Allowed

Divisional Manager v. Ahalesh

Karnataka HC25 Jun 2021MFA/2056/2013

Case brief

AI extract

What is this about?

The High Court allowed the insurer's appeal, holding that a 'Liability only Policy' does not cover the risk of the vehicle's own occupants. The Tribunal erred in imposing liability on the insurer, who was thus exonerated.

What did the court decide?

The appeals are allowed; the insurer is exonerated from liability; the owner–respondent No.3 is liable to pay compensation.

Divisional Manager Vs Ahalesh — Insurance | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 25^TH DAY OF JUNE, 2021

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BEFORE

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THE HON'BLE MR. JUSTICE H.P. SANDESH

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M.F.A.NO.2054/2013 (MV)

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C/W. M.F.A.NO.2050/2013 (MV) M.F.A.NO.2051/2013 (MV) M.F.A.NO.2052/2013 (MV) M.F.A.NO.2053/2013 (MV) M.F.A.NO.2055/2013 (MV) M.F.A.NO.2056/2013 (MV)

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IN M.F.A.NO.2054/2013:

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BETWEEN:

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DIVISIONAL MANAGER UNITED INDIA INSURANCE CO. LTD., DIVISIONAL OFFICE B.H.ROAD, A.A.CIRCLE SHIVAMOGGA-577 201. … APPELLANT (BY MR. A.N.KRISHNA SWAMY, ADVOCATE)

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AND:

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1 . SMT. SARASWATHI W/O GOPI VAKODE NOW AGED ABOUT 32 YEARS OCC: HOUSEWIFE R/O G.S.K.M.ROAD SHIVAMOGGA-577 201.

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2 . MOHAMMED RAFIK S/O JIYAVULLA, MAJOR DRIVER OF OMNI VAN R/O O.T.ROAD, MURADANAGAR

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OPP: KUDAD MASIDI SHIVAMOGGA-577 201.

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3 . SMT. NAGINABI W/O JIYAVULLA, MAJOR OWNER OF OMNI VAN R/O O.T.ROAD, MURADANAGAR OPP: KUDAD MASIDI SHIVAMOGGA-577 201. … RESPONDENTS

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(BY MRS.DEEPTHI R. KOTIAN, ADVOCATE FOR R3, R1-SERVED; R2-SERVICE HELD SUFFICIENT VIDE ORDER DATED 28.05.2018)

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THIS M.F.A IS FILED UNDER SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 20.12.2012 PASSED IN MVC.NO.58/2009 ON THE FILE OF THE PRINCIPAL SENIOR CIVIL JUDGE, MACT, SHIVAMOGGA, AWARDING A COMPENSATION OF Rs.75,000/- WITH INTEREST @ 6% P.A. FROM THE DATE OF PETITION TILL ITS DEPOSIT.

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IN M.F.A.NO.2050/2013 :

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BETWEEN:

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DIVISIONAL MANAGER UNITED INDIA INSURANCE CO. LTD., DIVISIONAL OFFICE B.H.ROAD, A.A.CIRCLE SHIVAMOGGA-577 201. … APPELLANT

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(BY MR. A.N.KRISHNA SWAMY, ADVOCATE)

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AND:

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1 . SMT.MALA W/O NARAYANA VAKODE NOW AGED ABOUT 34 YEARS OCC: HOUSEWIFE R/O G.S.K.M.ROAD SHIVAMOGGA-577 201.

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2 . MOHAMMED RAFIK S/O JIYAVULLA, MAJOR DRIVER OF OMNI VAN R/O O.T.ROAD, MURADANAGAR OPP: KUDAD MASIDI SHIVAMOGGA-577 201.

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3 . SMT. NAGINABI W/O JIYAVULLA, MAJOR OWNER OF OMNI VAN R/O O.T.ROAD, MURADANAGAR OPP: KUDAD MASIDI SHIVAMOGGA-577 201. … RESPONDENTS

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(BY MRS.DEEPTHI R. KOTIAN, ADVOCATE FOR R3, R1-SERVED; R2-SERVED)

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THIS M.F.A IS FILED UNDER SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 20.12.2012 PASSED IN MVC.NO.46/2009 ON THE FILE OF THE PRINCIPAL SENIOR CIVIL JUDGE, MACT, SHIVAMOGGA, AWARDING A COMPENSATION OF Rs.75,000/- WITH INTEREST @ 6% P.A. FROM THE DATE OF PETITION TILL ITS DEPOSIT.

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IN M.F.A.NO.2051/2013:

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BETWEEN:

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DIVISIONAL MANAGER UNITED INDIA INSURANCE CO. LTD., DIVISIONAL OFFICE B.H.ROAD, A.A.CIRCLE SHIVAMOGGA-577 201. … APPELLANT

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(BY MR. A.N.KRISHNA SWAMY, ADVOCATE)

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AND:

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1 . PRAMODA S/O PANDU VAKODE NOW AGED ABOUT 14 YEARS SINCE MINOR REPRESENTED

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BY GUARDIAN/FATHER, PANDU VAKODE S/O YALLAPPA VOKADE R/O G.S.K.M.ROAD SHIVAMOGGA-577 201.

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2 . MOHAMMED RAFIK S/O JIYAVULLA, MAJOR DRIVER OF OMNI VAN R/O O.T.ROAD, MURADANAGAR OPP: KUDAD MASIDI SHIVAMOGGA-577 201.

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3 . SMT. NAGINABI W/O JIYAVULLA, MAJOR OWNER OF OMNI VAN R/O O.T.ROAD, MURADANAGAR OPP: KUDAD MASIDI SHIVAMOGGA-577 201. … RESPONDENTS

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(BY MRS.DEEPTHI R. KOTIAN, ADVOCATE FOR R3, R1-SERVED; R2-SERVICE HELD SUFFICIENT)

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THIS M.F.A IS FILED UNDER SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 20.12.2012 PASSED IN MVC.NO.49/2009 ON THE FILE OF THE PRINCIPAL SENIOR CIVIL JUDGE, MACT, SHIVAMOGGA, AWARDING A COMPENSATION OF Rs.2,00,000/- WITH INTEREST @ 6% P.A. FROM THE DATE OF PETITION TILL ITS DEPOSIT.

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IN M.F.A.NO.2052/2013 :

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BETWEEN:

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DIVISIONAL MANAGER UNITED INDIA INSURANCE CO. LTD., DIVISIONAL OFFICE B.H.ROAD, A.A.CIRCLE SHIVAMOGGA-577 201. … APPELLANT

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(BY MR. A.N.KRISHNA SWAMY, ADVOCATE)

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AND:

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1 . DARSHAN

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S/O PANDU VAKODE NOW AGED ABOUT 9 YEARS SINCE MINOR REPRESENTED BY GUARDIAN/FATHER, PANDU VAKODE S/O YALLAPPA VOKADE R/O G.S.K.M.ROAD SHIVAMOGGA-577 201.

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2 . MOHAMMED RAFIK S/O JIYAVULLA, MAJOR DRIVER OF OMNI VAN R/O O.T.ROAD, MURADANAGAR OPP: KUDAD MASIDI SHIVAMOGGA-577 201.

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3 . SMT. NAGINABI W/O JIYAVULLA, MAJOR OWNER OF OMNI VAN R/O O.T.ROAD, MURADANAGAR OPP: KUDAD MASIDI SHIVAMOGGA-577 201. … RESPONDENTS (BY MRS.DEEPTHI R. KOTIAN, ADVOCATE FOR R3, R1-SERVED; R2-HELD SUFFICIENT)

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THIS M.F.A IS FILED UNDER SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 20.12.2012 PASSED IN MVC.NO.52/2009 ON THE FILE OF THE PRINCIPAL SENIOR CIVIL JUDGE, MACT, SHIVAMOGGA, AWARDING A COMPENSATION OF Rs.1,10,000/- WITH INTEREST @ 6% P.A. FROM THE DATE OF PETITION TILL ITS DEPOSIT.

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IN M.F.A.NO.2053/2013 :

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BETWEEN:

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DIVISIONAL MANAGER UNITED INDIA INSURANCE CO. LTD.,

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DIVISIONAL OFFICE B.H.ROAD, A.A.CIRCLE SHIVAMOGGA-577 201. … APPELLANT

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(BY MR. A.N.KRISHNA SWAMY, ADVOCATE)

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AND:

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1 . SUMAN S/O Y.NARAYAN VAKODE NOW AGED ABOUT 14 YEARS SINCE MINOR REPRESENTED BY GUARDIAN/FATHER S/O Y.NARAYANA VAKODE R/O G.S.K.M.ROAD SHIVAMOGGA-577 201.

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2 . MOHAMMED RAFIK S/O JIYAVULLA, MAJOR DRIVER OF OMNI VAN R/O O.T.ROAD, MURADANAGAR OPP: KUDAD MASIDI SHIVAMOGGA-577 201.

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3 . SMT. NAGINABI W/O JIYAVULLA, MAJOR OWNER OF OMNI VAN R/O O.T.ROAD, MURADANAGAR OPP: KUDAD MASIDI SHIVAMOGGA-577 201. … RESPONDENTS

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(BY MRS.DEEPTHI R. KOTIAN, ADVOCATE FOR R3, R1-SERVED; R2-HELD SUFFICIENT)

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THIS M.F.A IS FILED UNDER SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 20.12.2012 PASSED IN MVC.NO.55/2009 ON THE FILE OF THE PRINCIPAL SENIOR CIVIL JUDGE, MACT, SHIVAMOGGA, AWARDING A COMPENSATION OF Rs.80,000/- WITH INTEREST @ 6% P.A. FROM THE DATE OF PETITION TILL ITS DEPOSIT.

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IN M.F.A.NO.2055/2013 :

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BETWEEN:

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DIVISIONAL MANAGER UNITED INDIA INSURANCE CO. LTD., DIVISIONAL OFFICE B.H.ROAD, A.A.CIRCLE SHIVAMOGGA-577 201. … APPELLANT

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(BY MR. A.N.KRISHNA SWAMY, ADVOCATE)

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AND:

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1 . PANDU VAKODE S/O YALLAPPA VAKODE NOW AGED ABOUT 36 YEARS OCC: BUSINESSMAN R/O G.S.K.M.ROAD SHIVAMOGGA-577 201.

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2 . MOHAMMED RAFIK S/O JIYAVULLA, MAJOR DRIVER OF OMNI VAN R/O O.T.ROAD, MURADANAGAR OPP: KUDAD MASIDI SHIVAMOGGA-577 201.

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3 . SMT. NAGINABI W/O JIYAVULLA, MAJOR OWNER OF OMNI VAN R/O O.T.ROAD, MURADANAGAR OPP: KUDAD MASIDI SHIVAMOGGA-577 201. … RESPONDENTS

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(BY MRS.DEEPTHI R. KOTIAN, ADVOCATE FOR R3, R1 AND R2 ARE SERVED)

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THIS M.F.A IS FILED UNDER SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 20.12.2012 PASSED IN MVC.NO.265/2009 ON THE FILE OF THE PRINCIPAL SENIOR CIVIL JUDGE, MACT, SHIVAMOGGA, AWARDING A

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COMPENSATION OF Rs.1,00,000/- WITH INTEREST @ 6% P.A. FROM THE DATE OF PETITION TILL ITS DEPOSIT.

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IN M.F.A.NO.2056/2013 :

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BETWEEN:

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DIVISIONAL MANAGER UNITED INDIA INSURANCE CO. LTD., DIVISIONAL OFFICE B.H.ROAD, A.A.CIRCLE SHIVAMOGGA-577 201. … APPELLANT

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(BY MR. A.N.KRISHNA SWAMY, ADVOCATE)

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AND:

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1 . AHALESH S/O CHANDRASHEKAR NOW AGED ABOUT 14 YEARS SINCE MINOR REPRESENTED BY GUARDIAN/FATHER CHANDRASHEKAR SHINDE R/O G.S.K.M.ROAD SHIVAMOGGA-577 201.

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2 . MOHAMMED RAFIK S/O JIYAVULLA, MAJOR DRIVER OF OMNI VAN R/O O.T.ROAD, MURADANAGAR OPP: KUDAD MASIDI SHIVAMOGGA-577 201.

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3 . SMT. NAGINABI W/O JIYAVULLA, MAJOR OWNER OF OMNI VAN R/O O.T.ROAD, MURADANAGAR OPP: KUDAD MASIDI SHIVAMOGGA-577 201. … RESPONDENTS

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(BY MRS.DEEPTHI R. KOTIAN, ADVOCATE FOR R3, R1 AND R2 ARE SERVED)

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THIS M.F.A IS FILED UNDER SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 20.12.2012 PASSED IN MVC.NO.920/2011 ON THE FILE OF THE PRINCIPAL SENIOR CIVIL JUDGE, MACT, SHIVAMOGGA, AWARDING A COMPENSATION OF Rs.90,000/- WITH INTEREST @ 6% P.A. FROM THE DATE OF PETITION TILL ITS DEPOSIT.

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THESE MFAs’ COMING ON FOR ADMISSION THROUGH ‘VIDEO CONFERENCE’ THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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J U D G M E N T

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Though these matters are listed for admission today, with the consent of learned counsel appearing for the

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appellant/Insurance Company, the same are taken up for final disposal.

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These appeals are filed by the appellant/Insurance Company challenging the Judgments and Awards dated 20.12.2012 passed in M.V.C.No.58/2009, M.V.C.No.46/2009, M.V.C.No.49/2009, M.V.C.No.52/2009, M.V.C.No.55/2009, M.V.C.No.265/2009 and M.V.C.No.920/2011, respectively, on the file of Principal Senior Civil Judge and MACT., at Shivamogga (‘the Tribunal’ for short), questioning the liability.

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The parties are referred to as per their original rankings before the Tribunal to avoid confusion and for the convenience of the Court.

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The factual matrix of the case is that the claimants met with an accident on 28.04.2008 at about 8:30 p.m, near Raminakoppa cross, Gayathri Hotel, Hubli-Shiggaon N.H.4 road. An accident was occurred due to rash and negligent driving on the part of the driver of Maruti Omni Van bearing registration No.KA-14-1680 when the claimants were proceeding as occupants of the Car. All the claim petitions are allowed granting compensation and the liability is fastened on the Insurance Company. Hence, the present appeals are filed.

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The main contention of the appellant/Insurance Company is that, the policy which has been marked as Ex.R1 is ‘Liability only Policy’. The Insurance Company is not liable to indemnify the insured in respect of claims made by the occupants. The Tribunal was required to notice that in view of clear admission made by the first respondent that the vehicle is used for hire purpose; the insurer cannot be made liable to pay any compensation in respect of private car policy.

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This Court has issued notice against the claimants in all the cases though they have served, they are not represented. However, respondent No.1-owner has represented through Counsel. This matter was called earlier on several occasions and learned counsel for respondent No.1 was absent. This Court made it clear that on 31.05.2021, if respondent No.1’s counsel does not appear on the next date of hearing, the matters will be heard on merits in his absence.

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The learned counsel for the appellant would vehemently contend that when the Car is used for hire purpose and the occupants of the Car are not covered under policy and the policy is ‘Liability only Policy’, the Tribunal committed an error in fastening the liability on the Insurance Company.

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The learned counsel for the appellant/Insurance Company in support of his contentions relied upon the judgment of the Apex Court in the case of National Insurance Company limited v. Balakrishnan and another reported in (2013) 1 SCC 731 , the Apex Court held that, owner or gratuitous passenger travelling in motor vehicle meeting with accident -

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Liability of Insurer - Managing Director travelling in companyowned vehicle – Vehicle insured by company – Insurer liable to pay compensation in case of “comprehensive/package policy” but not in case of “Act policy”.

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Having heard the arguments of learned counsel appearing for the appellant - Insurance Company and on perusal of the grounds urged in the appeals and the materials available on records, the points that would arise for consideration of this Court are:

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(i) Whether the Tribunal has committed an error in fastening the liability on the Insurance Company and whether it requires an interference of this Court?

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(ii) What order?

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Point No.(i):

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Having heard the arguments of the learned counsel

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appearing for the appellant - Insurance Company and on perusal of the Judgment of the Tribunal in paragraph No.15 regarding liability is concerned, the Tribunal discussed in detail. It is also contended that respondent No.3 has taken his specific defense

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that the vehicle was overloaded. Admittedly, there are six persons including the children in the vehicle. Though the Tribunal discussed in detail failed to take note of the document – Ex.R1-policy and no discussion made with regard to coverage of the policy.

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The specific contention is that the policy issued by

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the Insurance Company is ‘Liability only Policy’ and the same is not covered the risk of the occupants of the Car. It is not in dispute that the claimants were travelling in the private car as occupants including the children and the liability of the Insurance Company only subject to the payment of the premium in respect of the persons, who are the occupants of the vehicle. If no premium is paid the liability only policy, the same not covers the risk of the occupants of the Car. In this regard, nothing has been discussed in the judgment of the Tribunal with regard to the contention of the Insurance Company that the same is not covered in respect of the occupants of the Car. Hence, I am of the opinion that there is a force in the contention of the learned counsel for the appellant that the policy is a ‘Liability only Policy’

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and no premium is collected in respect and the occupant of the car.

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On perusal of Ex.R1, it is clear that the policy is a ‘Private Car Liability only Policy’. On perusal of schedule of premium, the premium is collected in respect of B: Third Party - Basic Compulsory PA to Owner-Driver Amount to the extent of Rs.2 Lakhs. WC to employee 1, i.e., driver only. When the policy does not cover the risk of the occupants of the Car fixing the liability on the Insurance Company is erroneous. Policy also discloses that subject to the limit of liability as laid down in the schedule hereto, the Company will indemnify the insured in the event of accident caused by or arising out of the use of the Motor Vehicle anywhere in India against all sums including claimant’s cost and expenses which the insured shall become legally liable to pay in respect of i.e., only towards liability to third parties. These claimants are not the third parties and they are the occupants of the car and policy not covers their risk.

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In the circumstances and in view of the judgment of the Apex Court in Balakrishnan ’s case (supra), fastening the

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liability on the Insurance Company is erroneous. Hence, it requires an interference of this Court.

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Point No.(ii):

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In view of the discussions made above, I pass the

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following:

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ORDER

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(i) The appeals are allowed.

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(ii) The appellant/Insurance Company is exonerated from the liability and ownerrespondent No.3 is liable to pay the compensation amount.

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(iii) The amount in deposit, if any, is ordered to be refunded on proper identification in favour of the appellant.

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(iv) The Registry is directed to transmit the records to the concerned Tribunal, forthwith.

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Sd/JUDGE

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cp*

Divisional Manager v. Ahalesh

Case brief

What is this about?

What did the court decide?

Divisional Manager v. Ahalesh

Case brief

What is this about?

What did the court decide?

What the court decided

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Cases cited

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