IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF FEBRUARY 2019 BEFORE THE HON’BLE MR. JUSTICE B.M. SHYAM PRASAD MISCELLANEOUS FIRST APPEAL NO.8613 OF 2010 (MV) BETWEEN:
THE NEW INDIA ASSURANCE CO. LTD., DIVISIONAL OFFICE MYSURU, THROUGH REGIONAL OFFICE P. KALINGA RAO ROAD BENGGALURU – 560 027, BY DULY CONSTITUTED ATTORNEY.
... APPELLANT (BY SRI. K. SURYANARAYANA RAO, ADVOCATE) AND:
1. K. M. NIYAZ, SON OF K. M. MOHAMMAD AGED ABOUT 27 YEARS DOOR NO. 4, NEW EXTENSION MADIKERI.
2. G. E. NIRANJAN, SON OF ESHWAR MAJOR IN AGE, NEAR ALANKAR STORES CHOWK MADIKERI.
3. G S ESHWAR AGED ABOUT 60 YEARS NEAR COFFEE BOARD DASWAL MADIKERI.
... RESPONDENTS (BY SRI.S.LAKSHMINARAYANA REDDY , ADVOCATE FOR RESPONDENT NO.1 ;
NOTICE TO RESPONDENT NOS.2 AND 3 IS SERVED) THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 07.05.2010 PASSED IN MVC NO.17 OF 2004 ON THE FILE OF THE CIVIL JUDGE(SR.DN) AND MACT, MADIKERI, AWARDING A COMPENSATION OF Rs.1,73,514/- WITH INTEREST @ 6% P.A. FROM THE DATE OF PETITION TILL DEPOSIT OR RECOVERY.
THIS APPEAL COMING ON FOR HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT Heard Sri K. Suryanarayana Rao, the learned counsel for the appellant, who submits that the appellant -Insurance Company has impugned the judgment and award dated 7.5.2010 in MVC No.17 of 2004 on the file of the Civil Judge (Senior Division) and MACT, Madikeri, on the sole ground that in the case of an Act Policy, the Insurance Company cannot be made liable to answer the claim made by a passenger in a private car.
2. Perused the impugned judgment and the appeal papers. The respondent No.1 filed the claim petition in MVC No.17 of 2004 contending that he suffered fracture injuries when he was travelling in a private car bearing No.KA-12-M-9278 driven by a certain Venugopal. He has further contended that the accident occurred because of the negligent driving by the said driver of the private car. There is no dispute that the offending private car was covered under an Act Policy. Insofar as the liability of the appellant- Insurance Company, the Tribunal after adverting to the different decisions, concluded that the appellant would be liable to pay compensation because the policy issued by the appellant for the private vehicle was in vogue. The Tribunal thus rejected the appellant’s contention that its liability was subject to the terms and conditions of the policy and in the admitted facts and circumstances of the case, the appellant could not be made liable.
3. The learned counsel for the appellant arguing in support of the grounds urged in the appeal relied upon a decision of a Division Bench of this court in Branch Manager, The New India Assurance Company Ltd., vs. Mahadev Pandurang Patil and another reported in ILR 2011 KAR.850 and a decision of the Hon’ble Supreme Court in Oriental Insurance Company Ltd. vs. Sudhakaran K.V. and others, reported in 2008 ACJ 2045. The learned counsel further submits that in fact, the aforesaid Division Bench decision of this Court is based on the aforesaid decision of the Hon’ble Supreme Court. The Division Bench of this court has categorically held thus in Paragraph-15 and 16 of its judgement:
“15. Therefore, the passenger of a vehicle which is not meant for public service is not covered under this Section. The said passenger in the case of a two wheeler is the pillion rider and in the case of three wheeler and four wheeler the occupants of such vehicle who are not carried in the said vehicle for hire or reward. Therefore, the insurance policy taken in respect of a vehicle, in which they are travelling as such passengers are not treated as third parties and such an insurance do not cover the risk of such persons. The reason is Section 147 does not require a policy to cover the risk to passengers who are not carried for hire or reward. The statutory insurance does not cover injuries suffered by occupants of the vehicle who are not carried for hire or reward and the insurer cannot be held liable under the Act. The occupants/passengers/inmates of a private vehicle do not fall within the definition of the word third party. Therefore, the legal obligation arising under Section 147 of the Act cannot be extended to an injury or death of the owner of the vehicle, passengers in such private vehicle or a pillion rider in the case of a two wheeler. Gratuitous passengers who are not carried for hire or reward in a vehicle other than a public service vehicle, cannot be construed as third parties.
16. If the risk of an occupant of a car, inmate of vehicle or passenger in a private car, is to be covered, additional premium has to be paid.
If no additional premium is paid, their risk is not covered. The statutory liability under Sections 146 and 147 of the Act has to be read with the terms of the insurance policy issued under Section 146 of the Act. But that does not prevent an insurer from entering into a contract of insurance covering a risk wider than the minimum requirement of the statute, whereby the risk of gratuitous passengers could also be covered. A third party policy does not cover liability to gratuitous passengers who are not carried for hire or reward. If a liability other than the limited liability provided for under the Act is to be enhanced under an insurance policy, additional premium is required to be paid. The liability is restricted to the liability arising out of the statutory requirements under Section 146 only. “ 4. In view of the settled law and undisputed facts and circumstances of this case, the appellant- Insurance Company succeeds insofar as its liability.
5. Accordingly, the appeal by the Insurance Company is allowed, and the impugned judgment and award are modified insofar as the Insurance Company is held jointly and severally liable clarifying that the claimant’s right for recovering the compensation awarded by the Tribunal as against the owner of the vehicle would subsist unaltered. The amount in deposit in the appeal is directed to be refunded to the appellant.
SD/- JUDGE nv