ORIENTAL INSURANCE COMPANY LTD.versusSURENDRA NATH LOOMBA AND OTHERS

                    [2012] 9 S.C.R. 1007


         ORIENTAL INSURANCE COMPANY LTD.                           A
                              V.
       SURENDRA NATH LOOMBA AND OTHERS
       (Civil Appeal Nos. 1345-1346 of 2009 etc.)

                   NOVEMBER 20, 2012
                                                                   B
   [K.S. RADHAKRISHNAN AND DIPAK MISRA, JJ.)

    MOTOR VEHICLES ACT, 1988:

    s. 166 - Motor accident - Claimant traveling in offending      C
vehicle lost both of his eyes - Compensation - Liability of
insurer - Held: Whether the insurer would be liable or not
would depend upon the nature of the policy when it is brought
on record in a manner as required by law - When Certificate
of Insurance is filed but the policy is not brought on record it   D
only conveys that the vehicle is insured and nature of policy
(whether it is "Act Policy" or "Comprehensive/Package
Policy'~ cannot be discerned from the same - In the case at
hand, the policy has not been brought on record - Matter
remitted to Tribunal to enable the insurance company to            E
produce the policy with liberty to parties to lead further
evidence - However, quantum of compensation determined
by High Court as Rs.16,42,6561- needs no interference.

     A car belonging to respondent no. 2, met with an
accident as a result of which the claimant, who was                F
traveling in the said car lost both of his eyes. The Motor
Accident Claims Tribunal, keeping in view the salary and
various perquisites of the claimant, who was working as
a Senior Manager in a nationalized Bank, awarded a
compensation of Rs.20,97,984/- with 9% interest. The               G
Tribunal held that the insurer had issued the Certificate
of Insurance in respect of he vehicle and it was valid
when the accident occurred. Both the insurance
compaey and the claimant filed appeals before the High
                             1007                                  H
    1008    SUPREME COURT REPORTS             [2012] 9 S.C.R.

A Court which reduced the compensation toRs.16,42,656/-

      ln the instant appeals filed, both by the insurance
  company and the claimant, it was contended for the
  insurance company that the insurance policy was only
B an "Act Policy" and, therefore, no liability of the insurer
  would arise.

       Partly allowing the appeals of the insurance
    company and dismissing those of the claimant, the Court

c      HELD: 1.1 In the case at hand, the policy has not been
  brought on record. The stand of the insurer that it is an
  "Act Policy" has been disputed by the claimant who
  would submit that the policy may be a "comprehensive/
  package policy". When Certificate of Insurance is filed but
0 the policy is not brought on record it only conveys that
  the vehicle is insured. The nature of policy cannot be
  discerned from the same. Thus, it would be appropriate
  to remit the matter to the tribunal to enable the insurer to
  produce the policy and grant liberty to the parties to file
E additional documents and also lead further evidence as
  advised. Ordered accordingly. [para 14] [1017-E-G]

         Yashpal Luthra and Anr. V. United India Insurance Co.
    Ltd. and Another 2011 ACJ 1415 - relied on.

F       1.2 Whether the insurer would be liable or not would
    depend upon the nature of the policy when it is brought
    on record in a manner as required by law. [para 15] [1017-
    H; 1018-A]
      1.3 As far as quantum is concerned, the
G compensation allowed by the High Court is just and
  proper compensation requiring no interference. [para 6
  and 16] [1018-B]

      United India Insurance Co. Ltd., Shim/a v. Tilak Singh
H and 2006 (3) SCR 758 = (2006) 4 SCC 404; Oriental
     ORIENTAL INSURANCE COMPANY LTD. v.               1009
           SURENDRA NATH LOOMBA

Insurance Company Ltd. v. Jhuma Saha (Smt.) 2007 (1) SCR      A
979 =(2007) 9 SCC 263, Oriental Insurance Company Ltd.
v. Sudhakaran K. V. and others 2008 (9) SCR 367 = (2008) 7
SCC 428 and New India Assurance Company Ltd. v.
Sadanand Mukhi and others 2008 (17) SCR 1313 = (2009)
2 SCC 417; National Insurance Co. Ltd. v. Laxmi Narain Dhut   8
2007 (3) SCR 579 = (2007) 3 SCC 700; Oriental Insurance
Company Ltd. v. Meena Variyal and Other 2007 (4) SCR 641
= (2007) 5 SCC 428; Bhagyalakshmi and others v. United
Insurance Company Limited and another 2009 (7) SCR 1031
= (2009) 7 SCC 148; Amrit Lal Sood and Another v.             c
Kaushalya Devi Thapar and Others 1998 (2) SCR 284 =
(1998) 3 SCC 744; and National Insurance Company Ltd. v.
Balakrishnan & Another 2012 (11) JT 260 - referred to.

   New India Assurance Co. Ltd. V. Asha Rani 2002 (4)
Suppl. SCR 543 = (2003) 2 sec 223 - cited.                    D

                    Case Law Reference:
    2006 (3) SCR 758           referred to        para 7
    2007 (1) SCR 979           referred to        para 7      E
    2008 (9) SCR 367           referred to        para 7
    2008 (17) SCR 1313         referred to        para 7
    2002 (4) Suppl. SCR 543 cited                 para 9
                                                              F
    2007 (3) SCR 579           referred to        para 11
     2007 (4) SCR 641          referred to        para 11
    2009 (7) SCR 1031          referred to        para 12
                                                              G
    1998 (2) SCR 284           referred to        para 12
    2012 (11) JT 260           referred to        para 13
    2011 ACJ 1415              relied on          para 13
                                                              H
    1010    SUPREME COURT REPORTS                [2012] 9 S.C.R.

A       CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
    1345-1346 of 2009.

      From the Judgment & Order dated 12.07.2007 of the High
  Court of Uttarakhand at Nainital in A.O. No. 201 and 284 of
B 2003.
                                  WITH
    C.A. Nos. 1347-1348 of 2009.

         Dr. Meera Agarwal, Ramesh Chandra Mishra (for Oriental
c   Insurance Co. Ltd.} for the Appellant.

        A.T.M. Rangaramanujam, Vinod Wadhawani, M.A.
    Chinnasamy, M.A. Krishna Moorthy for the Respondents.

        The Judgment of the Court was delivered by
D
        DIPAK MISRA, J. 1. In the present batch of appeals, two
  preferred by the Oriental Insurance Company Limited and two
  preferred by claimant, the assail is to the common judgment
  passed by the High Court of Uttarakhand at Nainital in A.O. No.
E 201 of 2003 and A.O. No. 284 of 2003 wherein the award dated
  19.5.2003 passed by the Motor Accidents Claims Tribunal,
  Dehradun (for short 'the tribunal') in M.A.C.T. Petition No. 10
  of 1999 was challenged by the insurer and the claimant from
  different spectrums.
F      2. The facts which are requisite to be stated are that on
  9.10.1998 about 4.30 a.m. claimant, Surendra Nath Loomba,
  was travelling in a Maruti Esteem Car bearing Registration No.
  DL 8C-5096 belonging to the respondent No. 3, Savita Matta,
  and driven by the respondent No. 2, Raj Loomba, the son of
G the claimant. Near the President Body-guard House, Rajpur
  Road, the vehicle dashed against a tree and in the accident
  the windscreen (front) of car was smashed and its pieces got
  inserted into the eyes of the claimant as a consequence of which
  he lost his both eyes. As set forth, at the time of the accident
H the claimant was working as a Senior Manager in Punjab
      ORIENTAL INSURANCE COMPANY LTD. v.                  1011
    SURENDRA NATH LOOMBA [DIPAK MISRA, J.]

 National Bank and his gross salary was Rs.18,949.86 per A
month and various perquisites were also attached to the
:service. Keeping in view his salary and other perquisites he
 filed an application under Section 166 of.the Motor Vehicles
 Act, 1988 before the tribunal putting forth a claim of
 Rs.62,00,000/- with 18% interest as compensation.            B

     3. The respondent No. 2, Raj Loomba, filed his written
statement contending, inter alia, that at the time of accident the
vehicle was insured with the Oriental Insurance Company
Limited and hence, it being the insurer was liable to pay the C
compensation.

     4. The insurance company resisted the claim of the
claimant on the ground that the driver of the vehicle did not have
a valid driving licence; that the proceedings had been initiated
in a collusive manner; and that even if the accident as well as D
the injuries were proven the insurer was not liable to indemnify
the owner as the claimant was travelling as a gratuitous
passenger.

     5. The tribunal on the basis of material brought on record E
came to hold that as the insurer had issued Certificate of
Insurance in respect of the vehicle in question and it was valid
during the period when the accident occurred, it was liable to
pay the compensation; that the opposite party No. 1 had a valid
driving licence and the accident had occurred and there was F
no collusion between the parties; and that the victim was
entitled to get a total sum of Rs.20,97,984/- towards
compensation with 9% interest per annum regard being had
to the pecuniary and non-pecuniary losses. Be it noted, the
tribunal, while computing the amount, had deducted certain sum
under certain heads which need not be stated in detail.          G

      6. Aggrieved by the aforesaid award the insurance
 company preferred A.O. No. 201 of 2003 and the injured
 claimant preferred A.O. No. 284 of 2003 before the High Court.
 The High Court, by the common impugned order, reduced the        H
     1012      SUPREME COURT REPORTS                  [2012] 9 S.C.R.


A   amount of compensation to Rs.16,42,656/- and concurred with
    the conclusion arrived at by the tribunal as regards the liability.
    Thus, the appeal preferred by the insurance company was
    allowed in part and the appeal preferred by the claimant was
    dismissed. Hence, the present batch of appeals by the
B   insurance company as well as by the claimant.

          7. First, we shall deal with the appeals preferred by the
    insurance company It is worth noting that the Certificate of
    Insurance was filed before the tribunal which clearly showed that
    the vehicle was insured with the appellant-company. Dr. Meera
C   Agarwal, learned counsel for the appellant-insurer would submit
    that it was only an "Act Policy" and, therefore, the liability of the
    insurer does not arise. She has commended us to the
    decisions in United India Insurance Co. Ltd., Shim/a v. Tilak
    Singh and Others 1, Oriental Insurance Company Ltd. v.
D   Jhuma Saha (Smt.)2, Oriental Insurance Company Ltd. v.
    Sudhakaran K. V. and others 3 and New India Assurance
    Company Ltd. v. Sadanand Mukhi and others4 .

         8. Learned counsel for the respondents would contend that
E   whether the policy is an "Act Policy" or a "Comprehensive/
    Package Policy" or whether any extra premium was paid to
    cover the passenger, is not reflected from the Certificate of
    Insurance as the policy was not brought on record by tendering
    the same before the tribunal.
F        9. In Tilak Singh (supra) this Court referred to the
    concurring opinion rendered in a three-Judge Bench decision
    in New India Assurance Co. Ltd. V. Asha Rani5 and ruled thus:-

          "In our view, although the observations made in Asha Rani
G
    1.   (2006) 4 sec 404.
    2.   (2007) 9 sec 263.
    3.   c2008) 7 sec 428.
    4.   (2009) 2 sec 41.7.
H   5.   (2003) 2 SC~ 223.
      ORIENTAL INSURANCE COMPANY LTD. v.    1013
     SURENDRA NATH LOOMBA [DIPAK MISRA, J.]

     case were in connection with carrying passengers in a             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         B
     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."

It is worthy to note in the said case the controversy related to       C
gratuitous passenger carried in a private vehicle.

     10. In Jhuma Saha (Smt.) (supra) this Court has stated
thus: -

     "The additional premium was not paid in respect of the            o
     entire risk of death or bodily injury of the owner of the
     vehicle. If that be so, Section 147 (b) of the Motor Vehicles
     Act which in no uncertain terms covers a risk of a third party
     only would be attracted in the present case."

     11. In National Insurance Co. Ltd. v. Laxmi Narain Dhut6          E
after elaborately referring to the analysis made in Asha Rani
(supra) the Bench ruled thus:-

      "Section 149 is part of Chapter XI which is titled "Insurance
      of Motor Vehicles against Third-Party Risks". A significant      F
      factor which needs to be noticed is that there is no
      contractual relation between the insurance company and
      the third party. The liabilities and the obligations relatable
      to third parties are created only by fiction of Sections 147
      and 149 of the Act".                                             G

In the said case it has been opined that although the statute is
a beneficial one qua the third party but that benefit cannot be
extended to the owner of the offending vehicle. The said
6.   (2007) 3 sec 100.                                                 H
     1014       SUPREME COURT REPORTS                   [2012] 9 S.C.R.


A    principle was reiterated in Oriental Insurance Company Ltd.
     v. Meena Variyal and Other, Sudhakaran K. V. (supra) and
     Sadanand Mukhi (supra).

           12. It is apt to note here that this Court in Bhagyalal<shmi
B and others v. United Insurance Company Limited and
    another8, after dealing with various facets and considering the
    authorities in Amrit Lal Sood and Another v. Kaushalya Devi
    Thapar and Others 9, Asha Rani (supra), Tilak Singh (supra),
    Jhuma Saha (supra), Sudhakaran K. V. and Others (supra),
    has observed thus :-
C
          "Before this Court, however, the nature of policies which
          came up for consideration were Act policies. This Court
          did not deal with a package policy. If the Tariff Advisory
          Committee seeks to enforce its decision in regard to
D         coverage of third-party risk which would include all persons
          including occupants of the vehicle and the insurer. having
          entered into a contract of insurance in relation thereto, we
          are of the opinion that the matter may require a deeper
          scrutiny."
E
         13. Recently this Bench in National Insurance Company
    Ltd. v. Balakrishnan & Another10, after referring to various
  decisions and copiously to the decision in Bhagyalakshmi
  (supra), held that there is a distinction between "Act Policy" and
F "Comprehensive/Package Policy". Thereafter, the Bench took
  note of a decision rendered by Delhi High Court in Yashpal
  Luthra and Anr. V. United India Insurance Co. Ltd. and
  Another11 wherein the High Court had referred to the circulars
  issued by the Tariff Advisory Committee (TAC) and Insurance

G 7.     (2007) s sec 428.
    8.   (2009) 7 sec 148.
    9.   (1998) 3 sec 744.
    10. Civil Appeal No. 8163 of 2012 (Arising out of SLP(C) No. 1232/2012)
        decidied on 20.11.2012.
H   11. 2011ACJ1415.
     ORIENTAL INSURANCE COMPANY LTD. v.                 1015
   SURENDRA NATH LOOMBA [DIPAK MISRA, J.]

Regulatory and Development Authority (IRDA). This Court         A
referred to the portion of circulars dated 16.11.2009 and
3.12.2009 which had been reproduced by the High Court and
eventually held as follows: -

    "19. It is extremely important to note here that till 31st B
    December, 2006 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 by all
    insurance companies. The High Court had issued notice
    to the Tariff Advisory Committee and the IRDA to explain C
    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 D
    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. He had also admitted that the
    comprehensive policy is presently called a package policy. E
    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 F
    "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 G
    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
                                                                H
    1016   SUPREME COURT REPORTS                     [2012] 9 S.C.R.


A      and 3rd December, 2009, that have been reproduced
       hereinabove, were issued.

       20. It is also worthy to note that the High Court after referring
       to individual circulars issued by various insurance
       companies and eventually stated thus:-
B
              "l n 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
c             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
D             rider on a two-wheeler or the occupants in a private
              car. In fact, in view of the TAC's 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."
E
       21. 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 than a
F      "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
G      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
H      covered. These aspects were not noticed in the case of
    ORIENTAL INSURANCE COMPANY LTD. v.                      1017
   SURENDRA NATH LOOMBA [DIPAK MISRA, J.]

    Bhagyalakshmi (supra) and, therefore, the matter was             A
    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 I RDA, which is presently the statutory
    authority, has clarified the position by issuing circulars
    which have been reproduced in the judgment by the Delhi          B
    High Court and we have also reproduced the same.

    22. In view of the aforesaid legal position the question that
    emerges for consideration is whether in the case at hand
    the policy is an "Act Policy" or "Comprehensive/Package          C
    Policy". There has been no discussion either by the tribunal
    or the High Court in this regard. True it is, before us
    Annexure P-1 has been filed which is a policy issued by
    the insurer. It only mentions the policy to be a
    comprehensive policy but we are inclined to think that there
    has to be a scanning of the terms of the entire policy to        D
    arrive at the conclusion whether it is really a package policy
    to cover the liability of an occupant in a car."

      14. We have quoted in extenso to reiterate the legal
position. In the case at hand, the policy has not been brought       E
on record. The learned counsel for the appellant-insurer would
submit that it is an "Act Policy". The learned counsel for the
respondent would seriously dispute and submit that extra
premium might have been paid or it may be a "Comprehensive/
Package Policy". When Certificate of Insurance is filed but the      F
policy is not brought on record it only conveys that the vehicle
is insured. The nature of policy cannot be discerned from the
same. Thus, we are disposed to think that it would be
appropriate to remit the matter to the tribunal to enable the
insurer to produce the policy and grant liberty to the parties to    G
file additional documents and also lead further evidence as
advised, and we order accordingly.

     15. It needs no special emphasis to state that whether the
insurer would be liable or not would depend upon the nature of
                                                                     H
    1018    SUPREME COURT REPORTS                [20121 9 S.C.R.

A the policy when it is brought on record in a manner as required
  bylaw.

       16. As far as quantum is concerned, though numbers of
  grounds were urged, yet the learned counsel for the parties did
8 not really address on the same and, therefore, we do not think
  it necessary to dwell upon the same and treat it as just and
  proper compensation requiring no interference.

       17. In the result, the appeals preferred by the insurer,
  namely, Oriental Insurance Company Limited are allowed to the
C extent indicated hereinabove and to that extent the award is set
  aside and the matter is remitted to the tribunal and the appeals
  preferred by the claimant for enhancement of compensation are
  dismissed. There shall be no order as to costs.

D R.P.                                     Appeals disposed of.