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2008 DIGILAW 482 (KER)

Babu Mathew v. Biju Mathew

2008-08-11

M.N.KRISHNAN

body2008
Judgment : 1. This appeal is preferred against the award of the Motor Accidents Claims Tribunal, Ernakulam in O.P. (MV) No.1126 of 2000. The claimant has challenged the finding of the Tribunal, whereby the Tribunal has exonerated the insurance company from indemnifying the owner. The Tribunal held that "thus notwithstanding the nomenclature, Ext. B1 does not suggest that any amount has been collected by the third respondent to cover the risks of persons other than third parties or own damage of the vehicle. In the circumstances, the third respondent has no liability to indemnify the second respondent, the insured". 2. Learned counsel for the appellant had made available before me the copy of the policy with the terms and conditions. Admittedly it is a B policy which means that it is a comprehensive policy. Section II-Liability to Third Parties. Under S.11(1) of the conditions attached to the policy it is stated that "subject to the limits of liability as laid down in the Schedule hereto the company will indemnify the insured in the event of an accident caused by or arising out of the use of motor cycle against all sum including the claimants costs and expenses which the insured shall become legally liable to pay instead of (i) death or bodily injury to any person including person conveyed in or the motor cycle provided such person is not carried for hire or reward". Learned counsel would contend that by the terms and conditions of the policy referred to above, the person travelling as a pillion order is also covered by virtue of this clause. Recently a Division Bench of this Court had considered this aspect in MACA 1380/2008 by judgment dated 7.2008. There also it was a B policy and S.11(1)(i) of the conditions attached to the policy revealed that as per the terms and conditions of the policy, the persons travelling in the vehicle are covered. The very same condition was considered and the Division Bench of this Court held that "the above clearly states that the insurer has undertaken liability in respect of death or bodily injuries to any person including a person conveyed in or on the motor cycle provided such person is not carried for hire or reward. Here, no limitation of liability is mentioned in the Schedule. Here, no limitation of liability is mentioned in the Schedule. In fact specific coverage is provided for the risk of gratuitous passenger as per the conditions of policy regarding the coverage of risk due to death or bodily injury to any person, provided, the person is not carried for hire or reward". So the very same clause which is relied on by the appellant has been interpreted and found that it covers a pillion rider travelling in a motor bike. 3. There is no embargo for entering into such a contract is also very clear from the decision of the Apex Court in Amrit Lal Sood & Anr. v. Kaushalya Devi Thapar (1998 (1) KLT SN 82 (C.No.82) SC = (1998) 3 SCC 744). The purport of this decision was considered by the Apex Court in a Larger Bench decision reported in New India Assurance Co. Ltd. v. Jaya (2002 (1) KLT 596 (SC) = (2002) 2 SCC 278). The Supreme Court held as follows: "On a careful reading and analysis of the decision in Amrit Lal Sood (supra), it is clear that the view taken by the Court is not different. In this decision also, the case of fugal Kishore is referred to. It is held (i) that the liability of the insurer depends on the terms of the contract between the insured and the insurer contained in the policy; (ii) there is no prohibition for an insured from entering into a contract of insurance covering a risk wider than the minimum requirement of the statute whereby risk to the gratuitous passenger could also be covered; and (iii) in such cases where the policy is not merely statutory policy, the terms of the policy have to be considered to determine the liability of the insurer. Hence, the Court after noticing the relevant clauses in the policy, on facts found that under 5.11 (a) of the policy, the insurer has agreed to indemnify the insured against all sums which the insured shall become legally liable to pay in respect of death of or bodily injury to "any person". The expression "any person" would undoubtedly include an occupant of the car who is gratuitously traveling in it. The expression "any person" would undoubtedly include an occupant of the car who is gratuitously traveling in it. Further, referring to the case of Pushpabai Purushottam Udeshi (supra), it was observed that the said decision was based upon the relevant clause in the insurance policy in that case which restricted the legal liability of the insurer to the statutory requirement under S. 95 of the Act. As such, that decision had no bearing on Amrit Lal Sood’s case as the terms of the policy were wide enough to cover a gratuitous occupant of the vehicle. Thus, it is clear that the specific clause in the policy being wider, covering higher risk, made all the difference in Amrit Lal Soods case as to unlimited or higher liability. The Court decided that case in the light of the specific clause contained in the policy, the said decision cannot be read as laying down that even though the liability of the insurance company is limited to the statutory requirement, an unlimited or higher liability can be imposed on it." It was made very clear that if there is a condition in the policy then necessarily the insurance company has to pay the liability. 4. Recently a Division Bench of the Madhya Pradesh High Court has considered this question in the decision reported in National Insurance Company Ltd. v. Brijlata & Ors. (2008 (2) TAC 888 (M.P.)). There also after reviewing the case law and also the conditions of the policy, the Division Bench held that there is no provision in the tariff for payment of extra premium for passenger in a private car which also shows that the passengers in a private car are covered without paying any additional premium. It has to be stated that in Tilak Singhs case, (2006 (2) KLT 884 (SC) = 2006 ACJ 1441) the Apex Court was only considering the question of liability basing upon an Act only policy. The Apex Court held that in an Act only policy, there is no wider coverage and so the statute does not permit the Court to grant relief against the insurance company. So far as this case is concerned, being a comprehensive policy which contains a specific clause so as to cover a person traveling in a motor bike then it is the contractual liability that has to be looked into. 5. So far as this case is concerned, being a comprehensive policy which contains a specific clause so as to cover a person traveling in a motor bike then it is the contractual liability that has to be looked into. 5. Therefore the finding of the Court below that the insurance company is not liable to indemnify the owner is to be set aside and it has to be held that the amount has to be paid by the insurance company. The quantum fixed is not interfered with and therefore the appeal is allowed and the insurance company, viz., the 3rd respondent in the claim petition is directed to deposit the amount ordered to be paid by respondents 1 and 2 within 60 days from the date of receipt of a copy of this judgment.