The extent of an insurance company's liability is determined by the terms of the insurance policy, as established by relevant case law.

P. KALAIYARASAN, J.

1. This Civil Miscellaneous Appeal has been filed against the award passed by the Motor Accident Claims Tribunal (I Additional District and Sessions Court), Vellore, dated 16.11.2015 in M.C.O.P. No. 58 of 2013 at the instance of the Insurance Company Ltd. as appellant.

2. The legal heirs of the deceased Sundaramoorthi claim compensation under Section 166 of the Motor Vehicles Act r/w Rule 3(1) of TNMACT Rules 1989, as the deceased while riding his two wheeler met with an accident resulting to death by hitting on the parapet wall of a bridge and fell down from a height of 20 feet. The appellant / insurance company took a stand that since the deceased being owner of the vehicle himself had died due to his own negligence, the insurance company is not liable to pay compensation to the petitioners.

3. The Tribunal after analysing oral and documentary evidence of both sides, awarded compensation of Rs. 14,31,000/-. Aggrieved by the same, the insurance company has preferred this Civil Miscellaneous Appeal.

4. The learned counsel appearing for the appellant argued that the deceased being owner of the vehicle died due to his own negligence and hence his heirs are entitled to limited compensation as the policy is a package policy with compulsory Personal Accident cover.

5. The learned counsel appearing for the respondents per contra contends that since the policy is a package policy/comprehensive policy, legal heirs of the deceased owner is entitled to the compensation as claimed by the petitioners.

6. The fact remains that the accident occurred only due to negligence on the part of the deceased as he hit the parapet wall of the bridge by talking over a cellphone and riding the vehicle in single hand, as spoken to by the pillion rider, who has also lodged the FIR, examined as RW-1. The photostat copy of the insurance policy is marked as Ex.P.2. This Court perused the said copy of the policy. The policy-cum-certificate of insurance is two wheeler package policy including compulsory Personal Accident cover for owner and driver.

7. The only point that revolves in this appeal is whether liability covered under the said policy is for unlimited amount or limited to as per the terms of the special contract entered into between the insurer and the insured under the policy.

8. The Hon’ble Supreme Court in Bhagyalakshmi and Others vs. United Insurance Company Ltd. and Another, (2009) 7 SCC 148 held that package policy / comprehensive policy covers the pillion rider and the occupants of the car and the owner who was also occupant (not driving at that time) is entitled to compensation as per the terms of the policy placed in that case. The matter was then referred to the Larger Bench to decide as to what would be the liability of the insurer if the policy is a comprehensive/package policy.

9. The above decision in Bhagyalakshmi’s case (cited supra) was rendered by the Hon’ble Supreme Court on 06.05.2009. In a subsequent decision rendered on 20.11.2012, the Hon'ble Supreme Court in National Insurance Co. Ltd. vs. Balakrishnan, (2013) 1 SCC 731 has held as follows:

“26. In view of the aforesaid factual position, there is no scintilla of doubt that a “comprehensive/package policy” would cover the liability of the insurer for payment of compensation for the occupant in a car. There is no cavil that an “Act policy” stands on a different footing from a “comprehensive/package policy.” As the circulars have made the position very clear and IRDA, which is presently the statutory authority, has commanded the insurance companies stating that a “comprehensive/package policy” covers the liability, there cannot be any dispute in that regard. We may hasten to clarify that the earlier pronouncements were rendered in respect of the “Act policy” which admittedly cannot cover a third-party risk of an occupant in a car. But, if the policy is a “comprehensive/ package policy” the liability would be covered. These aspects were not noticed in Bhagyala