Insurance policies must be interpreted based on their contractual terms, including liability coverage for gratuitous passengers.

J U D G M E N T

This is an appeal preferred against the award of the M.A.C.T, Kottayam in O.P.(MV)No.1560/2004. The claimant was a passenger in a private jeep. It met with an accident as a result of which he sustained injuries. He had claimed a compensation of Rs. One lakh and the Tribunal has awarded him Rs.15,500/=. It also directed the insurance company to pay the amount. It is against that d ecison, the insurance compnay has come up in appeal.

2. The learned counsel for the insurance company strongly contends before me that the person was traveling as a passenger in a private jeep which means that he was a gratuitous passenger and as the terms of the policy does not cover the risk of such passengers the insurance compnay is not liable to pay the amount. He had also referred to a decision of the Full Bench reported inMathew Joseph v. Janaki ( 2007 (1) KLT 747 ). In the said decision, the Full Bench of this Court had held that merely because a policy is comprehensive policy or a package policy it does not cover all the risks and uless premium is collected with respect to a particular coverage, it will not entitle the owner to have indemnified. A Divisin Bench of this Court in the decison reported inMathew v. Shaji Mathew ( 2009 (3) KLT 813 ) held that mere existence of a comprehensive policy is not a pointer to the unlimited liability of Insurance Company. It depends on the construction of contract. So, this Court held that it is the construciton of the contract that has to be considered in all cases. The court also referrd to a ruling of a Division Bench of this Court reported inNew India Assurance Co. Ltd. v. Hydrose ( 2008 (3) KLT 778 ). It w as a case wherein Division Bench of this Court was considering the question regarding the coverage of a passenger and it was held that by virtue of Section II (1) of the terms of the contract cover the liability and therefore the insurance company is liable to pay the amount. In the decision referred to by me above the clauses had been extracted and it is the very same clause which is the subject matter of this case that was also considered by the court. The court after considering the entire materials had summarised it in Paras 16 and 17 of the judgment. It is stated therein that we can safely hold that this is a case where under the contract of insurance, the insurance compnay has undetaken an extended liabilly by virtue of the words employed. We have already dealt with the words which according to the insurance company qualify the liability and found that there is no merit in the contention that the word limit or abridge the liability . Clearly this is a case where as held by a Bench of this Court in New India Assurance Co. Ltd. v. Hydrose ( ) the company has undertaken the liability in respect of a gratuituous passenger. Going by the Schedule of premium we find that basic is shown as Rs.500/=. According to the owner, it would cover the liability which is referred to us in Section II (1). In Para 17 it is stated that going by the terms of the policy clearly the insurance company has undertaken the liability. As stated by me earlier, the very same condition was the subject matter of the decision referred to above and therefore, by virtue of the judicial pronouncements of this Court the insurance compnay cannot get exonerated from the liability and therefore it is liable to pay the amount.

In the result, the appeal fails and the same is dismissed.

M.N.KRISHNAN, JUDGE cl