CMA/242/2020 of M/S.BAJAJ ALLIANZ GEN INS CO LTD Vs G.JEGANATHAN on 12 October 2026

Common Judgment

P.T.ASHA & N.MALA, JJ. The 2nd respondent -Insurance Company before the Tribunal has filed the civil miscellaneous appeal challenging the award passed by the Motor Accident Claims Tribunal (III court of Small Causes), Chennai in M.C.O.P.No.1634 of 2012 dated 17.06.2019.

2. The cross objection is filed by the claimants seeking enhancement of compensation awarded by the Tribunal.

3. The facts are briefly set out herein below and the parties are referred to in the same ranking as before the Tribunal. Since both the appeal as well as the Cross Objection arise out of one and the same award, they are disposed of by this common judgment. Petitioners’ Case:

4. The petitioners had filed the above referred claim petition seeking compensation of a sum of Rs.50,00,000/- for the death of one J.Muthurajan, who is the son of the petitioners herein. It was their case that on 21.04.2011 at about 18.00 hours, the said Muthurajan was travelling as a passenger in a Bolero Car bearing Registration No.TN-09- BH-8525 on the Virudhunagar to Sattur National Highways Road. As the vehicle neared Ettur Vattam Vilakku, Virudhunagar District, the driver of the said car lost control of the vehicle, as he was driving the same in a rash and negligent manner. As a result, the car capsized and the deceased, who was travelling as an occupant in the said car, sustained fatal injuries and died on his way to the hospital. The petitioners would submit that the first respondent, as the owner of the vehicle and the second respondent, as its insurer, are jointly and severally liable to pay compensation to the petitioners. It is their further contention that their son was working as a Legal Officer with the 1st respondent-Company, earning a monthly income of Rs.15,000/-. The deceased was unmarried and therefore, the petitioners as his parents and legal heirs are entitled to the said compensation. Counter of the 1

st respondent:

5. The 1st respondent had filed a counter denying the averments made in the claim petition. It is their case that car in question belonged to them and was insured with the 2nd respondent. They would submit that at the time of the accident, the insurance policy was in force and covered the period 07.03.2011 to 06.03.2012. They would submit that the claim was exaggerated and that the petitioners have to prove that they are the legal representatives of the deceased Muthurajan. They would further submit that since the policy was in force, the second respondent-Insurance Company is liable to pay compensation. Counter of the 2

nd respondent:

6. The second respondent had filed a counter denying the contents of the claim petition. They had put the petitioners to strict proof of the age, occupation and the monthly income of the deceased, Muthurajan. They had further denied the manner in which the accident had been described, as also the injuries sustained by the deceased. The second respondent would further submit that they were not liable to indemnify the first respondent on the ground that on the date of the accident, the deceased was being carried on official duty in the vehicle, which was evident from the F.I.R. The vehicle in question was registered and insured as a private car. The policy issued by the first respondent did not cover employees travelling in the vehicle for which an additional premium was required to be paid in order to extend the cover to employees other than the paid driver. It was their specific case in the counter that no additional premium under IMT-29 had been paid to cover the risk of employees.

They would further submit that the driver of the offending vehicle did not possess a valid driving licence to drive the vehicle and that without proof of the same, they could not be held liable. Therefore, they sought for dismissal of the petition. Before the tribunal:

7. The points that arose for consideration before the Tribunal were as follows: “1) Whether the accident was due to rash and negligent driving of the driver of the first respondent car bearing Reg.No. TN-09-BH-8525?

2) Whether the petitioners are entitled to any compensation?

3) What is the quantum of the compensation that the petitioners are entitled to?

4) Who is liable to pay compensation?”

8. To prove their case, the 1st petitioner had examined himself as P.W1 and one Prasath, who was an eye witness, was examined as P.W2. They had marked Exs.P1 to P6. On the side of the 2nd respondent, one

Sridhar, the Manager of the 1st respondent was examined as R.W1. One Balaji Damo and Sreejith Mohan, Legal Officers were examined as R.W2 and R.W3 respectively. The respondents had marked Exs.R1 to R6.

9. On a perusal of the oral and documentary evidence, the Tribunal had held that the accident had occurred only due to the rash and negligent driving of the driver of the 1st respondent. The Tribunal had also answered the second point for consideration in favour of the petitioners, holding that the petitioners 1 and 2, being the legal heirs of the deceased, were entitled to compensation. The Tribunal had fixed the income of the deceased at a sum of Rs.15,000/- per month and thereafter, added 50% towards future prospects and deducted 50% towards the personal and living expenses, since the deceased was a bachelor. Therefore, the annual contribution worked out to a sum of Rs.1,35,000/- to which a multiplier of 18 was applied. Therefore, a sum of Rs.24,30,000/- was arrived at under the head of Loss of Dependency. The Tribunal had awarded a total compensation of a sum of Rs.26,45,000/-under the following heads.

1. Loss of Dependency Rs. 24,30,000

2. Loss of love and affection Rs 1,00,000

3. Filial Consortium Rs. 1,00,000

4. Funeral Expenses Rs. 15,000 Total Rs. 26,45,000

10. The 4th point for consideration that had been raised by the Tribunal related to the liability to pay the compensation. The Tribunal had taken into consideration the evidence of R.W1 to R.W3 and Exs.R2 and R3-Insurance Policy and R.C Book, respectively, which showed that the policy was taken in the name of the first respondent. Though the policy would clearly show that no premium as contemplated under IMT-29 had been paid,the Tribunal observed that the vehicle had been insured in the name of the Company and therefore, there was no necessity to pay the additional premium under IMT-29. Therefore, the Tribunal has proceeded to hold that the second respondent was liable to pay the compensation. Aggrieved by this award, the Insurance Company has filed this Civil Miscellaneous Appeal. Cross Objection:

11. The petitioners have also filed a cross-objection seeking enhancement of compensation, contending that the Tribunal has erred in fixing the income of the deceased and in not properly considering his age, qualification and future prospects. They would further contend that the deduction of 50% towards personal expenses is erroneous, that no amount has been awarded towards loss of estate and that the amounts awarded towards loss of love and affection, funeral expenses and consortium are inadequate. On such grounds, the petitioners sought for enhancement of compensation. Submissions of the learned counsel for the 2

nd respondent-Insurance

Company

12. Mr.S.Arunkumar, learned counsel for the 2nd respondent- Insurance Company would submit that the respondents had in their counter statement clearly denied their liability on the account of the fact that the risk was not covered under the policy as the premium under IMT-29 had not been paid. He would submit that the Tribunal has not taken into consideration the said statement and has also failed to analyse the terms of the contract. He would refer to Section II of the terms of the policy which reads as follows: "Section II- Liability to Third Parties

1. Subject to the limits of liability as laid down in the Schedule hereto the Company will indemnify the insured in the event of an

accident caused by or arising out of the use of the insured vehicle against all sums which the insured shall become legally liable to pay in respect of…

(i) Death or bodily injury to any person including occupants carried in the vehicle (provided such occupants are not carried for hire or reward) but except so far as it is necessary to meet the requirements of the Motor Vehicles Act, the Company shall not be liable where such death or injury arises out of and in the course of employment of such person by the insured". He would draw a distinction between the terms “Passengers-Occupants” by referring to Section 147 of the Motor Vehicles Act. He would submit that even under Section 147 of the Motor Vehicles Act, an employee is not covered under the policy and would be covered only under an additional contractual obligation, which, in the instant case, requires payment of premium under IMT-29. He would refer to the judgment of the Hon’ble Supreme Court reported in 1977 ACJ 343[Pushpabai Purushottam Udeshi] where the Hon’ble Supreme Court had expressed the necessity of the risk being compulsorily covered by the insurance policy for occupants of a private car. He would also rely on the judgment of the Delhi High Court in Yashpal Ludhra Vs United India Insurance Company[2009 SCC Online Del 4291] where the Delhi High Court had taken the view that a comprehensive policy / package policy does not require payment of additional premium for covering occupants in a private car not carried for hire or reward as per the earlier circulars issued by the Tariff Advisory Committee(TAC). Thereafter, the Insurance Regulatory and Development Authority of India (IRDAI) issued a circular dated 16.11.2009 confirming that occupants other than the employee would automatically be covered under comprehensive / package policy. He would rely upon the judgment of the Hon’ble Supreme Court reported in 2012 (2) TNMAC 650[OIC Vs Surendra Nath Loomba and Others] where the Hon’ble Supreme Court had held that the liability of the insurer depends upon the nature of the policy. Therefore, the liability of the insurance company vis-a-vis the pillion rider / occupant would depend upon the type of policy issued and the terms therein. He would seek to distinguish the judgment relied upon by the respondents and would submit that since IMT-29 was in force on the date of the accident, the award passed by the Tribunal has to necessarily be set aside as the employee was not covered as per the terms of the policy. He would further submit that the circular dated 08.10.2023, wherein it was directed that IMT-29 be made an in-built cover without charging any additional premium, would apply only prospectively and not retrospectively.

Submissions of the learned counsel for the petitioners:

13. The learned senior counsel appearing for the petitioners would submit, at the outset, that a beneficial welfare legislation ought to be applied retrospectively and he would draw strength from the Judgment of the Division Bench of this Court in C.M.A.No.2166 of 2019 wherein in similar circumstances, the Bench had held that the insurer would be liable to pay compensation. He would submit that since the issue is now pending before the Hon’ble Supreme Court and that until the Hon’ble Supreme Court pronounces its judgment, the order passed by the Division Bench would continue to apply. He would argue that the legislature had deemed it fit to introduce the circular the same only goes to show that it has been the legislative intent to extend the welfare benefit to persons who have been placed at a disadvantage. The learned senior counsel would rely on the following judgments in support of the aforesaid contentions. S.No Citation

1. (2013) 1 SCC 731 - National Insurance Company Limited vs. Balakrishnan and Anr

2. Before the Madurai Bench of Madras High Court C.M.A.(MD) No. 1186 of 2014 - The Manager, TATA AIG General Insurance Company Ltd vs. S. Hemalatha & Ors

3. 2019 SCC OnLine Cal 2968 - Cholamandalam Ms. General Insurance Company Limited vs. Tanushree Chakraborty and Ors

4. Supreme Court of India Civil Appeal No. 013509 of 2025 SLP (C) No.

S.No Citation 8434 of 2023 - Akula Narayana vs. The Oriental Insurance Company Limited & Anr

5. 2016 SCC OnLine Kar 9347 - Manager, Royal Sundaram Alliance Insurance Co. Ltd vs. Chetan TK & Anr

6. Madras High Court C.M.A.No. 261 & 1067 of 2015 - The New India Assurance Co. Ltd vs. Uthra & Ors

7. (2019) 6 SCC 212 - Bharat Watch Company through its Partner vs. National Insurance Company Limited through its Regional Manager

8. 1986 SCC OnLine Bom 228 - Oriental Fire and General Insuance Company Limited vs. Smt Shantabai S. Dhume & Ors

9. Madras High Court L.P.A.No. 1 of 1988 - M/s. Venkataswami Motor Service P.N. Palayam, Coimbatore vs. C.K.Chinnaswamy & Ors

10. Madras High Court (2000-3-L.W.863) - Saffia Bee & Ors vs. B. Sathar & Ors

11. (2020) 4 SCC 594 - K Sivaraman & Ors vs. P. Sathishkumar & Anr

13. SLP (C) No. 7139-7140 of 2023 - K. Nagendra vs. The New India Insurance Co. Ltd & Ors

14. Yashpal Luthra vs. United Insurance Co. [2011 ACJ 1415 Del]

15. New India Assurance Company Ltd. Vs. Shanti Bopanna and Ors. [(2018) 12 SCC 540]

14. Mr.M.B.Raghavan, learned counsel for the 4th respondent/IRDAI who was impleaded by this Court would submit that the circular has only a prospective effect and therefore cannot be applied to the case on hand.

15. Heard the learned counsel on both sides and perused the evidence and other materials available on record.

16. The points that arise for consideration in the above appeal are as follows:

(i) Whether the petitioners have proved the employment of the deceased with the first respondent and whether the deceased travelled as an employee of the 1st respondent.

(ii) Whether the finding of the Tribunal that the 2nd respondent-Insurance Company is liable to pay compensation to the petitioners is justified?

(iii) Whether the cross objection should be allowed and if so, to what extent?

17. In order to appreciate and decide the arguments advanced with reference to the above points for consideration, it is necessary to briefly extract some of the terms of the insurance policy, which has been marked as Ex.R5. The policy in question is titled as a “Private Car Package Policy Schedule”. The insurance policy has been issued on 11.07.2011, covering the period from 07.03.2011 (12.00 hrs) to the midnight of 06.03.2012. However, in the column titled “cover note details”, it has been mentioned as MC1001281234/07-March 2011. The make and model of the vehicle are described as Mahindra and Mahindra Bolero, having a seating capacity of 7. Apart from the own damage premium, the liability premium consists of the following. Own Damage Premium (Rs.) Liability Premium (Rs.) Own Damage Premium 17605 Basic Third Party Liability

LL to person for Paid driver/Operation /Maintenance

Special Discount

PA Cover For 7 Passenger of Rs.100000 each

Total OD Premium -A 17605 Total Act Premium -B

Total Premium (Net Premium) (A+B) 20480 Service Tax

Swachh Bharat /Edu.Cess

Final Premium (Rupees Twenty two Thousand Five Hundred Eighty 22589 The column titled “Subject to Warranties / IMT- Endorsements/Add on Package describes IMT Nos.22,5,16, 28 and the Plan Name: “24 x7 SPOT ASSISTANCE”.apart from he Third party liability the 2nd respondent

Insurance Company has collected premium to cover the limited liability to paid driver/ operation/ Maintenance and personal accident cover of Rs 1,00,000 each for 7 passengers.

18. Therefore, from the above, it is seen that, apart from the endorsements specifically mentioned, no other IMT endorsements are included. Therefore, the liability premium stated above does not include IMT-29. Extensive arguments have been made on either side regarding the liability of the 2nd respondent Insurance Company in the absence of payment of premium under IMT 29.

19. The petitioners' argument is that the insured was not put on notice of the same at the time the policy was taken and that, apart from that, the deceased, who was a third party, was automatically covered under a comprehensive insurance policy under Section 147 of the Motor Vehicles Act.

20. With reference to the above argument, it would be apposite to peruse the counter filed by the first respondent in the above matter. The first respondent filed its counter statement on 13.09.2012, and the insurance company filed its counter on 13.12.2013. The first respondent had taken a stand that, by reason of Ex.R5 (Insurance Policy), the 2nd respondent was liable to compensate the petitioners. In the counter statement, the 2nd respondent-Insurance Company, in paragraph No. 4, has stated as follows: “4. This Respondent submits that the deceased was travelling in the alleged vehicle bearing reg no TN 09 BH 8525 as an employee of the 1* Respondent. The usage of the 1s Respondent's car on the date of accident was used to carry the deceased officially which has been admitted and evident from the FIR. The said vehicle is registered and insured as a private car and the policy issued by this Respondent for the vehicle does not cover employees traveling in the vehicle, which as per IMT 29 requires to pay an additional premium for the employees other than the paid drivers. Since no additional premium was was paid under IMT 29 to cover the risk of the employee, the claim against this Respondent ought to be dismissed and this Respondent has no liability for the claim made by the petitioners under the policy covering the vehicle TN 09 BH 8525.”

21. No doubt the first respondent has not chosen to file a reply to the said counter. However the evidence of the Manager of the 1st respondent- Company who has been examined as R.W1 can be referred to. The proof

affidavit in lieu of chief examination simply states that the insurance Policy was valid from 07.03.2011 to 06.03.2012. During the cross examination by the Insurance Company, he has deposed that the car in question was being used for inspecting their lands as well as private lands and also for the work of the Company. He would further state that the car in question was used by the staff, legal officers and engineers. He has stated as follows: “fk;bgdpapDila

CHpah;fs ; me;j

fhiu gad;gLj;jpdhy ; mjw;fhd g;hPkpak ; brYj;jntz;Lk ; vd;W mjpy; Fwpg;gpltpy;iy vd;why; rhp jhd;”.

22. The second respondent has examined him extensively with reference to the employment of the deceased and the following is an extract of his deposition. “,we;Jnghd Kj;Juh$ ; v';fSila jiyik mYtyfj;jpy ; jhd ; gzpg[hpe;jhh;/ mth ; irl;oy ; ntiy ghh;j;jhh;/ mth ; jiyik mYtyfj;jpy ; hpg;nghh;l;o'; oa{l;of;F Mtz';fs ; vJt[k ; jhf;fy ; bra;atpy;iy/

vkrhM 1y; njjp Fwpg;gplg;gltpy;iy/ mjpy; ,we;J nghd Kj;Juh$ ; v';fs ; epWtdj;jpy ; gzp g[hpe;jjhf Fwpg;gpltpy;iy vd;why; vkrhM1d; go mtiu ntiyapy; mkh;j;Jtjhf gpshd ; ,Ug;gjhf Fwpg;gpltpy;iy vd;why; mt;thW jhd; Fwpg;gplg;gl;Ls;sJ vd;why; rhpjhd;/ ntW vJt[k; vdf;F bjhpahJ/ Kj;Juh$; rk;gsk; th';fpa[s;shh; vd;gjw;F Mtzk; jhf;fy; bra;atpy;iy vd;why; rhpjhd;. mtUila gzp epakd Miza[k; ePjpkd;wj;jpy; jhf;fy; bra;atpy;iy vd;why; rhpjhd; ” Therefore, from the line of cross examination, it is evident that the Insurance company had questioned the very employment of the deceased by the 1st respondent.

23. A perusal of Ex.R1-Appointment Order would indicate that the deceased was proposed to be recruited as a Legal Officer, subject to his reporting for duty on 04.02.2011. The undated letter would read as follows: “Further to the above, we are planning to recruit you as an Legal officer in our Organization and you will be absorbed six months training period and Rs.9000/-compensation per month will be paid during this period and once your performance is found satisfactory, you will be confirmed otherwise will be terminated from the Service. You are requested to report this office on Feb 4th 2011 and place of the position will intimate you. This letter will be valid, only after reported this office on the above said date.”

24. There is no document to establish that on 04.02.2011 the deceased had reported to the office of the 1st respondent. This assumes significance as the letter in question states that it would be valid only after the deceased reported to the office on the said date, namely 4th February, 2011. Therefore, no document has been filed to prove employment except a voucher dated 05.03.2011 which does not contain any signature. Ex.R1, by itself cannot be treated a proof of the employment of the deceased with the first respondent as Ex.R1 contemplates a further contract. Since the employment is not proved, it cannot be stated that the deceased had travelled in the car as an employee.

25. We have proceeded to discuss the issue of employment only on account of the fact that the second respondent- Insurance Company has questioned the employment of the deceased with the 1st respondent- Company and has also cross examined R.W1 in this regard as extracted above. Since we hold that the petitioners have not proved that the deceased was employed by the first respondent, the issue of the non- payment of premium under IMT-29 endorsement pales into insignificance. We have re-appreciated the evidence only because the 2nd respondent – Insurance Company relied on IMT 29, to wriggle out of its liability.

26. Since we have found that the deceased was not in employment with the 1st respondent, the question arises, if the deceased can be treated as a third party. In our view, the deceased having travelled in the car, cannot be treated as a third party, vis-a-vis, the owner and insurer of the car.

27. The insurance policy marked as Ex.R5, has been extracted supra and from the terms of the policy, it is apparent that the owner of the vehicle has taken ‘Personal Accident’ coverage for 7 passengers for Rs.1 lakh each, by receiving an additional premium of Rs.350/-. Since we have found that the deceased is not an employee and that he cannot also be treated as a third party, we are of the view that the deceased as a passenger in the car, is liable to be compensated by the Insurance Company under the personal accident coverage of Rs.1 lakh, as per the policy conditions.

28. Thus, the points for consideration (i) and (ii) are answered as follows:

a) The petitioners have not proved employment of the deceased with the 1st respondent therefore, on the fateful day, the deceased has not travelled in the car as an employee of the 1st respondent. b)Since the deceased was a passenger, the insurance Company is liable to pay Personal Accident cover of Rs.1,00,000/- only. The finding of the Tribunal that the Insurance Company is liable to pay the entire compensation cannot be sustained. The finding of the Tribunal is set aside and it is held that the Insurance Company is liable to pay only the Personal Accident cover of Rs.1 lakh.

29. As regards the third point for consideration, namely, the cross- objection, we have come to the conclusion, based on the documents, that the deceased was not an employee of the first respondent and in the absence of proof of employment, Ex.R2 cannot be considered and we have to fix a notional income. Admittedly, the deceased was a lawyer and, considering the fact that he was not an employee of the 1st respondent, he must have been practising law and would have earned at least a sum of Rs.17,000/- per month. To this, 40% has to be added towards future prospects, as per the judgment in Sarla Verma Vs. Delhi Transport Corporation and Another, reported in (2009) 6 SCC 121. Therefore, the monthly income would be Rs.23,800/-, and the annual income would work out to Rs.2,85,600/-. Since the deceased was a bachelor, 50% has to be deducted towards his personal expenses, and the contribution to the petitioners would be a sum of Rs.1,42,800/-. As the deceased was aged 25 years at the time of his death, the multiplier to be adopted would be 18, and therefore, the loss of dependency would be Rs.25,70,400/-. The Tribunal below has awarded a sum of Rs.1,00,000/- each under the heads of Loss of Love and Affection and Filial Consortium. The Tribunal has awarded a sum of Rs.1,00,000/- under the head of Filial Consortium. However, in the present case, the petitioners are the parents of the deceased and therefore, the said amount awarded under the head of Filial Consortium is not warranted. Hence, the same is set aside. The Tribunal, however, has not granted compensation under the head of “Loss of Estate”. Therefore, the award amount has to be modified as follows:

30. The petitioners 1 and 2 shall be entitled to the enhanced compensation of Rs.27,00,400/- [Rupees Twenty Seven Lakhs Foun Hundred only] along with 7.5% interest per annum, from the date of petition till the date of deposit. Out of the said amount of Rs.27,00,400/-, the Insurance Company shall be liable to pay Rs.1,00,000/- and the balance amount of Rs.26,00,400/- shall be paid by the 3rd respondent. The 3rd respondent shall deposit the balance amount of Rs.26,00,400/- along with 7.5% interest per annum from the date of petition till the date of deposit, within a period of twelve (12) weeks from the date of receipt of the web copy of this judgment. On such deposit, the petitioners 1 and 2 are permitted to withdraw the enhanced award amount along with accrued interest, by filing appropriate application in the same proportion as S.No. Various Heads Award by Tribunal amount in Rs. Award by this Court amount in Rs.

Loss of Dependency 24,30,000 25,70,400

Loss of love and Affection 1,00,000 1,00,000

Filial Consortium 1,00,000 -

Funeral Expenses 15,000 15,000

Loss of Estate - 15,000 Total Compensation 26,45,000 27,00,400

awarded by the Tribunal. Accordingly, the 3rd point for consideration is answered in favour of the petitioners.

31. Accordingly, the civil miscellaneous appeal filed by the Insurance Company is partly allowed and the Cross Objection filed by the claimants is allowed. No costs. Consequently, connected miscellaneous petitions are closed. (P.T.A.,J.) (N.M.,J.) 12-10-2026 Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No SRN/AP To

1. The III court of Small Causes, The Motor Accidents Claims Tribunal Chennai .

2. M/s.Bajaj Allianz General Insurance Co Ltd No.25/26, Prince Towers, 4th Floor, College Road, Nungambakkam Chennai-600 006

3. The Section Officer, VR Section, High Court, chennai.

P.T.ASHA J. AND N.MALA J. SRN/AP CMA No. 242 of 2020 AND CROS.OBJ NO. 77 OF 2021 12-10-2026