The Madras High Court Bench here has said that insurance companies are liable to pay compensation for the death of or injury suffered by pillion riders in two wheelers or occupants of cars if the vehicle owners had taken Motor Package Insurance Policies.
Issuing the direction yesterday to the Motor Accident Claims Tribunals (MACT) in Tamil Nadu, Justice D Hariparanthaman said they should not to permit insurance companies to deny their liability to compensate pillion riders or occupants of cars.
Disposing an appeal filed against an award passed by a tribunal in Kumbakonam, the judge to referred to the many pending cases in Tamil Nadu, involving pillion riders and occupants of cars not getting compensation and asked the court Registry to send a copy of the judgement to all the MACT to take suitable steps as stated above.
"The Motor Vehicles Act (MV Act) does not make it mandatory that the risk of the pillion riders and occupants of a car be covered by the insurance policy. Since the Act does not provide for mandatory coverage, it is done by Package Policies. Even when there are package policies, the insurance companies take a plea that they are not bound to pay the compensation", he said.
He suggested that the MV Act should be amended so that it was made compulsory for covering the risk of pillion riders and occupants of cars in insurance policies.
"It is high-time the amendment is brought in especially when there is vehicular explosion in our country competing with the population explosion. In fact, the automobile industry has succeeded in the race", he observed.

In the present case, the Kumbakonam tribunal had discharged Oriental Insurance Company from its liability of compensating a woman pillion rider, who was injured in an accident on July 12, 2007 and directed the vehicle owner to pay a compensation of Rs 88,531 to the woman. The owner had filed the appeal questioning the correctness of the award passed by the tribunal.
Reversing the lower court order, Justice Hariparanthaman held that the insurance company alone was liable to compensate the woman who had suffered disability assessed at 21 per cent.
He also increased the compensation amount to Rs 1,75,051.