The central legal point established in the judgment is the interpretation of 'Act only' policy and the coverage of gratuitous passengers under the Motor Vehicles Act, 1988, which influenced the court's decision in determining the liability of the insurance company and the entitlement of the claimants for enhanced compensation.

JUDGMENT :

V. Gopala Gowda, J.

This appeal is filed by the insurance company. Cross-appeal is also filed by the claimants along with miscellaneous petition seeking for condonation of delay in filing the cross-appeal. The insurance company has filed the appeal, questioning the correctness of the judgment dated 4.9.2004 passed by the Second Motor Accidents Claims Tribunal, Northern Division, Sambalpur in Misc. (A) Case No. 31 of 1999 (S) fastening the liability upon it contending that it is not liable to pay the compensation to the cross-objectors-claimants as the deceased was a gratuitous passenger in the offending vehicle. Therefore, fastening the liability on the insurer awarding compensation of Rs. 3,32,000 with interest at 9 per cent, is not legal and valid, which is liable to be set aside. The cross-objection filed by cross-objectors-claimants, legal representatives of the deceased, was also listed today along with this appeal. Mother of the deceased, respondent No. 1, has died during the pendency of appeal and has been deleted from the cause-title. Legal representatives of the deceased have sought for enhancement of the compensation to the tune of Rs. 5,00,000 by modifying the impugned award applying the law laid down by the Apex Court in the case of Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, AIR 2009 SC 3104 as the compensation awarded is very less and inadequate.

2. The ground of attack of the impugned award by the insurance company is that the insurance policy issued to the offending vehicle is an 'Act only' policy which does not cover the risk to the passengers who are not carried for hire and reward and deceased having travelled as a gratuitous passenger in the car, the learned Tribunal was wrong in saddling the liability on the insurance company. Placing reliance upon the decisions in the case of The General Manager, United Insurance Co. Ltd. Vs. M. Laxmi and Others, AIR 2009 SC 626, Oriental Insurance Co. Ltd. Vs. Sudhakaran K.V. and Others, AIR 2008 SC 2729; and United India Insurance Co. Ltd., Shimla Vs. Tilak Singh and Others, AIR 2006 SC 1576, it is contended that when the policy does not cover the risk of a gratuitous passenger, the liability fastened upon the insurance company is contrary to the judgment of the Apex Court. Therefore, that portion of the award is liable to be set aside.

3. The impugned award in fastening the liability upon the insurance company is also liable to be set aside in view of the letter of the R.T.O., Sundergarh, Exh. D, wherein it is reported that the driver of the offending vehicle did not possess a valid and effective licence. Hence there is violation of the terms and conditions of the insurance policy by the owner of the offending vehicle. Therefore, fastening the liability upon the insurance company is contrary to the judgments of the Supreme Court in National Insurance Co. Ltd. Vs. Vidhyadhar Mahariwala and Others, AIR 2009 SC 208, Bhuwan Singh Vs. Oriental Insurance Company Ltd. and Another, AIR 2009 SC 2177 ; The New India Assurance Company Limited Vs. G. Sampoorna, (2010) 5 ALT 105 and Others, and National Insurance Co. Ltd. Vs. Parvathneni and Another, (2009) 8 SCC 785. Further reliance is placed upon the decision of the Apex Court in the case of National Insurance Co. Ltd. Vs. Baljit Kaur and Others, AIR 2004 SC 1340, wherein at para 17 interpreting provisions of section 147(1) of the Act with regard to the meaning of 'any person' it has been observed that 'any person' includes the owner of the goods or his authorised representative carried in the vehicle, besides the third party. In the case of Baljit Kaur (supra), reliance is placed upon the decision in the case of New India Assurance Co. Ltd. Vs. Asha Rani and Others, AIR 2003 SC 607, wherein it has been opined that 'any person' must also be attributed having regard to the context in which they have been used, i.e., 'a third party'. Therefore, the appellant insurance company is not liable to pa