National Insurance Co. Ltd. vs Afroza

Bansi Lal Bhat, J.—This Civil First Miscellaneous Appeal is directed against the interim order dated 22.01.2013 passed by the Presiding

Officer of the Motor Accidents Claims Tribunal, (for short, 'Tribunal'), Shopian, in a claim petition titled Afrooza and others v. Zahoor Ahmad

Najar and others, on the grounds projected in the memo of appeal. The short controversy in the instant appeal is limited to the issue as to whether

the death of an occupant in a road accident traveling in a private car as a gratuitous passenger would entitle the legal representatives of the

deceased occupant to interim relief in terms of Section 140 of the Motor Vehicles Act, 1988, on the principles of no fault liability.

The admitted facts giving rise to this controversy may briefly be noticed.

One Fayaz Ahmad Ganai was travelling in the offending vehicle bearing registration No. JKO1F-9188 from Jammu to Srinagar. At Sherbibi

near Banihal, the said vehicle met with an accident and fell into a gorge. The deceased sustained fatal injuries and died on the spot. The legal

representatives of the deceased filed a claim petition u/s 166 of the Motor Vehicles Act, 1988 (for brevity 'Act') before the Tribunal. Pending

adjudication of the claim, the claimants filed an application for grant of interim relief u/s 140 of the Act. The appellant-insurer raised objections to

the award of interim relief on the ground that the driver/owner of the private car was not holding a valid and effective driving license on the date of

accident and that the deceased was not covered under the insurance policy as the said car was insured against 3rd party risks and deceased was a

gratuitous passenger. It is the admitted case of the parties that the deceased was travelling in the said car which met with a fatal accident resulting in

death of the deceased. It is also an admitted case before the Tribunal that offending car was insured with the appellant-Insurer. The Tribunal, on

consideration of the respective cases of the parties, was of the opinion that the expression 3rd party includes everyone including the persons

travelling in any vehicle. The Tribunal has placed reliance on the judgment of this Court in Oriental Insurance Co. Ltd. Vs. Surinder Kumar and

Others, . It being the undisputed case of the parties that the deceased met with a fatal accident involving use of offending vehicle which was

covered by insurance against 3rd party risks, it is to be determined whether the occupant of a private car travelling as a gratuitous passenger is

governed by the insurance against the 3rd party risks.

In National Insurance Co. Ltd. Vs. Faqir Chand and Others, , this Court while considering the case set out therein has held that the expression

'third party' refers to a party which is neither the first party (the insurer) nor the second party (the insured). It would be advantageous to reproduce

the paragraph 3 of the judgment, which reads hereunder:

Other than the contracting parties to the insurance policy, the expression ""third party"" therefore, should include everyone, be it a person

travelling in another vehicle, one walking on the road or a passenger in the vehicle itself which is the subject matter of the insurance policy. Every

insured takes out an insurance policy against a third party risk, and enters into a contract with insurer, only with the motive, intention and purpose

of covering the risks which may arise in relation to claims lodged against him by a third party. Be agreeing to issue the insurance policy, the insurer

undertakes to insure the insured and indemnify him against all risks and in relation to all claims lodged against him by third parties. Narrowing the

concept, scope and ambit of a third party, and therefore, excluding the passengers in the vehicle from the operation and purview would not only

defeat the very purpose of taking out the insurance policy, but the very object of the Motor Vehicles Act which makes it a mandatory requirement

of law that all vehicles/owners of vehicles must be compulsorily insured against third party risks.

What emerges from the reproduction aforementioned is that the Court was dealing with the claim petition in regard to a passenger traveling in a

bus. It is significant to notice that in terms of the provisions of Section 147 of the Act, a policy of insurance required to comply with the

requirement of Chapter XI of the Act, must be a policy which, inter alia, is issued by an insurer and insures the persons(s) specified in the insurance

policy, against the death 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. It is manifestly clear that a public service vehicle, used for transportation of passengers for hire or reward, has to be compulsorily insured

against third party risk covering the passengers. However, a private car is not a vehicle used for commercial purposes or for transportation of

passengers for hire or reward. The insurers' liability would, therefore, be not made out when the private car is not specifically covered in regard to

gratuitous passengers.

Admittedly, premium to cover a gratuitous passenger has not been paid in the instant case.

Learned counsel for the appellant has placed reliance on the judgment passed by one of the coordinate Benches of this Court in CIMA No.

55/2007 in case National Insurance Co. Ltd. v. Mst. Feroza and another, decided on 27.02.2008, which squarely applies to the facts and

circumstances of the instant case. In the aforesaid case, the offending vehicle was insured only with respect to third party risk and the injured who

happened to be the wife of the insured, was travelling in the offending car as a gratuitous passenger. It is apt to reproduce paragraph 5 of the

judgment, which reads hereunder:

The vehicle admittedly was insured only with respect to the 3rd party risk. Respondent No. 1 was the gratuitous passenger. In order to make the

company liable to pay the compensation, premium under IMT-16 has to be paid, which admittedly has not been paid. So admittedly, vis-Ã -vis

gratuitous passenger, Insurance Company is not liable to pay any compensation.

Viewed thus, this appeal merits acceptance. Accordingly, appeal is allowed and the impugned order dated 22.01.2013 is set aside. The learned

Tribunal is directed to proceed ahead with the matter in accordance with the settled law and the provisions of the Motor Vehicles Act.

Registry is directed to send a copy of this order to the Tribunal for information. Disposed of.