Holding

A person whose name remains on the RTO register remains liable to third parties, and a third‑party motor insurance policy does not cover liability to gratuitous passengers.

Summary

A passenger died in a car accident on 9 April 1987. The claimants filed a suit before the Motor Accidents Claims Tribunal against the appellant (Dr. T.V. Jose), the driver and the insurer. The appellant asserted that he had transferred ownership of the car before the accident, but the transfer was never recorded in the RTO, which still listed him as the owner and the insurance policy was in his name. The Tribunal held only the driver liable; the High Court later held the appellant liable as the owner and discharged the insurer, relying on a tariff circular that applied only to comprehensive policies. On appeal, the Supreme Court held that the appellant remains liable to third parties because his name remained on the RTO register, that any inter‑se dispute with the transferee must be pursued separately, and that a third‑party policy does not cover liability to gratuitous passengers; consequently the insurer was not liable. The appeals were dismissed.

Issues considered

The appellant's liability despite the transfer of ownership not being reflected in RTO records.
Whether inter‑se liability between the appellant and the transferee can be adjudicated by the court.
The scope of coverage under a third‑party motor insurance policy with respect to gratuitous passengers.
The relevance of the Tariff Advisory Committee circular to a third‑party policy.
The necessity of producing the policy's terms and conditions to determine insurer liability.

Legislation cited

Motor Vehicles Act, 1939s. 94, s. 95
Motor Vehicles Act, 1988

Subjects

motor accidentcompensationthird‑party insurancegratuitous passengerowner liabilityRTO registrationMotor Vehicles Actinter‑se liabilityinsurance policy coverage

Judgment

A DR. T. V. JOSE
v.
CHACKO P.M. @ THANKACHAN AND ORS.

SEPTEMBER 27, 2001

B [N. SANTOSH HEGDE AND S.N. VARIAVA, JJ.]

Motor Vehicles Act, 1988:

Car accident-Death of a passenger-liability to pay compensation vis-
a-vis the driver, the owner ofthe car and insurance company-Plea ofappellant-
c owner that the car was transferred to another person-RTO records not showing
the trans.fer-Tribunal held the driver liable and discharged the owner and
insurance company.from the liability-High Court held appellant liable relying
on RTO records-On appeal appellant held liable though the ownership of the
car had changed since the trans.fer was not effected in the records of RTO-
D Insurance company discharged from liability as third party policy did not cover
liability to gratuitous passengers who were not carried for hire or reward-
Motor Vehicles Act, 1939-Sections 94 and 95.

In a car accident one of the passenger travelling in the car died. The
legal representatives of the deceased claimed compensation before the
E Motor Accidents Claims J'ribunal. Appellant contended that he was not
the actual owner and one 'R' was the owner of the same on the date of the
accident. However, he admitted that the transfe.r was not intimated to
R.1~0. and in its record appellant was shown the owner and the insurance
policy was also i11 the name of the appellant. Respondent No. l driver
F contended that the appellant was the owner as he was employed by the
appellant. Insurance Company contended that since the policy was 'Third
Party Policy' it did not have any liability towards its passengers. Tribunal
passed an award holding the driver liable to pay compensation and relying
on the oral evidence held that the appellant not being the owner of the car
was not liable and the Insurance Company too was not liable since the
G
policy was issued in the name of the appellant when he was not the real
owner•

. Before High Court, appellant contended that Insurance Company
was liable to pay compensation in view of the circular issued by the Tariff
H Advisory committee. High Court held that the appellant was also liable to
366
DR. T.V. JOSE v. CHACKO P.M. @ THANKACHAN 367

.pay compensation since he was the owner of the car as documents disclosed A
so, and that the Insurance Company was not liable since the said cireular
only dealt with comprehensive policy.

In appeal to this Court, appellant contended that the real owner of
the car was 'R' and hence he was liable to pay the compensatiOn; and that
the Insurance Company was liable to pay the compensation as even in a B
third party policy the Insurance Company would be liable for a claim by a
passenger in the car as Section Il(l)(a) of Insurance Policy provided that
Insurance Company was liable for death or bodily injury of any person,
and as Sections 94 and 95 of Motor Vehicles Act 1939 provided that 'any
person' and 'third party' would also include passengers in the car; and c
that it was the duty of the Insurance Company to have produced the terms
and conditions of the original Policy before the Court. Respondents
contended that though according to a clause of the policy I.M. T. S was for
accident to passengers other than insured, but since the premium required
to be paid to cover passengers or occupants of the car were not paid, the
• .,. D
policy did not cover liability to such persons; and that terms and comUtions
relied upon by the appellant were not on record and the appellant had
shown the terms and conditions of a comprehensive policy which did not
apply to third party policy.

Dismissing the appeals, the Court E
HELD : 1.1. High Court was not right in holding that the appellant
continued to be the owner~as the name had not been changed in the records
of R.T.O. There can be transfer of title by payment of consideration and
delivery of the Car. The evidence on record shows that ownership of the
car bad been transferred. However the appellant still continued to remain F
liable to third parties as his name continued in the records of R.T.O. as
owner; he could not escape the liability by adding the transferee, who was
not a party either before the Tribunal or the High Court. [370-F; GJ

- 1.2. In order to decide inter se liability between the appellant and the
transferee it is for the appellant to adopt appropriate proceedings against
him if, in law, he is entitled to do so. (370-H; 371-A]
G

2. In the absence of terms and conditions governing Insurance Policy
it is not possible to accept that this policy covered liability to occupants of
the car. A third party policy does not cover liability to gratuitous passengers H
368 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
A who are not carried for hire or reward. The Insurance Company will,
therefore, not be liable to reimburse the appellant. [377-H; 378-A]

Amrit Lal Sood v. Kaushalya Devi Thapar, [1998] 3 SCC 744; National

B
Insurance Co. Ltd. v. V.S.R. Kumaresan, AIR (1991) Madras 3; P.P. Udeshi v.
Ranjit Ginning and Pressing Co., [1977] 2 SCC 745 and National Insurance
Co. Ltd. v. Jugal Kishore, [1988] 1 SCC 626, referred to.
-
· 3. The finding of the High Court that Circular issued by Tariff
Advisory Committee only covered comprehensive policies cannot be
challenged now. A new case cannot be allowed to be made out. Section Il
C (l)(a) of Insurance Policy relied upon is a term which is incorporated
pursuant to that circular. If the Circular only applies to comprehensive
policies then this term also applies to comprehensive policies only. It is now
too late in the day to call upon the Insurance Company to, produce the
original terms and conditions. [378-D; EJ

D National Insurance Co. Ltd. v. Jugal Kishore, [1988] 1 SCC 626, referred
to.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2215-2216 of
1993.

E From the Judgment and Order dated 30.1.91 of the Kerala High Court
in M.F.A. Nos. 566 and 627 of 1989.

T.L.V. Iyer, B.P. Suresh, Vipin Nair, K.M.K. Nair, K.K. Misra, S.N. Jha,
M.K.D. Namboodiri, N.M. Popli for P.I. Jose, Vishnu Mehra for C.N. Sreekumar
F for the appearing parties.

The Judgme~t of the Court was delivered by ...,
/

S. N. VARIAVA, J. These Appeals are against a Judgment dated 30th
January, 1991.
G
Briefly stated the facts are as follows: -
Car bearing No. KLO 4828, driven by the 1st Respondent (herein), met
with an accident on 9th April, 1987. One of the passengers viz. one Anthony
Alexander was seriously injured in that accident. The said Anthony Alexander
H thereafter succumbed to his injuries on 10th April, 1987. Respondents 1 to 6
DR. T.V. JOSE v. CHACKO P.M. @ THANKACHAN [VARIAVA, J.] 369
are the legal representatives of the said Anthony Alexander. They filed a claim A
before the Motor Accidents Claims Tribunal (hereinafter referred to as the
MACT) against the Appellant, the 1st Respondent and the 8th Respondent
(Insurance Company).

Before MACT the Appellant claimed that he had sold the car, on 7th
May, 1986, to one Smt. M. K. Bhavani. It was claimed that Smt. Bhavani had B
thereafter sold the car, on 12th May, 1986, to Sh. Aboobacker. It was claimed
that on 15th August, 1986 Sh. Aboobacker had sold the car to one George
Mathew. The said George Mathew had supposedly thereafter sold the car to one .
Roy Thomas on 18th August, 1986. The Appellant claimed that on the date of
the accident the car belonged to Roy Thomas. However it was an admitted c
position that the transfer of ownership of the car was never intimated to the
R.T.O. and that in the records of R.T.O. the name of the Appellant continued
to be shown as the owner.

•.,. An Insurance Policy bearing No. 100505/22/1/0067/86 had been issued
by the 8th Respondent. It was valid from 25th November, 1986 to 24th D
November, 1987. This Policy had been issued in the name of the Appellant.
Before M'ACT the Appellant claimed that he had not taken out the Insurance
Policy.

The 1st Respondent claimed, before the MACT, that the real owner was
E
the Appellant. The 1st Respondent claimed that he was employed by the
Appellant. The 8th Respondent claimed that the Policy was only an Act Policy
(Third Party Policy) and, therefore, it did not cover liability towards passengers.

Before MACT the Appellant examined himself. He also examined Smt.
M. K. Bhavani, her son, Sh. Aboobacker and George Mathew to show that the F
... car had been sold by him. The 1st Respondent gave evidence to the effect that
the Appellant was still the owner of the car.

After considering the evidence MACT gave an Award dated 5th May,
1988. It held that the Appellant was not the owner of the car and was, therefore,
not liable. It held that the Insurance Company was also not liable as the Policy G
had been got issued in the name of the Appellant when he was not the real
owner. It held that the driver was rash and negligent· and responsible for the
accident. MACT passed an Award in a sum of Rs. 1,40,700/- with interest at
12 per cent per annum. MACT held that the driver was bound to pay the sum
to the claimants. H
370 SUPREME COURT REPORTS [2001] SUPP. 3 S.C'.R.
A The 1st Respondent and Respondents 1 to 6 filed Appeals before the
High Court. The High Court disposed of both the Appeals by the impugned
Judgmen~dated 30th January, 1991. The High Court held that all the documents
disclosed the Appellant to be the owner of the car. The High Court held that
the Appellant was thus the owner of the car. The High Court held that as such
B owner the Appellant was liable to pay compensation to the claimants. The High
Court confirmed the finding that the driver had been rash and negligent and
was the cause of the accident. The High Court held that the Policy was an Act
only (Third Party Policy) and, therefore, the Insurance Company was riot liable.
The High Court, however, reduced the compensation to a sum of Rs. 1,32,000/
- with interest at 12 per cent per annum from 7th July, 1987. Hence t~ese Civil
c Appeals.

Mr. Iyer appearing for the Appellant submitted that the High Court was
wrong in ignoring the oral evidence on record. He submitted that the oral
evidence clearly showed that the Appellant was not the owner of the car on the
D date of the accident. Mr. Iyer submitted that nierely because the name had not
been changed in the records of the R.T.O. did not mean that the ownershiJ> of
the vehicle had not been transferred. Mr. Iyer submitted that the real owner of
the car was Mr. Roy Thomas. Mr. Iyer submitted that Mr. Roy Thomas had
been made party Respondent No.9 to these Appeals. He pointed out that an
E Advocate had filed appearance on· behalf of Mr. Roy Thomas but had then
applied for and was permitted to withdraw the appearance. He pointed out that
Mr. Roy Thomas had been duly served and a public notice had also been issued.
He pointed out that Mr. Roy Thomas had chosen not to appear in these Appeals.
He submitted that the liability, if any, was of Mr. Roy Thomas.

F We agree with Mr. Iyer that the High Court was not right in holding that
•
the Appellant continued to be the owner as the name ·had not been changed in
~~e records of R.T.O. There can be transfer of title by payment of consideration
and delivery of the car. The evidence on record shows that ownership of the
car had been transferred. However the Appellant still continued to remain liable
G to third parties as his name continued in the records of R.T.O. as owner. The
Appellant could not escape that liability by merely joining Mr. Roy Thomas
in these Appeals. Mr. Roy Thomas was not a party either before MACT or the
High Court. In these Appeals we cannot and will not go into the question of
inter se liability between the Appellant and Mr. Roy Thomas. It will be for the
H Appellant to adopt appropriate proceedings against Mr. Roy Thomas if, in law,
DR. T.V. JOSE v. CHACKO P.M. @ THANKACHAN [VARIAVA, J.] 371

he is entitled to do so. A
Mr. Iyer then submitted that the Policy was in the name of the Appellant.
He admitted that this was a third party Policy.. He submitted that even in a third
party policy the Insurance Company would be liable for a claim by a passenger
in the car. He submitted that in any case the terms of this policy made the
Insurance Company liable even for a claim by a gratuitous passenger. He B
produced certain terms and conditions and claimed that these governed this
policy. He then relied upon Section II (l)(a) wherein it is provided as follows~

"SECTION II - LIABILITY TO THIRD PARTIES.

(1) The Company will indemnify the insured in the event of accident C
caused by or arising out of the use of the Motor Car against all sums
including claimants costs a.nd expenses which the Insured shall become
legally liable to pay in respect of

(a) death of or bodily injmy to any person including occupants
carried in the Motor Car provided that such occupants are not carried D
for hire or reward but except so far as is necessary to meet the
requirements of Section 95 of the motor Vehicles Act, 1939, the
Company-shall not be liable wher~ such death or injury arises out of
and in the course 'of employment of such person by the Insured.
E
xxx xxx xxx"

Mr. Iyer then showed to Court the Policy which is on record. From it he showed
that l.M.T. Endorsement No. 2(a) had been excluded. He submitted that l.M.T.
Endorsement 2(a) only excluded Sections I and III of the Policy. He submitted
that this clearly showed that Section II continued to apply. He submitted that F
Clause 1(a) of Section II clearly showed that the Insurance Company was liable
for death or bodily injury to any person including the occupant. He submitted
that, therefore, the 8th Respondent was liable to reimburse the Appellant.

Mr. Iyer further submitted that under Sections 94 and 95 of the Motor
Vehicles Act, 1939 it was compulsory that all cars be insured. He submitted G
that the minimum insurance which was required under Section 95 (l)(b) was
as follows:

"95. xxx xxx xxx

(a) xxx xxx xxx H
372 SUPREME COURT REPORTS (2001) SUPP. 3 S.C.R.
A (b) insures the person or classes of persons specified in the policy to
the extent specifi~d in sub-section (2) -

(i) again~t any liability which may be incurred by him in
respect of the death of or bodily injury to any person or
damage ~o any property of a third party caused by or arising
B out of the use of the vehicle in 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:

c 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
D course of his employment other than a liability arising
under the Workmen's Compensation Act, 1923 (8of1923),
in respect of the death of, or bodily injury to, any such
employee - , • -'
. . :.\ . . 'ti\ -r~.

E (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 vehicle, being carried in the vehicle, or
F (ii) except where the vehicle is a vehicle in which passengers
are carried for hire or reward or by reason of or in pursuance
of a contract of employment, to cover liability in respect of
the death of or bodily injury to persons ,being carried in or
upon or entering or mounting or alighting from the vehicle
G at the time of the occurrence of the event out of which a
claim-arises, or

(iii) to.cover any contractual liability."

He submitted that even a third party policy covers liability for bodily
H iajury to any person or damage to the property of a third party. He submitted
DR. T.V. JOSE v. CHACKO P.M. @ THANKACHAN [VARIAVA, J.] 373
that the term "any person" and the term "third party" would also include A
gratuitous passengers in the car.

Mr. Iyer relied upon the authority in the case of Amrit Lal Sood v.
Kaushalya Devi Thaparreported in [1998) 3 SCC 744, whereunder it has been
held that the term "any person" would include an occupant of the car who was
gratuitously travelling in the car. However, at this stage, it must be noted that B
this Court has in Para 4 of this Judgment held as follows:

"The liability of the insurer in this case depends on the terms of the
contract between the insured and the insurer as evident from the policy.
Section 94 of the Motor Vehicle Act, 1939 compels the owner of a
motor vehi~le to insure the vehicle in compliance with the requirements
c
of Chapter VIII of the Act. Section 95 of the Act provides that a policy
of insurance must be one which insures the person against any liability
which may be incurred by him in respect of death or bodily injury to
any person or damage to any property of third party caused by or
arising out of the use of the vehicle in a public place. The section does D
not however require a policy to cover the risk to passengers who are
not carried for hire or reward. The statutory insurance does not cover
injury suffered by occupants of the vehicle who are not carried for hire
or reward and the insurer cannot be held liable under the Act. But that
does not prevent an insurer from entering into a contract of insurance E
covering a risk wider than the minimum requirement of the statute
whereby the risk to gratuitous passengers could also be covered. In
such cases where the policy is not merely a statutory policy, the terms
of the policy have to be considered to determine the liability of the
insurer."
F
The finding that the term "any person" would include an occupant who is
gratuitously travelling in the car is clearly in respect of a comprehensive policy
and not in respect of a third party policy.

Mr. Iyer also relied upon the authority in the case of National Insurance
Co. ltd. v. V. S. R. Kumaresan reported in AIR (1991) Madras 3. In that case G
the Policy had a term which said "used only under a stage carriage permit" and
the accident occurred when the vehicle was being test driven on a private road.
The Court held that the Insurance Company was still liable. The Court further
held that the expression "third party" in Section 95 ( 1)(b) does not mean one
outside the vehicle. H
374 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
A On the other hand, Mr. Vishnu Mehra appearing for the 8th Respondent
submitted that the policy was a third party policy. He pointed out that the
premium paid was only Rs. 120/-. He pointed out that in the Policy, which was
on record, there was a Clause which read as follows:

"Add: Personal Accident Benefit as per IMT 5, Death benefit Rs.
B

He pointed out that LH.T. .S was for accident to passengers other than
the insured, his paid driver or cleaner. He submitted that the premium required
to be paid. to cover r>assengers or occupants of the car had not been paid. He
submitted that this policy did not cover liability to such persons. He pointed
c out that the terms an<l conditions of the policy relied upon by Mr. Iyer were
not on record. He pointed out that what was being shown to the Court were
some terms and conditions of a comprehensive policy for private cars. H':'
submitted that those terms did not apply to a third party policy and would not
help the claimants.
D
Mr. Vishnu Mehra relied upon the Judgment in the case of P.P. Udeshi
v. Ranjit Ginning and Pressing Co. reported in [1977] 2 SCC 745. In that case
the question was the identical, i.e. whether a Third Party Policy would cover
risk to a passenger. This Court has held a!'follows:

E "19 .As Section 95 of the Motor Vehicles Act, 1935 as amended by Act
56 of 1969 is based on the English Act it is useful. to refer to that.
Neither the Road Traffic Act, 1960, or the earlier 1930 Act required
users of motor vehicles to be insured in respect of liability for death
or bodily injury to passengers in the vehicle being used except a
F vehicle in which passengers were carried for hire or reward or by
reason of or in pursuance of a contract of employment. In fact, sub-
section 203( 4) of the 1960 Act provided that the policy shall not be
required to cover liability in respect of death of or bodily injury to
persons being carried in or upon, or entering or getting on to or •
alighting from, the vehicle at the time of the occurrence of the event
G out of which the claims arise. The provisions of the Englis_h Act being
explicit the risk to passengers is not covered by the insurance policy.
The provisions under the English Road Traffic Act, 1960, were
introduced by the amendment of Section 95 of the Indian Motor
Vehicles Act. The law as regards general exclusion of passengers is
H stated in Halsbury's Laws ofEngland, Third Edition, Vol. 22, at p. 368,
DR. T.V. JOSE v. CHACKO P.M. @ THANKACHAN [VARIAVA, J.] 375
para 755 as follows: A
Subject to certain exceptions a policy is not required to cover
liability in respect of the death of, or bodily injury to, a person being
carried in or upon, or entering or getting into or alighLing from, the
vehicle at the time of the occurrence of the event out of which the claim
arises. B

It is necessary to refer to the subsequent developm~nt of the English
law and as the subsequent changes have not been adopted in the Indian
statute, suffice it to say that the Motor Vehicle (Passenger Insurance)
Act, 1971, made insurance cover for passenger liability compulsory by
repealing paragraph (a) and the proviso of sub-section 203(4). But this
c
Act was repealed by Road Traffic Act, 1972 though under Section 145
of i 972 Act the coming into force of the provisions of Act 1971
covering passenger liability was delayed under December 1, 1972.
(vide Bingham's Motor Claims Cases, 7th Ed., p. 704.)
D
20. Sectio~s 95(a) and 95(b)(i) of the Motor Vehicles Act adopted the
provisions of the English Road Traffic Act, 1960, and excluded the
liability of the insurance company regarding the risk to the passengers.
Section 95 provides that a policy of insurance must be a policy which
insures the persons against any liability which may be incurred by hiin
E
in respect of death or bodily injury to any person or damage to any
property of a third party caused by or arising out of the use of the
vehicle in a public place. The plea that the words "third party" are wide
enough to cover all persons excepi the person and the insurer is
negatived as the insurance cover· is not available to the passengers
made clear by the proviso to sub-section which provides that a policy F
shall not be required:

(ii) except where the vehicle is a vehicle in which passengers are
carried for hire or reward or by reason of or in pursuance of a contract
of employment, to cover liability in respect of the death of or bodily
G
injury to persons being carried in or upon or entering or mounting or
alighting from the vehicle at the time of the occurrence of the event
out of which a claim arises.

Therefore it is not required that a policy of insurance should cover risk
to the passengers who are not carried for hire or reward. As under H
376 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
.A Section 95 the risk to a passenger in a vehicle who is not carried for
hire or reward is not required to be insured the plea of the counsel for
the insurance company will have to be accepted and the insurance
company held not liable under the requirements of the Motor Vehicles
Act.

B 21.The insurer can always take policies covering risks which are not
covered by the requirements of Section 95. In this case the insurer had
insured with the insurance company the risk to the passengers. By an
endorsement to the policy the insurance company had insured the
liability regarding the accidents to passengers in the following terms:
c In consideration of the payment of an additional premium it is
hereby understood and agreed that the Company undertakes to pay
compensation on the scale provided below for bodily injury as
hereinafter defined sustained by any passenger .......... .

D The scale of compensation is fixed at Rs. 15,000. The insurance
company is ready and willing to pay compensation to the extent of Rs.
15,000 according to this endorsement but the learned Counsel for the
insured submitted that the lia_bility of the insurance company is unlimited
. with regard to risk,!o the passengers. The counsel relied on Section II
of the Policy which relates to liability to third parties. The clause relied
E on is extracted in full:

Section II - Liability to Third Parties

1. The Company will indemnify the insured in the event of
accident caused by or arising out of the use of the Motor Car against
F all sums including claimant's costs and expenses which the insured
shall become legally liable to pay in respect of

(a) death of or bodily injury to any person but except so
far as is necessary to meet the requirements of Section 95 of the
Motor Vehicles Act, 1939, the Company shall not be liable where
G
such death or injury arises out of and in the course of the
employment of such persons by the insured.

It was submitted that the wording of clause 1 is wide enough to cover
all risks including injuries to passengers. The clause provides that the
H Company will indemnify the insured against .all sums including
DR. T.V. JOS.f; v: CHACKO P.M. @ THANKACHAN [VARIAVA, J.] 377
claima'nt's costs and expenses which the insured shall become legally A
fiab1e,. 'rhis according to the learned Counsel would include legal
liability to pay for risk to passengers. The legal liability is restricted
to clause l\a) which states that the indemnity is in relation to the legal
liabifity to pay in respect of death of or bodily injury to any person but
except so far as is necessary to meet the requirements of Section 95
B
of the Motor Vehicles Act, the Company shall not be liable where such
death or injury arises out of and in the course of the employment of
such person by the insured. Clause 1 and l(a) are not very clearly
worded but the words "except so far as is necessary to meet the
requirements of Section 95 of the Motor Vehicles Act, 1939." would
indicate that the liability is restricted to the liability arising out of the c
statutory requirements under Section 95. The second part of clause
l(a) refers to the non-liability for injuries arising in the course of
employment of such person. The meaning of this sub-clause becomes
clear when we look to the other clauses of the insurance policy. The
policy also provides for insurance of risks which are not covered under D
Section 95 of the Act by stipulating payment of extra premium. These
clauses would themselves indicate that what was intended to be covered
under clause 1 and 1(a) is the risk required to be covered under Section
95 of the Motor Vehicles Act."

Mr. Vishnu Mehra further pointed out that in Amrit Lal Sood's case E
(supra) also it has been held that Section 95 of the Motor Vehicles Act does
not require a policy to cover the risk to pas~gers, who are not carried for hire
or reward. He submitted that in that case the Policy was a comprehensive policy
and because of that it was held that the risk to passengers was covered.

Mr. Vishnu Mehra also relied upon the case of National Insurance Co. F
Ltd. v. fugal Kishore reported in [1988] 1 SCC 626, wherein it has been held
that as the liability under the policy was in excess of the statutory liability the
award against the insurance company could only be in accordance with the
statutory liability.

In this case only the first sheet of the policy is on record. This clearly
G
shows that the policy is a third party policy. The terms and conditions governing
this Policy are not on record. What was shown to Court was terms and conditions
of a comprehensive policy relating to private cars. These cannot apply to this
policy. In the absence of terms and conditions governing this policy it is not
possible to accept the submission of Mr. Iyer that this policy covered liability H
378 SUPREME COURT REPORTS (2001] SUPP. 3 S.C.R.
A to occupants of the car. As has been set out hereinabove, the law on this subject
is clear, a third party policy does not cover liability to gratuitous passengers
who are not carried for hire or reward. The 8th Respondent Company will,
therefore, not be liable to reimburse the Appellant.

Faced with this situation, Mr. Iyer relied upon Jugal Kishore's case
B (supra) and submitted that it was the duty of the Insurance Company to have
produced the terms and conditions of the original Policy. He submits that they
should even now be called upon to produce the terms and conditions governing
this policy. We are unable to accept this submission. It has not been the
Appellant's case, either before MACT or before the High Court, that the policy
c contained any term which covered liability to passengers. Before MACT the
~ase was that the Appellant was not the owner and was, therefore, not liable.
Before the High Court the case that because of the Circular issued by the Tariff
Advisory Committee the Insurance Company was liable. The High Court held
that that Circular only dealt with comprehensive policy. ThatCircular has not
been produced before us. Therefore the finding of the High Court that that
D Circular only covered comprehensive policies cannot be challenged. Now a
new case cannot be allowed to be made out. Section Il(l)(a) relied upon is a
term which is incorporated pursuant to that Circular. If the Circular only applies
to comprehensive policies then this term also applies to comprehensive policies
only. In our view it is now too late in the day to call upon the 8th Respondent
E to produce the original terms and conditions.

Under the circumstan~es, ~ see no substance in these Appeals. The
same stand dismissed. There will be no Order as to costs.

K.K.T. Appeals dismissed.
F