JUDGMENT Rajesh Bindal J.:- The claimant is in appeal before this Court challenging the finding of the Motor Accidents Claims Tribunal, Ambala (for short, ‘the Tribunal’) absolving the insurance company of the liability to pay compensation and holding the owner and driver of the vehicle responsible for the same. 2. Briefly, the facts of the case are that on 16.1.2005, the claimant-appellant was travelling in car No. HR-61/AAHQ/1458, which was being driven by respondent No. 1. When the car reached in the area of village Khan Ahmadpur, a tractor trolley came from the opposite side, which was being driven rashly and negligently and struck against the car. The car was also at a high speed. The car driver could not avoid the accident and hit against the motor cycle. As a result of the accident, the appellant sustained injuries. The learned Tribunal awarded a sum of Rs. 2,25,000/- to the appellant and held the owner and driver of the car liable to pay the compensation absolving the insurance company from indemnifying the insured. It is against this award that the claimant is before this Court submitting that the Insurance Company should be held liable to satisfy the award and not the owner of the vehicle. 3. Learned counsel for the appellant raised a brief argument, namely, that the vehicle in question was insured with respondent No. 3-insurance company and the policy was a package policy. In that eventuality, there was no requirement to pay any additional premium for the occupants of the private car, as it is covered therein. The finding recorded by the learned Tribunal absolving the insurance company only on the ground that extra premium for the occupants of the car having not been paid, the insurance company was not liable, is totally erroneous. He further submitted that an identical issue came up for hearing before Delhi High Court in MAC. APP. No. 176 of 2009 –Yashpal Luthra and another v. United India Insurance Co. Ltd. and another, decided on 9.12.2009, where the matter was examined in detail by framing the issue as to whether under a comprehensive/ package policy, the insurance company is liable to compensate for the death or injury of a pillion rider on a two-wheeler or the occupants in a private car. Ltd. and another, decided on 9.12.2009, where the matter was examined in detail by framing the issue as to whether under a comprehensive/ package policy, the insurance company is liable to compensate for the death or injury of a pillion rider on a two-wheeler or the occupants in a private car. The representatives of even the Tariff Advisory Committee (for short, ‘TAC’) and the Insurance Regulatory and Development Authority (for short, ‘IRDA’) were also heard. In the aforesaid judgment, it was finally opined that comprehensive/package policy of the two-wheeler as well as private car covers the occupants thereof and in view of the TAC and IRDA’s directives, such a plea was not permissible to the insurance company. In view of the aforesaid arguments, it was submitted that the finding of the Tribunal that the Insurance Company was not liable, deserves to be set aside. 4. On the other hand, learned counsel for the Insurance Company very fairly admitted that the policy in question has been got examined by him from the insurance company and it was found that it was a package policy. He further could not dispute the proposition of law laid down by Delhi High Court in Yashpal Luthra’s case (supra). 5. After hearing learned counsel for the parties, in my opinion, the finding recorded by the Tribunal absolving the insurance company of its liability to indemnify the insured on the ground that compensation payable to the occupants of the private car is not to be borne by the insurance company, is erroneous. Finding is based on the fact that in the column of additional premium ‘NA’ had been mentioned, meaning thereby that extra premium had not been paid for the occupants of the car. 6. Delhi High Court in Yashpal Luthra’s case examined the following issue: “Whether under a comprehensive/package policy, the insurance company is liable to compensate for the death or injury of a pillion rider on a two-wheeler or the occupants in a private car?” 7. 6. Delhi High Court in Yashpal Luthra’s case examined the following issue: “Whether under a comprehensive/package policy, the insurance company is liable to compensate for the death or injury of a pillion rider on a two-wheeler or the occupants in a private car?” 7. While noticing the fact that till 31.12.2006, TAC and w.e.f. 1.1.2007, IRDA are the statutory regulatory authorities which fix the tariff as well as terms and conditions of the policy of all the insurance companies, notice was directed to be issued to both of them regarding factual position with regard to liability of the insurance company in respect of a pillion rider on a two-wheeler and occupants of the private car under the comprehensive/package policy. The statement of Deputy Manager, TAC was recorded by the Court under Section 165 of the Indian Evidence Act, wherein he deposed that all the insurance companies are liable to pay compensation in respect of occupants of a private car w.e.f. 25.3.1977 and in respect of a pillion rider on a two-wheeler w.e.f. 2.6.1986 under the comprehensive/package policy. The statement, as extracted in the aforesaid judgment, is reproduced hereunder: “The Insurance Company is not liable in respect of the pillion rider on a scooter and occupant in a car in respect of an `Act Only’ policy which only covers the risks towards the Third Party’. In respect of Comprehensive Policy, the TAC issued a circular dated 18th March, 1978 instructing all the Insurance Companies to cover the liability towards the occupant in a car w.e.f. 25th March, 1977. There is no change in position since then and the Insurance Companies are liable in respect of liability towards the occupant of a private car under the Comprehensive Policy, which is now called a Package Policy. On 2nd June, 1986, the TAC issued instructions to all the Insurance Companies to cover the pillion rider on a scooter/ motorcycle under the Comprehensive Policy. This position continues to be till date. The Comprehensive Policy is now called a Package Policy. The instructions/circulars dated 18th March, 1978 and 2nd June, 1986 continue to be valid and effective till date and all the Insurance Companies are bound to pay compensation in respect of the liability towards a pillion rider on a scooter and occupant in a car under the Comprehensive Policy/Package Policy irrespective of the terms and conditions contained in the policy.” 8. The stand of the representative of TAC was endorsed by the Officer on Special Duty of IRDA, who also appeared in the court on 26.10.2009. The relevant portion of his statement is extracted as under: “All the Insurance Companies are liable in respect of occupant in a private car w.e.f. 25th March, 1977; and in respect of a pillion rider on a scooter w.e.f. 2nd June, 1986, under a Comprehensive Policy, now called as Package Policy. The circulars dated 18th March, 1978 and 2nd June 1986 were issued by TAC. The control and regulation of Tariff class of insurance business was taken over by Insurance Regulatory Development Authority (IRDA) w.e.f. Ist January, 2007 and IRDA has specifically reiterated the said instructions in their guidelines. The circulars dated 18th March, 1978 and 2nd June, 1986 of the TAC, contents of which were incorporated in the `India Motor Tariff effective from Ist July, 2002 continue to be operative and binding on the Insurance Companies.” 9. The court had further extracted the circular issued by IRDA to all the CEOs of the Insurance Companies on 16.11.2009 clarifying the aforesaid legal and factual position. The same is extracted below: “IRDA Ref: IRDA/NL/CIR/F&U/073/11/2009 November 16, 2009 To CEOs of all General Insurance Companies Re: Liability of Insurance Companies in respect of occupants of a Private Car and Pillion rider on a Two-Wheeler under Standard Motor Package Policy [also called Comprehensive Policy]. Insurers’ attention is drawn to wordings of Section (II) 1 (ii) of Standard Motor Package Policy [also called Comprehensive Policy] for Private Car and Two-Wheeler under the (erstwhile) India Motor Tariff. For convenience the relevant provisions are reproduced hereunder: “SECTION II – Liability to Third Parties 1. Insurers’ attention is drawn to wordings of Section (II) 1 (ii) of Standard Motor Package Policy [also called Comprehensive Policy] for Private Car and Two-Wheeler under the (erstwhile) India Motor Tariff. For convenience the relevant provisions are reproduced hereunder: “SECTION II – Liability to Third Parties 1. Subject to the limits of liabilities 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 the insured vehicle against all sums which the insured shall become legally liable to pay in respect of – (i) death or bodily injury to any person including occupants carried in the vehicle (provided such occupants are not carried for hire or reward) but except so far as it is necessary to meet the requirements of Motor Vehicles Act, the Company shall not be liable where such death or injury arises out of and in the course of employment of such person by the insured.” It is further brought to the attention of insurers that the above provisions are in line with the following circulars earlier issued by the TAC on the subject: (i) Circular M. V. No. 1 of 1978 – dated 18th March, 1978 (regarding occupants carried in Private Car) effective from 25th March, 1977. (ii) MOT/GEN/10 dated 2nd June, 1986 [regarding Pillion Riders in a Two-Wheeler] effective from the date of the circular. The above circulars make it clear that the insured’s liability in respect of Occupant(s) carried in a Private Car and Pillion Rider carried on Two-Wheeler is covered under the Standard Motor Package Policy. A copy each of the above circulars is enclosed for ready reference. The Authority vide circular No. 066/IRDA/F&U/Mar-08 dated March 26, 2008 issued under File &Use Guidelines has reiterated that pending further orders the insurers shall not vary the coverage, terms and conditions wording, warranties, clauses and endorsements in respect of covers that were under the erstwhile tariffs. Further the Authority vide circular No. 019/IRDA/NL/F&U/Oct-08 dated November 6, 2008 has mandated that insurers are not permitted to abridge the scope of standard covers available under the erstwhile tariffs beyond the options permitted in the erstwhile tariffs. All General Insurers are advised to adhere to the aforementioned circulars and any non-compliance of the same would be viewed seriously by the Authority. This is issued with the approve of Competent Authority. All General Insurers are advised to adhere to the aforementioned circulars and any non-compliance of the same would be viewed seriously by the Authority. This is issued with the approve of Competent Authority. Sd/- (Prabodh Chander) Executive Director” 10. It has further been noticed in the aforesaid judgment that on 26.11.2009, a meeting of CEOs of all the Insurance Companies was convened under the auspices of the IRDA. An amicus curiae was appointed as Observer for the meeting. The meeting was attended by the CEOs of seventeen Insurance Companies. It is noticed in the judgment that after deliberations all the Insurance Companies admitted their liability in respect of occupants in a private car and a pillion rider on a two-wheeler under the Comprehensive/Package policy. They further agreed to comply with the circular dated 16.11.2009 issued by IRDA restating the position relating to liability of the Insurance Companies. The Insurance Companies further agreed to withdraw the contrary plea, wherever taken before the Tribunals and to issue necessary instructions to their respective lawyers and operating officers within seven days. It was further agreed by the Insurance Companies that they will withdraw all the appeals filed by them before various High Courts raising this plea and also concede the liability in respect of appeals filed by the claimants before the High Courts. 11. The minutes of meeting convened by IRDA on 26.11.2009, as referred to in the aforesaid judgment and the circular issued by IRDA on 3.12.2009, are extracted below: Minutes of the meeting convened by IRDA on 26.11.2009 “5. The insurers companies have sought the advice of the learned amicus, Shri Arun Mohan in the matter. The learned amicus explained that it would be prudent on the part of the Companies to take the advice of their counsel. However, he stated that the companies may express their views freely and he will record them as stated by them. Thereafter the learned amicus noted the stand taken by the Companies on various issues as under: (i) All the Insurance Companies agreed to comply with the circular dated 16th November, 2009 issued by IRDA restating the position relating to the liability of the Insurance Companies in respect of occupants in a private car and pillion rider on a two wheeler under the comprehensive/package policies. Insurers, however, maintained that they will take up the issues of pricing with the Regulatory Authority for future. Insurers, however, maintained that they will take up the issues of pricing with the Regulatory Authority for future. (ii) With respect to the pending cases before the MACT, all the Insurance Companies have agreed to withdraw the aforesaid plea wherever taken and to issue appropriate instructions to their respective lawyers and the operating officers within 7 days. (iii) With respect to the appeals pending before the High Courts, all the Insurance Companies have agreed to issue instructions within 7 days to their respective operating officers as well as to counsels to withdraw the contest on this ground (that of pillion rider in two-wheeler or occupant in a private car). (iv) The number of appeals pending before the High Courts (whether filed by the claimants or the insurers) on this issue will be identified by the companies within a period of two weeks and the contest on this ground shall be withdrawn within a period of four weeks thereafter. (v) With respect to the appeals pending before the Hon’ble Supreme Court, all the insurance companies have agreed to inform, within a period of 7 days, their respective Advocates on record about the IRDA Circulars for appropriate advice and action. The companies have submitted that in view of the difficulty in collecting date on the number of claims pending on the issue before the MACTs, they may be given time. The learned amicus explained that collection of such date is required by the Honourable Court and efforts must be made and if there are difficulties the court may be apprised of the position. The Government companies expressed lot of difficulty in finding out the statistics on this ground because they have to work out the statistics on the basis of the information extracted from each of the file and contacting each of the advocate and also by examining the defences the advocate might have taken before the courts. However,all the insurers were unanimous that they shall abide by the orders of the High Court by not contesting the cases before MACT/High Courts on this ground at all. The learned amicus curiae advised the insurers to take immediate steps and collect the statistics at a central point for further necessary communication to the Hon’ble High Court.” Circular dated 3.12.2009 issued by IRDA. “IRDA 3rd Dec. The learned amicus curiae advised the insurers to take immediate steps and collect the statistics at a central point for further necessary communication to the Hon’ble High Court.” Circular dated 3.12.2009 issued by IRDA. “IRDA 3rd Dec. 2009 IRDA/NL/CIR/F&U/078/12/2009 To All CEOs of all General Insurance Companies (except ECGC, AIC, Staff Health, Apollo) Re: Liability of Insurance Companies in respect of occupant of a Private Car and Pillion Rider in a two-wheeler under Standard Motor Package Policy (also called Comprehensive Policy). Pursuant to the Order of the Delhi High Court dated 23.11.2009 in MAC APP No. 176/209 (sic. 2009) in the case of Yashpal Luthra Vs. United India and Others, the Authority convened a meeting on November 26, 2009 of the CEOs of all the general insurance companies doing motor insurance business in the presence of the counsel appearing on behalf of the Authority and the learned amicus curiae. Based on the unanimous decision taken in the meeting by the representatives of the general insurance companies to comply with the IRDA circular dated 16th November, 2009 restating the position relating to the liability of all the general insurance companies doing motor insurance business in respect of the occupants in a private car and pillion rider on a two wheeler under the comprehensive/package policies which was communicated to the court on the same day i.e. November 26, 2009 and the court was pleased to pass the order (dt. 26.11.2009) received from the Court Master, Delhi High Court, is enclosed for your ready reference and adherence. In terms of the said order and the admitted liability of all the general insurance companies doing motor insurance business in respect of the occupants in a private car and pillion rider on a two-wheeler under the comprehensive/package policies, you are advised to confirm to the Authority, strict compliance of the circular dated 16th November, 2009 and orders dated 26.11.2009 of the High Court. Such compliance on your part would also involve. (i) withdrawing the plea against such a contest wherever taken in the cases pending before the MACT, and issue appropriate instructions to their respective lawyers and the operating officers within 7 days. Such compliance on your part would also involve. (i) withdrawing the plea against such a contest wherever taken in the cases pending before the MACT, and issue appropriate instructions to their respective lawyers and the operating officers within 7 days. (ii) with respect to all appeals pending before the High Courts on this point, issuing instructions within 7 days to the respective operating officers and the counsels to withdraw the contest on this ground which would require identification of the number of appeals pending before the High Courts (whether filed by the claimants or the insurers) on this issue within a period of 2 weeks and the contest on this ground being withdrawn within a period of four weeks thereafter. (iii) With respect to the appeals pending before the Hon’ble Supreme Court, informing, within a period of 7 days, their respective Advocates on record about the IRDA Circulars, for appropriate advice and action. Your attention is also drawn to the discussions in the CEOs meeting on 26.11.2009, when it was reiterated that insurers must take immediate steps to collect statistics about accident claims on the above subject through a central point of reference decided by them as the same has to be communicated in due course to the Honourable High Court. You are therefore advised to take up the exercise of collecting and collating the information within a period of two months to ensure necessary and effective compliance of the order of the Court. The information may be centralized with the Secretariat of the General Insurance Council and also furnished to us. The IRDA requires a written confirmation from you on the action taken by you in this regard. This has the approval of the Competent Authority. Sd/- (Prabodh Chander) Executive Director.” 12. National Insurance Company Ltd., Oriental Insurance Company Ltd., TATA AIG General Insurance Company Ltd., IFFCO Tokio General Insurance Company Ltd., Bharti AXA General Insurance Company Ltd. and Raheja QBE General Insurance Company Ltd. admitted their liability in respect of a pillion rider on a two-wheeler and occupants in a private car under comprehensive/ package policy, before Delhi High Court. 13. Even a circular issued by respondent No. 3-company on 27.11.2009 to all the Regional In-charges and Regional Offices with regard to legal issue referred to above, as extracted in the aforesaid judgment, is reproduced hereunder: “We forward herewith the captioned circular of the IRDA dated 16.11.2009. 13. Even a circular issued by respondent No. 3-company on 27.11.2009 to all the Regional In-charges and Regional Offices with regard to legal issue referred to above, as extracted in the aforesaid judgment, is reproduced hereunder: “We forward herewith the captioned circular of the IRDA dated 16.11.2009. In the Meeting of CEOs/GMs convened by IRDA on 26.11.2009 at New Delhi, it has unanimously been decided by the PSU Companies for the time being, no fresh SLPs will be filed in the Supreme Court on the above ground and all currently pending SLPs will be dealt with as per the advice of our Counsels on a case to case basis. Further advices in this regard will be intimated in due course. Meanwhile, you are advised to take the following steps in the matter immediately. 1. Initiate immediate action, at any rate before 7.12.2009, for withdrawal of all Appeals cases filed by you in High Courts solely on the ground of lack of liability towards occupants of private cars and pillion rider of two-wheelers (not carried for hire or reward) covered under package policies. 2. If such Appeals have been filed on concurrent grounds of Quantum, Negligence etc. as well along with the above ground, file applications before High Courts to the effect that the company is not pressing the ground of lack of liability towards occupants of private cars and pillion riders of two-wheelers under package policies and thereafter continue to maintain the said appeals on the remaining grounds. 3. Segregate all MACT cases where such a pleading has been taken in our written statements, and file applications before the respective courts to the effect that the company no longer wishes to press the said pleading and continue to defend the cases on other grounds. 4. Update the data of all such cases filed Solely on the above ground before High Courts and furnish the same to HO TP department in the format already sent to you along with the financial impact of such withdrawal. 5. You are also advised to submit details of the instances falling under item No. 3 above in a specific ‘format’ being sent to you separately. 6. Since the Company is required to furnish the accurate Data regarding the above to IRDA and to Delhi High Court by 7.12.09, you are advised to take immediate action in compliance.” 14. 5. You are also advised to submit details of the instances falling under item No. 3 above in a specific ‘format’ being sent to you separately. 6. Since the Company is required to furnish the accurate Data regarding the above to IRDA and to Delhi High Court by 7.12.09, you are advised to take immediate action in compliance.” 14. Considering the aforesaid facts and the enunciation of law by Delhi High Court in Yashpal Luthra’s case (supra), in my opinion, a comprehensive/ package policy of a two wheeler covers a pillion rider and in a private car, covers the occupants thereof and the Insurance Company would be liable to compensate for the death or the injury to a pillion rider on a two-wheeler or the occupants of a private car. 15. For the reasons mentioned above, the present appeal is accepted. The finding of the Tribunal absolving the Insurance Company of the liability on the ground that extra premium for the occupants of a private car had not been paid, even though the insurance policy was admittedly a package policy, is set aside. It is held that the Insurance Company shall be liable to pay compensation to the appellant-claimant. 16. As this issue is coming before the courts quite often, a copy of this judgment be sent to all the District & Sessions Judges in the States of Punjab and Haryana and Union Territory, Chandigarh for information. --------------