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TMI Blog2012 (11) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... The question that emerges for consideration is whether in the case at hand, the policy is an “Act Policy” or “Comprehensive/Package Policy”. - Matter remanded back to the tribunal to scrutinize the policy in a proper perspective and, if necessary, by taking additional evidence and if the conclusion is arrived at that the policy in question is a “Comprehensive/Package Policy”, the liability would be fastened on the insurer. - CIVIL APPEAL NO. 8163 OF 2012 - - - Dated:- 20-11-2012 - K. S. Radhakrishnan And Dipak Misra, JJ. JUDGMENT Dipak Misra, J. Leave granted. 2. The singular issue that arises for consideration in this appeal is whether the first respondent, the Managing Director of the respondent No. 2, a company registered under the Companies Act, 1956, is entitled to sustain a claim against the appellant-insurer for having sustained bodily injuries. Succinctly stated, the facts are that the respondent No. 1 met with an accident about 8.30 p.m. on 23.3.2001 while travelling in the Lancer car bearing registration No. TN 49 K 2750 belonging to the respondent No. 2, as it dashed against a bullock cart near Muthandipatti Pirivu Road-I. He kno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paying passenger in the car for which no extra premium was paid and hence, the liability could not be fastened on the insurer. The High Court treated the company to be the owner of the vehicle and repelled the stand that the Managing Director was the owner, and further held that as he was only an occupant of the car the insurance company was liable to indemnify the owner for the claim put forth by the victim. It is worthy to note that the High Court opined that if no premium is paid to cover the owner, the insurer is not liable to make good the loss but if another person travels with the owner and suffers injuries the insurer is liable to pay the compensation. Being of this view, the High Court dismissed the appeal. Hence, the present appeal by the insurer. 6. We have heard the learned counsel for the parties and perused the record. As has been indicated at the beginning, the seminal issue is whether the appellant-company is liable to make good the compensation determined by the tribunal to the victim in the accident. On a scrutiny of the award passed by the tribunal which has been given the stamp of approval by the High Court, it is manifest that the 1st respondent was the M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be required (i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen s Compensation Act, 1923 (8 of 1923) in respect of the death of, or bodily injury to, any such employee - (a) engaged in driving the vehicle, or (b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle or (c) if it is a goods carriage, being carried in the vehicle, or (ii) to cover any contractual liability. Explanation. For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Narain Dhut[(2007) 3 SCC 700], after elaborately referring to the analysis made in Asha Rani (supra), the Bench stated thus:- Section 149 is part of Chapter XI which is titled Insurance of Motor Vehicles against Third-Party Risks . A significant factor which needs to be noticed is that there is no contractual relation between the insurance company and the third party. The liabilities and the obligations relatable to third parties are created only by fiction of Sections 147 and 149 of the Act. In the said case, it has been opined that although the statute is a beneficial one qua the third party, yet that benefit cannot be extended to the owner of the offending vehicle. 11. In Oriental Insurance Company Ltd. v. Meena Variyal and Others[(2007) 5 SCC 428], the facts were that a Regional Manager of the company, which was the owner of the vehicle, was himself driving a vehicle of the company and met with an accident and eventually succumbed to the injuries. It was contended by the insurer before this Court that the policy did not cover the employee of the owner who was driving the vehicle while attending the business of the employer-company and the deceased was not a thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Regional Manager of the Company that owned the car. He was using the car given to him by the Company for use. Whether he is treated as the owner of the vehicle or as an employee, he is not covered by the insurance policy taken in terms of the Act without any special contract since there is no award under the Workmen's Compensation Act that is required to be satisfied by the insurer. In these circumstances, we hold that the appellant Insurance Company is not liable to indemnify the insured and is also not obliged to satisfy the award of the Tribunal/Court and then have recourse to the insured, the owner of the vehicle. 13. In Oriental Insurance Company Ltd. v. Sudhakaran K. V. and Others[(2008) 7 SCC 428], a two-Judge Bench, while dealing with the issue whether a pillion rider on a scooter would be a third party within the meaning of Section 147 of the Act, after referring to number of authorities, stated thus:- The contract of insurance did not cover the owner of the vehicle, certainly not the pillion-rider. The deceased was travelling as a passenger, stricto sensu may not be as a gratuitous passenger as in a given case she may not (sic) be a member of the family, a fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCC 744], Asha Rani (supra), Tilak Singh (supra), Jhuma Saha (supra) and Sudhakaran K. V. and Others (supra) and observed thus :- Before this Court, however, the nature of policies which came up for consideration were Act policies. This Court did not deal with a package policy. If the Tariff Advisory Committee seeks to enforce its decision in regard to coverage of third-party risk which would include all persons including occupants of the vehicle and the insurer having entered into a contract of insurance in relation thereto, we are of the opinion that the matter may require a deeper scrutiny. On a perusal of the aforesaid paragraph, it is clear as crystal that the decisions that have been referred to in Bhagyalakshmi (supra) involved only Act Policies . The Bench felt that the matter would be different if the Tariff Advisory Committee seeks to enforce its decision in regard to coverage of third party risk which would include an occupant in a vehicle. It is worth noting that the Bench referred to certain decisions of Delhi High Court and Madras High Court and thought it appropriate to refer the matter to a larger Bench. Be it noted, in the said case, the Court was dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ler 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mply 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 dt. 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; ii) with r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inues to be in vogue till date. It had also admitted that the comprehensive policy is presently called a package policy . It is the admitted position, as the decision would show, the earlier circulars dated 18th March, 1978 and 2nd June, 1986 continue to be valid and effective and all insurance companies are bound to pay the compensation in respect of the liability towards an occupant in a car under the comprehensive/package policy irrespective of the terms and conditions contained in the policy. The competent authority of the IRDA was also examined before the High Court who stated that the circulars dated 18th March, 1978 and 2nd June, 1986 of the Tariff Advisory Committee were incorporated in the Indian Motor Tariff effective from 1st July, 2002 and they continue to be operative and binding on the insurance companies. Because of the aforesaid factual position, the circulars dated 16th November 2009 and 3rd December, 2009, that have been reproduced hereinabove, were issued. 20. It is also worthy to note that the High Court, after referring to individual circulars issued by various insurance companies, eventually stated thus:- In view of the aforesaid, it is clear tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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