MAC App./1/2009 of Senior Branch Manager National Insurance Co. Ltd Vs Namita Dixit and Others on 1 December 2009

JUDGMENT

Wanadi,J.

The two appeals have been taken up together fordisposal by this common ].udgment as the issues involved in themare the same.

M.A.C. ADDeal No.1 of 2009

In M.A.C. Appeal No.01 of 2009 the appellant, who is theSenior Branch Manager, Nat:ional Insurance Company Limited,Gangtok, has preferred this appeal under Section 173 of the MotorVehicles Act, 1988 against the I.udgment of the learned MotorAccident Claims Tribunal, East and North Sikkim at Gangtok, dated19.05.2008 in M.A.C.T. Case No.33 of 2006.

The facts of the case mat:erial for the purpose of disposalof this appeal are that on 05.02.2005, the deceased Jai Kant Dixitwas travelling by a Maruti Alto Car along with some other personsfrom Kaluk, West Sikkim to Gangtok, East Sikkim, after attending amarriage ceremony. On the way, the vehicle met with an accidentat a place called Charcharey Bhir on the Jorethang Melli Road, SouthSikkim, resulting in the death of the deceased on the spot. Therespondents 1 and 2 who are the wife and son of t:he deceased, filedan application under Section 166 of t:he Motor Vehicles Act,. 1988against the appellant in the present case and the owner of t:hevehicle who is t:he present respondent No.3, for award of deathcompensation of Rs.18,10,052.00. The claim was contested

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primarily by the appellant here who was the respondent No.1 before

the learned trial Court by filing a written ob].ection t:o the claimpetition substantially on the following grounds: -

(i) The driver of the accident vehicle did not possessa valid driving licence at the time of theaccident;a valid driving licence at the time of theaccident;

(ii) The claim petition was not maintainable and theterms and conditions of the Insurance Policy hadbeen grossly violated as the vehicle in questionregistered as a private vehicle was used for thepurpose of hire and reward at the time when theaccident took place;terms and conditions of the Insurance Policy hadbeen grossly violated as the vehicle in questionregistered as a private vehicle was used for thepurpose of hire and reward at the time when theaccident took place;

(iii) There being neither a statutory liability nor anycontractual obligation on the part of theappellant to pay the compensation or toindemnify the owner of the vehicle, no liabilit:ycould be fastened on the appellant, and that, ifat all the petition would be maintainable onlyagainst the opposite party no.2 (the respondentno.3 in this appeal), the owner of the vehicle inquestion.contractual obligation on the part of theappellant to pay the compensation or toindemnify the owner of the vehicle, no liabilit:ycould be fastened on the appellant, and that, ifat all the petition would be maintainable onlyagainst the opposite party no.2 (the respondentno.3 in this appeal), the owner of the vehicle inquestion.

Apart from the above, some formal ob].ections had been taken in the written object:ions which were not pressed before thetribunal and are also immaterial and irrelevant for the purpose ofdisposal of this appeal.

The respondent no.3 who was the owner of the vehicleand impleaded as the -respondent no.2 before the Claims Tribunal inher writt:en ob].ection, simply stated that the accident vehicle hadindeed been insured with the appellant.

On the basis of t:he pleadings of the parties, learnedclaims Tribunal framed two issues which are as under: -

1. Whether the deceased (late Jai Kant Dixit) died on05.02.2005 due to mot:or accident involving vehicle bearing,05.02.2005 due to mot:or accident involving vehicle bearing, -I

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registration No.SK-02 A/0457 at Charcharey Bhir, nearJorethang Bazar, South Sikkim?

2. Whet:her the claimants are entitled for the compensation, andif so, who is liable for the same?

It appears that the respondent no.2, as the claimant no.2before the learned Tribunal, had entered int:o the witness box anddeposed on the facts of the case and exhibited all relevantdocuments including the Cert:ificate of Insurance/Insurance Policy asExt. 12 wit:h the object to subst:antiate the fact t:hat the deceased JaiKant Dixit died on 05.02.2005 due to motor accident involving theaccident vehicle and that the vehicle was indeed insured with theappellant and that it belonged to the respondent no.3. In his cross-examination, no material contradictions were brought out on behalfof t:he appellant and his evidence remained unshaken leading to thet:ribunal deciding Issue No.1 in favour of the respondents.

It: is quite significant to note that although in its writtenob].ection, the appellant had denied the claims and made certainassert:ions, subst:ance of which have been set out hereinbefore, theappellant chose not to adduce any evidence t:o substantiate them.Based upon the materials available, the learned Tribunal decidedissue no.2 also in favour of the claimants and passed the impugned].udgment awarding a compensation of Rs.19,50,252.00 and interest@ 10% per annum if the amount was not paid within a period oftwo months from the date of the judgment.

Before this Court, amongst the grounds set up forassailing the impugned judgment, the appellant only preferred t:o .,,9

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press the ground that since the deceased was a gratuitouspassenger whose risk was not covered by the Insurance Policy, theappellant was not liable for payment of the compensation. Mr.Sudipto Majumdar, learned Advocate, appearing on behalf of theappellant in support of this content:ion, placed reliance upon thedecision of the Hon'ble Supreme Court in the case of Wew rnd/`aInsurance Company Ltd. vs. Asha Rani and Others .. 2003 (2)SCC 223 in which it was held that as the Motor Vehicles Act, 1988do not enjoin any statutory liability on the owner of a vehicle t:o gethis vehicle insured for any passenger travelling in a goods vehicle,the insurers would not be liable therefor and that in order to coversuch risk, an owner of passenger carrying vehicle must payadditional premium. As per him although the accident vehicle in thepresent: case was not a passenger carrying vehicle but a private car,the principle in the case of Asha Rani would apply in equal force.Since no additional premium had been paid to cover the passengersby the owner, the claim petition was not maintainable against theappellant.

Mr. A. Moulik, learned Senior Advocate, appearing onbehalf of the respondents no.1 and 2, t:he claimants, at the outsetraised a preliminary objection and submitted that as the presentob].ection was never raised before the learned tribunal either in thewritten objection filed on behalf of the appellant or in the oralarguments it was not permissible to raise it for the time in appeal.It was submit:ted that the matter involved the question of a

ought t:o have been raised specifically. Having not done so, theappellant is estopped from raising them at the appellate stage andshould be deemed to have been waived and extinguished. Mr.Moulik further submitted that even on the merits, such objectionwas clearly misconceived and uhsustainable in law. As per him, thecase of Asha Rani, the principle of which was adopted in the case ofunited India Insurance Company Lid. vs. Tilak Singh andOthers : 2006 f4J SCC 404, is clearly distinguishable in as muchas those two decisions relat:ed to ``statutory or Act policies" whereasin t:he present case we are dealing with a ``package policy" as wasevident from Certificate of Insurance Exhibit 12 filed as Annexure `C'to the memo of appeal. Mr. Moulik went on to submit that the TariffAdvisory Committee constituted under Section 64(u) of theInsurance Act, 1938 has prescribed a number of tariffs termed asThe India Motor Tariff (IMT for short) and the policy we are\,presently dealing with is Section II(1)(i) of the IMT.

Taking his arguments further, Mr. Moulik submitted thatunder Section 95(2) of the Motor Vehicles Act, 1939 there was alimit capped on the amount of compensation which has since beensuperseded in Section 147(2)(a) of the Motor Vehicles Act, 1988.This provision read with Section 11 (1)(i) of the IMT Policy of 2002which present:ly holds the field, includes a gratuitous passenger andthe liability of t:he Insurance Company rendered unlimited. Insupport of his submission, Mr. Moulik relied upon a Single Benchdecision of the Madras High Court in C.M.A. Nos. 4203 and 4204 of 2008 -in the matter Of Royal Sundaram AIIiance Insuranc:e vs. A.

Pappatl.i & Others and Royal Sundaram AIIiance Insurance vs.[akshm/- and Others respectively, and drew the at:tention of t:hisCourt to paragraphs 28 and 30 thereof, relevant portions of which are reproduced below: - ``28. Since the policy in this case is a package policy andSection 11 (page 119 to IMT) third party liability clearlycovers occupants in a private car which is the case on hand,the appellant insurance company cannot avoid their liabilitymerely on the ground that no additional premium was paid....................... But the fact remains thatSection 11 liability specifically covers occupants, passengersof a private car and its limit will be governed by the termscontained therein. The difference by reading the terms ofthe policy. In Tilak Singh's case which is a case of act onlypolicy, the Apex Court clearly held that the IMT-70endorsement covering the liability to pillion passengers wasnot: made.''

``30. In view of the above discussion, the contention of thelearned counsel for the appellant on the above stated issuestands rejected. The package policy issued in this caseclearly covers the liability in respect of death of or bodilyinjury to any persons including occupants carried in thevehicle, the ill fat:ed Maruti Car."

Mr. Moulik contended that since the facts in the present case wasidentical and that the policy was also a package policy with thelimits of liability covered under Sect:ion II(1)(i) of the IMT Rules, thecase of the claimants was fully covered thereby.

10. Mr. N. Rai, learned Counsel appearing on behalf of therespondent No.3, the owner of the car, generally supported t:he caseof the respondents no.1 and 2 and rather inappropriately placedreliance upon the case of Sarpa/ S;ngh reported in AIR 2000 SC235 in para 11 of which it had been held that there was no upperlimit to the liability of Insurance Company to pay compensation andt:hat the term `third party' included a gratuitous passenger.

ONeedless to state that.this decision has since been categoricallyoverruled in the Asha Rani Case (supra).

11. Mr. A. K. Upadhyaya, learned Senior Advocate, who hadbeen requested to conduct the case amicus curiae by this Courtsupplemented the arguments placed by Mr. A. Moulik and referringto and relying upon the case of Un/-red Jndt-a Insurance Co,[[d.vs. Alka Mangla .. AIR 2008 Delhi 201, subm.itted that -in apackage policy of the kind under consideration, a gratuitouspassenger should be deemed to have been covered and is inherentin the policy due t:o t:he higher premium required to be paidtherefor.

12. I have heard the learned Counsels on behalf of theparties and I am inclined to agree with the submissions made by Mr.Moulik, learned Senior Counsel for the respondent nos. 1 and 2 andMr. Upadhyaya, the learned Senior Counsel appearing as amicuscuriae. Before proceeding to deal with t:he case, it is relevant toput on record at the outset, that: on 08.09.2009 when the case wastaken up for final hearing, Mr. Sudipto Majumdar, Advocate, whohad argued the case on behalf of the appellant on 07.09.2009conveyed to this Court through his ].unior colleague, Mr. RameshSharma, Advocate that he had nothing further to add to hissubmissions made on the previous day.

13. Coming to the case, although the matter could have beendecided on the preliminary objection raised by Mr. Moulik, I havefelt it necessary to deal with the merit of the case first, keeping in view the larger public interest. The fact that: the deceased was agrat:uitous passenger is an admitted position between the parties.The questions t:hat require determination are (i) whether they arecovered by the Insurance Policy subscribed by the insured and (ii)having regard to the policy, whether the insurer, i.e., the appellantis liable to defray the entire amount awarded by the tribunal. Toanswer these questions we need to examine the scope of certainprovisions of the Motor Vehicles Act, 1988 more particularlySections 146 and 147 which are the amended forms of Sections 94and 95 of the Motor Vehicles Act, 1939 for the purpose ofad].udication of the issues involved in the present case.

14. Chapter XI has been provided in t:he Motor Vehicles Act,1988 specifically to cater to the requirement of insurance of motorvehicles against third party risks. Section 146 falling under thechapter makes it: mandatory for a vehicle to have insurance policycovering third party risks before it can be used in a public place.This statut:ory compulsion has been created so that the victims ofmotor vehicle accidents are guaranteed of their security in as muchas they would be able to get damages without delay and therecovery of such damages would not be dependent upon thefinancial condition of the driver or the owner of the vehicle, Section147 is a composite provision which prescribes the requirement ofpolicies, the limits of coverage and the extent of the liability of theInsurer. It will be useful to reproduce sub-sect:ions 1(b)(i), 2 and 5of Section 147 for convenience which are as follows: - ``Section 147. Requirement of policies and limits ofliability. (1) In order to comply with the requirements of thisChapter, a policy of insurance must be a policy which - (a)

(b) Insures the persons or classes of persons specified in t:hepolicy to the extent specified in sub-section (2).

(i) against any liability which may be incurred by him inrespect of the death of or bodily (in]-ury to any person,including owner of the goods or his authorised representativecarried in the vehicle) or damage to any property of a thirdparty caused by or arising out of the use of the vehicle in apublic place; Provided.............................

(2) Subject to the proviso to sub-section (1), a policy ofinsurance referred to in sub-section (1), shall cover anyliability incurred in respect of any accident, up to the followinglimits, namely:- (a) save as provided in clause (b), the amount of liabilityincurred; (b) in respect of damage to any property of a third party,a limit of rupees six thousand; Provided.........................

(5) Notwithstanding anything contained in any law for thetime being in force an insurer issuing a policy of insuranceunder this section shall be liable to indemnify the person orclasses of persons specified in the policy in respect of anyliability which the policy purports to cover in the case of thatperson or those classes of persons."

It can be seen from the above that sub-section 1(b)(i) prescribes asto what should be covered under an Insurance Policy to comply withthe requirement of Chapter XI. Sub-section 2 requires to be readwith sub-section 1 and sets the limit of liability and sub-section 5places a statutory obligation upon the insurer to indemnify thosepersons specified in the policy against t:he liabilit:ies covered in the policy.

15. It is now well set:t:led that Section 147(1)(b)(i) bringswithin its ambit all persons in the `third party' category includingpassengers travelling gratuitously by interpretation of the term `any •,9, person' appearing therein. Under sub-section 2 of Section 147 thelimits of liability has been prescribed as t:he amount of liabilityincurred under the terms of the policy of insurance .involved in theCase.

16. Therefore, when we examine the certificate of insurance(Annexure C to the memo of appeal) we find it endorsed as ``underSection II-1(i) of t:he policy - death of or bodily injury. Suchamount as is necessary to meet the requirements of Motor VehiclesAct, 1988 ........ " against the column for limits of liabilities. Inorder tounderstand the scope and ext:ent of the provision Section II-1(i) of t:he policy relevant portion thereof is reproduced below: - ``Section Il-1- Subject to the limits of liability laid downin the schedule hereto the company will indemnify t:heinsured in the event of an accident caused by or arising out:of the use of the vehicle against: all sums which the insuredshall become legally liable to pay in respect of: -

(i) death of or bodily injury including occupants carriedin the vehicle (provided such occupants are not carried forhire or reward) but except so far as it is necessary to meetthe requirements of Motor Vehicles Act, t:he Company shallnot be liable where such death or injury arises out of and inthe course of the employment of such person by the insured.

(ii) It can be seen from t:he above that the limits of the liability of theappellant and the person or classes of persons t:hat it is liable toindemnify under the policy in pursuance to section 147(5) of the Actare ``such amount as is necessary to meet the requirements of theMotor Vehicles Act, 1988''. In other words, it covers risks in respectof all categories of third party in pursuance of Section 147(1) to theextent of the amount that maybe awarded by a Claims Tribunal interms of Section 147(2) read with Section 147(5). This remains a `., well established position of law as will be revealed from thediscussions that will follow hereafter.

17. I.n I:he case Of Amrit Lal Sood vs. Kaushalya Devi7lf]apar : (I998J 3 SCC 744, the Apex Court while dealing wit:h apoliey termed as comprehensive poliey containing amongst others"SECTION - 11 LIABILITY TO THIRD PARTIES" held t:hat theexpression "any person" appearing therein, includes an occupant ofa car who is gratuitously travelling and that under the t:erms of thepoliey, the insurer is liable t:o satisfy the award passed in favour ofthe complainant. Para 8 of the judgment is quite explicit to thateffect and is reproduced below: -

"8. Thus under sect/on IT I/a) of the Doliev the insurer hasaareed to indemnify the insured aaainst all sums which theinsured shall become leaallv liable to Dav in respect of deathof or bodilv iniurv to `anv Person.' The expression `anvDerson' would undoubtedlv include an ocouDant: of the carwho is aratuitouslv travellina in the car. The remaining partof clause (a) relates to cases of death or injury arising out ofand in the course of employment: of such person by theinsured. In such cases the liability of the insurer is only tothe extent necessary to meet the requirements of Section 95of the Act. In so far as gratuitous passengers are concerned,there is no limitation in the poliay as such. Hence under thet:erms of the policy, the insurer is liable to satisfy the awardpassed in favour of the claimant ............... "aareed to indemnify the insured aaainst all sums which theinsured shall become leaallv liable to Dav in respect of deathof or bodilv iniurv to `anv Person.' The expression `anvDerson' would undoubtedlv include an ocouDant: of the carwho is aratuitouslv travellina in the car. The remaining partof clause (a) relates to cases of death or injury arising out ofand in the course of employment: of such person by theinsured. In such cases the liability of the insurer is only tothe extent necessary to meet the requirements of Section 95of the Act. In so far as gratuitous passengers are concerned,there is no limitation in the poliay as such. Hence under thet:erms of the policy, the insurer is liable to satisfy the awardpassed in favour of the claimant ............... "

±8. In the case Of New India Assurance Co.Ltd. vs. C. M.

Java & Others (supra) .. (2002) 2 SCC 278 a Cor\stiifutiion Bench,while deciding on a reference made t:o it to settle an apparentconflict in a two Judge Bench decisions of the Apex Court, in Amr;ILal Sood vs. Kaushalya Devi Thapar (supra) ar\d New IndiaAssu.rance Co. Ltd. vs. Shanti Bai : (1995) 2 SCC 529, acceptedthe observations .in New India Assurance Co.Ltd. vs. KaushalyaDevi 7lhapar (supraj in view of the express term in the policy.

S The portions ofthe].udgment relevant so far as the present case is concerned, are reproduced below: - "6 ............................ The question that came up for decisionbefore this Court was whether the insurer was liable tosatisfy the claim for cc)mpensation made bv a persontravellinci aratuitouslv in the car. In deciding this questionthe Court took the view that: (SCC p. 747, para 4)

"4.The liability of the insurer in this case dependson the terms of the contract between the insuredand the insurer as evident from the Doliov. Section94 of the Motor Vehicles Act, 1939 compels theowner of a motor vehicle to insure the vehicle incompliance with the requirements of Chapter VIIIof the Act. Section 95 of the Act Drovides that aDoliov of insurance must be one which insures thePerson aaainst anv liabilitv which mav be incurredbv him in resDect of death or bodilv iniurv to anvPerson or damaae to anv DroDertv of third Dartvcaused bv or arisina out of the use of the vehicle ina Dublic Dlace. The section does not: howeverrequire a poliey to cover the risk to passengers whoare not carried for hire or reward. The statutoryinsurance does not cover injury injury suffered byoccupants of the vehicle who are not carried forhire or reward and the insurer cannot: be held liableunder the Act. But that does not Drevent: aninsurer from enterina into a contract of insurancecoverina a risk wider than the minimumreauirement of the st:atute wherebv the risk toGratuitous Dassenaers could also be covered. !jisuch cases where the Dolicv is not merelv astatutorv Dolicv, the terms of the Doliov have to beconsidered to determine the liabilitv of the insurer."

``7.

Distinguishing the judgment in Pushpaba/ Purshotfam i/desh/.v. Ranjit Ginning & Pressing Co. (P) Ltd. the Court observedthat the said judgment was based upon the relevant dause inthe insurance poliey, which restricted the legal liability of theinsurer to the statutory requirements under Section 95 of theAct and so that decision had no application to the case as theterms of the poliey stat:ed in paragraph 6 of the judgmentwere wide enough to cover a gratuitous occupant of thevehicle. The Court also referred to t:he case of Juaal Kishorein which it is held that thouah it is not Dermissible to use avehicle unless it is covered at least under "Act only" policy, itis not obligatory for the owner to get a comprehensive policybut it is open to the insurer to take a policy covering a higherdsk.

8. Thus, a careful reading of these decisions clearlyshows that the liability of the insurer is limited, as indicatedin Section 95 of the Act, but it is oDen to the insured to makepayment of additional higher premium and get higher riskcovered in respect of third party also. But in the absence ofanv such clause in the insurance Dolicv the liabilitv of the insurer cannot be unlimited in resDect of third Dartv and it islimited onlv to.the statutorv liabilitv .,................

10. On a careful reading and analysis of the decision inAmrit Lal Sood it is clear that the view taken by the Court isno different. In this decision also, the case of Juga/ K/shoreis referred to. It is held:

(i) that the liabilitv of the insurer deDends on theterms of the contract between the insured andthe insurer contained in the Dolicterms of the contract between the insured andthe insurer contained in the Dolic

(ii) there is no prohibition for an insured fromentering into a contract of insurance covering arisk wider than the minimum requirement of thestatute whereby risk to the gratuitous passengercould also be covered; andentering into a contract of insurance covering arisk wider than the minimum requirement of thestatute whereby risk to the gratuitous passengercould also be covered; and

(iii) in such cases where the Dolicv is not merelvstatutorv Doliov. the t:erms of the Dolicv have tobe considered to determine the liabilitv of theinsurer.statutorv Doliov. the t:erms of the Dolicv have tobe considered to determine the liabilitv of theinsurer.

Hence. the Court: after noticinci the relevant clauses inthe Dolicv. on facts found that under Section II/1`/a`of the Dolicv. the irrsurer has aareed to indemnifv theinsured aaainst all sums which the irrsured shallbecome leaallv liable to Dav in resDect of death of orbodilv iniurv to "anv Person". The exDression "anvPerson" would undoubtedlv include an ocouDant of thecar who is aratuitouslv trave]lina in it. Further,referriing to the case Of Pushpabai Purshottam Udeshi .Itwas observed that the said decision was based uponthe relevant clause in the insurance policy in that casewhich restricted the legal liability of the insurer to thesstatutory requirement under Section 95 of the Act:. A§such, that decision had no bearing on Amrif la/ Soocdcase as the terms of the policy were side enough tocover a gratuitous occupant of the vehicle. Thus. it isclear that the specific clause in the policy being wider,covering higher risk, made all the difference in AmrffI.a/ Sood Case as to unlimited liability. The Courtdecided that caseln the liaht of the specific clausecontained in the Dolicv

16. As alreadystated above, in Amrff La/ Sood case the Court found#:T:::9:#=1:#%##:f:#E#i¥Shanti Bai.

19. In the case before us, the policy involved is a packagepolicy in which as already noted above, Section II(1)(i) of IMT Rulesis covered. No decision later in the point of t:ime overruling the C.M. Jaya's case (supra) has been placed before this Court on behalfof the appellant. No such decision also exists.

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20. The decision of the Delhi High Court in the matter ofunited India Insurance Co.Ltd. vs. Alka Mangla .. AIR 2008De/h/. 201 cited by Mr. Upadhyaya, only supplements the decisionof the Const:itut:ion Bench of the Apex Court. The case of Roya/Sundaram AIIiance Insurance vs. A. Pappathi and Othersfsupra) cited by Mr. A. Moulik has also dealt wit:h a sit:uation wherea package policy containing Section II(1)(i) of the I.MT was involved.The Single Bench of the Madras High court in that case whiledrawing conclusion in paragraph 30 of the judgment as extractedhereinbefore dealt with all the leading cases on the sub].ect, i.e., theextent of the liability of an insurer with regard to third party risksincluding gratuitous passengers. The judgment is consistent with Jthe ratio laid down in C. M. Jaya's case (supra). I, therefore, haveno hesit:ation in concurring with the views expressed therein.

21. The decisions rendered by the Apex Court are consistenton the view that in an `Act:' or `statutory policy' the insurer's liabilitywould be limited to the extent provided in the Act, but the law doesnot rest:rict or prohibit the insLired and the insurer to enter into aspecial contract for the purpose of providing larger coverage of riskon payment of special or higher premium. This view has. beenreiterated in the case of C. M. Jaya (supra) which is a ConstitutionBench decision consisting of 5 Judges of the Hon'ble Supreme Court:.In paragraphs 8 and 11 of the judgment after dealing with theapparent conflict in various judgments of the Hon'ble SupremeCourt it was held as follows : -

cii....--,

apparent conflict in various I.udgments of the Hon'ble Supreme Court it was held as follows : - "8. Thus, a careful reading of these decisions clearlvshows that the liability of the insurer is limited, as indicatedin Section 95 of the Act. but it is oDen to the insured to makepayment of additional higher premium and get higher riskcovered in resDect of third Dartv also. But in the absence ofanv such clause in the insurance Doliov the liabilitv of theinsurer cannot be unlimited in respect of third Dartv and it islimited onlv to the statutorv liabilitv ..................

11. In the light of what is stated above, we do not findany conflict on the question raised in the order of referencebetween the decisions of two Benches of three leanedJudges in Shant/ Ba/ and Amrif La/ Sood aforementionedand, on the other hand, there is consistencv on the Doint thatin case of an insurance Doliov not takina any hiaher liabilitvbv acceDtina a hiaher Dremium. the liability of the InsuranceComDanv is neither unlimited nor hiaher than the statutorvliability fixed under Section 95/21 of the Act. In Amrif fa/Sood case the decision inShant/ Ba/ is not noticed. However, both these decisionsrefer to the case of Juga/ K/shore and no contrary view isexpressed."

2.2. ±n the c:ace Of united India Insurance Co.Ltd. vs. Alka tryJang/a : AJR 2008 De/fi; 201 cited by Mr. Upadhyaya, which isalso a case under Section II(1)(i) of the policy notified by the Tariff\Advisory Committee referred t:o above, held that the Notification ofthe Tariff Advisory Committee which prescribes that t:he packagepoliey should be treated as a part and parcel of the insurance poliey.In this regard, we may refer to releva.nt portions of paragraphs 9and 14of the judgement: - "9. Whether a Gratuitous passenger travelling in a privatecar would fall within the meaning of `third party' and covered`by `Statutory Policv' within the meaning of S. 147 of the Actis no more debatable, but in the instant case in contraclistinction to this, on perusal of the policy it becomesmanifest that the policy in c]uestion taken out bv the insuredand issued by the appellant is a `PRIVATE CAR PACKAGEPOLIcy' and as notified by the Tariff Advisory Committee,with effect from 1-7-2002, the terms and conditions of aprivate car package policy mandates as under :-car would fall within the meaning of `third party' and covered`by `Statutory Policv' within the meaning of S. 147 of the Actis no more debatable, but in the instant case in contraclistinction to this, on perusal of the policy it becomesmanifest that the policy in c]uestion taken out bv the insuredand issued by the appellant is a `PRIVATE CAR PACKAGEPOLIcy' and as notified by the Tariff Advisory Committee,with effect from 1-7-2002, the terms and conditions of aprivate car package policy mandates as under :- ``sECTION 11 - LIABILlrv TO THIRD pARTIEs

1. Sub].ect to the limits of liability as laid down in theschedule hereto the company will indemnify the insured inthe event of an accident caused by or arising out of the useof the vehicle against all sums which the insured shallbecome legally liable to pay in respect of :-

(i) death of or bodily injury to any person includingoccupants carried in the vehicle (provided suchoccupants are not carried for hire or reward) butexcept so far as it is necessary to meet therequirements of Motor Vehicles Act, the Companyshall not be liable where such death or in].ury arisesout of and in t:he course of the employment of suchperson by the insured.occupants carried in the vehicle (provided suchoccupants are not carried for hire or reward) butexcept so far as it is necessary to meet therequirements of Motor Vehicles Act, the Companyshall not be liable where such death or in].ury arisesout of and in t:he course of the employment of suchperson by the insured.

(ii) Damage to property other than property belongingto the insured or held in trust or in the custody orcontrol of the insured."

The law Dertainina to the "Statutorv/Act Poliov" cannotbe same for the "Private Car Packaae Policv." Where theDoliov is a statutorv Dolicv or an Act only Doliov, a aratwitousDassenaer in a Private vehicle would not be covered for abodilv iniurv or death under the Dolicv of insurance. But,nothina Drevents the insurance comDanv from issuina a widercoveraae i.e. assumina a areater risk liabilitv ......... „.„.„..."

"14. Coming back to the case at hand, the insurance Doliovis Private Car Package Policy, dated 10-8-2002, thus thenotification dated 1-7-2002 of the Tariff Advisory Committeeshall be treated as a part and parcel of the said policy.Accordingly, in view of the t:erms and conditions of the policyand the t:erms of the notification dated 1-7-2002 of the TariffAdvisory Committee, the respondent No.1-Smt:. Alka Manglais liable to be compensated."

(Emphasis supplied)

Therefore, it can be seen that in a case like t:he presentone where the insurance policy has specifically incorporated``SECTION 11 - LIABILITY TO THIRD PARTIES" there can be no roomfor doubt t:hat the policy also covers gratuitous passengers and theinsured who is the respondent no. 3 herein, is fully covered of allrisks connected with such category of passengers setting at naughtthe only ground of appeal set up by the appellant.

23. There is another aspect to t:his appeal which by itselfwould have been sufficient to call for its dismissal. There can be nodenying the fact that: insurance policy is a matter of contractbetween the insurer and the insured. Under the law, it is essentialfor the appellant to have raised all objections permissible underSection 149(2) of the Motor Vehicles Act, 1988 before the learnedTribunal which as already stated earlier was not done. The writtenobjection filed on behalf of the appellant appears to have been filedonly for the sake of filing because t:here was no effort at all made forsubstantiating its stand taken in the written objection. Had theobjection been taken before the tribunal, the claimant would havehad an opportunity to rebut it and an issue would have been struckand the claimant could have the opportunity to lead evidence thatthe appellant/insurance company was liable. It is not permissiblefor the appellant to raise the question as an abstract question of lawin appeal. We find support on this proposition in the case ofNational Insurance Co. Ltd. vs. Ravinder Goyal .. 1993(1)AccCC 530 fp&#JfDBJ. In any case, the law enjoins the insurerto pay t:o the person entitled to the benefit of the decree and theonly grounds for avoiding such payment are prescribed under sub-section 2 of Section 149 of the Motor Vehicles Act, 1988. It is a wellsettled position of law that the liability of the insurer is a statutoryone and that the liability of the insurer to satisfy the decree passedin favour of a third party is also statutory. I am of the firm viewthat the present objection having not been t:aken before the learned ',, ~`' \e-,.. a`, Tribunal apart from the fact that the objections do not fall undersub-sect:ion 2 of Section 149, the appellant is now estopped fromraising it for t:he first t:ime in this appeal, having waived his right todo so. The appeal appears to have been filed as an afterthoughtbordering on frivolity.

24. It is rather unfortunate to note t:he recalcitrant andinsensitive attitude of the Insurance Company in discharging itsobligation under a law which is benevolent in nature. Under Section149(1) of the Motor Vehicles Act, 1988 there is statutory obligationon the part of t:he Insurance Companies to comply with the awardspassed by the Motor Accidents Claims Tribunal with the limitedgrounds of avoidance of such compliance as provided under Section149(2). Such obligation has been statutorily placed on theInsurance Company considering the object of the law contained inChapter XI of the Motor Vehicles Act, 1988. The interest of theinsurer has been duly protected under proviso 3 to sub-section 4 ofSection 149 by which payments made in excess of the liability of theinsurer can be recovered from the insured. In the case ofNational Insurance Co. Ltd. vs. Swaran Singh E 2004(3) SCC .Tt has been held in paragraphs 78 and 83 as under: - `i ``78. The social need of the victim being compensated asenacted by Parliament was the subject-matter ofconsiderat.==;Fj.===,.£b_55.TL_p;jtjs.]nqja.6ep_=[_a,:s_u_ra^T,c,=.fo;L^td.+hv=ion before a three-Judge Bench of this Court asCapfa/.n Jtbar S/.ngh wherein Sarkar, J. speaking for theBench observed : {AIR p. 1335, para 16)enacted by Parliament was the subject-matter ofconsiderat.==;Fj.===,.£b_55.TL_p;jtjs.]nqja.6ep_=[_a,:s_u_ra^T,c,=.fo;L^td.+hv=ion before a three-Judge Bench of this Court asCapfa/.n Jtbar S/.ngh wherein Sarkar, J. speaking for theBench observed : {AIR p. 1335, para 16)

``16. Again, we find the cont:ention wholly acceptable.The statute has no doubt creat:ed a liability in theinsurer to the in].ured person but the statute has alsoexpressly confined the right to avoid that liability tocertain grounds specified in it. It is not for us to addThe statute has no doubt creat:ed a liability in theinsurer to the in].ured person but the statute has alsoexpressly confined the right to avoid that liability tocertain grounds specified in it. It is not for us to add

to those grounds and therefore to the statute forreasons of hardship. We are furthermore notconvinced that t:he st:atute causes any hardship. First,the insurer has the right, provided he has reserved itby t:he policy, to defend the act:ion in the name of theassured and if he does so, all defences open to theassured can then be urged by him and there is nodefence that he claims to be ent:itled to urge. He canthus avoid all hardship, if any, by providing for a rightto defend the action in the name of the assured andthis he has full liberty to do. Secondly, if he has beenmade to pay something which on the contract of thepolicy he was not bound t:o pay, he can under theproviso to sub-sect:ion (3) and under sub-section (4)recover it from the assured. It was said that theassured might be a man of straw and the insurermight not be able to recover anything from him. Butthe answer to that is that: it is the insurer's bad luck.In such circumstances the injured person also wouldnot have been able to recover the damages sufferedby him from the assured, the person causing theinjuries.„

``83. Sub-section (5) of Section 149 which imDoses a liability on the insurer must also be given its full effect. Theinsurance comDany may not be liable to satisfy the decreeand, therefore, its liabilitv may be zero but it does not meanthat it did not have initial liability at all. Thus, if the:::s:E%:v:i:i:§h:::::w::::e;%:nt§s,o§:n::;t::i=:a:;;s;:;:::::::::an¥d:=::¥5j:t;t:i;::e;:::provisions can be given effect to_.

M,A.C.APPEAL NO.2 01= 2009

25. I In M.A.C. Appeal No.2 of 2009 also, the appellant hasraised the very objection with regard to the victim being agratuitous passenger who was purportedly not covered under theinsi]rance policy. Miss Navtara Sarda, Advocate, appearing onbehalf of the appellant Submitted that it would not be necessary t:ogointothefactsofthecaseast:heappealcanbedlsposedofonthefindinginM.A.C\,\APpealNo.01of2009.Itwasfairlyconcededby \\.. .

Ms. Sarda that the point with regard to gratuit:ous passenger hadnot been taken up before the Tribunal and it was for the first timethat it was being raised here and.that, that was the only point shewould press before this Court. It was further submitted that shewould adopt the arguments placed on behalf of the appellant inM.A.C. Appeal No.01 of 2009. Mr. A].ay `Rathi, learned Advocate,appearing on behalf of respondents no. 1, 2 and 3 in MAC AppealNo.02 of 2009, also adopted the arguments placed by Mr. A. Moulik,Senior Advocate, for the respondents no. 1 and 2 in M.A.C. AppealNo.01 of 2009.

26. Under the facts and circumstances and in view of thefindings in M.A.C.Appeal No.1 of 2009 as set out above, I do notfind any reason to interfere with the findings of the Ld. Tribunal inboth the cases.

27. In the result, the appeals are dismissed with cost ofRs.10,000/-(Rupees ten thousand) only in each of the above cases,half of which will go to the Bar Association of Sikkim and half to therespondents/claimants. The appellants shau comply with the termsof the impugned judgments of the learned Motor Accident ClaimsTribunal vyl`thin a Period of 30 days, failing which an additional_ I I _ -L,be paid by the appellantsinterest''@ 20/o ShaH be liable toretrospectivelywitheffectfromthedateoftheclaim.

--=T

'iftB:i; r`

28. The records of the learned Motor Accident claims Tribunal, East and North Sikkim at Gangtok be sent back forthwith.

JUDGE