The judgment emphasizes the liability of the insurer in a Comprehensive Policy and the inability to deny indemnity based on a chance statement by a witness.

K.Kannan, J.

1. (3rd August, 2010) - The insurance company challenges the liability on the ground that the vehicle had been actually transferred and the same had not been brought to the notice of the insurer. The contract of insurance will come to an end and the liability could not be fastened on the insurer. It was the further contention of the insurance company that one of the witnesses on the side of the claimant, Sunder Singh PW4, had admitted that all the passengers in the car had hired it as a taxi and the accident had taken place by the negligent driving of the driver of the taxi. The last contention raised was that the Tribunal determined the compensation at Rs.3,16,000/- for the representatives of the decease, who was 37 years of age. The Tribunal adopted a multiplier of 16, which was high and runs counter to the several decisions of the Honble Supreme Court with regard to the quantum and choice of multiplier.

2. On the issue of liability of the insurer notwithstanding the transfer of the vehicle, the matter has been finally settled by a decision of the Honble Supreme Court in United India Insurance Co. Ltd. Shimla v. Tilak Singh and others, (2006-2)143 P.L.R. 297 where the registered owner was contesting the case and the plea of transfer itself had been denied. The liability of the insurer to a passenger in a Comprehensive Policy was dealt with by the Honble Supreme Court in Pushpabai Purshottam Udeshi and others v. M/s Ranjit Ginning and Pressing Co. and another 1977 A.C.J. 343. In fact, subsequent to the judgment of the Honble Supreme Court an amendment was made by the Tariff Advisory Committee by a circular dated 17.03.1978 to bind the insurer to liability accepting the interpretation as adopted by the Honble Supreme Court to Section 95 of the old Motor Vehicles Act, 1939. The third party cover under the Comprehensive Policy then prevailing from 25.03.1977 was worded as follows: "The company will indemnify the insured in the event of accident caused by or arising out of the use of the motor car against all sums including claimants costs and expenses which the insured shall become legally liable to pay in respect thereof for death or bodily injury to any person but except so far as it is necessary to meet the requirements of Section 95 of the Motor Vehicles Act, 1939. The wording of Comprehensive Policy before 25.03.1977 did not expressly cover "occupants carried in the vehicle". However, in view of the ruling of the Honble Supreme Court with the resultant position that there was no liability for occupants in a private car, TAC had deliberated the issue and came out with a Circular dated 17.03.1978 which stated as follows:

"Insurance Companys Liability in respect of Gratuitous Passengers conveyed in a Private Car-Standard Form for Private Car Comprehensive Policy - Section II - Liability to Third Parties. I am directed to inform Insurers that advices have been received from the Tariff Advisory Committee to the effect that since the industry had ail these years holding the view on liability the same practice should continue. In order to make this intention clear, Insurers are requested to arrend clause 1(a) of Section II of the Standard Private Car Policy by incorporating the following words death of or bodily injury to any person" appearing therein: Including occupants carried in the motor car provided that such occupants are carried for hire or reward I am accordingly to request insurers to make the necessary amendment on sheet 38 of the Indian Motor Tariff pending reprinting of the relevant sheet. All existing policies may be deemed to incorporate the above amendment as the above decision is being brought in to force with effect from 25t h March, 1977."

3. The Circular makes it clear that the intention was never to deny cover for liability to occupants in a private car under a Comprehensive Policy. However, in view of the Supreme Court judgment, lest it be applied even for a Comprehensive Policy, it was d