1. Motor accident claim — Pillion rider injured — Appeal against award by insurer disputing liability. (Para 1 , 2 , 3 )
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2025 Supreme(Online)(Mad) 74221
IN THE HIGH COURT OF JUDICATURE AT MADRAS
K.K. Ramakrishnan, J
United India Insurance Co. Ltd. – Appellant
Versus
R Selvaraj – Respondent
C.M.A.(MD)No.667 of 2025 | C.M.P.(MD)No.10481 of 2025
Advocates:
For the Appellants/Petitioners: B. Rajesh Saravanan
For the Respondents: N. Sudhagar Nagaraj
For the Appellants/Petitioners: B. Rajesh Saravanan
For the Respondents: N. Sudhagar Nagaraj
Pillion riders are covered under the Standard Motor Package Policy as per binding IRDA circulars. The requirement for a separate premium for pillion rider coverage is misconceived, making the insurance company liable to satisfy the award, potentially utilizing the 'pay and recover' principle.
Headnote:(A) Motor Vehicles Act, 1988 - Section 173 - Insurance Law - Liability of Insurance Company - Coverage of Pillion Rider - The appellant insurer contended that the pillion rider was not covered under the policy and no separate premium was paid for such coverage - It is well settled by the clarificatory circulars issued by the Insurance Regulatory and Development Authority (IRDA) dated 16.11.2009 and 03.12.2009 that passengers in private vehicles and pillion riders on two-wheelers are covered under the Standard Motor Package Policy - IRDA regulations, guidelines, and circulars are binding on insurance companies (Paras 12, 13, 14, 16.1) - The argument that a separate premium is required to cover a pillion rider is misconceived (Para 15).
Facts of the case:
The first respondent, a tailor, sustained injuries while traveling as a pillion rider on a motorcycle due to the rash and negligent driving of the rider. The Motor Accident Claims Tribunal awarded Rs.1,88,740/- with 7.5% interest, directing the insurance company to pay the amount and recover it from the vehicle owner. The insurance company appealed, arguing that the pillion rider was not covered under the policy.
Findings of Court:
The court found that the Standard Motor Package Policy, in accordance with IRDA circulars, covers pillion riders. The contention that a separate premium is necessary for such coverage, or that it was an "Act policy," is legally unsustainable.
Issues: Whether the insurance company is liable to pay compensation to a pillion rider under a Standard Motor Package Policy despite the absence of a separate premium for pillion rider coverage.
Ratio Decidendi: The court held that IRDA circulars are binding on insurance companies and that the Standard Motor Package Policy inherently covers pillion riders. Consequently, the direction to the insurance company to pay and recover the compensation from the owner is sustainable.
Result: Appeal dismissed.
Legal Category Hierarchy
- tort
- insurance law
- practice and procedure
Table of Contents
2. Insurer argued no coverage for pillion rider under Act policy. Claimant contended pillion rider is third party covered. (Para 8 , 9 )
3. IRDA circulars and judicial precedents hold that pillion riders are covered under standard motor package policies. (Para 12 , 13 , 14 , 15 , 17 , 18 )
4. Pillion riders are covered under Standard Motor Package Policy; IRDA circulars are binding on insurers. (Para 15 )
5. Appeal dismissed — Award confirmed — Insurer to pay and recover from owner. (Para 18 )
6. Is a pillion rider covered under a Standard Motor Package Policy?
Yes, per IRDA circular dated 16.11.2009, pillion riders are covered under the Standard Motor Package Policy for two-wheelers. (Para 13 , 15 )
7. Can the pay and recovery principle be applied when insurer contests liability?
Yes, the court confirmed the pay and recovery direction, allowing the insurer to recover the amount from the vehicle owner. (Para 17 , 18 )
JUDGMENT
The Civil Miscellaneous Appeal has been preferred by the Insurance Company against the award dated 28.04.2018 passed in M.C.O.P.No.598 of 2015 by the Special Subordinate Judge / Motor Accident Claims Tribunal, Tiruchirappalli.
2. The first respondent / claimant has filed a claim petition in M.C.O.P.No.598 of 2015, claiming compensation for the injuries sustained by him, in an accident that took place on 12.01.2014. The Tribunal has awarded a sum of Rs.1,88,740/- (Rupees One Lakh Eighty Eight Thousand Seven Hundred and Forty only) with interest at 7.5% per annum as compensation. Against which, the appellant / insurer has preferred this appeal.
3. A brief substance of the claim petition is as follows:
The first respondent was aged about 56 years and was working as a tailor and was earning Rs.15,000/- per month. On 12.01.2014, the first respondent as a pillion rider and one David Thomas Panneer Selvam as a rider were proceeding in a motorcycle bearing Registration No.TN-45-Y-1366 in Trichy to Chennai Bye-pass road from South to North direction near Sanjeevi Nagar opposite to ABT parcel service Trichy and at that time, the said David Thomas Panneer Selvam was riding the motorcycle in a rash and negligent manner without adhering traffic rules and dashed against the police barryguard and as a result, the first respondent sustained injuries. The first respondent was immediately taken to Atlas Hospital, Trichy. Due to the accidental injuries, he is not able to walk, stand, sit and squat. Hence, the claim petition was filed by the first respondent seeking compensation to the tune of Rs.3,00,000/-.
4. Since the rider was died, his wife added as second respondent. The Second respondent, owner of the vehicle, remained ex-parte before the Tribunal and the claim petition was opposed by the appellant.
5. A brief substance of the counter filed by the appellant is as follows:
The age, income and occupation and the manner of the accident of the first respondent are all denied. The accident was occurred only due to the rash and negligent driving of a car driver, who attempted to overtake the two wheeler rider. No extra premium was paid by the rider of the two wheeler to the pillion rider. The claim of compensation is excessive and exorbitant.
6. On the side of the first respondent, 2 witnesses were examined as P.W.1 and P.W.2 and 8 documents were marked as Ex.P.1 to Ex.P.8. On the side of the appellant, 1 witness was examined as R.W.1 and 1 document was marked as Ex.R.1.
7. The learned trial Judge, after considering the evidence, both oral and documentary, passed the impugned award dated 28.04.2018, holding that the two wheeler rider was responsible for the accident and directed the appellant to pay the award amount of Rs.1,88,740/- to the first respondent and then to recover the same from the second respondent. Aggrieved by the said award, the appellant has come up with the present appeal.
8. The learned counsel appearing for the appellant would submit that the Tribunal failed to consider the fact that the first respondent was travelling in the two wheeler as a pillion rider, which was not covered by the insurance policy issued by the appellant and that the Tribunal ought not to have applied pay and recovery theory as there is no liability on the appellant.
9. The learned counsel appearing for the first respondent would submit that the pillion rider should be treated as third party contract of insurance and therefore, he is covered by the policy. Hence, he prayed for sustaining the award passed by the Tribunal.
10. I have carefully considered the submission made by the learned counsel on either side and perused the materials available on record.
11. Though the learned counsel appearing for the appellant would submit that they have not disputed the quantum of compensation awarded at by the Tribunal and only disputed the liability.
12. With regard to liability, in Ex.R.1, the heading itself shows that it is a Motorcycle / Scooter Liability
