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2020 Supreme(Mad) 1521
IN THE HIGH COURT OF JUDICATURE AT MADRAS
G. Jayachandran, J.
The Manager, Oriental Insurance Company Ltd., Karnataka – Appellant
Versus
Aasaithambi & Another – Respondents
C.M.A. No. 846 of 2015 & M.P. No. 1 of 2015
Decided On : 03-11-2020
Advocate Appeared:
For the Appellant :S. Arun Kumar, Advocate.
In an Act only Policy, the insurer is not liable to indemnify the occupants for whom no premium was paid by the owner to cover the risk.
Headnote:
Motor Vehicles Act - Insurance Coverage for Occupants - Section 173 - 147, 149 - 2013 SC 473, 2002 (4) L.W 14, 2007 ACJ 1284 - The judgment discusses the liability of the insurer in a case where the car capsized and the occupant sustained injuries. It clarifies the distinction between Act only policy and comprehensive policy, and the coverage provided for occupants in a private car. The court held that in an Act only Policy, the insurer is not liable to indemnify the occupants for whom no premium was paid by the owner to cover the risk. The judgment references key legal provisions such as Section 147 and 149 of the Motor Vehicles Act, along with interpretations from previous judgments, to support the decision to exonerate the insurer from liability.
Fact of the Case:
The claimant, a gratuitous passenger, sustained injuries when the car capsized after its left front wheel tyre got inflated. The insurer contested the claim, arguing that the car is insured under an Act only policy and no additional premium was paid for the risk of the passengers.
Finding of the Court:
The court found that the insurer is not liable to indemnify the occupants in a private car for whom no premium was paid to cover the risk, as per the terms of the Act only policy.
Issues: The main issue was whether the insurer is liable to compensate the claimant, who was a gratuitous passenger in a private car covered under an Act only policy.
Ratio Decidendi: The court held that in an Act only Policy, the insurer is not liable to indemnify the occupants for whom no premium was paid by the owner to cover the risk.
Final Decision: The court set aside the award of the Tribunal holding the insurer liable and directed the claimant to proceed against the owner of the vehicle for recovery of the award amount.
JUDGMENT :
(Prayer: Civil Miscellaneous Appeal is filed under Section 173 of the Motor Vehicles Act, 1988, praying against the award and decree dated 19.09.2014 made in M.C.O.P.No.55 of 2012 on the file of the Motor Accidents Claims Tribunal, Sub Court, Namakkal.)
(The case has been heard through video conference)
1. Heard the Learned Counsel for the appellant. No representation for the respondent No.1
2. The Appeal is preferred by the Insurance Company being aggrieved by the award of the Motor Accidents Claims Tribunal, Namakkal, to compensate the claimant who travelled as gratuitous passengers and sustained injury when the car capsized after its left front wheel tyre got inflated.
3. On 17.03.2010 while the claimant along with his friends Kannan, Rajasekar and Shanmugam were travelling in the Matiz car bearing registration No.MH-05-H-4971, near Nellukuthiparai, Kamarajar Nagar, Dharmapuri to Salem Road, the left front wheel tyre got inflated and the car capsized. Mr.Rajasekar, who was driving the car sustained fatal injury, died on the spot. The claimant sustained fracture in 4th and 5th right metacarpal bone. He was admitted in the Hospital as inpatient and treated for his injuries from 17.03.2010 to 21.03.2010. Claiming compensation of Rs.5,00,000/-, the petition was filed before the MACT, Namakkal, against the owner of the car and its insurer.
4. The claim petition was resisted on the ground that the car is insured under Act only policy. No additional premium paid for the risk of the passengers. The vehicle being a private passenger car, the liability to pay the occupants not vest with the insurer.
5. However, the Tribunal rejected the defence raised by the insurer. It held the occupant in the car is a third party. The premium collected under basic third party risk covers the claimant/occupant. It awarded a sum of Rs.65,000/- as compensation.
6. In the Appeal, the insurer referring the policy Ex.R-1, Terms and Conditions and the judgments reported in 2009 ACJ 104 : 2009 (3) LW 354 and 2013 ACJ 321, has impugned the Tribunal award as erroneous and contrary to law.
7. Heard the Learned Counsel for the appellant. Records perused.
8. The accident occurred while travelling in the car which capsized after the left front tyre got suddenly inflated. The F.I.R marked as Ex.P-1, is against the driver of the car. The perusal of the Insurance Policy Ex.R-1 indicates that no additional premium is collected to cover the risk of the passengers occupying the car. The premium paid is to cover the third party claim and limited liability for the car owner/driver. Therefore, it is to be tested whether the occupant in the private car is a third party or not.
9. The claimant, who deposed as P.W-1 has stated that the car is presently owned by Kannan but RC still stands in the name of the Subramaniam Nataraj (first respondent in the claim petition) the former owner. The car was driven by Rajasekar. Three others including Kannan, the car owner where the passengers. Ex.R-1 Insurance Policy indicates, the coverage is for the period 03.07.2009 to 02.07.2010(midnight). The accident occurred on 17.03.2010, hence the vehicle had insurance coverage at the time of accident. The owner of the vehicle has paid Premium of Rs.670/- for basic third party cover and Rs.100/- under Personal Accident cover for the owner driver with additional premium of Rs.25/- towards limited liability for paid driver/cleaner/conductor with IMT endorsement No.28. No additional premium for the passenger paid. It is Act only Policy.
10. Under the current dispensation of the Motor vehicle Act, the owners of the vehicle are at liberty to opt for comprehensive policy (Package policy) or Act only policy (liability policy). Under Comprehensive policy apart from basic premium to cover third party risk, additional premium for the risk of occupants and own damages collected. In such case, the insurer is responsible to indemnify the insured against the third party claim and to the extent the terms of t
