Insurance contracts must be interpreted based on their specific terms, which can extend coverage to pillion riders unless explicitly excluded.

J U D G M E N T

This appeal is preferred against the award of the Motor Accidents Claims Tribunal, Ernakulam in O.P.(MV)1534/00. The claimant, a pillion rider sustained injuries in a road accident and he has been awarded a total compensation of Rs.22,833/-. The Tribunal exonerated the insurance company from the liability and directed the amount to be recovered from respondents 1 and 2 jointly and severally. It is against that decision exonerating the insurance company from the liability and for enhancement the appeal is preferred.

2. So far as the quantum of compensation is concerned it can be seen from the record that the claimant had sustained a fracture on the ulna and he was an inpatient in the hospital for four days. It is also seen that he had also a fracture on the tarsal bone left foot and abrasions on other parts of the body as well. Taking into consideration these aspects it is certain that he would have suffered loss of amenities and enjoyment in life for which I enhance an amount of Rs.3,000/- under that head.

3. Now the next question is regarding the liability of the insurance company. The Tribunal held that all comprehensive policies do not cover the risk of a pillion rider. It is true that merely on the basis of payment of premium on some heads a pillion rider will not be covered. A comprehensive policy may cover the risk of third party as well as own property damage and some times the extended personal accident coverage. Therefore it is clear from this case also that additional premium as such is not paid to cover the risk of a pillion rider. But what will be the position when the terms and conditions of the insurance contract shows it otherwise. Clause (II)(i) of the terms of insurance contract is extracted as follows:

'death of or bodily injury to any person conveyed in or on the motor cycle provided such person is not carried for hire or reward'

So there is a specific term of contract of insurance which cast the liability on the insurance company. This decision came up for consideration before a Division Bench of this Court in the decision reported in New India Assurance Co. Ltd. v.

Hydrose [2008 (3) KHC 522(DB). This Court held that, “The above clearly states that the insurer has undertaken liability in respect of death or bodily injuries to any person including a person conveyed in or on the motor cycle provided such person is not carried for hire or reward.”

It was also held that there was no limitation of liability mentioned in the Schedule. Therefore in the light of the specific terms in the contract the finding of the Tribunal that the insurance company is not liable to pay is wrong and it requires to be set aside. Therefore the said finding is set aside and the insurance company is made liable to pay the amount.

4. In the result the MACA is partly allowed and the claimant is awarded an additional compensation of Rs.3,000/- with 7.5% interest on the said sum from the date of petition till realisation and the insurance company is directed to deposit the same within a period of sixty days from the date of receipt of a copy of the judgment.

5. It is also made clear that the insurance company is liable to pay the entire amount ordered under the award as it is made liable to indemnify the owner of the vehicle.

The MACA is disposed of accordingly.

M.N. KRISHNAN, JUDGE.

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