Nandita Dubey, JThis appeal has been filed by the appellant/Insurance Co.being aggrieved by the Award dated 30.10.2015 passed in Claim Case No.16/14 by Addl.Motor Accident Claims Tribunal, Umaria (M.P.).

2. The respondents/claimants have filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 claiming compensation to the tune of Rs. 51, 10, 000/- for the death of Paramsukh who died in a vehicular accident.

3. According to respondents/claimants, on 08.04.2013 Paramsukh, the deceased was travelling in the offending Jeep No. MP-18A/7722 which was driven in a rash and negligent manner met with an accident with the motorcycle going from the opposite side, as a result of which Paramsukh and motorcyclist Santosh Vishwakarma died.

4. The insurer of the motorcycle denied its liability and alleged that the accident occurred due to rash and negligent driving of the offending jeep.

5. The owner/driver of the offending vehicle denied the averments of claim petition alleging that if any liability arises, same is to be borne by the appellant/insurance company.

6. The appellant/insurance co.filed written statement and contested the claim petition. One of the grounds taken in the defence was that the offending jeep was driven in violation of the terms and conditions of the policy of insurance, as the offending vehicle was insured as a private car, but was carrying passengers and no premium was charged for the persons/passengers travelling in the jeep by the insurer.

7. The Claims Tribunal in its award dated 30.10.2015 addressed the issue of rash and negligent driving of the driver and the liability of the insurance company on the basis of material on record. It came to hold that the accident happened due to rash and negligent driving of the driver of the offending jeep and the claimants were entitled to get Rs. 34, 47, 088/-as compensation with interest at the rate of 7% per annum for the death of Paramsukh and held the insurance company liable to indemnify the award.

8. Shri Dinesh Kaushal, learned counsel appearing on behalf of appellant/Insurance Co. has contended that the insurance policy being a private car policy would not cover the risk of passengers in the car as requisite premium for such coverage was not paid, hence, the insurance company cannot be held liable.

9. Smt. Devika Singh Thakur, learned counsel appearing for the claimants/respondents has relied on a decision of Supreme Court in case of Manuara Khatun and others vs. Rajesh Kumar Singh and others, (2017) 4 SCC 796 [LQ/SC/2017/278] in support of her contention that principle of pay and recover could be applied against the insurance company where victim was travelling in the vehicle/car as a gratuitous passenger.

10. At this juncture, it would be appropriate to refer to a decision of the Supreme Court in case of National Insurance Company Limited vs. Balakrishnan and another, (2013) 1 SCC 731 [LQ/SC/2012/1016 ;] ">(2013) 1 SCC 731 [LQ/SC/2012/1016 ;] [LQ/SC/2012/1016 ;] wherein the Supreme Court has referred to the IRDA circulars reproduced in case of Yaspal Luthra vs. United India Insurance Co.Ltd, (2011) ACJ 1415 (Del) as under :-

"21. At this stage, it is apposite to note that when the decision in Bhagyalakshmi vs.United Insurance Co. Ltd, (2009) 7 SCC 148 [LQ/SC/2009/1146] was rendered, a decision of High Court of Delhi dealing with the view of the Tariff Advisory Committee in respect of "comprehensive/package policy" had not come into the field.

We think it apt to refer to the same as it deals with certain factual position which can be of assistance. The High Court of Delhi in Yashpal Luthra and Anr. V. United India Insurance Co. Ltd. and Another, (2011) ACJ 1415 (Del), after recording the evidence of the competent authority of Tariff Advisory Committee (TAC) and Insurance Regulatory and Development Authority (IRDA), reproduced a circular dated 16.11.2009 issued by IRDA to CEOs of all the Insurance Companies restating the factual position relating to the liability of Insurance companies in respect of a pillion rider on a two-wheeler and occupants in a private car under the comprehensive/package policy.

22. The relevant portion of the circular which has been reproduced by the High Court is as follows:

"INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY :

Ref: IRDA/NL/CIR/F&U/073/11/2009

Dated :16.11.2009

To,

CEOs of all general insurance companies

Re: Liability of insurance companies in respect of occupants of a Private car and pillion rider on a two-wheeler under Standard Motor Package Policy (also called the Comprehensive Policy).

Insurers attention is drawn to wordings of Section II 1 (ii) of Standard Motor Package Policy (also called the Comprehensive Policy) for private car and two-wheeler under the (erstwhile) India Motor Tariff. For convenience the relevant provisions are reproduced hereunder:-

Section II - Liability to Third Parties

1. Subject to the limits of liabilities 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 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.

It is further brought to the attention of insurers that the above provisions are in line with the following circulars earlier issued by the TAC on the subject:

(i) Circular M.V. No. l of 1978 - dated 18th March, 1978 (regarding occupants carried in Private Car) effective from 25th March, 1977.

(ii) MOT/GEN/10 dated 2nd June, 1986 (regarding pillion riders in a two-wheeler) effective from the date of the circular.

The above circulars make it clear that the insured liability in respect of occupant(s) carried in a private car and pillion rider carried on two-wheeler is covered under the Standard Motor Package Policy. A copy each of the above circulars is enclosed for ready reference.

The Authority vide circular No. 066/IRDA/F&U/Mar-08 dated March 26, 2008 issued under File & Use Guidelines has reiterated that pending further orders the insurers shall not vary the coverage, terms and conditions wording, warranties, clauses and endorsements in respect of covers that were under the erstwhile tariffs. Further the Authority, vide circular No. 019/IRDA/NL/F&U/Oct-08 dated November 6, 2008 has mandated that insurers are not permitted to abridge the scope of standard covers available under the erstwhile tariffs beyond the options permitted in the erstwhile tariffs. All general insurers are advised to adhere to the afore-mentioned circulars and any noncompliance of the same would be viewed seriously by the

Authority. This is issued with the approval of competent authority.

Sd/-

(Prabodh Chander)

Executive Director"

23. The High Court has also reproduced a circular issued by IRDA dated 3.12.2009. It is instructive to quote the same:-

"INSURANCE REGULATORY & DEVELOPMENT AUTHORITY

"IRDA /NL/CIR/F&U/078/12/2009

Dated 3.12.2009.

To

All CEOs of All general insurance companies (except ECGC,

AIC, Staff Health, Apollo)

Re: Liability of insurance companies in respect of occupant of a private car and pillion rider in a two-wheeler under Standard Motor Package Policy (also called the Comprehensive Policy). Pursuant to the Order of the Delhi High Court dated 23.11.2009 in MAC Appeal No. 176/2009 in the case of Yashpal Luthra v. United India Insurance Co.Ltd., the Authority convened a meeting on November 26, 2009 of the CEOs of all the general insurance companies doing motor insurance business in the presence of the counsel appearing on behalf of the Authority and the leaned amicus curie.

Based on the unanimous decision taken in the meeting by the representatives of the general insurance companies to comply with the IRDA circular dated 16th November, 2009 restating the position relating to the liability of all the general insurance companies doing motor insurance business in respect of the occupants in a private car and pillion rider on a two wheeler under the comprehensive/package policies which was communicated to the court on the same day i.e. November 26, 2009 and the court was pleased to pass the order (dt. 26.11.2009) received from the Court Master, Delhi High Court, is enclosed for your ready reference and adherence. In terms of the said order and the admitted liability of all the general insurance companies doing motor insurance business in respect of the occupants in a private car and pillion rider on a two-wheeler under the comprehensive/package policies, you are advised to confirm to the Authority, strict compliance with the circular dated 16th November, 2009 and order dt. 26.11.2009 of the High Court. Such compliance on your part would also involve:

(i) withdrawing the plea against such a contest wherever taken in the cases pending before the MACT, and issue appropriate instructions to their respective lawyers and the operating officers within 7 days;

(ii) with respect to all appeals pending before the High Courts on this point, issuing instructions within 7 days to the respective operating officers and the counsel to withdraw the contest on this ground which would require identification of the number of appeals pending before the High Courts (whether filed by the claimants or the insurers) on this issue within a period of 2 weeks and the contest on this ground being withdrawn within a period of four weeks thereafter;

(iii) With respect to the appeals pending before the Honble Apex Court, informing, within a period of 7 days, their respective Advocates-on-Record about the IRDA Circulars, for appropriate advice and action. Your attention is also drawn to the discussions in the CEOs meeting on 26.11.2009, when it was reiterated that insurers must take immediate steps to collect statistics about accident claims on the above subject through a central point of reference decided by them as the same has to be communicated in due course to the Honble High Court. You are, therefore, advised to take up the exercise of collecting and collating the information within a period of two months to ensure necessary & effective compliance with the order of the Court. The information may be centralized with the Secretariat of the General Insurance Council and also furnished to us.

IRDA requires a written confirmation from you on the action taken by you in this regard.

This has the approval of the Competent Authority.

Sd/-

(Prabodh Chander)

Executive Director"

24. It is extremely important to note here that till 31st December, 2006 the Tariff Advisory Committee and, thereafter, from 1st January, 2007, IRDA functioned as the statutory regulatory authorities and they are entitled to fix the tariff as well as the terms and conditions of the policies issued by all insurance companies. The High Court had issued notice to the Tariff Advisory Committee and the IRDA to explain the factual position as regards the liability of the insurance companies in respect of an occupant in a private car under the "comprehensive/ package policy". Before the High Court, the Competent Authority of IRDA had stated that on 2nd June, 1986, the Tariff Advisory Committee had issued instructions to all the insurance companies to cover the pillion rider of a scooter/motorcycle under the "comprehensive policy" and the said position continues to be in vogue till date. It had also admitted that the "comprehensive policy" is presently called a "package policy". It is the admitted position, as the decision would show, the earlier Circulars dated 18th March, 1978 and 2nd June, 1986 continue to be valid and effective and all insurance companies are bound to pay the compensation in respect of the liability towards an occupant in a car under the "comprehensive/package policy" irrespective of the terms and conditions contained in the policy. The competent authority of the IRDA was also examined before the High Court who stated that the Circulars dated 18th March, 1978 and 2nd June, 1986 of the Tariff Advisory Committee were incorporated in the Indian Motor Tariff effective from 1st July, 2002 and they continue to be operative and binding on the insurance companies. Because of the aforesaid factual position, the Circulars dated 16th November 2009 and 3rd December, 2009, that have been reproduced hereinabove, were issued.

25. It is also worthy to note that the High Court, after referring to individual circulars issued by various insurance companies, eventually stated thus:-

"27. In view of the aforesaid, it is clear that the comprehensive/package policy of a two wheeler covers a pillion rider and comprehensive/package policy of a private car covers the occupants and where the vehicle is covered under a comprehensive/package policy, there is no need for Motor Accident Claims Tribunal to go into the question whether the Insurance Company is liable to compensate for the death or injury of a pillion rider on a two-wheeler or the occupants in a private car. In fact, in view of the TACs directives and those of the IRDA, such a plea was not permissible and ought not to have been raised as, for instance, it was done in the present case."

26. In view of the aforesaid factual position, there is no scintilla of doubt that a "comprehensive/package policy" would cover the liability of the insurer for payment of compensation for the occupant in a car. There is no cavil that an "Act policy" stands on a different footing from a "Comprehensive/Package Policy". As the circulars have made the position very clear and the IRDA, which is presently the statutory authority, has commanded the insurance companies stating that a "Comprehensive/Package Policy" covers the liability, there cannot be any dispute in that regard. We may hasten to clarify that the earlier pronouncements were rendered in respect of the "Act policy" which admittedly cannot cover a third party risk of an occupant in a car. But, if the policy is a "Comprehensive/Package Policy", the liability would be covered. These aspects were not noticed in the case of Bhagyalakshmi and, therefore, the matter was referred to a larger Bench. We are disposed to think that there is no necessity to refer the present matter to a larger Bench as the IRDA, which is presently the statutory authority, has clarified the position by issuing circulars which have been reproduced in the judgment by the Delhi High Court and we have also reproduced the same."

11. On a perusal of the award, it is clear that the Claims Tribunal has not discussed the nature of the policy nor given any finding in this regard. The document (Ex.D/3) filed as policy issued by the Insurer mentions the policy to be a "Private Car Liability Policy" and a TP premium of Rs.3003 has been charged, hence it is necessary to scan the terms of the entire policy to arrive at a conclusion whether it is an "Act policy" or a "Package policy" to cover liability of the occupants in a car.

12. Hence, in view of the aforestated legal position, the finding of the Tribunal only with regard to liability of the insurance company is set aside. The other findings of Tribunal as regard to quantum of award shall remain undisturbed. The matter is remitted to the Tribunal to scrutinize the policy in proper perspective and if necessary take additional evidence and on the basis of the nature of the policy and the conclusion arrived at, the liability may be fastened accordingly.

13. Resultantly, the appeal is allowed to the extent indicated above and the matter is remitted back to the Tribunal for the limited purpose as directed hereinabove.