Insurance policy covering risk of third party only

 Insurance policy covering risk of third party only 

It is well settled that where the contract of insurance covers the risk of third party but not that of the owner or pillion rider of a two wheeler, the liability of the insurance company, in a case of this nature, is not extended to a pillion rider of the vehicle.

In oriental insurance co. Ltd. V. Sudhakaran k. v., the deceased , one thankamani, was traveling as a pillion as a rider on a scooter, when she fell down and succumbed to the injuries sustained by her. In terms of section 147 of the motor vehicle act, 1988, it is imperative for the owner of a vehicle to take a policy of insurance in regard to reimbursement of the claim to a third party while it is permissible for the owner to take a policy which may cover himself from other risks. Since, in the instant case, the contract of insurance covered the risk of third party only, the question before the court was whether the pillion rider on a scooter would be a third party within the meaning of section 147 of the 1988 Act.

Holding that the pillion rider in a two wheeler was not to be treated as a third party when the accident had taken place owning to rash and negligent riding of the scooter and not on the part of the driver of another vehicle, the apex court held that the legal obligation arising under section 147 of the Act, 1988, could not be extended to an injury or death of the owner of the vehicle or the pillion rider.

It is trite that a gratuitous passenger in a goods carriage would not be covered by a contract of insurance entered into by and between the insurer and the owner of the vehicle in terms of section 147 of the Motor Vehicle Act, 1988. The observations made in connection with carrying passengers in a goods vehicle, it was held, would apply with equal force to gratuitous passengers in any other vehicle also. Explaining the status of a pillion rider, the court observed :

              "The contract of insurance did not cover the owner of the vehicle, certainly not the pillion rider. The deceased was traveling as a passenger, stricto sensu may not be as a gratuitous passenger as in a given case she may not be a member of the family, a friend or other relative. In the sense of the term which is used in common parlance, she might not be even a passenger".

The court further said that the provisions of the Act and, in particular, section 147 of the Act were enacted for the purpose of enforcing the principles of social justice. "It, however, must be kept confined to a third party risk", the court ruled. A contract of insurance which is not statutory in nature, should be construed like any other contract, the court said.

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