C.M.A.No.1565 of 2020 S.VAIDYANATHAN,J., This Civil Miscellaneous Appeal is listed today under the caption “For Clarification” at the instance of Mr.S.Ar

C.M.A.No.1565 of 2020
S.VAIDYANATHAN,J.,
This Civil Miscellaneous Appeal is listed today under the caption “For Clarification” at the instance of Mr.S.Arunkumar, learned counsel for General Insurance Council (GIC).
2. Heard Mr.M.B.Raghavan, learned counsel appearing for Insurance Regulatory & Development Authority (IRDA) and Mr.Mr.N.Vijayaraghavan, learned counsel, for Mr.N.P.Vijayakumar, representing Society of Indian Automobile Manufacturers (in short ‘SIAM’), (though SIAM is not a party to this Writ Petition). Upon hearing the submissions made on behalf Insurance Regulatory and Development Authority (IRDAI), General Insurance Council (GIC) representing the licensed General Insurance Companies and SIAM, as a non profit entity that has been espousing the cause of Automobile industry for several years, it would appear that the order dated 04.08.2021, mandating the coverage of bumper to bumper policy may not be logistically and economically feasible for effective implementation in the present legal dispensation. It was submitted that the directions issued by this Court in Paragraph Nos.12 and 13 of the orders dated 04.08.2021, have unintended impact, causing severe repercussions on the society and therefore, the directions issued by this Court may be withdrawn in the interest of Policyholders, Automobile Industry and public at large. He also brought to the notice of this court that the issue of long term third party insurance coverage has been mandated by the Apex Court as early as in September, 2018, and the Regulating Body, viz., Insurance Regulatory and Development Authority (IRDAI) has been periodically monitoring over the changing scenario from time to time and hence, there is no need for issuance of such compulsory directions.
3. This Court also heard the submissions of Mr.M.B.Raghavan, learned counsel appearing for Insurance Regulatory & Development Authority (IRDA) and Mr.S.Arunkumar, learned counsel for GIC, on the points urged by Mr.N.Vijayaraghavan, learned counsel for SIAM, who all in one voice stated that the views expressed by this Court on 04.08.2021 in respect of protective coverage to uninsured innocent victims, such as gratuitous occupants in a private car and pillion riders, will be duly taken care in consultation with IRDAI to safeguard the interest of innocent victims, which is the anxiety of the Court.
4. Mr.M.B.Raghavan, learned counsel appearing for IRDA has submitted that IRDAI will consider better and fuller insurance coverage to all unfortunate victims, be it Drivers, Owners or gratuitous occupants or pillion riders, as the case may be and prayed for suitable modification / withdrawal of the directions issued by this Court on 04.08.2021.
5. Considering the overall submissions made by the Parties, including Mr.N.Vijayaraghavan, learned counsel for SIAM and taking into account the concern of the IRDAI, this Court feels that the direction issued by this Court on 04.08.2021 in Paragraphs No.13 may not be conducive and suitable for implementation in the current situation. Therefore, the said direction in Paragraph No.13 is hereby withdrawn for the present. This Court hope and trust that law makers will look into this aspect and examine the need for suitable amendment in the Act, relating to wide coverage of vehicles so as to protect the innocent victims. In view of withdrawal of the direction regarding bumper to bumper policy, the Circular dated 31.08.2021 issued by the Joint Transport Commissioner, Chennai also stands cancelled.
6. Registry is directed to remove Paragraph No.13 from the earlier order of this Court dated 04.08.2021 and issue a fresh copy of the order to the parties concerned.
13.09.2021
ar
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C.M.A.No.1565 of 2020

S.VAIDYANATHAN,J.,

This Civil Miscellaneous Appeal is listed today under the caption “For Clarification” at the instance of Mr.S.Arunkumar, learned counsel for General Insurance Council (GIC).

2. It is represented by the learned counsel for GIC that GIC is constituted under Section 64-C of the Insurance Act, 1938. There is a Regulatory body, namely, “Insurance Regulatory and Development Authority of India” (in short “IRDAI”) and its main role is to coordinate with both private and public sector insurance companies in respect of common issues arising in the field of insurance business. Therefore, it is mandatory that both GIC and IRDAI may be impleaded as party respondents to this Appeal and heard.

3. It is further represented by the learned counsel for GIC that this Court, by an order dated 04.08.2021, mandated coverage of bumper to bumper policy (generally known as ‘Package Policy’) for all new two and four wheelers with effect from 01.09.2021. It was brought to the notice of this Court that consequent to the said order, the Joint Transport Commissioner (R), Chennai has issued a Circular dated 31.08.2021 to all the Regional Transport Departments of the State to ensure effective implementation of the order.

4. Learned counsel for GIC has filed a Memo dated 31.08.2021 on behalf of GIC, stating that though Insurance Companies are prepared to comply with the orders issued by this Court, they merely act as Distributors of the products, that are approved by IRDAI and without obtaining product approvals, actuarial pricing of products, etc., from IRDAI, they cannot launch any new product or add-on cover. It is further stated that Insurance Companies may be granted 90 days’ time to effect changes in the computer system after due approval from IRDAI. Till then, the order passed by this Court may be kept in abeyance.

5. In view of the above representations made by Mr.S.Arunkumar, learned counsel for GIC, this Court is of the view that both GIC and IRDAI are necessary parties to this case, in addition to arraying the Additional Chief Secretary, Transport Department, Chennai and the Joint Transport Commissioner (R), Chennai as Respondents, as the Circular dated 31.08.2021 has already been issued by the Joint Transport Commissioner, Chennai.
6. Accordingly,

1. General Insurance Council,
Rep. by its General Secretary,
5th Floor, National Insurance Building,
14, Jamshedji Tata Road, Church Gate,
Mumbai, Maharashtra – 400 020.

2. Insurance Regulatory and Development Authority of India,
Rep. by its Chairman,
Sy.No.115/1, Financial District,
Nankramguda, Gachibowli,
Hyderabad-500 032.

3. The Additional Chief Secretary,
Fort St.George, Chennai – 600 009 and

4. The Joint Transport Commissioner (R),
Ezhilagam, Chepauk, Chennai-600 005.

are suo motu impleaded as Respondents 5 to 8 to this Civil Miscellaneous Appeal.

7. Notice to the Respondents 6 to 8 returnable by 13.09.2021. Mr.S.Arunkumar, learned counsel, who took notice for General Insurance Council / R5, is expected to serve notice on Mr.M.B.Vijaya Raghavan, learned Counsel, who is said to be representing IRDAI. In the meanwhile, the order passed by this Court on 04.08.2021 is kept in abeyance for the present. After hearing R5 and R6, clarification may be issued in this matter, if required.
8. This Court really appreciates the rapid action taken by the Government in issuance of the Circular dated 31.08.2021 for implementation of the orders of this Court, which shows that the Government is also keen in safeguarding the interest of Drivers, Riders and others, who were referred to in the Order dated 04.08.2021.

List this matter on 13.09.2021 at 4:00pm under the very same caption.

01.09.2021
ar

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IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 04.08.2021
CORAM

THE HONOURABLE MR. JUSTICE S.VAIDYANATHAN

C.M.A.No.1565 of 2020
and
C.M.P.No.11557 of 2020

The New India Assurance Co. Ltd.,
20B, Erode Kankeyam Main Road,
Avalpoondurai. … Appellant
vs.
1. K. Parvathi
2. K.K. Kolandasamy
3. K. Suresh
4. P. Gowthaman @ Suresh … Respondents

Prayer: Civil Miscellaneous Appeal filed under Section 173 of the Motor Vehicles Act, 1988 against the judgment and decree dated 07.12.2019 made in M.C.O.P.No.17 of 2017 on the file of the Motor Accidents Claims Tribunal, Special District Court, Erode.
For Appellant : Mr.M.Krishnamoorthy

For R1 to R3 : Mr.N.Manokaran

For R-4 : Served – No appearance
*****
JUDGMENT
This appeal has been filed by the Insurance Company, challenging the Award dated 07.12.2019 passed by the Motor Accident Claims Tribunal, Special District Judge, Erode in M.C.O.P.No.17 of 2017, directing the appellant/Insurance Company to pay the Claimants a sum of Rs.14,65,800/- as compensation for the death of the deceased Sadayappan @ Dhanapal due to the accident, which occurred on 03.08.2016. The Tribunal has awarded compensation of Rs.14,65,800/- on the ground that the entire policy conditions have not been produced by the Insurance Company. Respondent Nos.1 to 3 / Claimants are the dependants of the deceased viz. Sadayappan @ Dhanapal.

2. The accident occurred on 03.08.2016 at about 4.00am at Pennagaram to Hogenakkal Main Road. After the accident, a Criminal Case was registered by the Hogenakkal Police Station on the basis of the complaint given by one Lingeshwaran, who travelled in the car, witnessed the accident and was examined as P.W.2. In the F.I.R., it has been stated that on 02.08.2016, the 4th Respondent herein by name Gowthaman and his friends went for a tour to Hogenakkal in a Qualis Car bearing Reg.No.TN-49-H-1913 and that on 03.08.2016, the 4th Respondent, who is the owner of the said Car had driven the Car towards Pennagaram to Hogenakkal Road. The deceased Sadayappan @ Dhanapal, who is said to be the driver of the car was sitting in the car along with other friends. When the car reached near Hogenakkal around 4.00 a.m., on account of the rash and negligent driving of the car by the 4th Respondent, he, who lost control, dashed against a tree planted on the left side of the road. As a result, one Sugumar and the deceased Dhanapal @ Sadayappan sustained grievous injury and died on the spot and that others suffered serious injury. From the F.I.R., it is very clear that the car was driven by the 4th respondent herein.

3. Before the Tribunal, a different / dramatic stand was taken that the deceased Sadayappan @ Dhanapal was an Engineering graduate and was employed as a Driver under the 4th Respondent for a salary of Rs.15,000/- per month. As per the statement of the complainant / Lingeshwaran, the deceased Dhanapal had driven the Car from Elavanatham and on 03.08.2016 early morning, due to tiredness, he handed over the Car to the 4th respondent / owner of the car and that while he was driving the Car, the accident took place and in the accident two persons died and others suffered injury.

4. The Insurance Company took a stand before the Tribunal that the policy taken was ‘Act only’ (otherwise known as ‘third party’) policy and that as per the policy, the Driver-cum-Owner would be entitled to a sum of Rs.1,00,000/- and for the purpose of claiming compensation, it has been stated in the Claim Petition that Sadayappan @ Dhanapal was driving the Car. It was further stated by the Insurance Company that the deceased Sadayappan @ Dhanapal was not at all a driver of the vehicle at the time of accident, as the vehicle was originally driven by the 4th respondent herein.

5. The Tribunal, after analyzing the evidence on record, came to the conclusion that the entire policy conditions in respect of the car have not been produced by the Insurance Company and that the premium for a sum of Rs.5,081/- was paid as T.P. Premium. Unless or otherwise the entire policy conditions have been produced, it would be very difficult to analyze as to whether the Insurance Company is liable to pay the compensation or not. Though the Tribunal is entitled to take a different view from the F.I.R., which is based on the evidence, the F.I.R. can be looked into for the purpose of corroboration or contradiction.

6. As per the Policy, the owner-cum-driver alone is entitled to compensation. Even going by the policy, it is very clear that it is a Private Car Liability Policy, wherein the third party premium has been paid as Rs.5,081/- and not even a pie has been paid as premium for the passengers. Firstly, the driver, who is said to have driven the vehicle before the accident was not the owner of the vehicle. Secondly, the 4th Respondent had driven the vehicle and not the person, who died in the accident. As no income proof has been produced by the Claimants, the Tribunal, on the basis of the Driving License of the deceased Dhanapal had fixed his monthly salary as Rs.9,000/- and foisted the liability on the Insurance Company taking the age as 25 years based on the date of birth given in the Driving License.
7. Learned counsel for the Appellant / Insurance Company relied upon the following judgment of this Court in support of his submission that the Insurance Company need not pay any compensation, where a vehicle is covered under ‘Act only’ policy:
i) The Branch Manager, The New India Assurance Co. Ltd. vs. G. Sumathi and Others, reported in 2021 1 TNMAC 620;
“13. We have heard the learned counsel for both sides and perused the materials placed on record. As per the averments of the claimants, the car, in which the deceased, PW 1 and others travelled on the fateful day, capsized, after hitting the centre median divider in the road. It is also an admitted fact that the rear side tyre of the car bursted when the car was proceeding near Kandampatti at Salem. It is also an admitted fact that no other motor vehicle is involved in the accident. It is in such an accident, due to capsizing of the car and its impact, the deceased sustained grievous bleeding injuries and he died as a result of such injuries. Thus, it is an undisputed fact that the deceased was one of the occupants of the car and he is not a third party as defined in the terms and conditions of the Insurance Policy under Ex. R-1. When the deceased is not a third party, the Insurance Policy cannot get extended to cover the risk of such occupants of the car. Furthermore, it is substantiated by the appellant that the Insurance Policy in question is only an “Act Policy”, which will cover only the risk that may be confronted by a third party to the vehicle and not to the occupant of the vehicle. The coverage for an occupant of the vehicle can be extended upon payment of additional premium by the owner of the car. In the present case, even as admitted by the claimants, the owner of the car has not remitted any additional premium to cover the risk that may be confronted by the occupants of the car. In such circumstances, we are of the view that the Tribunal erred in mulcting the appellant/Insurance Company with the liability to pay the compensation to the claimants.
14. Even though several decisions were relied on by the learned counsel for the appellant in this appeal, we are fortified by the decision of the Supreme Court in the case of United India Insurance Co. Ltd. Vs. Tilak Singh and others, reported in MANU/SC/8088/2006 : 2006 (4) Supreme Court Cases 404 : 2006 (1) TN MAC 36 (SC). In that case, the issue that had arisen for consideration of the Supreme Court is whether a statutory Insurance Policy under the Motor Vehicles Act, 1998, intended to cover the risk to life or damage to properties of third parties, would cover the risk of death or injury to a gratuitous passenger carried in a private vehicle. The Supreme Court in that case held that the Insurance Company owe no liability towards the injuries suffered by a pillion rider, as the insurance policy was a statutory policy and it does not cover the death of or bodily injury to a gratuitous passenger. The ratio laid down by the Supreme Court in the said decision, squarely applies to the facts of this case. In the present case, the Policy in question is an “Act Policy” and in the absence of remittance of any additional premium by the owner of the car, the appellant/Insurance Company cannot be statutorily made liable to pay the compensation for the deceased, who was an occupant of the car.

15. As we have held that the appellant/Insurance Company is not required or statutorily liable to pay compensation to the respondents 1 to 4/claimants, there is no necessity for us to go into the question relating to quantum of compensation, particularly when the owner of the vehicle has not chosen to appear before this Court.

16. In the light of the above, we set aside the Judgment and Decree dated 14.09.2018 passed in M.A.C.T.O.P. No. 552 of 2015 on the file of the Motor Accidents Claims Tribunal (Principal District Judge) at Namakkal and exonerate the appellant/Insurance Company from their liability to pay the compensation amount to the respondents 1 to 4/claimants. It is open to the respondents 1 to 4/claimants to proceed against the owner of the Car/fifth respondent herein to recover the compensation amount for the death of the deceased. The Civil Miscellaneous Appeal filed by the appellant-Insurance Company is allowed to the extent indicated above. No costs. Consequently, C.M.P. No. 20788 of 2019 is closed.”
8. Learned counsel for the Respondents / Claimants contended that the award of the Tribunal is fair and justifiable, as the Tribunal had analyzed various factors and awarded the amount. Hence, the said Award warrants no interference by this Court.

9. Heard the learned counsel for the Appellant and Claimants and perused the material documents available on record.

10. In the present case on hand, not even a pie has been paid towards premium with regard to driver and for other passengers, who are going to travel in the vehicle. That apart as stated earlier, the stand taken in the Claim Petition filed before the Tribunal was in total contra to the contents in the F.I.R., marked as Exhibit-A1 on the side of the Claimants. That being the case, the Tribunal completely erred in granting compensation only on the ground that the conditions of the policy have not been produced. In fact, the Tribunal should have rejected the claim petition for non-filing of the details of the Policy by the Claimants, as it was claimants, who had approached the Tribunal, with unclean hands, by taking a different stand. Hence, I am of the view that the award of Tribunal is liable to be interfered with and set aside.

11. Accordingly, the Civil Miscellaneous Appeal is allowed and the Award of the Tribunal dated 07.12.2019 made in M.C.O.P.No.17 of 2017 is hereby set aside. It is made clear that this order will not preclude the Claimants and others from claiming compensation for the death of the deceased from the owner of the Car / 4th Respondent herein, who also travelled in the Car along with them, in terms of the judgment of a Division Bench of this Court (supra)

12. Before parting with this judgment, it is saddening to point out that when a vehicle is sold, the purchaser / buyer is not clearly informed about the terms of policy and its importance. Similarly, at the time of buying the vehicle, the buyer is also not interested in thoroughly understanding the terms and conditions of the policy, as he/she is more concerned about the vehicle’s performance and not about the policy. When a buyer is ready to pay a huge amount for purchase of a vehicle, it is really shocking as to why the buyer is not interested in spending a paltry sum to take a policy so as to safeguard himself / herself and others.
13. Therefore, this Court directs that whenever a new vehicle is sold after 01.09.2021, it is mandatory for coverage of bumper to bumper insurance every year, in addition to covering the driver, passengers and owner of the vehicle, for a period of five years. Thereafter, the owner of the vehicle must be cautious in safeguarding the interest of driver, passengers, third parties and himself/herself, so as to avoid unnecessary liability being foisted on the owner of the vehicle, as beyond five years, as on date there is no provision to extend the bumper to bumper policy, due to its non-availability. In view of untoward incidents like the present one on hand, the order shall be circulated by the Additional Chief Secretary, Transport Department, Chennai, to all the Insurance Companies and the said Officer must ensure that the above direction is followed scrupulously in letter and spirit without any deviation. No costs.
List this matter for reporting compliance on 30.09.2021.

04.08.2021