Sikkim High Court: In an appeal made under Section of the (“MVA”), the appellants had challenged the denial of compensation of Rs. 99,21,020 by the Motor Accidents Claims Tribunal, Gangtok (“MACT”), upon the demise of the deceased Assistant Sub-Inspector of Police (ASI). The MACT in its impugned order had found that the insurance policy of the vehicle in accident that the deceased was travelling in, was an “Act Policy” and not a “Comprehensive Package Policy”.
The single-Judge Bench of Meenakshi Madan Rai, J., agreed with the findings of the MACT vis-a-vis the Policy being an “Act Policy”. The Court found that the sum insured was Rs 50,000, for which a premium of Rs 25 had been deposited. The Court also found that no premium was paid to cover a gratuitous passenger which the deceased ASI undoubtedly was.
Background
The deceased was an Assistant Sub-Inspector of Police (ASI) with the Sikkim Armed Police, and was travelling from Hee Pechrek, West Sikkim to Pangthang, Gangtok, in an Alto vehicle, on 18-10-2021. At around 08.30 a.m., the vehicle met with an accident, resulting in the death of the ASI and the owner/driver of the vehicle. Other occupants also sustained injuries.
The appellants had claimed compensation of Rs. 99, 21, 020 (“compensation”), i before the Motor Accidents Claims Tribunal, Gangtok (“MACT”). The MACT observed that the insurance policy (“policy”) of the accidental vehicle was an “Act Policy” and not a “Comprehensive/Package Policy”, and therefore, the appellants were only entitled to the extent of compensation in terms of “personal accident cover for unnamed passenger” as per the policy and granted a compensation of Rs. 50,000 and Rs. 100,000 for litigation costs.
Aggrieved with the afore-stated decision, the appellants knocked on the doors of the High Court. They contended that the deceased was a third party as the occupant of the accidental vehicle, and therefore was fully covered by the insurance policy, and the respondent was liable to pay the entire compensation. The appellants, referring to Section of the (“MVA”) further contended that the referred MVA provision does not distinguish between an “Act Policy” and a “Comprehensive Policy”).
The respondent contended that the deceased was a gratuitous passenger, and since the instant policy was an Act Policy, the cover was limited to Rs. 50,000, as he would be covered under the personal accident cover alone.
Issue: Whether the appellants are entitled to compensation and if yes, then who is liable to pay the compensation?
Court’s analysis and Judgment
The Court referred to National Insurance Co. Ltd. v. Balakrishnan, , wherein the Supreme Court had distinguished between a Comprehensive/Package Policy and Act Policy by stating that an Act Policy cannot cover a third-party risk of an occupant in a car, but a Comprehensive/Package Policy would cover such risk. Considering the appellant’s contention that Section 147 MVA does not distinguish between the two kinds of policies, the Court referred to New India Assurance Co. v. Asha Rani, , wherein the Supreme Court held the insurer will not be liable to pay compensation to a gratuitous passenger, deceased in the event of an accident of the insured vehicle.
The Court also referred to United India Insurance Co. Ltd., Shimla v. Tilak Singh, , wherein, the Supreme Court held that a statutory insurance policy that covered third parties, would not cover the risk of a gratuitous passenger, and the insurer owed no liability towards the deceased gratuitous passenger.
The Court perused the insurance policy and found it was an Act Policy alone and included a Personal Accident Cover for Unnamed Passengers for Rs. 50,000 only. It was also pointed out that no premium had been paid by the insured to cover a gratuitous passenger.
Therefore, based on the afore-stated analysis, the Court found no reason to interfere with the MACT’s judgment and upheld the same.
[Jai Bahadur Subba v. SBI General Insurance Co. Ltd., MAC Appeal No. 08 of 2023, decided on 05-06-2024]
*Judgment authored by: Justice Meenakshi Raj Madan
Advocates who appeared in this case :
For the appellants: Umesh Ranpal, Rubusha Gurung, and Laxmi Khawas, Advocates
For the respondent: Pawan Gurung, Advocate
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