Case : Mohana Krishnan S vs K.Balasubramaniyam | SLP(C) 3433/2020
Summary
The Supreme Court has referred a Special Leave Petition, including Justices Hemant Gupta and Vikram Nath, to a larger bench for a decision on whether a motorcycle pillion rider is a third party and if the insurance company is obligated to provide indemnification under a “Act Only” policy. The petition argued that a pillion rider on a motorcycle does not qualify as a third party, and the insurance company is not obligated to indemnify the insured in the event of the pillion rider’s injuries or death.
The Kerala High Court’s judgment was based on the Supreme Court’s decision in Manuara Khatun and Ors v. Rajesh Kr. Singh and Ors, where it was determined that the deceased was an uninsured passenger who was not covered by the insurance policy. The court ruled that the insurer was obliged to pay the amount of compensation determined by the tribunal and authorized the insurer to pursue collection of funds from the proprietor of the negligent vehicle.
About the case
Whether a motorcycle pillion passenger constitutes a third party. Regarding the demise or injury of the pillion passenger, is the insurance company obligated to provide indemnification to the insured under the terms of a “Act Only” policy? These inquiries have been referred to a larger bench by the Supreme Court. A Special Leave Petition was being reviewed by the bench, which included Justices Hemant Gupta and Vikram Nath. The petition argued that since a pillion rider on a motorcycle does not qualify as a third party, the insurance company is not obligated to indemnify the insured in the event of the injuries or death of the pillion rider.
The petitioner’s attorney filed the SLP in opposition to a Kerala High Court ruling, citing two prior Supreme Court decisions: Oriental Insurance Company Limited vs. Tilak Singh (2008) (7) SCC 428 and United India Insurance Company Limited vs. Tilak Singh (2006) (4) SCC 404. It was further argued, with reference to Indian Motor Tariff Endorsement No. 70, that the insured must pay an additional premium for pillion coverage under a “Act Only” policy. In the case of Tilak Singh (supra), it was determined that the insurance company had no responsibility for the pillion rider’s injuries, as the policy was a statutory policy and therefore did not provide coverage for the risk of fatality or bodily harm to gratuitous passengers. It was determined in Sudhakaran KV (supra) that the pillion occupant of a two-wheeler should not be considered a third party in an accident caused by the scooter’s reckless and negligent operation, and not by the driver of another vehicle.
Nevertheless, the inquiry pertains to whether the term “third party” encompasses all individuals apart from the insurer, who is the second party, and the insured, who is the first. Hence, with the exception of those individuals who are neither the insurer nor the insured, who are considered third parties and are therefore covered by the Act Only policy, we have an initial reservation regarding the viewpoint expressed. “An authoritative determination is necessary for such a question,” the bench noted, referring the matter to a larger bench. The Kerala High Court’s impugned judgment was founded upon the Supreme Court’s decision in Manuara Khatun and Ors v. Rajesh Kr. Singh and Ors (AIR 2017 SC 1204), in which it was determined that the deceased was an uninsured passenger who was not covered by the insurance policy.
As a result, the insurer was ordered to compensate the claimants and recover the cost from the insured. Additionally, the High Court observed that in Shivaraj v. Rajendra and Anr. (AIR 2018 SC 4252), there was no evidence to suggest that the claimant was operating as a loader in the trailer that was affixed to the tractor, that the trailer itself was insured, or that any trailer was insured or was attached to the tractor and insured. The court ruled that the insurer was obliged to pay the amount of compensation as determined by the tribunal and authorized the insurer to pursue collection of the funds from the proprietor of the negligent vehicle.
