Occupant Of Private Car Is Not A "Third Party": Himachal Pradesh High Court Allows Appeal By Insurance Company Against MACT Award
The Bench criticised the Judicial Officer for failing to examine the insurance policy or understand the distinction between Act-only and comprehensive policies, observing that such elementary ignorance of the Motor Vehicles Act was unacceptable in a head of the District Judiciary.
Justice Sushil Kukreja, Himachal Pradesh High Court
The Himachal Pradesh High Court has held that the occupant of a private car “does not fall within the definition of third party” and is “only a gratuitous passenger” where the vehicle is covered by an Act Policy and no additional premium has been paid for occupants’ risk.
Allowing an appeal by New India Assurance Company Limited, the Court exonerated the insurer of liability under an award passed by the Motor Accident Claims Tribunal, Sundernagar. It also found that the Tribunal had decided the case on an insurance policy that had expired before the accident, and directed that a copy of the judgment be placed on the service record of the concerned judicial officer.
A Single Judge Bench of Justice Sushil Kukreja observed, “…since the occupant of a private car does not fall within the definition of third party and he is only a gratuitous passenger, as such, the appellant-insurance company is not liable to pay any compensation to the petitioners as no additional premium was paid to cover the risk of death or bodily injuries to the occupant of the car. Therefore, the learned Tribunal below ought to have exonerated the Insurance Company from the liability of paying compensation, but it has erroneously come to the conclusion that the insurance company is liable to indemnify the owner”.
“Before parting, in the considered opinion of this Court, the award passed by the Tribunal below clearly reflects total non-application of mind by the concerned Judicial Officer…”, it noted further.
Advocate Raman Sethi appeared for the appellant and Advocate Surender Verma appeared for the respondent.
As per the facts, a painter, aged 44, said to be earning Rs 15,000 per month, died on December 30, 2016, when the car in which he was travelling rolled into fields at Beh-Ki-Dhar. His wife and son sought Rs 50 lakh, alleging rash and negligent driving.
By award dated August 16, 2023, the Tribunal awarded Rs 13,93,100 with interest at 6% per annum, held the respondents jointly and severally liable, and directed the insurer to deposit the amount. The insurer appealed under Section 173 of the Motor Vehicles Act, contending that its policy was an Act Policy that did not cover occupants of a private car.
The High Court noted that the Tribunal had relied on a policy valid from September 3, 2015 to September 2, 2016. The policy in force on the date of accident, valid from September 19, 2016 to September 18, 2017, “had to be taken into consideration.”
On the merits, the Court relied on United India Insurance Co. Ltd. v. Tilak Singh, Oriental Insurance Co. Ltd. v. Sudhakaran, New India Assurance Co. Ltd. v. Sadanand Mukhi and National Insurance Co. Ltd. v. Balakrishnan.
The Court found that only a third-party premium of Rs 2,205 had been paid. Since no additional premium covered the occupants, the Tribunal “ought to have exonerated the Insurance Company”.
The award was modified only to exonerate the insurer. The owner, respondent No. 4, was held liable to satisfy it, with the remaining terms, including interest, unchanged.
Terming the Tribunal’s approach “highly objectionable,” the Court directed the officer to undergo a refresher course and periodic training at the H.P. State Judicial Academy in MACT matters. The Registrar General was directed to place a copy of the judgment on the officer’s service record and send one to the Director of the Academy.
“It is quite shocking that the Judicial Officer has adjudicated the case while taking into consideration the insurance policy Ext.R-3, which had no relevance. This reflects not only lack of application of mind to the facts of the case but is also against the settled judicial norms. The Judicial Officer now-adays is the District & Sessions Judge heading District Judiciary and also dealing with MACT cases. Needless to state that the District judiciary is the bedrock of our judicial system and is positioned at the primary level of entry to the doors of justice. The Officer is not even aware about the difference between the Act/Liability only Policy and the Comprehensive/Package Policy and has not even cared to see the insurance policy…It is not expected from the head of District Judiciary to pass such kind of award/order which lacks even elementary knowledge of the MV Act. This approach of the Judicial Officer in adjudicating the petition without application of mind is highly objectionable and deserves to be deprecated. Judicial orders cannot be allowed to be passed in a mechanical manner. Such tendency must be deprecated and cannot be allowed to perpetuate…”, the Bench noted.
Cause Title: New India Assurance Company Limited v. Promila Devi and others (Neutral Citation: 2026:HHC:47519)
Appearances:
Appellant: Raman Sethi, Advocate.
Respondent: Surender Verma, Kanishk Rohal, Vinay Sharma, Vinod Thakur, Mohar Singh, Advocates.