Supreme Court of India
ORIENTAL INSURANCE CO. LTD.versusSUDHAKARAN K.V. & ORS.
- Citation
- 2008 INSC 713
- Decided
- 16 May 2008
- Disposal
- Appeal(s) allowed
- Bench
- S B SINHA
Holding
A pillion rider on a two‑wheeler is not a third party within the meaning of Section 147 of the Motor Vehicles Act, 1988, and the insurer is not liable unless a separate premium covers that risk.
Summary
The case concerned a claim for compensation under Section 147 of the Motor Vehicles Act, 1988 for the death of a pillion rider who fell from a scooter. The Motor Accident Claims Tribunal and the Kerala High Court held that the insurer, Oriental Insurance Co. Ltd., was liable because the vehicle was insured and the accident was caused by the rider's rash driving. The insurer appealed, contending that a pillion rider is not a "third party" within the meaning of the Act and that the policy covered only third‑party liability, not the risk of a gratuitous passenger. The Supreme Court examined the language of the insurance contract and prior jurisprudence, concluding that a pillion rider on a two‑wheeler is not a third party unless a specific premium is paid to cover such risk. Consequently, the Court set aside the award, held the insurer not liable, and allowed the appeal. The decision reaffirmed that Section 147 liability is confined to third‑party risks and does not extend to owners or pillion riders.
Issues considered
- Whether a pillion rider on a two‑wheeler qualifies as a 'third party' under Section 147 of the Motor Vehicles Act, 1988 for the purpose of insurer liability.
Legislation cited
- Motor Vehicles Act, 1988s. 140, s. 147, s. 168, s. 173, s. 174
Subjects
Motor Vehicles ActSection 147third partypillion riderinsurance liabilitygratuitous passengerMotor Accident Claims Tribunalsocial justice
Judgment
[2008] 9 S.C.R. 367
.l ..
ORIENTAL INSURANCE CO. LTD. A
v.
SUDHAKARAN K.V. & ORS.
(Civil Appeal No. 3634 of 2008)
MAY 16, 2008
B
[S.B. SINHA AND LOKESHWAR SINGH PANTA, JJ]
~
Motor Vehicles Act, 1988:
s.147 - Claim in respect of death of a pillion rider on a
scooter - Liability of insurer - Held : Pillion rider in a two c
wheeler was not treated to be a third party when accident took
place owing to rash and negligent riding of the scooter and
not of the driver of another vehicle - Judgment of High Court
upholding the liability of insurer set aside.
D
A petition was filed before the Motor Accident Claims
Tribunal claiming compensation for death of a pillion rider,
who fell from the scooter of respondent no.1 and sue-
cumbed to the injuries. The Tribunal held that the accident
took place due to rash and negligent riding of respondent
no.1. It awarded a sum of Rs. 1,18.900/- with 12% interest E
from the date of filing of the claim petition till the realiza-
tion, holding that since existence of insurance policy was
admitted, the insurance company was also liable. The Di-
..., vision Bench of the High Court having upheld the award,
~
the insurance company filed the instant appeal. F
The question for consideration before the Court was:
whether the pillion rider on a scooter would be a third party
within the meaning of Section 147 of the Motor Vehicles
Act, 1988?
G
Allowing the appeal, the Court
' -t
HELD: 1.1 The provisions of the Motor Vehicles Act,
1988 and, in particular, Section 147 of the Act were en-
367 H
368 SUPREME COURT REPORTS [2008] 9 S.C.R.
...
A acted for the purpose of enforcing the principles of so-
cial justice. It, however, must be kept confined to a third
party risk. A contract of insurance which is not statutory
in nature should be construed like any other contract. In
the instant case, the contract of insurance was entered
B into on or about 2.12.1992. It was 'A policy for act liability'
meaning thereby a third party liability and not covering
the risk of the owner or a pillion rider. Indisputably, a dis- ,.
tinction has to be made between a contract of insurance
in regard to a third party and the owner or the driver of
c the vehicle. An exception in the contract of insurance has
been made, i.e., by covering the risk of the driver of the
vehicle. The deceased was, indisputably, not the driver
of the vehicle. In view of the terms of the contract of in-
surance, however, she would not be covered thereby.
[para 7, 10,14-16] [371-G; 372-F-G; 373-F-G; 374-C]
D
1.2 The law which emerges from the decisions of the ~
Court is: (i) the liability of the insurance company in a case
of this nature is not extended to a pillion rider of the mo-
tor vehicle unless the requisite amount of premium is paid
E for covering his/her risk (ii) the legal obligation arising un-
der 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
F and negligent riding of the scooter and not on the part of ..
the driver of another vehicle. [para 19) [375-H; 376-A-B]
United India Insurance Co. Ltd., Shim/a v. Tilak Singh
and Ors. [(2006) 4 SCC 404]; National Insurance Co. Ltd. v.
Laxmi Narain Dhut [(2007) 3 SCC 700), Oriental Insurance
G Co. Ltd. v. Meena Variyal [(2007) 5 SCC 428) and New India
Assurance Co. Ltd. v. Ved Wati (2007) 9 SCC 486
~
..
•
United India Insurance Company Ltd. v. Serjerao & Ors.
2007 (13) SCALE 80; Ghulam Mohammad Dar v. State of
J&K and Ors. (2008) 1 SCC 422; The New India Insurance
H
ORIENTAL INSURANCE v. SUDHAKARAN K.V. 369
& ORS. [S.B.SINHA.J:]
Company v. Darshana Devi & Ors. 2008 (2) SCALE 432; and A
United India Insurance Co. Ltd. Shim/a v. Tilak Singh and Ors.
(2006) 4 sec 404 - referred to.
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 3634
From the final Judgment and Order dated 22.3.2006 of B
the High Court of Kerala at Ernakulam in M.F.A. No. 536of1999
Anchal Jain, Santosh Paul and M.J. Paul for the Appellant.
Purnima Bhat and K. Sarada Devi for the Respondents.
The Judgment of the Court was delivered by c
S.B.SINHA.J: Leave granted.
1. This appeal is directed against a judgment and order
dated 22.3.2006 passed by the High Court of Kerala at
Ernakulam in M.F.A. No. 536of1999 whereby and whereunder D
~
the appeal preferred by the appellant herein from the judgment
and award dated 31.10.1998 passed by the Motor Accident
Claims Tribunal, Perumbavoor awarding a sum of Rs.1, 18,900/
-(Rupees One lakh eighteen thousand and nine hundred only)
together with interest thereon at the rate of 12% p.a. from the E
date of the filing of the claim petition till date of realization of the
amount against the appellant as also against the owners of the
vehicle was dismissed.
'y 2. The basic fact of the matter is not in dispute. Thankamani
(hereinafter referred to as the deceased) was travelling as a F
pillion rider on a scooter on 20.10.1993. She fell down from the
scooter and succumbed to the injuries sustained by her. In re-
gard to the said accident, a claim petition was filed.
Appellant having been served with a notice, in its written G
statement, inter alia, raised a contention that she being a pillion
~ ., rider and, thus, a gratuitous passenger, the insurance policy did
not cover the risk of injury or death of such a passenger and,
thus, it was not liable to reimburse the owner of the scooter there-
for.
H
370 SUPREME COURT REPORTS [2008] 9 S C.R.
A It was, furthermore, contended that the accident had taken
place at a private place.
By reason of the impugned award, the tribunal, however,
opined:
B (i) The accident had taken place due to rash and
negligent riding of the scooter by Sebastian P.V.-
respondent No.1 to the claim petition;
(ii) Keeping in view the monthly income of the deceased
which was estimated at Rs. 1200/- per month as
C also age of the deceased assessed at 50 years;
claimants were entitled to compensation for a sum
of Rs.1,05,600/-. A sum of Rs.5,000/- was allowed
towards compensation for pain and suffering; a sum
of Rs.100/-was allowed towards damage of clothing
D and articles, a sum of Rs.5,000/- was allowed towards
loss of love and affection and a sum of Rs.1,000/-
was allowed towards mental shock and agony.
3. As regards liability of the appellant it was held as the
E existence of the insurance policy in respect of the offending
scooter is admitted, it was also liable.
4. Aggrieved by the said award, the appellant filed an ap-
peal before the High Court of Kerala under Section 173 of the
Motor Vehicles Act, 1988 (for short "the Act"). On the question
F as to whether the Insurance Company would be liable in a case
of this nature, the Division Bench opined as under:
"1. The appellant is the third respondent in O.P.(MV) 119/
94 on the file of the motor Accident Claims Tribunal,
Perumbavoor. Appellant was directed to pay
G compensation for the death of the pillion rider of a motor
cycle. The vehicle was insured with the appellant.
.. :
2. It was contended that the pillion rider would not come
within the coverage of the Act policy. The Tribunal repelled
that contention. Hence this appeal.
H
vt<IENTAL INSURANCE v. SUDHAKARAN K.V. 371
& ORS. [S.B.SINHA.J:]
3. The question whether the pillion rider is covered by an A
Act policy stands settled by the decision of the Full Bench
of this Court in Oriental Insurance Co.Ltd. Vs. Ajay
Kumar(1999 (2) KLT 886. Hence the appellant cannot
successfully take up a contention contrary to the above
proposition in this appeal. .. " B
5. Ms. Aanchal Jain, learned counsel appearing on behalf
of the appellant, submits that as the deceased was in a vehicle
which was not covered by the contract of insurance must be
held to be a gratuitous passenger and as such the impugned
judgment cannot be sustained. C
Strong reliance, in this behalf, has been placed on United
India Insurance Co. Ltd., Shim/av Tilak Singh and Ors. [(2006)
4 sec 404].
6. Mrs. Purnima Bhat and Mrs. K.Sarada Devi, learned D
counsel appearing on behalf of the respondents, on the other
hand, would urge:
(i) the principles of law deduced by this Court as regards
gratuitous passenger should not apply in a case of E
this nature;
(ii) in any event this Court should exercise its jurisdiction
under Article 142 of the Constitution of India directing
the appellant to pay the claimed amount to the
claimants and recover the same from the owner of F
the scooter.
7. Before embarking on the rival contentions, we may no-
tice the insurance policy. The contract of insurance was entered
into on or about 2.12.1992. It was 'A policy for act liability' mean-
ing thereby a third party liability. G
The relevant clauses of the said contract of insurance are
as under:
"1. Subject to the Limit of liability as laid down in the Motor
Vehicles Act the Company will indemnify the insured in the H
372 SUPREME COURT REPORTS [2008) 9 S.C.R.
A event of accident caused by or arising out of the use of
Motor Vehicle any where in India against all sums including
claimant's costs and expenses which the insured shall
become legally liable to pay in respect of death or bodily
injury to any person and/or damage to any property of
B Third Party.
Exception
Except so far as necessary to meet the requirements of
the Motor Vehicles Act the Company shall not be liable in re-
c spect of death arising out of and in the course of employment of
person in the employment of the insured or in the employment
of any person who is indemnified under this Policy or bodily
injury sustained by such person arising out of and in the course
of such employment."
D 8. In terms of Section 147 of the Act only in regard to reim-
bursement of the claim to a third party, a contract of insurance ;...
must be taken by the owners of the vehicle. It is imperative in
nature. When, however, an owner of a vehicle intends to cover
himselffrom other risks; it is permissible to enter into a contract
E of insurance in which event the insurer would be bound to reim-
burse the owner of the vehicle strictly in terms thereof.
9. The liability of the insurer to reimburse the owner in re-
spect of a claim made by the third party, thus, is statutory whereas
F
other claims are not. . ,.
10. The only question which, therefore, arises for our con-
sideration is as to whether the pillion rider on a scooter would
be a third party within the meaning of Section 147 of the Act.
Indisputably, a distinction has to be made between a
G contract of insurance in regard to a third party and the
owner or the driver of the vehicle. ~ ...
11. This Court in a catena of decisions has categorically
held that a gratuitous passenger in a goods carriage would not
be covered by a contract of insurance entered into by and be-
H
- ...
ORIENTAL INSURANCE v. SUDHAKARAN K.V. 373
& ORS. [S.B.SINHA.J:]
.
tween the insurer and the owner of the vehicle in terms of Sec- A
ti on 147 of the Act. [See New India Assurance Co. Ltd. v Asha
Rani (2003) 2 sec 223]
12. A Division Bench of this Court in United India Insur-
ance Co. Ltd., Shim/a v. Tilak Singh and Ors. [(2006) 4 sec
404] extended the said principle to all other categories of ve- B
hicles also, stating as under:
"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 c
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
D
-'. hence it did not cover the risk of death of or bodily injury
to a gratuitous passenger."
13. The submission of Mrs. Bhat, learned counsel, how-
ever, is that this Court should not extend the said principle to the
vehicles other than the goods carriage. As at present advised, E
we may not go into the said question in view of some recent
decisions of this Court, viz., National Insurance Co. Ltd. v.
Laxmi Narain Dhut [(2007) 3 SCC 700], Oriental Insurance
~
Co. Ltd. v. Meena Variya/ ((2007) 5 SCC 428] and New India
>- Assurance Co. Ltd. v Ved Wati [(2007) 9 SCC 486]. F
14. The provisions of the Act and, in particular, Section
147 of the Act were enacted for the purpose of enforcing the
principles of social justice. It, however, must be kept confined to
a third party risk. A contract of insurance which is not statutory in
nature should be construed like any other contract. G
""" , 15. We have noticed the terms of the contract of insur-
ance. It was entered into for the purpose of covering the third
party risk and not the risk of the owner or a pillion rider. An ex-
ception in the contract of insurance has been made, i.e., by
H
•
,..:..
374 SUPREME COURT REPORTS [2008] 9 S.C.R.
>
A covering the risk of the driver of the vehicle. The deceased was,
indisputably, not the driver of the vehicle.
16. 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 gratu-
8 itous passenger as in a given case she may not 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.
c In view of the terms of the contract of insurance, however,
she would not be covered thereby.
It is not necessary for us to deal with large number of pre-
cedents operating in this behalf as the question appears to be
covered by a few recent decisions of this Court.
D
17. In United India Insurance Company Ltd. v. Serjerao ~
& Ors. [2007 (13) :)CALE 80], it was held as under:
"7 .... When a statutcry liability has been imposed upon the
owner, in our opinio11, the same cannot extend the liability
E of an insurer to indemnify the owner, although in terms of
the insurance policy or under the Act, it would not be liable
therefor.
17. In a given case. the statutory liability of an insurance
company, therefore.either may be nil or a sum lower than
F the amount specified under Section 140 of the Act.
Thus.when a separate application is filed in terms of
Section 140 of the Act, in terms of Section 168 thereof, an
insurer has to be given a notice in which event, it goes
without saying, it would be open to the insurance company
G to plead and prove that it is not liable at all.
18. Furthermore, it is not in dispute that there can be more
than one award particularly when a sum paid may have to
be adjusted from the final award. Keeping in view the
provisions of Section 168 of the Act, there cannot be any
H
"'
~
ORIENTAL INSURANCE v. SUDHAKARAN KV 375
& ORS. [S.B.SINHA.J:]
_.. .J.
f doubt whatsoever that an award for enforcing the right A
under Section 140 of the Act is also required to be passed
under Section 168 only after the parties concerned have
filed their pleadings and have been given a reasonable
opportunity of being heard. A Claims Tribunal, thus, must
be satisfied that the conditions precedent specified in B
Section 140 of the Act have been substantiated, which is
the basis for making an award.
"'
19. Furthermore, evidently, the amount directed to be paid
even in terms of Chapter-X of the Act must as of necessity, in
the event of non-compliance of directions has to be recovered c
in terms of Section 174 of the Act. There is i;io other provision in
the Act which takes care of such a situation. We, therefore, are
of the opinion that even when objections are raised by the in-
surance company in regard to it liability, the Tribunal is required
to render a decision upon the issue, which would attain finality D
.. and, thus, the same would be any award within the meaning of
Section 173 of the Act."
It was furthermore held as under:
"8. So far as the question of liability regarding labourers E
travelling in trollies is concerned, the matter was
considered by this Court in Oriental Insurance Company
Ltd. Vs. Brij Mohan and Ors. (2007) 7 SCALE 753 and it
-" was held that the Insurance Company has no liability... ""
" 18. Yet again in Ghulam Mohammad Dar v. State of J&K F
and Ors. [(2008) 1 sec 422], this Court opined that the words
"injury to any person" as inserted by reason of the 1994 Amend-
ment would only mean a third party and not a passenger travel-
ling on a goods carriage whether gratuitous or otherwise. [See
also The New India Insurance Company v. Darshana Devi & G
... ., Ors. 2008 (2) SCALE 432]
19. 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 piiiion rider of the motor vehicle UJlless the
H
376 SUPREME COURT REPORTS [2008] 9 S. C.R.
A 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 ow-
B ing to rash and negligent riding of the scooter and not on the
part of the driver of another vehicle.
20. For the views we have taken, it is not necessary to
refer to a large number of decisions cited at the Bar as they are
not applicable in a case of this nature.
c
21. For the reasons aforementioned, the impugned judg-
ment cannot be sustained. It is set aside accordingly. The ap-
peal is allowed. No costs
R.P. Appeal allowed.
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