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2024 Supreme(Online)(MAD) 22642
HIGH COURT OF MADRAS
Honourable Mr Justice N. SESHASAYEE
THE MANAGING DIRECTOR – Appellant
Versus
A. SIVA – Respondent
C.M.A.No.1362 of 2023 and CMP.No.13621 of 2023
Mr.S.Arun Kumar for Appellant; Mr.A.R.Nixon for R1 to R3; Mr.M.B.Raghavan for R5
The pillion rider of a motorcycle is not considered a third party under standard insurance policies unless explicitly included, limiting the insurer's liability.
Headnote:
Insurance - Motor Vehicle Accident - Motor Vehicles Act, 1988 - Sections 140, 147 - The court interpreted the insurance policy's definition of 'third party' and the liability of the insurance company, concluding that the pillion rider was not covered under the policy as a third party.
Fact of the Case:
A motor-cycle accident resulted in the death of a pillion rider. The insurance company contested liability, arguing the accident was caused by an unknown vehicle, while claimants sought compensation based on the rider's negligence.
Finding of the Court:
The court upheld the tribunal's finding that the rider was not negligent and ruled that the insurance policy did not cover the pillion rider as a third party, limiting compensation to no fault liability under the Motor Vehicles Act.
Issues: Whether the rider of the motor cycle was negligent and if the insurance company was liable for the pillion rider's death under the insurance policy.
Ratio Decidendi: The court determined that the rider was not negligent as per the FIR and that the insurance policy did not extend coverage to the pillion rider as a third party.
Final Decision: The appeal was dismissed, and the insurance company was directed to pay no fault liability of Rs.50,000 to the claimants.
JUDGMENT
This civil miscellaneous appeal is preferred by the insurance company of the vehicle owned by the fourth respondent and drove by the first respondent, challenging an award passed in MCOP.No.63 of 2020 by the Motor Accidents Claims Tribunal / Additional Subordinate Judge, Madurantakam.
2. The brief facts are that on 11.06.2020, the first respondent with his wife in the pillion was riding a motor-cycle bearing registration No.TN 13 Q 3915 which belonged to the fourth respondent herein. According to the claimants/respondents 1 to 3, the rider of the vehicle, the husband of the victim (the first respondent) drove the vehicle rashly and negligently and dashed against the road median, and it resulted in the death of the pillion rider. Seeking compensation, the heirs of the victim approached the Tribunal. 3. The insurance company raised a defence that the accident had occasioned when an unknown car came into contact with the bike, and placed reliance on the averments made in the FIR as well as the Accident Register of the victim.
4. The victim was 40 years at the relevant time and was stated to be a maid servant, and was earning a monthly income of Rs.8,000/-. The Tribunal applied 15 as the multiplier and added another 40% towards future prospects and deducted 1/3rd towards the personal expenditure of the victim, and arrived at the net value of dependency at Rs.13.44 lakhs. After adding other conventional heads of compensation, which incidentally did not include the compensation for loss of love and affection for the the children of the victim, the tribunal arrived at a total compensation of Rs.14.14 lakhs.
5. On the point of negligence, the tribunal had held that the cause of the accident was entirely due to the negligence of the driver of the unknown car.
In other words, the Tribunal had rejected the case of the claimants that negligence of the rider of the motor cycle was the cause of death of the pillion rider.
6. The learned counsel appearing for the appellant made the following submissions: When the negligence is found against the driver of the unknown vehicle and not on the rider of the motor cycle, then, the owner and the insurance company of the motor cycle in which the deceased was travelling cannot be made liable to pay compensation. He also added that the driver of the two wheeler did not possess a valid driving licence at the time of accident. 7. Per contra, the learned counsel appearing for the respondents 1 to 3/ claimants submitted along the line of reasoning of the Tribunal, and argued: a) that the accident had occasioned when the rider of the motor cycle dashed against the median;
b) that the Conditions of Policy enumerated in Section-II of the policy provides for an enlarged meaning of the expression Third Party to include the passenger of the vehicle. Therefore, notwithstanding the commonly understood position that a pillion rider of a motor cycle would not be a third party, in terms of the special definition given in Ext.P10 = Ext.R1 policy to Third Party, even a pillion rider, being a passenger of the two wheeler has to be treated as a third party.
Therefore, the insurance company is still liable to pay compensation.
8. Replying to the same, the learned counsel for the appellant submitted:
a) Ext.P10 = Ext.R1 is a bundle policy which was prepared in tune with the IRDAI circulars dated 28.08.2018 and 21.06.2019. As per the IRDAI circular dated 28.08.2018, any third party liability shall be for a minimum of five years in case of two-wheeler. Accordingly, the period of insurance cover differ in the case of (i) third party liability and (ii) comprehensive liability. So far as comprehensive liability including Personal Accident cover are concerned, it will be for one year period whereas for third party liability it will be for five years. Accordingly, in the instant case, the comprehensive liability cover and PA cover would be for a period of one year from 25.02.2019 to 24.02.2020, and the third party liability cover
