An insurance company is not liable for a claim if the insurance policy only covers statutory obligations and the involved party is not endorsed under that policy.

JUDGMENT

This appeal is filed by the 3rd respondent insurer in O.P.

(MV) No.356 of 2011 on the file of the Motor Accidents Claims Tribunal, Kasaragod, challenging the liability to pay the award amount. The respondents herein are the claimant and respondents 1 and 2 before the tribunal.

2. Brief facts of the case are as follows: On 03.01.2011, at about 04.00 p.m., while the claimant was pillion riding on a motorcycle bearing registration No.KL-09/L-8153 towards Kanhangad side, a car bearing registration No.KL-11-L-5959 driven by the first respondent in a rash and negligent manner hit against the motorcycle and as a result, the claimant sustained serious injuries. The claimant approached the tribunal claiming a total compensation of ₹3,42,000/- which is limited to ₹3,00,000/-.

3. Though notice was issued on first and second respondents, the driver and the owner of the offending vehicle respectively, they remained absent and were set ex parte before the tribunal. The third respondent - insurer filed a written statement admitting the insurance policy to the extent of liability only policy, disputing the liability and quantum of compensation claimed. They contended that the pillion rider is not covered by the policy issued since the policy is an Act only policy and no extra premium was collected for the pillion rider. Before the tribunal, Exts.A1 to A5 and A6 series and Ext.B1 were marked. The tribunal, after analysing the pleadings and materials on record, the appellant/claimant was awarded a sum of ₹1,22,850/- as compensation under different heads with interest @ 9% per annum from the date of petition till realization with proportionate costs against the third respondent insurer and further recover the same from the second respondent/owner. Challenging the liability to pay the compensation awarded, the third respondent - insurance company has come up in appeal.

4. Heard the learned standing counsel for the appellant/insurance company and the learned counsel for the respondent/claimant.

5. The learned standing counsel appearing for the insurance company submitted that the injured was a pillion rider on a motorcycle and that the policy was a statutory (Act only) policy. It was further submitted that, although the tribunal found that the insurance company was not liable to pay the award and that the second respondent–owner was liable to pay the compensation, in the operative portion of the award, at point No. 6, the tribunal mistakenly directed the insurance company to pay the amount and then recover the same from the second respondent–owner.

6. The learned counsel for the respondent/claimant, however, submitted that the tribunal had rightly directed the insurance company to pay and then to recover the said amount from the owner of the vehicle.

7.On a perusal of the award, it is seen that the tribunal, in paragraphs 18 and 19, found that since the policy was an “Act only” policy, the insurance company was not liable to pay any amount, and the contention raised by the insurance company was found to be sustainable. In paragraph 19, it is specifically stated that the second respondent–owner is liable to pay the amount. However, in the operative portion of the award, the tribunal has directed the third respondent–insurer to pay the amount and granted the insurer the right to recover the same from the second respondent–owner. There is no discussion in the award regarding a recovery right granted to the insurer. Since the finding in the award was that the second respondent– owner is liable to pay the amount, I find that the direction in the operative portion cannot be sustained, even following the Apex Court judgment in United India Insurance Co. Ltd, Shimla v. Tilak Singh & others [(2006) 4 SCC 404] and the judgments