Case Note & Summary
The case arose out of a motor accident claim petition filed by the legal representatives of the deceased pillion rider. The deceased, Shaikh Laikoddin, was travelling as a pillion rider on a Hero Honda motorcycle owned by Sk. Wasimoddin and driven by Sk. Naim on 21.08.2004. The motorcycle met with an accident due to the alleged rash and negligent driving of the driver, resulting in a tyre burst and fall. The deceased sustained serious injuries and succumbed on 23.08.2004. The claimants, being his wife and two children, filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 before the Motor Accident Claims Tribunal, Beed, seeking compensation of Rs. 3,00,000 from the owner, driver, and insurer. The Tribunal, by its award dated 18.01.2007, granted total compensation of Rs. 3,21,500 along with interest, holding the owner, driver, and insurer jointly and severally liable. The insurer, United India Insurance Company, appealed to the High Court challenging its liability primarily on the ground that the deceased was a pillion rider and his risk was not covered under the Act-only policy; additionally, that the driver did not possess a valid driving license. Before the High Court, the insurer argued that a pillion rider is not a third party and therefore the insurer cannot be held liable under a third-party policy, relying on the Division Bench decision in New India Assurance Company v. Babasaheb Anna Mali. The insurer also contended that the driver had no license and the insurer had taken a specific defence in the written statement. The claimants supported the Tribunal’s finding that the cover note did not specifically exclude the pillion rider and therefore the insurer was liable. The High Court, after examining the insurance policy Exhibit 29, found that the policy did not cover the risk of a pillion rider as no separate premium was paid for such coverage. Relying on the settled law that a pillion rider is not a third party, the court held that the insurer could not be saddled with liability for the death of the pillion rider. On the second point, the court observed that no evidence was led by the insurer to prove that the driver lacked a valid driving license; a mere mention in the FIR was insufficient. Therefore, the insurer could not be absolved on that ground. However, the appeal was partly allowed because the insurer succeeded on the first ground. The award was modified to set aside the insurer’s liability to pay compensation. Considering the economic background of the claimants, who had already withdrawn a portion of the deposited amount, the court did not direct recovery from them. Instead, the insurer was given liberty to recover the entire amount it had paid or deposited towards the award from the owner and driver of the offending vehicle. Thus, the insurer’s appeal was allowed to the extent of absolving its liability, with a right of recovery against the owner and driver.
Headnote
A) Motor Insurance - Pillion Rider Liability - Third Party Insurance - Pillion rider on a motorcycle is not a third party under a third party insurance policy; the risk of a pillion rider is not covered unless a separate premium is paid - Court followed New India Assurance Company Ltd. Vs. Babasaheb Anna Mali & others, 2001 (4) Mh.L.J. 562 - Held that the insurance company cannot be saddled with compensation for the death of a pillion rider (Paras 8-11). B) Motor Insurance - Burden of Proof - Driving License - The burden to prove that the driver did not hold a valid driving license lies on the insurance company; mere mention in the FIR is insufficient - In the absence of evidence, the plea was rejected - Held that the insurance company failed to prove the driver lacked a license (Para 12). C) Motor Accident Claim - Maintainability - Section 166 Motor Vehicles Act, 1988 - A claim petition is maintainable when the driver of the offending vehicle is alleged to be rash and negligent; the deceased being a pillion rider does not bar the claim (Para 13). D) Compensation - Recovery Rights - When an insurance company is held not liable but has already deposited compensation, the court may permit the insurer to recover the amount from the owner and driver instead of from the claimants - Liberty granted to the appellant to recover the entire amount paid towards the award from the owner and driver (Paras 15-16).
Issue of Consideration
Whether the insurance company is liable to pay compensation for the death of a pillion rider when the insurance policy does not specifically cover the risk of a pillion rider; and whether the insurance company can be absolved from liability on the ground that the driver did not hold a valid driving license at the time of the accident.
Final Decision
The appeal is partly allowed. The Tribunal’s award is modified to set aside the liability of the insurance company. The claimants are not required to refund amounts already withdrawn. The insurance company is at liberty to recover the entire amount it has paid or deposited towards the award from the owner and driver (original respondent nos. 01 and 02).
Law Points
- pillion rider on a motorcycle is not a third party under third party insurance policy
- insurer not liable for no fault liability for pillion rider unless separate premium paid
- burden of proving driver did not hold valid driving license lies on insurer
- mere mention in FIR insufficient
- claim under Section 166 MV Act maintainable when driver liable
