1 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 2073 of 2019 1 - Ghasiya Ram Markam S/o Late Budhu Ram Aged About 64 Years R/o Orkiwahi, Tahsil Keshkal, District Kondagaon, Chhattisgarh. 2 - Munna Ram S/o Ghasiya Aged About 23 Years R/o Orkiwahi, Tahsil Keshkal, District Kondagaon, Chhattisgarh. 3 - Munesh Kumar Markam S/o Ghasiya Ram Aged About 21 Years R/o Orkiwahi, Tahsil Keshkal, District Kondagaon, Chhattisgarh. ... Appellants versus 1 - Sonsai Markam S/o Ghadwaram Aged About 39 Years R/o Village Orkiwahi, Tahsil Keshkal, District Kondagaon, Chhattisgarh. (Driver), 2 - Ramesh Kumar Netam S/o Sukdeo Netam R/o Nawagaon Dhamtari, District Dhamtari, Chhattisgarh. (Owner), 3 - Branch Manager National Insurance Company Limited, Shubham, Near Bus Stand, Behind Christian Hospital, Raipur Road Dhamtari, District Dhamtari, Chhattisgarh. (Insurance Company), ... Respondent(s) For Appellants : Mr. Praveen Dhurandhar, Advocate For Respondent No.1 For Respondent No.2 For Respondent No.3/Insurance Company : : : Ms. Harneet Kaur Khanuja, Advocate None Mr. B. N. Nande, Advocate Digitally signed by NADIM MOHLE 2 Hon’ble Shri Justice Rakesh Mohan Pandey Judgment on Board 06/11/2025 1. The claimants/appellants have filed this appeal for enhancement of compensation against award dated 19.08.2019 passed in Claim Case No.02/2019 by Motor Accident Claims Tribunal, Kondagaon, whereby the learned Tribunal has passed award to the tune of Rs. 4,26,000/- with interest @ 9 % on account of death of Mangali Bai. 2. Learned counsel for the appellants/claimants would submit that Manglibai met with an accident on 09.02.2016, resultantly, she sustained injuries and succumb to it. He would submit that the deceased was a pillion rider on the motorcycle (CG-05-L-4169) and it was covered with ‘Liability Only’ policy. He would submit that claimants who are husband and children of the deceased filed claim case under Section 166 of the Motor Vehicle Act and claimed a sum of Rs.9,45,000/-. He would contend that the Insurance Company filed reply and took a stand that as the deceased was a pillion rider and there was ‘Liability Only’ policy, the deceased would not come within the definition of 3 rd party, therefore, the liability cannot be fastened with the insurance company. He would contend that the learned Tribunal fastened liability with the Driver and owner, but failed to direct the insurance company to satisfy the award first and thereafter recover 3 it from Driver and owner. He would further submit that the learned Tribunal has considered the income of the deceased Rs.5,000/- per month, which is at lower side, looking to the minimum wages matrix. He would contend that the learned Tribunal has not granted compensation for loss of consortium to the appellants. He has placed reliance on the judgment of Hon’ble Supreme Court in the matter of Sunita and Others Vs. United India Insurance Co. Ltd. and Others reported in 2025 SCC OnLine SC 1464. 3. On the other hand, Mr. B. N. Nande, learned counsel appearing for the respondent No.3 would submit that the deceased was a pillion rider on motorcycle & there was ‘Liability Only’ policy, which would not cover the risk of pillion rider. He would contend that the pillion rider cannot be treated as 3 rd party in absence of comprehensive/package policy. He has placed reliance on the judgment passed by the Hon’ble Supreme Court in the matter of Oriental Insurance Company Limited v. Surendra Nath Loomba and ors. Reported in (2012) 13 SCC 792. 4. Ms. Harneet Kaur, learned counsel appearing for respondent No.1 would submit that driver of the offending vehicle had valid and effective driving license & offending vehicle was insured with the Insurance Company; thus, this appeal deserves to be dismissed. 5. Heard learned counsel for the parties and perused the record. 4 6. The Hon’ble Supreme Court in the matter of Surendra Nath Loomba (supra), in para 14 & 26 held as under:- “14. Recently this Bench in National Insurance Company Ltd. v. Balakrishnan & Another (2010)1 SCC 731, , after referring to various decisions and copiously to the decision in Bhagyalakshmi (2009) 7 SCC 148, held that there is a distinction between “Act Policy” and “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 Another[ 2011 Acj 1415 (Del)] wherein the High Court had referred to the circulars issued by the Tariff Advisory Committee (TAC) and Insurance Regulatory and Development Authority (IRDA). This Court 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 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 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. He 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 5 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. 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 than 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 (supra) 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.” 7. The Hon'ble Supreme Court in above judgment held that while an ‘Act Policy’ or ‘Liability Only Policy’ does not cover pillion rider in the insured vehicle, a ‘Comprehensive/Package Policy’ does cover such liability on the basis of circulars issued by the Tariff Advisory Committee and IRDA. The Hon’ble Supreme Court clarified that these circulars are mandatory and binding on all insurance companies, irrespective of any 6 contrary terms in the policy document. Thus, the nature of the insurance policy determines whether the insurer is liable to compensate occupants or passengers who suffer injuries or death in an accident. 8. With regard to the issue of liability raised by Mr. Nande, it is admitted that the offending vehicle was insured under a 'Liability Only' policy, which would not cover the risk to the driver/owner or pillion rider, as no premium was paid by the owner for such coverage. 9. The Claimants have proved that the deceased sustained injuries due to rash and negligent driving by the rider of motorcycle and she succumbed to injuries. The question whether the deceased would fall within the purview of 'third party' is consideration pending before the Hon'ble Supreme Court in Mohana Krishnan S. v. K. Balasubramaniyam & Ors., Special Leave to Appeal (C) No. 3433/2020 and Aashif Kasam Kalander v. Rajendrakumar Ramabhai Baria & Ors., Special Leave to Appeal (C) No. 14261/2020. 10. I am not going to examine the liability part, rather, the issue as to whether the Insurance Company is liable to first pay the compensation amount to the Claimants and thereafter recover it from the driver and owner? 11. Recently, the Hon’ble Supreme Court in the matter of Sunita (supra) while dealing with the issue of ‘Liability Only Policy’ where no premium was paid to cover the driver, owner, or a gratuitous passenger 7 travelling therein, held that the Insurance Company would be liable to indemnify the compensation amount to the claimant and thereafter recover the same from the driver-cum-owner of the offending vehicle. The relevant paragraphs No. 12 to 18 are reproduced herein below:- “12. “The next question which arises for our consideration is whether the Insurance Company is liable to indemnify the compensation amount to the claimant-appellant and, thereafter, recover the same from the driver and owner of the vehicle. 13. Adverting to the facts in hand, from a bare perusal of the record, it is borne that the vehicle in question was insured with “Liability Only Policy” and no premium was paid to cover the driver, owner, or a gratuitous passenger travelling therein. However, even then, in our view, the Courts below erred in holding that the Insurance Company is not liable to pay the compensation to the claimant-appellants, for the principle of “Pay and Recover” ought to have been invoked. As such, we are inclined to interfere with the above findings of the Courts below. 14. We must advert to the exposition of this Court in National Insurance Co. Ltd. v. Baljit Kaur, (2004) 2 SCC 1. The deceased therein was travelling as a gratuitous passenger, and duet to the rash and negligent driving of the offending vehicle, lost his life. The Insurance Company was directed to satisfy the amount awarded by the Courts below and recover the same from the owner of the vehicle, as the premium was not paid by the owner of the vehicle towards gratuitous passenger. 15. The above position has been followed by this Court in Anu Bhanvara v. IFFCO Tokio General Insurance Co. Ltd., (2020) 20 SCC 632, wherein the injured person was travelling as a gratuitous passenger and was not covered under the Insurance Policy, the driver and owner of the vehicle was held liable for payment of compensation amount. This Court applied the principle of “Pay and Recover” and directed the Insurance Company to pay the amount and, thereafter, recover the same from the owner of the vehicle. 8 16. The aforementioned principle was adopted by this Court in various judgments of this Court in Amrit Lal Sood v. Kaushalya Devi Thapar, (1998) 3 SCC 744; New India Assurance Co. Ltd. v. C.M. Jaya, (2002) 2 SCC 278; National Insurance Co. Ltd. v. Challa Upendra Rao, (2004) 8 SCC 517; New India Assurance Co. Ltd. v. Vimal Devi, 2010 SCC OnLine SC 49; National Insurance Co. Ltd. v. Saju P. Paul, (2013) 2 SCC 41; Manuara Khatun v. Rajesh Kumar Singh, (2017) 4 SCC 796; and Puttappa v. Rama Naik, 2018 SCC OnLine SC 3496. 17. Applying the above expositions of law, the Courts below ought to have directed the Insurance Company to indemnify the amount and thereafter recover the same. 18. Therefore, in light of the attending facts and circumstances of the case, we are of the view that the Insurance Company is liable to indemnify the compensation amount awarded by the Tribunal; and recover the same only from the owner of the offending vehicle.” 12. Taking into consideration the facts and law laid down by the Hon’ble Supreme Court, in my opinion, the Insurance Company must indemnify the amount, thereafter recover it from Driver and owner. 13. Now coming to the Second submission made by Mr. Dhurandhar with regard to the enhancement of compensation. 14. Admittedly, the deceased was 60 years of age on the date of accident and learned Tribunal has assessed her monthly income 5,000/- per month, which appears to be at lower side. According to minimum wages matrix prevalent in the State of Chhattisgarh in the month of February, 2016, the minimum wages admissible to an unskilled labourer was Rs. 5,860/-, therefore, the learned Tribunal has considered the notional monthly income of the deceased at lower side. Further, the learned 9 Tribunal has not awarded compensation for loss of consortium to the claimants, who are husband and children of the deceased. Thus, the compensation requires recomputation as under:- Sr. No. Heads Compensation awarded by Tribunal Compensation awarded by this Court 1. Income Rs. 5,000 x 12 = 60,000/- 5,860 x 12 = Rs. 70,320 2. Future Prospect 10 % = 66,000/- 10 % = 77,352/- 3. Deduction 1/3rd = 44,000/- 1/3rd = 51,568/- 4. Multiplier x9 =3,96,000/- X9 = 4,64,112/- 5. Loss of Estate 0 Rs. 15,000/- 6. Funeral expenses & Pain and suffering 30,000/- Rs. 15,000/- 7. Loss of Consortium (for appellants) 0 44,000 x 3 = 1,32,000/- 8. TOTAL Rs. 4,26,000/- Rs. 6,26,112/- 15. In view of the aforesaid analysis, the amount of compensation of Rs. 4,26,000/- awarded by the Claims Tribunal is enhanced to Rs. Rs. 6,26,112/-. Hence, after deducting the amount of Rs. 4,26,000/-, the appellants/claimants are entitled for an additional amount of Rs.2,00,112/-. 16. The Insurance Company/respondent No. 3 is directed to make payment of compensation to the claimants within a period of 02 months from the 10 date of receipt of copy of this judgment and they shall be at liberty to recover it from respondents No.1 & 2/driver and owner of the offending vehicle. The additional amount of compensation shall carry interest @ 9% per annum from the date of filing of claim application before the Tribunal till its realization. Rest of the conditions of the impugned award shall remain intact. 17. In the result, the appeal is allowed in part with modification in the impugned award to the above extent. Sd/- Rakesh Mohan Pandey JUDGE Nadim