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2024 Supreme(Online)(TS) 6008
HIGH COURT OF TELANGANA
K.SURENDER, J
Branch Manager – Appellant
Versus
Mrs. Avitha Awari – Respondent
MACMA/1112/2010
The act policy does not cover inmates of the vehicle, only third parties, thus exonerating the insurance company from liability for the claimants' injuries.
Headnote:(A) Motor Vehicles Act, 1988 - Insurance Policy - The claimants, family members of the car owner, sought compensation for injuries sustained in an accident involving the car and a lorry. The Insurance Company contended that the act policy did not cover inmates of the car, as established in National Insurance Co.Ltd. v. Balakrishnan (2013) 1 SCC 731 and United Insurance Company Limited vs. Prabha Sarkar (2014) SCC 719. (Paras 5-7)
(B) Third Party Coverage - The court addressed whether inmates of the car could be treated as third parties under an act policy. The court found that the act policy only covers third parties and does not extend to the driver or inmates of the vehicle. (Paras 7-8)
Facts of the case:
The claimants were injured when their car collided with a lorry while traveling from Maharashtra to Hyderabad. The Insurance Company denied liability based on the type of policy in force.
Findings of Court:
The Tribunal's finding that the claimants were third parties was incorrect; the act policy does not cover inmates of the vehicle.
Issues: The main issue was whether the claimants, as relatives of the owner, could be classified as third parties under the act policy.
Ratio Decidendi: The court ruled that the act policy does not cover the driver or inmates of the vehicle, affirming the principle that only third parties are covered under such policies.
Result: Appeals allowed; the Insurance Company is exonerated from liability but must pay the awarded sum to the claimants.
Aggrieved by the award dated 05.11.2008 in O.P.Nos.706 of 2004, 705 of 2004, 707 of 2004 and 708 of 2004 passed by the Motor Accident Claims Tribunal-cum-V Addl. District Judge (FTC), Nizamabad, the Insurance Company has filed the present appeals.
2. Since the claimants in all these appeals were injured in the very same accident, all the appeals are disposed by way of common judgment.
3. Heard Sri Kota Subba Rao, learned counsel for the appellant/Insurance company and Sri Janardhan Reddy, learned counsel for respondents/claimants.
4. The claimants who are the family members of the owner of the car were proceeding towards Hyderabad from Chandrapur town of Maharashtra State. By the time they reached Adloor, Yella Reddy bus station on NH7, the driver of the Maruthi car drove in high speed and dashed against a lorry which was coming in opposite direction. The claimants in all the cases have filed claim petitions for receiving injuries in the said accident.
5. The main contention of the Insurance company is that Ex.B1 is an act policy and it will not cover the inmates of the car. The claim was made from the insurer of the car, in which they were travelling. Unless, it is a comprehensive policy, the question of covering compensation to the said inmates of the car would not arise. He relied on the Judgment of Hon’ble Supreme Court in National Insurance Co.Ltd. v. Balakrishnan1. The Hon’ble Supreme Court was dealing with similar situation wherein, the inmates of the car filed for compensation. It was held that since it is an act policy, the inmates of the car would not be third parties and accordingly, the compensation was denied.
6. On the other hand, the learned counsel for the claimants would submit that the trial Court had correctly passed order on the basis of record available. Since inmates of the car are all relatives of the owner, they had to be treated as third parties.
7. The said argument of the learned counsel appearing for the claimants cannot be accepted. The act policy would cover only a third party. The third party excludes the driver of the vehicle and the inmates of the vehicle which is insured by way of act policy. The Hon’ble Supreme Court in United Insurance Company Limited vs. Prabha Sarkar 2 also held that the owner of the vehicle cannot be extended the benefits meant for third parties. The finding of the Tribunal that the persons travelling in the car would be third parties is incorrect.
8. Accordingly, all the appeals are allowed and the impugned orders are modified to the extent of liability of appellant/Insurance company. The liability of insurance company is exonerated, however, directed to pay the awarded sum to the claimants. Thereafter, appellant/Insurance company would be entitled to recover the entire paid awarded sum from the owner of the offending vehicle. No costs. 2 (2014) SCC 719
9. Accordingly, the appeal is allowed and the impugned order is modified to the extent that respondent Insurance company is accordingly directed to pay the awarded sum to the claimants. Thereafter, respondent Insurance company would be entitled to recover the entire paid awarded sum from the owner of the offending vehicle. No costs. Pending miscellaneous petitions, if any, shall stand closed.
