IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR.

ORDER

S.B. CIVIL MISC.APPEAL NO.2933/2009.

Navratan @ Noratmal & Ors. Vs. Hanuman & Ors.

Date of Order :-

December 7, 2011.

HON'BLE MR.JUSTICE MOHAMMAD RAFIQ

Shri J.P. Gupta for the claimant-appellants. $Miss$ Sharma for respondent No.3-National Raj Insurance Co.Ltd.

******

Reportable

BY THE COURT:-

1. This appea¹ has been filed by the claimant-appellants for enhancement of compensation and setting aside the finding of the Tribunal by which the liability of the insurance company has been limited only to Rs.50,000/- seeking further direction to direct the insurance company to make payment of compensation jointly and severally.

$2)$ Shri J.P. Gupta, learned counsel appearing the claimant-appellants has made for two fold arguments. His first submission is that amount of compensation is towards the lower side and second is that the learned Tribunal erred in law while restricting the liability of the insurance company to pay compensation to the extent of Rs.50,000/only, whereas as per the judgment of Supreme Court in General Manager, United Insurance Co.Ltd. (The) Vs. M.Laxmi & Ors. : MACD 2008 (SC) 418 when there is package policy as in the present case, the insurance company has to be held liable to indemnify the owner for payment of compensation jointly and severally. It is, therefore, prayed that the appeal be allowed and accordingly that finding of the Tribunal be set-aside and the amount of compensation be suitably enhanced.

3. Miss Raj Sharma, learned counsel appearing respondent No.3-National Insurance Co.Ltd. however opposed the appeal but could not controvert the ratio of the judgment of Supreme Court in M.Laxmi supra.

4. I have heard heard learned counsel for the parties, perused the award and the case law cited on the subject.

5. The Supreme Court in Amrit Lal Sood And Another Vs. Kaushalya Devi Thapar And Others : (1998) 3 SCC 744 held that in a case of comprehensive insurance policy, the terms of the contract of insurance can be wider than prescribed by the statute. If under the policy insurer agreeing 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 words 'any person' would include gratuitous passenger. In part 8 of the report,

2

Supreme Court held, as under:-

"Thus under Section $II(1)(a)$ of the policy<br>the insurer has agreed to indemnify the<br>insured against all sums which the insured shall become legally liable to pay in<br>respect of death of or bodily injury to<br>"any person". The expression "any person"<br>would undoubtedly include an occupant of the car who is gratuitously travelling in<br>the car. The remaining part of clause (a)<br>relates to cases of death or injury arising<br>out of and in the course of employment of such person by the insured. In such cases the liability of the insurer is only to the extent necessary to meet the requirements $\mathsf{of}$ Section 95 $\mathsf{of}$ the Act. Insofar $as$ gratuitous passengers are concerned there gratuitous passengers are concerned there<br>is no limitation in the policy as such.<br>Hence under the terms of the policy, the<br>insurer is liable to satisfy the award<br>passed in favour of the claimant. We are<br>unable to agree wit the policy are unambiguous.

6. This issue cropped up before the Delhi High Court in Yashpal Luthra and Anr. Vs. United India Insur. Co.Ltd. and Anr. arising out of Mac.App.No.176/2009 decided on $9/12/2009$ , wherein it was noted by the High Court that tariff as well as terms and conditions of the Insurance Policy was regulated by Tariff Advisory Committee (for short, $"TAC")$ $till$ $31/12/2006$ $\quad\text{and}\quad$ thereafter by the Insurance Regulatory and Development Authority (for short, "IRDA") under the Insurance Act, 1938. TAC issued a Circular dated $18/3/1978$ to $a$ the Insurance Companies to cover the risk of occupants in a private car under comprehensive policy w.e.f. $25/3/1977$ . TAC vide then subsequent Circular dated 2/6/1986 directed all the Insurance Companies to cover the risk of a pillion rider on a two-wheeler comprehensive policy. Comprehensive under the policy was later styled as "package policy". The Delhi High Court in the aforesaid case summoned all insurance companies, which admitted their the liability to indemnify the owner for payment of compensation to the claimant in respect of the bodily injury or death in a motor accident. $In$ fact, the IRDA issued a circular dated 6/11/2009 to all the Chief Executive Officers of the Insurance Companies clarifying the position relating to the liability of Insurance Companies in respect of a pillion rider on a two-wheeler and occupants in a private car under the comprehensive/package policy. meeting of all convened the the Chief IRDA Executive Officers on $26/11/2009$ , $\mathsf{who}$ admitted their liability in respect of occupants in that respect and insurance companies agreed to comply with the Circular dated $16/11/2009$ issued by the and further to withdraw the contrary plea TRDA wherever taken before the Motor Accident Claims Tribunals and accordingly to issue instructions to their respective lawyers. In those facts, it was held by the Delhi High Court in para 27 of the report, as under:-

"In view of the aforesaid, it is clear that<br>the comprehensive/package policy of a two $pillion$ rider wheeler covers $\mathsf{a}$ and

comprehensive/package policy of a private car covers the occupants and where the vehicle is covered under a comprehensive/ package policy, there is no need for Motor<br>Accident Claims Tribunal to go into the<br>question whether 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. In fact,<br>in view of the TAC's directives and those<br>of the IRDA, such a plea was not not permissible and ought not to have been<br>raised as, for instance, it was done in the present case.'

$7)$ In M.Laxmi supra, a reference was made to Circular dated $2/6/1986$ with the regard to compensation payable to the pillion riders in case comprehensive policy and it was $\mathsf{of}$ held that standard form for motorcycle should cover liability to pillion passengers in case of comprehensive policy but policy in that case was an Act Policy therefore. the insurance company was held not liable.

On consideration of material on record, 8) however, I am not persuaded to enhance the amount of compensation but the finding of the Tribunal confining the liability of the insurance company to pay compensation only in the sum of Rs.50,000/deserves to be set-aside.

In the result, the appeal is allowed in 9) part. The award passed by the Motor Accident Claims Tribunal, Beawar dated 6/2/2009 is modified in terms that finding of the learned Tribunal

confining the liability of the insurance company to pay compensation only in the sum of Rs.50,000/- is set-aside. The National Insurance Co.Ltd. is directed to indemnify the owner of the vehicle for full amount of compensation as awarded by the Tribunal and to make payment of compensation jointly and severally in the light of the judgments aforesaid.

10. Compliance of the judgment shall be made within a period of three months from the date, certified copy thereof is produced before the insurance company.

(MOHAMMAD RAFIQ), J.

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