Statutory act-only insurance policies do not cover risks to gratuitous passengers, limiting insurers' liability.

JUDGMENT

This appeal has been filed by the third respondent insurer in OP(MV) No.1665 of 2004 on the files of the Motor Accidents Claims Tribunal, Thiruvananthapuram, challenging the liability to pay the compensation awarded to the claimant. The first respondent herein is the claimant and respondents 2 & 3 herein were the respondents 1 & 2 before the tribunal.

2. The case of the claimant was that on 21.07.2004, while the deceased was pillion riding on a motorcycle bearing Reg.No.KBT-9146 through the Thiruvananthapuram-Kollam NH ridden by the second respondent in a rash and negligent manner, the motorcycle hit a student and thereafter, it capsized, whereby he sustained serious injuries. The claimant approached the tribunal claiming a total compensation of ₹2,00,000/-.

3. Respondents 1 and 2, who are the owner and rider of the offending vehicle respectively, remained ex parte before the tribunal. The respondent insurer filed a written statement, admitting the policy coverage for the offending vehicle, but disputing the liability and quantum of compensation claimed.

Exts.A1 to A14 & B1 were marked. The tribunal, after analysing the pleadings and materials on record, held that the accident took place on account of the negligence of the rider of the offending vehicle and awarded a sum of ₹77,860/- as compensation under different heads with interest @ 9% per annum from the date of petition till realization against the third respondent being the insurer. However, finding that there was a smell of alcohol, 20% of the compensation was deducted from the total compensation. The respondent insurer has come up in appeal, challenging its liability to pay compensation.

4. Heard the learned Standing Counsel for the appellant/respondent insurer and the learned counsel for the respondent/claimant.

5. The learned Standing Counsel for the appellant insurer submitted that the claimant was a pillion rider on the motorcycle and that the policy issued to the offending motorcycle was an act only policy and it does not cover the risk of pillion rider. It is further submitted that though they had raised the said contention in the written statement filed before the tribunal, without considering the same, the tribunal awarded compensation to the pillion rider finding negligence on the part of the rider and directed the insurer to pay the same, which cannot be sustained. In support of the contentions, the learned Standing Counsel relied on the judgment of the apex court in United India Insurance Co. Ltd, Shimla v. Tilak Singh & others [(2006) 4 SCC 404] and the judgments of this Court in New India Assurance Co. Ltd. v. Daisy Paul & Another [2021 (2) KHC 449] , New India Assurance Co. Ltd v. Sakuntala Roy [2025 KHC OnLine 10287] and National Insurance Co. Ltd. v.

Ummalimma [2025 KHC OnLine 902].

6. The learned counsel for the first respondent/claimant, on the other hand, submitted that even if the policy issued to the offending motorcycle was an act only policy, the insurer ought to have paid the amount and if at all they can recover from the owner. According to the learned counsel for the claimant, the claimant is a third party; and hence, the tribunal has rightly directed the insurer to pay compensation to the claimant. The learned counsel relied on the judgment of the apex court in Akula Narayana v. The Oriental Insurance Co. Ltd. & another [2025 KHC 7603] and Sunita & others v. United India Insurance Co. Ltd. & others [2025 KHC 7404] in support of the arguments.

7. I have considered the rival contentions raised on both sides.

8. The core issue to be decided in this case is whether the statutory insurance policy