuries. Legal heirs of Madan Singh filed a claim petition before learned Tribunal.

3. The claim petition, inter alia, was contested by the appellant - Insurance Company on the ground that the Car was insured by it in the 'Act Only' policy; the Insurance Company did not charge any premium for covering the risk of occupant of the Car.

4. Learned Tribunal while accepting the plea of the insurer held that the Insurance Company is not liable to indemnify the loss to the owner of the insured vehicle. However, learned Tribunal directed Insurance Company to pay the compensation to the claimants and recover the same from driver & owner of the vehicle.

5. Heard learned counsel for the parties and perused the material available on record.

6. Learned counsel for the appellant relying on the judgments afterwards contended that the insurance policy in this case does not cover the risk of occupant in the insured vehicle. Since, deceased was travelling in the insured vehicle itself, hence, he cannot be termed as thirty party. Insurance Company is liable to indemnify the owner only for the loss sustained by the third party, as it is 'Act Only' policy. There is no requirement in law to cover the risk of occupant of a private vehicle. Insurance Company did not charge any premium for covering the risk of occupant in the present case, hence, in view of provisions of Section 147 and 149 of the Act, learned Tribunal has committed grave error in directing the Insurance Company to pay the amount of compensation and then recover it from the driver & owner.

7. On the other hand, learned counsel for the respondent relying on the judgments of Hon'ble Apex Court in the matters of Varju & Ors. vs. United India Insurance Co. Ltd. : IV (2005) ACC 5156 and Anu Bhanvara Etc. vs. IFFCO TOKIO General Insurance Co. Ltd. : 2019 (2) RAR 209 (SC) contended that deceased was survived by widow, two minor children and mother. Insurance Company has been given right to recover the compensation from the driver and owner. So there is no illegality committed by learned Tribunal in passing the impugned judgment. In the aforesaid cases, the Hon'ble Apex Court has passed the order of pay and recover. In view of above circumstances, the impugned order of learned Tribunal should not be interfered with.

8. Having regard to the rival contentions of the learned counsel for the parties and after perusing the material available on record, in the present case, the question before this Court is whether learned Tribunal had right to order pay and recover in case of 'Act Only Policy', where the risk of the deceased was not covered.

9. In the present case, it is not in dispute that the risk of deceased was not covered under the policy of vehicle. There is no statutory requirement to cover the risk of occupants in private Car. The risk of occupant in a private Car can only be covered by paying premium, which is not the case in the present matter. It is admitted fact that no premium was paid by the owner of the Car for covering the risk of the occupant. Learned Tribunal also exonerated the Insurance Company since the policy wa