A bench consisting of Justices Hemant Gupta and Vikram Nath reconsidered allegations made in a special leave petition in the Supreme Court acting on which the Supreme Court referred these matters to a larger bench while saying that as motorcycle passengers were not the third parties, therefore, the insurance company was not liable to indemnify the insured on account of the injuries or death of any such passenger.
The bench even asked whether a motorcycle passenger was a third party or in the case of “Act Only” insurance, or whether the insurer was obliged to compensate the insured for the injury or death of such a passenger?
Special Leave Petition was filed against Kerala High Court Judgment and petitioner’s counsel relied on two earlier judgments of the Supreme Court:
United India Insurance Company Limited vs Tilak Singh, 2006 and Oriental Insurance Company Limited v Sudhakaran KV, 2008 refers to Indian Motor Tariff Endorsement Number 70 and furthermore, the “Act Only” policy allows the insured to pay additional premiums. claimed to have to pay the Pillion rider.
In the Tilak Singh Case it was held that the insurance company is a statutory insurance contract and therefore does not cover the risk of death or personal injury to non-paying passengers.
Sudhakaran KV (supra), it was held that a passenger of a two wheeler should not be treated as a third party in the event of an accident resulting from the scooter’s willful misconduct and negligence, not on the part of the driver of another vehicle.
However, the question arises as to whether a third party includes anyone other than the insured who is the first party and the insurer as the second party. Therefore, all other persons who are neither the insured nor the insurers should be considered as the third party and will be covered by the Act Only policy, we have prima facie reservation about the view expressed.
