G.M., United India
Insurance Co.Ltd. Vs. M. Laxmi & Ors.  INSC 1946 (14 November 2008)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 6659 OF 2008 (Arising
out of SLP (C) No. 20608 of 2004) The General Manager, United Insurance Co.
Ltd. ....Appellant Versus M. Laxmi and Ors. ....Respondents
Dr. ARIJIT PASAYAT, J.
in this appeal is to the judgment of a learned Single Judge of the Andhra
Pradesh High Court allowing the appeal filed by respondent Nos. 1 to 3.
facts in a nutshell are as follows:
(hereinafter referred to as the `deceased') died in a vehicular accident on
8.10.1996. Respondents 1 to 3 are his widow, son and father respectively. A
claim petition was filed under Section 166 of the Motor Vehicles Act, 1988 (in
short `the Act') claiming compensation of Rs.3,00,000/-. The claimants averred
in the claim petition that the deceased and one Mohd. Mohsin were going on a
scooter belonging to M. Yadireddy, respondent no.4 in the present appeal. The
scooter was being driven by Mohd. Mohsin. At about 7.00 p.m. the scooter hit a
bullock cart which was going in the same direction because of rash and
negligent driving of the scooter, the deceased fell down and sustained fatal
injuries. At the time of his death, he was 29 years of age. Compensation was
claimed from the owner of the scooter. Present appellant was the insurer which
had insured the vehicle in question. The insured remained ex-parte. The present
appellant filed its counter-affidavit denying all the material allegations. It
was pointed out that admittedly, the policy of insurance was an Act policy and
the deceased was a pillion rider and also gratuitous passenger and hence, not a
third party, and he cannot claim compensation from the insurance company which
insured the vehicle. The learned Additional Special Judge for SPE and ACB
Cases-cum-V Additional Chief Judge, City
Hyderabad (hereinafter referred to as `MACT') who adjudicated the claim
petition, held that the policy was an Act policy in respect of the Scooter on
the date of accident, therefore, the insurer had no liability. It was
categorically held that unless the policy in question covers even a gratuitous
passenger, such person, who met with an accident while going in the vehicle in
question and received injuries or his legal heirs, in case of his death
following such accident, cannot proceed against the concerned insurance company
for any compensation. The compensation payable was fixed at Rs.1,07,436/- with
12% interest per annum. It was held that the sum was to be realized from the
insured and not from the present appellant.
An appeal was
preferred by the claimants before the High Court, which, by the impugned
judgment relying on a Circular of the Tariff Advisory Committee held that the
liability of the insurer was there. The appeal was, accordingly, allowed.
counsel for the appellant submitted that the High Court has misread the
Circular of the Tariff Advisory Committee dated 2.6.1986.
The same referred to
compensation payable to pillion riders in case of comprehensive policy. The Clarification/Circular
has no relevance so far as Act Policy Cases are concerned and it related to
only Comprehensive Policy.
counsel for respondent Nos. 1 to 3, on the other hand, supported the judgment
of the High Court.
is no dispute that the Circular dated 2.6.1986 refers to Comprehensive Policy.
It categorically states that standard form for motorcycle should cover
liability to pillion passengers in case of Comprehensive Policy. As noted by
the MACT, the policy in the instant case was an Act Policy.
New India Assurance Co. Ltd. v. Asha Rani and Ors. (2003 (2) SCC 223), it has
been noted as follows:
"Section 147 of
the 1988 Act, inter alia, prescribes compulsory coverage against the death of
or bodily injury to any passenger of "public service vehicle".
Proviso ap- pended thereto categorically states that compulsory cover- age in
respect of drivers and conductors of public service vehicle and employees
carried in a goods vehicle would be limited to the liability under the Workmen's
Compensa- 4 tion Act. It does not speak of any passenger in a "goods
In view of the
changes in the relevant provisions in the 1988 Act vis-`-vis the 1939 Act, we
are of the opinion that the meaning of the words "any person" must
also be attributed having regard to the context in which they have been used
i.e. "a third party". Keeping in view the provisions of the 1988 Act,
we are of the opinion that as the provisions there of do not enjoin any
statutory liability on the owner of a vehicle to get his vehicle insured for
any passenger travelling in a goods vehicle, the insurers would not be liable
sub-clause (i) of clause (b) of sub-section (1) of Section 147 speaks of
liability which may be incurred by the owner of a vehicle in respect of death
of or bodily injury to any person or damage to any property of a third party
caused by or arising out of the use of the vehicle in a public place, whereas
sub-clause (ii) thereof deals with liability which may be incurred by the owner
of a vehicle against the death of or bodily injury to any passenger of a public
service vehicle caused by or arising out of the use of the vehicle in a public
United India Assurance Co. Ltd., Shimla v. Tilak Singh and Ors. (2006 (4) SCC
404), it has been noted as follows:
"In our view,
although the observations made in Asha Rani case (supra) were in connection
with carrying passengers in a goods vehicle, the same would apply with equal
force to gratuitous passengers in any other vehicle also. Thus, we must uphold
the contention of the appellant Insurance Company that it owed no liability
towards the injuries suffered by the deceased Rajinder Singh who was a pillion
rider, as the insurance policy was a statutory policy, and hence it did not cover
the risk of death of or bodily injury to a gratuitous passenger."
view of what has been stated by this Court in Asha Rani and Tilak Singh cases
(supra), the order of the High Court is clearly
Unsustainable and is
set aside and that of the MACT is restored.
appeal is disposed of accordingly.
(Dr. ARIJIT PASAYAT)