LexNATIONAL INSURANCE COMPANY LTD. versus BALAKRISHNAN & ANOTHER
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[2012] 12 S.C.R. 565 NATIONAL INSURANCE COMPANY LTD. v. BALAKRISHNAN & ANOTHER (Civil Appeal No. 8163 of 2012) NOVEMBER 20, 2012 [K. S. RADHAKRISHNAN AND DIPAK MISRA, JJ.] A B Motor Vehicles Act, 1988 - ss.140, 147 and 166 - Compensation claim - Insurance policy - Nature of - "Act policy" and "comprehensive/ package policy" - Distinction C between - Managing Director of company met with accident while travelling in a car registered in name of the company and sustained bodily injuries - He filed compensation claim - Car in question insured with appellant-insurer- Dispute over liability of appellant-insurer - Held: In the instant case, the o insurance policy in question mentions the policy to be a "comprehensive policy" but there has to be a scanning of the terms of the entire policy to arrive at the conclusion whether it is really a "package policy• to cover the liability of an occupant in a car - While a "comprehensive/ package policy" E would cover the liability of the insurer for payment of compensation for the occupant in a car, an "Act Policy" stands on a different footing - An "Act Policy'' cannot cover a third party risk of an occupant in a car - Matter remitted to tribunal to scrutinize the policy in question - If said policy F found to be a "Comprehensive/Package Policy~ liability be fastened on the insurer - Insurance. Respondent no.1, Managing Director of respondent no.2-company, met with an accident while travelling in a car registered in the name of respondent no.2 and G sustained bodily injuries. The car in question was insured with the appellant. Respondent no.1 claimed compensation before the Motor Accident Claim Tribunal 565 H 566 SUPREME COURT REPORTS [2012] 12 S.C.R. A under Sections 140, 147 and 166 of the Motor Vehicles Act, 1988. The tribunal held that the appellant-insurer was liable to indemnify as the owner of the vehicle was the company, and the injured was travelling in the car as a third party and accordingly granted compensation. B The appellant-insurer filed appeal before the High Court contending that respondent no.1 was the legal owner of the car though the vehicle was insured in the name of the respondent no.2-company and, therefore, the liability was to the limited extent as stipulated in the C policy. The High Court, however, treated respondent no.2-company to be the owner of the vehicle and repelled the stand that the Managing Director was the owner, and further held that as he was only an occupant of the car, the insurance company was liable to indemnify the owner D for the claim put forth by the victim. The High Court opined that if no premium is paid to cover the owner, the insurer is not liable to make good the loss but if another person travels with the owner and suffers injuries, the insurer is liable to pay the compensation. Being of this E view, the High Court dismissed the appeal and hence, the present appeal by the insurer. Partly allowing the appeal, the Court HELD: 1.1. A "comprehensive/package policy" would F cover the liability of the insurer for payment of compensation for the occupant in a car. An "Act Policy" stands on a different footing from a "Comprehensive/ Package Policy". The Insurance Regulatory and Development Authority (IRDA), which is presently the G statutory authority, has clarified the position by issuing circulars. As IRDA has commanded the insurance companies statin'g that a "Comprehensive/ Package Policy" covers the liability, there cannot be any dispute in that regard. An "Act Policy" cannot cover a third party H NATIONAL INSURANCE COMPANY LTD. v. 567 BALAKRISHNAN risk of an occupant in a car. But, if the policy is a A "Comprehensive/Package Policy", the liability would be covered. [Para 21] [585-D-G] 1.2. In the instant case, the question that emerges for consideration is whether in the case at hand, the policy 8 is an "Act Policy" or "Comprehensive/Package Policy". There has been no discussion either by the tribunal or the High Court in this regard. The policy issued by the insurer only mentions the policy to be a "comprehensive policy" but this Court is inclined to think that there has C to be a scanning of the terms of the entire policy to arrive at the conclusion whether it is really a "package policy" to cover the liability of an occupant in a car. [Para 22) [586-A-C] 1.3. The matter is remitted to the tribunal to scrutinize D the policy in a prope
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