CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 8163 OF 2012 (Arising out of
S.L.P. (Civil) No. 1232 of 2012)
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 knocked at the doors of the Motor Accident Claim Tribunal (for
short “the the tribunalâ€) in MACOP No. 357 of 2004 under Sections 140, 147
and 166 of the
Motor Vehicles
Act, 1988 (for brevity “the Actâ€) claiming compensation of
Rs.20,00,000/- jointly and severally from the appellant as well as the company
on the foundation that the vehicle in question was insured with the
appellant-company. Be it noted, the amount was calculated on the basis of
pecuniary and non-pecuniary damages.
3. The insurer resisted the claim on the grounds that the claimant had
suppressed the fact that he was the Managing Director of the company and hence,
the application deserved to be thrown overboard; that even if the petition was
entertained the insurance company could not be held liable to indemnify the
respondent as the appellant was himself the owner being the Managing Director
and under no circumstances he could be treated as a third party; that the policy
taken by the company did not cover an occupant in the vehicle but only covered
the owner for a limited quantum and hence, the claim was not allowable as sought
for.
4. The tribunal, in its award dated 19.4.2007, addressed to the issues of
rash and negligent driving of the driver, injuries sustained by the insured and
the liability of the insurance company. On the basis of the material brought on
record, it came to hold that the accident had occurred due to rash and negligent
driving of the driver of the 1st respondent; that the claimant was injured in
the accident; that regard being had to the injuries sustained he was entitled to
get Rs.8,63,200/- as compensation with interest @ 7.5% per annum from the date
of the petition till the date of deposit; and that the insurance company was
liable to indemnify as the owner of the vehicle was the company, and the injured
was travelling in the car as a third party.
5. Being dissatisfied with the award passed by the tribunal, the insurer
preferred C.M.A. (M.D.) No. 1624 of 2008 before the Madurai Bench of Madras High
Court and in appeal it was urged that the victim, the Managing Director, who was
running the hospital in the name of his deceased father, was the legal owner of
the car though the vehicle was insured in the name of the company and,
therefore, the liability was to the limited extent as stipulated in the policy.
It was also canvassed, in any case, he was a non- fare 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 Managing Director of the respondent No.
2 and the vehicle was registered in the name of the company but the Managing
Director had signed on behalf of the company in the R. C. book of the car that
was involved in the accident.
The High Court has returned a finding that the company and the Managing
Director are two different legal entities and hence, the Managing Director
cannot be equated with the owner. On that foundation, the claimant has been
treated as a passenger and, accordingly, liability has been fastened on the
insurer. The learned counsel appearing for the insurer would contend that
assuming he is the owner being a signatory in the R.C. book, the liability of
the company is limited upto Rs.2,00,000/- and under no circumstances a non-fare
paying passenger would be covered under the policy. In oppugnation, the learned
counsel for the respondent-claimant has proponed that barring the insurer and
the insured, all others are third parties and, therefore, he is covered by the
policy. It is also urged by him that as he had travelled as an occupant in a
private car he is a third party vis-à-vis the insurer and hence, it is bound to
indemnify the owner as the risk of the third party is covered.
7. As per the command of Section 146 of the Act, the owner of a vehicle is
obliged to obtain an insurance for the vehicle to cover the third party risk.
Section 147 deals with the requirements of policies and limits of liability.
Section 147 (1) which is relevant for the present purpose is reproduced below:-
“147. Requirement of policies and limits of liability. – (1) In order to
comply with the requirements of this Chapter, a policy of insurance must be a
policy which - (a) is issued by a person who is an authorised insurer; and (b)
insurers the person or classes of persons specified in the policy to the extent
specified in sub – section (2) – (i) against any liability which may be
incurred by him in respect of the death of or bodily [injury to any person,
including owner of the goods or his authorised representative carried in the
vehicle] or damage to any property of a third party caused by or arising out of
the use of the vehicle in a public place ;
(ii) 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
place;
Provided that a policy shall not 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.†On a scanning of the aforesaid provision, it is evident that
the policy of insurance must be a policy which complies with the conditions
enumerated under Section 147 (1) (a) & (b). It also provides where a policy
is not required and also stipulates to cover any contractual liability.
8. In United India Insurance Co. Ltd., Shimla v. Tilak Singh and Others[1],
this Court referred to the concurring opinion rendered in a three-Judge Bench
decision in New India Assurance Co. Ltd. V. Asha Rani[2] and ruled thus:- “In
our view, although the observations made in Asha Rani case 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.†It is
worthy to note that in the said case the controversy related to gratuitous
passenger carried in private vehicle.
9. In Oriental Insurance Co. Ltd. v. Jhuma Saha (Smt) and Others[3], the
controversy related to fastening of liability on the insurer for the death of
the owner of a registered vehicle, Maruti van. The Court observed that the
accident did not involve any other motor vehicle than the one which he was
driving and as the liability of the insurer Company is to the extent of
indemnification of the insured against the respondent or an injured person, a
third person or in respect of damages of property, the insured cannot be
fastened with any liability under the provisions of the
Motor Vehicles
Act, and, therefore, the question of the insurer being liable to indemnify
the insured does not arise. Thereafter, the Bench referred to the decision in
Dhanraj v. New India Assurance co. Ltd.[4] and ruled thus:- “The additional
premium was not paid in respect of the entire risk of death or bodily injury of
the owner of the vehicle. If that be so, Section 147 (b) of the
Motor Vehicles
Act which in no uncertain terms covers a risk of a third party only would be
attracted in the present case.â€
10. In National Insurance Co. Ltd. v. Laxmi Narain Dhut[5], 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 Risksâ€. 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[6], 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 third party in terms of the policy or in terms of the Act. It
was also urged that the same would be the position even if the deceased was only
travelling in the car in his capacity as a Regional Manger of the owner-company
and the vehicle was being driven by the driver. This Court observed that a
contract of insurance is ordinarily a contract of indemnity and when a car
belonging to an owner is insured with the insurance company and it is being
driven by a driver employed by the insured, when it meets with an accident, the
primary liability under law for payment of compensation is that of the driver.
Once the driver is liable, the owner of the vehicle becomes vicariously
liable for payment of compensation. It is this vicarious liability of the owner
that is indemnified by the insurer. Dealing with the said liability, the Bench
analysed the language employed under Section 147 (1) of the Act and observed as
follows:- “The object of the insistence on insurance under Chapter XI of the
Act thus seems to be to compulsorily cover the liability relating to their
person or properties of third parties and in respect of employees of the insured
employer, the liability that may arise under the Workmen's Compensation Act,
1923 in respect of the driver, the conductor and the one carried in a goods
vehicle carrying goods. On this plain understanding of Section 147, we find it
difficult to hold that the Insurance Company, in the case on hand, was liable to
indemnify the owner, the employer Company, the insured, in respect of the death
of one of its employees, who according to the claim, was not the driver.
Be it noted that the liability is not one arising under the Workmen's
Compensation Act, 1923 and it is doubtful, on the case put forward by the
claimant, whether the deceased could be understood as a workman coming within
the
Workmen's
Compensation Act, 1923. Therefore, on a plain reading of Section 147 of the
Act, it appears to be clear that the Insurance Company is not liable to
indemnify the insured in the case on hand.â€
12. After so stating, the Bench adverted to the decisions in National
Insurance Co. Ltd. v. Swaran Singh[7], Laxmi Narain Dhut (supra), Asha Rani
(supra) and Tilak Singh (supra) and opined that a policy in terms of Section 147
of the Act does not cover persons other than third parties.
Eventually, it ruled thus:- “The victim was the 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.â€
13. In Oriental Insurance Company Ltd. v. Sudhakaran K. V. and Others[8], 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 friend or other relative. In the sense of the term which is used
in common parlance, she might not be even a passenger. In view of the terms of
the contract of insurance, however, she would not be covered thereby.
xxx xxx xxx xxx xxx The law which emerges from the said decisions, is: (i)
the liability of the insurance company in a case of this nature is not extended
to a pillion-rider of the motor vehicle unless the requisite amount of premium
is paid for covering his/her risk; (ii) the legal obligation arising under
Section 147 of the Act cannot be extended to an injury or death of the owner of
vehicle or the pillion-rider; (iii) the pillion-rider in a two-wheeler was not
to be treated as a third party when the accident has taken place owing to rash
and negligent riding of the scooter and not on the part of the driver of another
vehicle.â€
14. In New India Assurance Company Limited v. Sadanand Mukhi and Others[9],
the son of the owner of the insured while driving the motor cycle met with an
accident and died. The accident allegedly took place as a stray dog came in
front of the vehicle. The stand of the insurance company was that in view of the
relationship between the deceased and the owner of the vehicle being father and
son the deceased was not a third party. The Bench relied on the decisions in
Tilak Singh (supra), Jhuma Saha (supra), Meena Variyal (supra), Laxmi Narain
Dhut (supra) and United India Insurance Co. Ltd. v. Davinder Singh[10] and came
to hold that the insurance company was not liable to indemnify the owner.
15. At this juncture, we may refer with profit to a two-Judge Bench decision
in Bhagyalakshmi and others v. United Insurance Company Limited and another[11]
wherein the learned Judges took note of the contention of the learned senior
counsel for the claimant-appellant which was to the effect that after the
deletion of the second proviso appended to Section 95(1)(b) of the
Motor Vehicles
Act, 1939 in the 1988 Act, the liability of a passenger in a private vehicle
must also be included in the policy in terms of the provisions of the 1988 Act.
The Bench reproduced the policy, referred to Section 64-B of the
Insurance Act,
1938, took note of the role of the Tariff Advisory Committee and referred to
the decisions in Amrit Lal Sood and Another v. Kaushalya Devi Thapar and
Others[12], 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 Policiesâ€. 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 dealing with
comprehensive policy which is also called a package policy.
In that context, in the earlier part of the judgment, the Bench had stated
thus:- “The policy in question is a package policy. The contract of insurance
if given its face value covers the risk not only of a third party but also of
persons travelling in the car including the owner thereof. The question is as to
whether the policy in question is a comprehensive policy or only an Act
policy.â€
16. Thus, it is quite vivid that the Bench had made a distinction between the
“Act policy†and “comprehensive policy/package policyâ€. We respectfully
concur with the said distinction. The crux of the matter is what would be the
liability of the insurer if the policy is a “comprehensive/package policyâ€.
We are absolutely conscious that the matter has been referred to a larger Bench,
but, as is evident, the Bench has also observed that it would depend upon the
view of the Tariff Advisory Committee pertaining to enforcement of its decision
to cover the liability of an occupant in a vehicle in a “comprehensive/package
policy†regard being had to the contract of insurance.
17. At this stage, it is apposite to note that when the decision in
Bhagyalakshmi (supra) was rendered, a decision of High Court of Delhi dealing
with the view of the Tariff Advisory Committee in respect of
“comprehensive/package policy†had not come into the field. We think it apt
to refer to the same as it deals with certain factual position which can be of
assistance. The High Court of Delhi in Yashpal Luthra and Anr.
V. United India Insurance Co. Ltd. and Another[13], after recording the
evidence of the competent authority of Tariff Advisory Committee (TAC) and
Insurance Regulatory and Development Authority (IRDA), reproduced a circular
dated 16.11.2009 issued by IRDA to CEOs of all the Insurance Companies restating
the factual 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. The relevant portion of the circular which has
been reproduced by the High Court is as follows:- “IRDA Ref:
IRDA/NL/CIR/F&U/073/11/2009 16.11.2009 To CEOs of all general insurance
companies Re: Liability of insurance companies in respect of occupants of a
Private car and pillion rider on a two-wheeler 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 the TAC on the subject:
(i) Circular M.V. No. l of 1978 - dated 18th March, 1978 (regarding occupants
carried in Private Car) effective from 25th March, 1977.
(ii) MOT/GEN/10 dated 2nd June, 1986 (regarding pillion riders in a
two-wheeler) effective from the date of the circular.
The above circulars make it clear that the insured liability in respect of
occupant(s) carried in a private car and pillion rider carried on two-wheeler is
covered under the Standard Motor Package Policy. A copy each of the above
circulars is enclosed for ready reference.
The Authority vide circular No. 066/IRDA/F&U/Mar-08 dated March 26, 2008
issued under File & Use Guidelines has reiterated that pending further
orders the insurers shall not vary the coverage, terms and conditions wording,
warranties, clauses and endorsements in respect of covers that were under the
erstwhile tariffs. Further the Authority, vide circular No.
019/IRDA/NL/F&U/Oct-08 dated November 6, 2008 has mandated that insurers are
not permitted to abridge the scope of standard covers available under the
erstwhile tariffs beyond the options permitted in the erstwhile tariffs. All
general insurers are advised to adhere to the afore-mentioned circulars and any
non- compliance of the same would be viewed seriously by the Authority.
This is issued with the approval of competent authority.
Sd/- (Prabodh Chander) Executive Director†[emphasis supplied]
18. The High Court has also reproduced a circular issued by IRD dated
3.12.2009. It is instructive to quote the same:- “IRDA
IRDA/NL/CIR/F&U/078/12/2009 3.12.2009.
To All CEOs of All general insurance companies (except ECGC, AIC, Staff
Health, Apollo) Re: Liability of insurance companies in respect of occupant of a
private car and pillion rider in a two-wheeler under Standard Motor Package
Policy (also called Comprehensive Policy).
Pursuant to the Order of the Delhi High Court dated 23.11.2009 in MAC APP No.
176/2009 in the case of Yashpal Luthra v. United India and Ors., the Authority
convened a meeting on November 26, 2009 of the CEOs of all the general insurance
companies doing motor insurance business in the presence of the counsel
appearing on behalf of the Authority and the leaned amicus curie.
Based on the unanimous decision taken in the meeting by the representatives
of the general insurance companies to comply 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 respect to all appeals pending before the High Courts on this point,
issuing instructions within 7 days to the respective operating officers and the
counsel to withdraw the contest on this ground which would require
identification of the number of appeals pending before the High Courts (whether
filed by the claimants or the insurers) on this issue within a period of 2 weeks
and the contest on this ground being withdrawn within a period of four weeks
thereafter;
iii) With respect to the appeals pending before the Hon'ble Apex Court,
informing, within a period of 7 days, their respective advocates on record about
the IRDA Circulars, for appropriate advice and action. Your attention is also
drawn to the discussions in the CEOs meeting on 26.11.2009, when it was
reiterated that insurers must take immediate steps to collect statistics about
accident claims on the above subject through a central point of reference
decided by them as the same has to be communicated in due course to the
Honourable High Court. You are therefore advised to take up the exercise of
collecting and collating the information within a period of two months to ensure
necessary & effective compliance of the order of the Court. The information
may be centralized with the Secretariat of the General Insurance Council and
also furnished to us.
IRDA requires a written confirmation from you on the action taken by you in
this regard.
This has the approval of the Competent Authority.
Sd/- (Prabodh Chander) Executive Director†[emphasis added]
19. It is extremely important to note here that till 31st December, 2006 the
Tariff Advisory Committee and, thereafter, from 1st January, 2007, IRDA
functioned as the statutory regulatory authorities and they are entitled to fix
the tariff as well as the terms and conditions of the policies by all insurance
companies. The High Court had issued notice to the Tariff Advisory Committee and
the IRDA to explain the factual position as regards the liability of the
insurance companies in respect of an occupant in a private car under the
“comprehensive/ package policyâ€. Before the High Court, the Competent
Authority of IRDA had stated that on 2nd June, 1986, the Tariff Advisory
Committee had issued instructions to all the insurance companies to cover the
pillion rider of a scooter/motorcycle under the “comprehensive policy†and
the said position continues to be in vogue till date. It had also admitted that
the “comprehensive policy†is presently called a “package policyâ€. 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 that the comprehensive/package
policy of a two wheeler covers a pillion rider 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 Accident Claims
Tribunal to go into the 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, in view of the TAC’s directives and those
of the IRDA, such a plea was not permissible and ought not to have been raised
as, for instance, it was done in the present case.â€
21. In view of the aforesaid factual position, there is no scintilla of doubt
that a “comprehensive/package policy†would cover the liability of the
insurer for payment of compensation for the occupant in a car. There is no cavil
that an “Act Policy†stands on a different footing from a
“Comprehensive/Package Policyâ€. As the circulars have made the position very
clear and the IRDA, which is presently the statutory authority, has commanded
the insurance companies stating that a “Comprehensive/Package Policy†covers
the liability, there cannot be any dispute in that regard.
We may hasten to clarify that the earlier pronouncements were rendered in
respect of the “Act Policy†which admittedly cannot cover a third party risk
of an occupant in a car. But, if the policy is a “Comprehensive/Package
Policyâ€, the liability would be covered. These aspects were not noticed in the
case of Bhagyalakshmi (supra) and, therefore, the matter was referred to a
larger Bench. We are disposed to think that there is no necessity to refer the
present matter to a larger Bench as the IRDA, which is presently the statutory
authority, has clarified the position by issuing circulars which have been
reproduced in the judgment by the Delhi High Court and we have also reproduced
the same.
22. In view of the aforesaid legal position, the question that emerges for
consideration is whether in the case at hand, the policy is an “Act Policyâ€
or “Comprehensive/Package Policyâ€. There has been no discussion either by
the tribunal or the High Court in this regard. True it is, before us, Annexure
P-1 has been filed which is a policy issued by the insurer. It only mentions the
policy to be a “comprehensive policy†but we are inclined to think that
there has to be a scanning of the terms of the entire policy to arrive at the
conclusion whether it is really a “package policy†to cover the liability of
an occupant in a car.
23. In view of the aforesaid analysis, we think it apposite to set aside the
finding of the High Court and the tribunal as regards the liability of the
insurer and remit the matter 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 Policyâ€, the liability would be fastened on the
insurer. As far as other findings recorded by the tribunal and affirmed by the
High Court are concerned, they remain undisturbed.
24. Consequently, the appeal is allowed to the extent indicated above and the
matter is remitted to the tribunal for the purpose of adjudication as directed
hereinabove. There shall be no order as to costs.
...................................J.
[K. S. Radhakrishnan]
........................................J
[Dipak Misra] New Delhi;
November 20, 2012.
