IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 1724 of 1993
For Approval and Signature:
HONOURABLE THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA
========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
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NATIONAL INSURANCE COMPANY LIMITED - Appellant(s)
Versus
KOLI BHAYABHAI RAJSIBHAI & 2 - Defendant(s)
========================================================= Appearance :
MR VALMIK VYAS FOR MR SUNIL B PARIKH for Appellant(s) : 1,MR BR SHAH for Appellant(s) : 1, NOTICE SERVED for Defendant(s) : 1 - 2. None for Defendant(s) : 3, MR RC KAKKAD for Defendant(s) : 3.2.1, 3.2.2, 3.2.3,3.2.4 =========================================================
CORAM :
HONOURABLE THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA
Date : 19/03/2012 CAV JUDGMENT
1. This First Appeal is at the instance of the Insurance Company and is directed against an Award dated April 23, 1993, passed by the Motor Accident Claims Tribunal, Junagadh, [“Tribunal”] in Motor Accident Claim Petition No. 193 of 1986, by which the Tribunal disposed of the said application for compensation by awarding a sum of Rs. 1,40,000/- with interest at the rate of 12% per annum from the date of filing of the application till deposit with proportionate costs.
2. Being dissatisfied, the insurer of the offending vehicle has come up with the present Appeal.
3. There is no dispute from the evidence on record that on November 3, 1985, while the victim was traveling on the motorcycle as a pillion rider, due to the negligence on the part of the motorcycle driver, an accident occurred. In the said accident, no other “motor vehicle” within the meaning of Motor Vehicles Act was involved. It appears from the materials on record that the owner of the said motorcycle had a comprehensive insurance agreement with the appellant in respect of the said vehicle, which commenced from September 23, 1985 and ended on September 22, 1986. Therefore, admittedly the accident occurred during the validity of the said insurance policy.
4. The only point raised in this Appeal by the insurer is that having regard to the fact that the victim was not a third party but a pillion rider of the insured vehicle, his heirs were not entitled to get compensation within the terms of the insurance coverage.
5. The learned Tribunal below, on consideration of the materials on record, concluded that although in case of a third party coverage, a pillion rider of a motorcycle is not protected, the policy in question being a comprehensive one, the Insurance Company was bound to pay the amount of compensation arising out of the accident.
6. Therefore, the sole question that arises for determination in this appeal is whether, within the terms of the insurance coverage, the pillion rider was also included.
7. The copy of the original policy has been placed before me. It appears that the policy itself was described as one covering a comprehensive risk. A sum of Rs. 78/- was taken from the insured as premium for his own damage and a further sum of Rs.100/- was taken as premium for I.E.V. and on electrical/electronic fittings of the vehicle. In addition to that, a further amount of Rs. 48/- was taken as liability to public risk, meaning, third party risk. Although there was a specific column for payment of additional premium for accident benefits to “unnamed driver/pillion passenger” as per END IMT.70 and also for accident benefits to insured as per END IMT.4[b], no amount of premium was paid under those columns which were specifically stated to be “NIL”. Thus, the total amount of premium paid was Rs. 226/-.
8. By relying upon the abovementioned policy, Mr. Valmik Vyas, the learned advocate appearing on behalf of the appellant, strenuously contended that the finding of the Tribunal that it was comprehensive enough to include the death of a pillion rider was on the face of it erroneous inasmuch as no premium was paid to cover the accident benefit to the unnamed driver/pillion passenger.
9. Mr. R.C. Kakkad, the learned advocate appearing on behalf of the claimants, on the other hand, opposed the aforesaid contention of Mr. Vyas by placing strong reliance upon a decision of a Division Bench of this Court in the case of Minor Harshvardhatiya Rudraditya, through his next friend Shri Govindbhai D. Parmar and another v. Jyotindra Chimanlal Parikh and others, reported in 1981 A.C.J. 277. According to Mr. Kakkad, the learned Tribunal rightly relied upon the Notification dated June 2, 1986 issued by the Secretary, Tariff Advisory Committee, Bombay, wherein, it was specifically provided that extra benefit no.2 granting legal liability to cover side car passengers will stand deleted and Standard Cover under Section 2[1][a] of Policy should be re-worded as under:-
“Death or bodily injury to any person including person conveyed in or on the Motor Cycle provided such person is not carried for hire or reward.”
Mr. Kakkad contends that admittedly, the victim-pillion rider was traveling not for hire or reward and therefore, the benefit of Notification dated June 2, 1986 should be available to his clients.
10. In order to appreciate the effect of the Notification dated June 2, 1986 issued by the Tariff Advisory Committee, Bombay and relied upon by the learned Tribunal, it will be appropriate to quote the entire Notification which is quoted below:
"PRIVATE AND CONFIDENTIAL: ISSUED FOR THE USE OF INSURERS CARRYING ON GENERAL INSURANCE BUSINESS IN INDIA) TARIFF ADVISORY COMMITTEE BOMBAY MOT/GEN/10 Ador House, 1st floor 6 K. Dubash Marg Bombay – 400 023 2nd June 1986 To:
All Regional Offices of: 1. National Insurance Co. Ltd., Calcutta
2. The New India Assurance Co.
Ltd., Bombay
3. The Oriental Insurance Co. Ltd.
Delhi
4. United India Insurance Co. Ltd., Madras Govt. Insc. Funds: 1. Maharashtra State, Bombay
2. Gujarat State – Ahmedabad
3. Kerala State – Trivandrum
4. Karnataka State, Bangalore Re: Compensation to Pillion Riders Insurers' attention is invited to Section II (1)(a) of Standard Form for Motor Cycle, Comprehensive Policy, Sheet 59 of the IMT.
It has now been decided that the Standard Motor Cycle Comprehensive Police should cover liability to Pillion Passengers treating them as occupants in the Motor Cycle and provide indemnity to such persons who/are not carried for hire or reward.
Accordingly, Extra Benefit No.2 granting legal liability to cover side car passengers will stand deleted and Standard Cover under Section 2(1) (a) of the Policy re-worded as under:
“Death or bodily injury to any person including person conveyed in or on the Motor Cycle provided such person is not carried for hire or reward.”
Insurers are requested to issue necessary instructions to their Divisional/Branch offices accordingly.
Sd/- (Y.D. PATIL} SECRETARY C.C. To: Head Office of New India/National/Oriental/United India. Bombay/Calcutta/Delhi/Madras Regional Committee General Insurance Corporation of India, Technical Department, Bombay Govt. Audit Depts. Bombay/Calcutta/Delhi/Madras "
(Emphasis supplied).
11. Similarly, I also propose to quote the earlier Notification dated March 17, 1978, issued by the Tariff Advisory Committee, which was the subject-matter of consideration in the decision of a Division Bench of this Court in the case of Minor Harshvardhatiya Rudraditya, through his next friend Shri Govindbhai D. Parmar and another [supra] relied upon by Mr. Kakkad. The said Notification is quoted below:
“TARIFF ADVISORY COMMITTEE BOMBAY REGIONAL COMMITTEE Circular M.V. No. 1 of 1978 Bombay, 17th March 1978.
INSURANCE COMPANY'S LIABILITY IN RESPECT OF GRATUITOUS PASSENGERS CONVENED IN A PRIVATE CAR – STANDARD FORM FOR PRIVATE CAR COMPREHENSIVE POLICY – SECTION II 0 LIABILITY TO THIRD PARTIES I am directed to inform Insurers that advices have been received from the Tariff Advisory Committee to the effect that since the industry had all these years been holding the view that a Comprehensive Private Car Policy Covers passenger liability the same practice should continue.
In order to make this intention clear, Insurers are requested to amend Clause 1(a) of Section II of the Standard Private Car Policy by incorporating the following words after the words “death of or bodily injury to any person” appearing therein :-
“Including occupants carried in the motor car provided that such occupants are not carried for hire or reward”.
I am accordingly to request Insurers to make the necessary amendment on sheet 38 of the Indian Motor Tariff pending representing of the relative sheet.
All existing polices may be deemed to incorporate the above amendment automatically as the above decision is being brought into force with effect from 25th March 1977.
Sd/- REGIONAL SECRETARY”
(Emphasis supplied).
12. After hearing the learned counsel appearing on behalf of the parties and after going through the materials on record, I find that the accident having occurred on November 3, 1985 while the effect of the Insurance Coverage having commenced from September 23, 1985 and being valid till September 22, 1986, having regard to the fact no additional premium for pillion passengers having been paid by the owner, according to the terms of the agreement as it stood, there was no scope of extending the benefit of Insurance to the pillion rider.
13. However, if the notification dated June 2, 1986 is construed to have retrospective effect even in case of an accident occurred prior to the said date in respect of a policy which was subsisting on the date of accident as well as the above date of notification, the claimants in this case can definitely lawfully claim such benefit.
14. Therefore, the most vital question that falls for determination in this appeal is whether the above notification has conferred the new benefit upon the insured even in respect of an accident occurred prior to the said date when the policy was valid both on the date of notification and the prior date of accident.
15. After going through the said notification, I find that the notification, uses the phrase “It has now been decided” and in the next paragraph has incorporated the following sentence:
“Accordingly, Extra Benefit No.2 granting legal liability to cover side car passengers will stand deleted and Standard Cover under Section 2(1) (a) of the Policy re-
worded as under:
“Death or bodily injury to any person including person conveyed in or on the Motor Cycle provided such person is not carried for hire or reward.”
Thus, the intention of conferring the new benefit only from the date of notification prospectively and not retrospectively was abundantly clear.
16. In the case of Harshvardhatiya Rudraditya (supra), the one relied upon by Mr. Kakkad, the learned counsel appearing on behalf of the claimants, a Division Bench of this court was considering a case of death of a pillion rider arising out of an accident occurred on November 22, 1974. The Supreme Court in the case of Pshhupabai’s case (1977 A. C.J 343 (S C) having ruled that the pillion riders were not entitled to the coverage, the Insurance Companies issued a circular dated 17th March, 1978 quoted above continuing the earlier benefit with effect from March 17, 1977. In that context, the Division Bench made the following observations:
“We are given to understand the insurance companies are discharging their obligation as hitherto notwithstanding Pashupabai’s case. If such is the policy that is being followed in other cases no discrimination can be made on principle in the present case. There cannot be selective application of the policy embodied in the aforesaid resolution. If such a selective application were to be countenanced, it would violate the constitutional mandate of Article 14 of the Constitution of India. We have, therefore, no doubt that the insurance company will follow the same policy uniformly and will not clutch at this defence in the present case if the policy decision contained in the aforesaid communication is being adhered to in other cases. In case of necessity, learned Counsel for the claimants will be at liberty to apply to the insurance company and make a request for implementing the aforesaid policy decision in the present case. It will be open to him to forward a copy of this judgment in support of this request.”
17. We, find that in the above case, the Division Bench had no occasion to consider the effect of the notification dated June 2, 1986 and while dealing with the earlier notification of the year 1978, the Bench made the above observation when the attention of the court was drawn to the fact that to some other earlier cases, the benefit of the said notification was given.
18. Thus, the above decision of the Division Bench cannot help the claimants in this case. The insurance companies in the subsequent comprehensive policies having adopted the provision of taking separate premium for covering pillion passengers and in this case, no such premium having been paid, in my opinion, the benefit of the notification cannot be availed of in respect of an accident occurred earlier. The benefit should be availed of, in my opinion, only in respect of accident occurred after the issue of such notification by addition of the clause mentioned above. There was no intention reflected from the notification to give retrospective effect either expressly or by necessary implication.
19. Consequently, I find substance in the submission of Mr. Vyas, the learned counsel for the appellant, that in the facts of the present case, the Insurance Company has no liability to pay the compensation.
20. The award impugned is thus modified only to this extent that the Insurance Company will not be liable to pay the amount. The amount will be realized from the owner of the vehicle concerned.
21. The appeal thus is allowed only to the extent indicated above. The money deposited by the Insurance company in the Tribunal below be returned with interest which has accrued to the principal after the lapse of two months from today. If the claimants have already withdrawn any amount by virtue of any interim order passed in this appeal, they are directed to refund the same to the Insurance Company within two months from today with interest at the rate of 8% per annum from the date of withdrawal till repayment.
22. There will be, however, no order as to costs.
[BHASKAR BHATTACHARYA, ACTING CJ.]
pirzada/-