The terms of a motor vehicle insurance policy, including an 'act only policy', can be interpreted to cover passenger risk, even if the policy does not specifically mention such coverage.

( 1 ) SUSTAINABILITY of the award dated 22-7-1996, passed by the Motor Accident Claims Tribunal, Mandla in Claim Case No. 41/94 granting compensation of Rs. 2,22,667/- in favour of legal heirs of the deceased, the respondents Nos. 1 to 8 herein, is called in question by the insurer, Oriental Insurance Company Limited.

( 2 ) THE factual scenario as depicted is as follows :-On 6-5-1993 one Mohanlal boarded a jeep bearing registration No. M. P. 20-A/5692 which was coming from Mandla to Jabalpur. The jeep was driven by Hukumsingh, the respondent No. 9, and owned by Sanjay, the respondent No. 10. As put forth by the claimants the deceased had travelled in the jeep as a gratuitous passenger and was sitting in the front. The jeep was being driven in a high speed. The driver, as alleged, had exhibited rashness and gross negligence. As misfortune would have it, the vehicle deshed against an electric-pole at village Udaipur as a result of which it fell into a ditch. Mohanlal sustained injuries in the said accident and ultimately succumbed to the same. It has been set forth in the petition that Mohanlal was working in Ordinance Factory at Khamaria and was getting Rs. 2300/- towards salary and was receiving Rs. 1200/- towards bonus every year. He was 50 years of age at the time of accident. Stating all these facts the legal heirs advanced a claim of Rs. 5,53,000/- towards compensation.

( 3 ) THE aforesaid claim petition was resisted by the driver on the ground that the accident had occurred due to mechanical failure and not because of rash and negligent driving. The owner of the vehicle was proceeded ex parte. The Insurance Company, non-applicant No. 3 before the Tribunal, disputed the claim of the legal representatives of the deceased on the ground that the vehicle in question was insured for the private use, but as the same was used for carrying passengers in breach of the policy, the insurer was not liable to pay any compensation. It was also pleaded by the Insurance Company that though the vehicle was registered as a public service vehicle, it was insured for private use and this aspect was concealed by the owner at the time of submitting proposal for insurance. The further stand of the said non-applicant is that the deceased was a fare paying passenger, and therefore, under no circumstance, the Insurance Company can be saddled with the liability.

( 4 ) ON consideration of the materials brought on record the learned Tribunal came to hold that as there was an amendment with regards to averments in the petition pertaining to payment of fare and the said amendment having been allowed the plea of the insurer that the deceased was a fare paying passenger was of no avail. The Tribunal further recorded a finding that the accident occurred due to rash and negligent driving of the driver. The Tribunal taking into consideration the income and the age of the deceased applied multiplier 13 and, thereafter reduced it by 1/3rd and arrived at the figure 1,90,667. To this Rs. 2,000/- was added towards funeral expenses, Rs. 15,000/- towards loss of consortium and 15000/- towards loss of estate. Thus the total amount of compensation came to Rs. 2,22,667/ -. Thereafter the Tribunal considering the nature, terms and conditions of the policy came to hold that Insurance Company was liable to indemnify the owner. Being of this view he directed Insurance Company to pay the awarded amount with interest at the rate of 12% per annum.

( 5 ) ASSAILING the aforesaid award, Mr. R. P. Agrawal learned counsel for the appellant has contended that the vehicle in question was insured for private use and the policy in question is an 'act only Policy', and, therefore, the Tribunal has fallen into error by holding the insurer liable to pay the compensation in regard to the death of the deceased who was a passenger in the said vehicle. His further submission is that the method of computation adopted by the Tribunal is contrary to law as has been enunciated