Case Study - 12 - Oriental Insure Co. Ltd Vs. Sudhakaran K.V. & Ors. - Pillion Rider

The significant question in law involved in the case was whether pillion rider would come within the coverage of the third party insurance policy (Act policy mandatory under Motor Vehicle Act)?
The appeal in question was directed against a judgment and order dated 22.3.2006 passed by the High Court of Kerala at Ernakulam in M.F.A. No. 536 of 1999 whereby the appeal preferred by the appellant 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 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.

The court observed that in terms of Section 147 of the Motor Vehicle Act only in regard to reimbursement 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 himself from other risks; it is permissible to enter into a contract of insurance in which event the insurer would be bound to reimburse the owner of the vehicle strictly in terms thereof. The liability of the insurer to reimburse the owner in respect of a claim made by the third party, thus, is statutory whereas other claims are not.

The court further relied on New India Assurance Co. Ltd. v. Asha Rani (2003) 2 SCC 223, in which it was categorically held that a gratuitous passenger in a goods carriage would not be covered by a contract of insurance entered into by and between the insurer and the owner of the vehicle in terms of Section 147 of the Motor Vehicle Act.

The court also relied on United India Insurance Co. Ltd., Shimla v. Tilak Singh and Ors. [(2006) 4 SCC 404], whereby the above principle was extended to all other categories of vehicles 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 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 hence it did not cover the risk of death of or bodily injury to a gratuitous passenger."

After considering the law as emerging from the various decisions, the court held that:

(i) the liability of the insurance company in a case of third party insurance is not extended to a pillion rider of the motor vehicle unless the requisite amount of additional 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 can not to be treated as a third party when the accident has taken place owing to rash and negligent riding of the scooter and not on the part of the driver of another vehicle.