IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HON’BLE SRI JUSTICE C.V.BHASKAR REDDY M.A.C.M.A.No.1057 of 2019 DATE:11.03.2026 Between:

The United India Insurance Co. Ltd.

…..Appellant AND M.Uday Kumar and another.

….Respondents

JUDGMENT

This appeal is filed by the appellant-Insurance Company under Section 173 of the Motor Vehicles Act, 1988, challenging the judgment and decree dated 11.08.2011 passed in O.P.No.854 of 2007 by the Chairman, Motor Accidents Claims Tribunal-cum-IV Additional District and Sessions Judge (FTC), Mahabubnagar (for short, “the Tribunal”), whereby the Tribunal awarded an amount of Rs.80,000/- as compensation, with interest at 7.5% per annum from the date of petition till realization, for injuries sustained by respondent No.1 in a motor vehicle accident.

2. The brief facts of the case are that on 16.05.2007 at about 7:30 P.M., the respondent No.1 was travelling in a Jeep bearing No.AP-09- AF-8054 from Shadnagar towards Keshampet. When the said vehicle reached the limits of Vemulnarva village, the driver of the jeep drove the vehicle in a rash and negligent manner and dashed against an oncoming tractor. As a result, the respondent No.1 sustained fracture injuries. He was treated at NIMS Hospital and Sri Sai Krishna Neuro Hospital, Hyderabad. A criminal case in Crime No.29/2007 was registered by the Keshampet Police for the offence under Section 337 IPC. The respondent No.1 filed the aforesaid claim petition seeking compensation of Rs.2,00,000/- for the injuries sustained by him. The Tribunal, after considering the evidence of PW-1 and RW-1 and documents Ex.A-1 to A-4 and Ex.B-1, awarded compensation of Rs.80,000/-with interest at the rate of 7.5% per annum from the date of the petition till the date of realization, fastening liability jointly and severally on the owner and the insurer. Aggrieved by the same, the present appeal is filed by the appellant/Insurance Company

3. Learned Standing Counsel for the appellant/Insurance Company contended that the Tribunal failed to appreciate that the insurance policy issued in respect of the offending vehicle is only an “Act Policy”, which does not cover the risk of inmates of the insured vehicle. It is further contended that the claimant was travelling in the vehicle as a gratuitous passenger and cannot be treated as a third party within the meaning of the policy, and that no additional premium was paid to cover the risk of occupants/inmates of the vehicle. It is submitted that only a comprehensive/package policy would extend coverage to such inmates and that the Tribunal erred in treating the inmate as a third party and in fastening the liability on the insurer. Learned Standing counsel placed reliance upon the judgment of the Hon’ble Supreme Court in United India Insurance Co. Ltd. v. Tilak Singh, 12006 ACJ 1441, wherein it was held that the Insurance Company is not liable to pay compensation in respect of a gratuitous passenger travelling in a private vehicle when the policy is only an Act Policy. Learned counsel also relied upon the judgment of the Division Bench of the erstwhile High Court in Branch Manager, United India Insurance Co. Ltd. v. Kondakotla Saroja, 2008(5) ALD 288 (DB), wherein it was held that in the absence of payment of additional premium covering the risk of passengers, the Insurance Company cannot be held liable. Therefore, it is contended that the Tribunal erred in treating the inmate as a third party and fastening the liability on the insurer, i.e., the appellant–Insurance Company, without properly examining the nature

and coverage of the policy. Thus the learned Standing Counsel prayed this Court to set aside the impugned judgment and decree passed by the Tribunal.

4. There is no representation on behalf of respondents.

5. As seen from the material placed on record, the evidence of RW.1 (Branch Manager of the Insurance Company) and the policy marked as Ex.B-1 establish that the policy in question was an “Act Policy”. The Tribunal,