Does third party insurance cover Pillion Rider? The Supreme Court refers to a wider bench

If a passenger on a motorcycle is a third party? Is the insurance company obliged to compensate the insured for the injury or death of this passenger in the case of an “Act Only” policy? The Supreme Court referred these issues to a larger panel.

The bench consisting of Judges Hemant Gupta and Vikram Nath was considering a claim raised in a motion for special leave that a passenger on a motorbike is not a third party, therefore the insurance company is not liable to compensate the insured due to the injury or death of such passenger.

The SLP was filed against a judgment of the High Court of Kerala and counsel for the petitioner relied on two previous judgments of the Supreme Court viz. United India Insurance Company Limited Vs. Tilak Singh 2006 (4) SCC 404 and Oriental Insurance Company Limited Vs. Sudhakaran KV 2008 (7) SCC 428. Referring to Indian Motor Tariff Endorsement No. 70, it was further argued that in the “Act Only” policy, the insured must pay an additional premium to cover the passenger. In Tilak Singh (supra), it was held that the insurance company was not liable for the injuries suffered by the passenger, as the insurance policy was a legal policy and therefore did not cover the risk death or temporary bodily injury. In Sudhakaran KV (supra) it was held that the passenger of a two-wheeler should not be treated as a third party when the accident occurred due to reckless and negligent driving of the scooter and not from the driver of another vehicle.

“However, whether the third party includes all other persons other than the insured, who is the first, and the insurer, who is the second. Therefore, all other persons who are neither the insured neither the insurer will be third party and will be covered by the “Act Only” policy, we have a prima facie reservation as to the opinion expressed.This matter must be decided by an authority.,” observed the bench, referring the question to a wider bench.

In the impugned judgment, the Kerala High Court relied on Manuara Khatun and Ors v. Rajesh Kr. Singh and Ors. (AIR 2017 SC 1204) in which the Supreme Court found that the deceased was a free passenger not covered by the insurance policy. , the insurer was ordered to pay the amount of the indemnity to the plaintiffs and to recover it from the insured. The High Court had also noted that Shivaraj v. Rajendra and Anr. (AIR 2018 SC 4252) was a case in which there was no evidence showing that the plaintiff was traveling as a loader in the trailer attached to the tractor or that a trailer was insured or attached to the tractor and the trailer was insured . It was held that the insurer was liable to pay the amount of compensation determined by the Court and granted freedom to recover the same amount from the owner of the vehicle at fault.

Case: Mohana Krishnan S vs. K.Balasubramaniyam | SLP(C) 3433/2020

Reference: 2022 LiveLaw (SC) 726

Summary: Motor Vehicle Act 1988 – Motor vehicle accident claims – Does liability insurance cover a motorbike passenger? The Supreme Court refers to a larger bench

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Earnest L. Veasey