THE GENERAL MANAGER, UNITED INSURANCE CO. LTD.versusM. LAXMI AND ORS.

                            [2008] 16 S.C.R. 49


                  THE GENERAL MANAGER, UNITED                       A
                       INSURANCE CO. LTD.
                                    v.
                           M. LAXMI AND ORS.
                     (Civil Appeal No. 6659 of 2008)
                                                                     B
                          NOVEMBER 14, 2008
            [DR. ARIJIT PASAYAT AND DR. MUKUNDAKAM
                           SHARMA, JJ.]

             Motor Vehicles Act, 1988- s.166- Gratuitous passenger   c
        - Liability of insurer - Scooter met with accident - Death of
        the pillion rider - Claim for compensation by legal heirs of
        deceased - Liability of insurance company to pay
        compensation - Held: Not liable, as the insurance policy
        was a statutory policy and did not cover the risk of death of D
        a gratuitous passenger.

              The scooter insured with Appellant-Insurance
         company met with an accident resulting in death of the
         pillion rider. Respondents, the legal heirs of the E
         deceased, filed a claim for compensation from the
         appellant. Inasmuch as the insurance policy in question
         was an Act policy and not comprehensive, the MACT held
,,.,,    that the Respondents could claim compensation from
         owner of the scooter i.e. the insured but not from the.
                                                                 F
         Appellant. The High Court set aside the order of MACT
        .holding that Appellant was liable to pay compensation.
         Hence the present appeal.

            Disposing of the appeal and restoring the order of
        the MACT, the Court                                    G

            HELD: Tha Appellant-insurance company owed no
        liability towards the deceased pillion rider, as the
        insurance policy was a statutory policy, and hence it did
                                     49                              H
    50         SUPREME COURT REPORTS                (2008] 16 S.C.R.


A   not cover the risk of death of or bodily injury to a
    gratuitous passenger. [Para 8] [53-D-E]

      New India Assurance Co. Ltd. v. Asha Rani and Ors.
  (2003 (2) SCC 223) and United India Assurance Co. Ltd.
B Shim/a v. Tilak Singh and Ors. (2006 (4) SCC 404), relied
  on

                        Case Law Reference:
         (2003 (2) sec 223)           relied on              Para 7
c        (2006 (41 sec 404)           relied on              Para 8

        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    6659 of 2008.

      From the final Judgment and Order dated 19.03.2004 of
D the High Court of Andhra Pradesh at Hyderabad in CMA No.
  2512 of 1999.
         Sakshi Mittal and B.K. Satija for the Appellant.
                           i
         K. Sarada Devi for the Respondents.
E
         The Judgment of the Court was delivered by
    "
         DR. ARIJIT PASAYAT, J.1. Leave granted.

        2. Challenge in this appeal is to the judgment of a learned
F   Single Judge of the Andhra Pradesh High Court allowing the
    appeal filed by respondent Nos. 1 to 3.

         3. Background facts in a nutshell are as follows:

G        One Ramulu (hereinafter referred to as the 'deceased')
    died in a vehicular accident on 8.10.1996. Respondents 1 to         <
    3 are his widow, son and father respectively. A claim petition
    was filed under Section 166 of the Motor Vehicles Act, 1988
    (in short 'the Act') claiming compensation of Rs. 3,00,000/-. The
    claimants averred in the claim petition that the deceased and
H
            GENERAL MANAGER, UNITED INSURANCE CO. v. M.                    51
                LAXMI AND ORS. [DR. ARIJIT PASAYAT, J.]

            one Mohd. Mohsin were going on a scooter belonging to M. A
            Yadireddy, respondent no.4 in the present appeal. The scooter
            was being driven by Mohd. Mohsin. At about 7.00 p.m. the
            scooter hit a bullock cart which was going in the same direction
            because of rash and negligent driving of the scooter, the
;.,         deceased fell down and sustained fatal injuries. At the time of B
            his death, he was 29 years of age. Compensation was claimed
            from the owner of the scooter. Present appellant was the insurer
            which had insured the vehicle in question. The insured
            remained ex-parte. The present appellant filed its counter-
            affidavit denying all the material allegations. It was pointed out c
            that admittedly, the policy of insurance was an Act policy and
            the deceased was a pillion rider and also gratuitous passenger
            and hence, not a third party, and he cannot claim compensation
            from the insurance company which insured the vehicle. The
             learned Additional Special Judge for SPE and ACB Cases-
                                                                                  D
             cum-V Additional Chief Judge, City Civil Court, Hyderabad
            (hereinafter referred to as 'MACT') who adjudicated the claim
             petition, held that the policy was an Act policy in respect of the
             Scooter on the date of accident, therefore, the insurer had no
             liability. It was categorically held that unless the policy in
            question covers even a gratuitous passenger, such person, who E
             met with an accident while going in the vehicle in question and
             received injuries or his legal heirs, in case of his death following
      ...    such accident, cannot proceed against the concerned
             insurance company for any compensation. The compensation
             payable was fixed at Rs.1,07,436/- with 12% interest per F
            annum. It was held that the sum was to be realized from the
             insured and not from the present appellant.

                 An appeal was preferred by the claimants before the High
            Court, which, by the impugned judgment relying on a Circular G
      }
            of the Tariff Advisory Committee held that the liability of the
            insurer was there. The appeal was, accordingly, allowed.

                4. Learned counsel for the appellant submitted that the
            High Court has misread the Circular of the Tariff Advisory
                                                                                 H
    52         SUPREME COURT REPORTS                 [2008] 16 S.C.R.


A   Committee dated 2.6.1986. The same referred to
    compensation payable to pillion riders ih case of
    comprehensive policy. The Clarification/Circular has no
    relevance so far as Act Policy Cases are concerned and it
    related to only Comprehensive Policy.
B
          5. Learned counsel for respondent Nos. 1 to 3, on the
                                                                               .
                                                                               •
    other hand, supported .the judgment of the High Court.

       6. There is no dispute that the Circular dated 2.6.1986
  refers to Comprehensive Policy. It categorically states that
C standard form for motorcycle should cover liability to pillion
  passengers in case ofComprehensive Policy. As noted by the
  MACT, the policy in th'e instant case was an Act Policy.

      7. In New India Assurance Co. Ltd. v. Asha Rani and Ors,
D (2003 (2) SCC 223), i_t has been noted as follows:

               "Section 147 of the 1988 Act, inter alia, prescribes
         compulsory coverage against the death of or bodily injury~
         !o any passeng~r of "public service vehicle". Proviso
         appended thereto categorically states that compulsory
E        coverage in resP,ect of drivers and conductors of public
         service vehicle and employees carried in a goods vehicle
         would be limited to the liability under the Workmen's
                          .
         Compensation Act. It does not speak .of any passenger in
         a "goods carriage".
F
                In view ofthe changes in the relevant provisions in
         the 1988 Act vis-a-vis the 1939 Act; we are of the opinion
         that the meaning of the words "any person" must also be
         attributed having regard to the context in which they have
         been used i.e. "a third party". Keeping in view the
G
         provisions of the 1988 Act, we are of the opinion that 35         1
         the provisions tllereof do not enjoin any statutory liability ·
         on the owner of a vehicle to get his vehicle insured for any
         passenger travelling in a goods vehicle, the insurers would
         not be liable therefor.
H
GENERAL MANAGER, UNITED INSURANCE CO. v. M.                       53
    LAXMI AND ORS. [DR. ARIJIT PASAYAT, J.]

            Furthermore, sub-clause (i) of clause (b) of sub- A
     section (1) of Section 147 speaks of liability which may
     be incurred by the owner of a vehicle in respect of death
     of 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, whereas sub-clause (ii) thereof B
     deals with liability which may be incurred by the owner of
     a vehicle 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."

    8. In United India Assurance Co. Ltd., Shim/a v. Tilak              C
Singh and Ors. (2006 (4) sec 404), it has been noted as
follows:
                                ,
             "'In our view, although the observations made in
     Asha Rani case (supra) were in connection with carrying            D
     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           E
     a pillion rider, as the insurance policy was a statuto1y policy,
     and hence it did not cover the risk of death of or bodily
     injury to a gratuitous passenger."

      9. In view of what has been stated by this Court in Asha
Rani and Tilak Singh cases (supra), the order of theHigh Court          F
is clearly unsustainable and is set aside and that of the MACT
is restored.

     10. The appeal is disposed of accordingly.
                                                                        G
B.B.B.                                       Appeal disposed of.