Common Judgment:

Moushumi Bhattacharya, J.

1. MACMA Nos.27 and 48 of 2025 are filed by the Insurance Company challenging the orders dated 16.05.2024 in MVOP Nos.221 of 2020 and 222 of 2020, respectively, passed by the Motor Accidents Claims Tribunal (Principal District Judge) at Khammam (‘Tribunal’). The Claimants filed Cross Objection No.17 of 2026 in MACMA No.27 of 2025 seeking enhancement of compensation awarded by the Tribunal in MVOP No.221 of 2020.

2. The Motor Accident Civil Miscellaneous Appeals (MACMAs), as well as the connected Cross Objection, are being dealt with and disposed of by this Common Judgment. The parties are common to both the Motor Vehicle Original Petitions (MVOPs) filed before the Tribunal. The impugned orders arise out of the same accident dated 23.07.2019 involving the same parties.

3. The claim petitions were filed by the two sons and the maternal grandparents of the deceased in MVOP No.221 of 2020, and by the two sons of the deceased in MVOP No.222 of 2020, represented by the maternal grandfather as guardian. The Tribunal partly allowed the claim petitions by awarding compensation of Rs.1,12,78,000/- along with interest at 7.5% per annum from the date of the petition till realization and proportionate costs in MVOP No.221 of 2020. Similarly, MVOP No.222 of 2020 was allowed with an Award of Rs.5,19,000/- along with interest at 7.5% per annum spinning from the date of petition till realization and proportionate costs. The Insurance Company was directed to pay the compensation to the claim petitioners and deposit the same to the credit of the above OP’s within thirty days from the date of the impugned orders. The Tribunal also ordered apportionment of the compensation among the claim petitioners.

4. The Insurance Company assails the impugned orders primarily on the ground that the claim petitioners were family members/kith and kin of the insured/deceased father of the claimants and consequently are not entitled to compensation. Learned counsel appearing for the appellant/Insurance Company further argues that the terms and conditions of the Insurance Policy only covers third-party risks and does not cover the death of the insured or his legal heirs. Hence, according to counsel, the Tribunal erred in awarding compensation to the claim petitioners, who were family members of the deceased/insured.

5. Counsel submits that the Tribunal ought to have restricted the compensation to Rs.2,00,000/- for the accidental death of each occupant as per the premium paid. Since the Insurance Company has already discharged its liability by paying compensation of Rs.15,00,000/- under personal accident and death of the owner-cum-insured and Rs.2,00,000/- each for the death of paternal grandmother and the death of the mother of the claim petitioners. Hence, according to counsel, the Insurance Company is not liable to pay any compensation beyond what has already been disbursed to the claim petitioners. It is further submitted that the amount awarded is contrary to the terms of the contract, namely the Insurance Policy executed between the appellant and the deceased insured/owner of the vehicle.

6. Learned counsel appearing for the respondents/claim petitioners submits that the deceased/owner of the vehicle had a comprehensive package policy with the appellant/Insurance Company, which also covers the occupants of the vehicle. According to counsel, there is no requirement for the Tribunal to enquire whether the Insurance Company is liable to compensate the occupants of a private vehicle in view of the directions issued by the Insurance Regulatory and Development Authority of India (IRDAI). Counsel further submits that both the owner/driver of the vehicle (deceased) and his wife were covered under the Policy, which would consequently fasten liability on the Insurance Company to pay compensation for their deaths.

7. The claim petitioners have also filed a Cross Objection (No.17) in MACMA No.27 of 2025 challenging the amount of compensation awarded by the Tribunal in MVOP No.221 of 2020, namely Rs.1,12,78,000/- along with interest at 7.5% per annum. The ground raised in the Cross Objection is that the Tribunal failed to consider that the deceased (wife of the owner of the vehicle) was employed in a secured job of Quality Controller at Divis Private Limited Company with a salary of Rs.55,000/- per month. According to counsel, the petitioners are entitled to an enhanced compensation under the heads of parental consortium and future income.

8. We have heard the arguments of learned counsel appearing on behalf of the parties and have also perused the relevant record received from the Trial Court/Claims Tribunal.

9. The claim petitions were filed against the Insurance Company under section 166 of The Motor Vehicles Act, 1988 (‘the 1988 Act’) seeking compensation for the accidental deaths of the deceased parents of the claimant Nos.1 and 2. The claim petitioners were the minor sons of the deceased at the time of filing the claim petitions. The maternal grandparents were claimant Nos.3 and 4 in the first claim petition (MVOP No.221 of 2020). The claim petitioners were represented by their maternal grandfather in the second claim petition (MVOP No.222 of 2020) in the capacity of a guardian.

10. The father of the claim petitioners was the driver and owner of the vehicle. The motor vehicle accident occurred on 23.07.2019 at about 07:00 A.M., when the owner of the vehicle (one of the deceased) was driving the vehicle from Hyderabad to Revuru Village. The wife of the owner of the vehicle (also deceased), the paternal grandmother of the claimants and their two sons (claimant Nos.1 and 2) were travelling in the car at the time of the accident. The car hit a culvert after the driver (deceased husband) lost control of the vehicle. Both the deceased sustained severe injuries as a result of the accident and were shifted to Kodad CHC – Community Health Centre Hospital. The mother of the claim petitioners succumbed to her injuries on 24.07.2019. The husband of the deceased later died while undergoing treatment at Kodad CHC Hospital. The paternal grandmother of the claim petitioners also succumbed to the injuries sustained in the accident.

11. The claim petitioners and the Insurance Company filed their respective pleadings before the Tribunal. The Insurance Company filed an additional counter in MVOP No.221 of 2020 stating that it had no further liability beyond the amounts already paid to the claim petitioners/sons, namely Rs.2,00,000/- for the death of their mother and Rs.2,00,000/- for the death of their paternal grandmother. The Insurance Company further contended that the occupants of the vehicle were not third parties and that the claim petition was, hence, not maintainable.

12. The Tribunal considered the rival contentions and proceeded to award compensation to the claim petitioners on the basis of the judgment of the Supreme Court in Sarla Verma & Ors v. Delhi Transport Corp. & Anr.(AIR 2009 SUPREME COURT 3104) in considering her salary and National Insurance Co. Ltd. v. Pranay Sethi(AIR 2017 SUPREME COURT 5157) in awarding amounts under conventional heads. The Tribunal also found that the Insurance Policy, being a comprehensive Policy, was in force on the date of the accident and relied on a circular issued by the IRDAI on 16.11.2019 wherein the insurer’s liability towards occupants and pillion rider of the standard Motor Package Policy has been clarified and general insurers were advised to comply with the guidelines in respect of such occupants carried in a private car and pillion riders on two-wheelers. The Tribunal found that the Insurance Company was bound to compensate all the occupants in the car irrespective of the terms and conditions contained in the Insurance Policy. Compensation of Rs.1,12,78,000/- was awarded to the claimants, namely the two sons of the deceased as well as the maternal grandparents, along with interest at 7.5% per annum. The claimants were also awarded and Rs.5,19,000/- along with interest at 7.5% per annum along with proportionate costs.

13. The issue for adjudication in the present Appeals and the Cross Objection is whether the appellant Insurance Company can be fastened with any liability on the ground that the claim petitioners (the two sons of the deceased) were family members/kith and kin of the deceased. This issue was dealt with by a Division Bench of the erstwhile Andhra Pradesh High Court at Hyderabad in Jayavarapu Rajamma And Ors. v. Jayavarapu Laxminarayana(2007(6)ALD306). The High Court held that the heirs and dependants of the owner of the vehicle can maintain a claim only if the Policy covers the risk of injury or death to the owner personally and for which premium has been paid. The Court further held that section 147 of the Act does not require an Insurance Company to assume the risk of death of, or bodily injury to, the owner of the vehicle and relied on Dhanraj v. New India Assurance Company Ltd.( 2004 (8) SCC 553) in reaching to such conclusion. The Court further observed that the mere nomenclature of the Policy being comprehensive Policy is not the guiding factor since the specific terms and conditions of the Policy would govern the existence and extent of the liability of the insurer.

14. Learned counsel appearing for the appellant/Insurance Company placed a clearer and legible copy of the Insurance Policy which was executed between the claimants and the appellants. Counsel informed the Court that a Policy with similar terms was being relied on since the original policy was cancelled pursuant to the Insurance Company paying the admissible dues to the claimants.

15. We have gone through the Insurance Policy which was placed for our perusal. The terms are identical to those contained in the Policy executed between the parties to the Appeal. The relevant terms reflect the following:

               (i) The Insurance Policy was for a ‘private car’ with the vehicle number mentioned therein.

               (ii) The Insurance Policy mentions – ‘personal accident covers for Owner-Driver CSI: Rs.20,00,000/-’ and clearly states that the policy subject to terms and conditions attached thereto in 16, 22, and 28.

               (iii) The Policy covers basic premium to vehicle and accessories, and Basic – TP (third party)

               (iv) Compulsory PA for owner Driver – Rs.100/-, PA for unnamed persons (5 persons), the sum insured per occupant – Rs.20,00,000/-.

16. Counsel for the appellant explains that a total number of five unnamed persons were insured for Rs.20,00,000/-. The Insurance Company paid Rs.15,00,000/- for the deceased father of the claimant (owner), Rs.2,00,000/- for the deceased mother of the claimant, Rs.2,00,000/- for the deceased grandmother of the claimant and Rs.2,00,000/- for car. Counsel submits that as per the Policy, the appellant is not liable for payment of any further amounts to the claimant.

17. We find the submission to be in accordance with the contractual obligation of the appellant’s Insurance Policy since the Insurance Policy does not contain any term which would cover injury or death of the family members of owner of the vehicle. The term “own damage” was explained in Jayavarapu Rajamma (supra) as damage to the vehicle and not for injury to the person from the owner. As stated above, Jayavarapu Rajamma (supra) referred to Oriental Insurance Company Limited v. Sunita Rathi (1998 ACJ 121) to reiterate that owner of a car can only make a claim, provided a personal accident insurance has been taken out.

18. The Division Bench also relied on New India Assurance Company Limited v. Meera Bai and Ors.((2007) 2 ACJ 821), following Dhanraj (supra), and Oriental Insurance Co. Ltd v.Jhuma Saha And Ors.((2007) 2 ACJ 818), to hold that the question of indemnification by the insurer does not arise if the insured cannot be held liable under the provisions of the Act.

19. The Supreme Court in New India Assurance Co. Ltd v. Sadanand Mukhi & Ors.( 2009 (2) SCC 417) dealt with a similar factual situation where the first respondent before the Supreme Court was the owner of a motorcycle which was insured with the appellant/Insurance Company. The son of the insured, while driving the motorcycle, met with an accident and died. The respondents therein filed a claim petition. The appellant/Insurance Company contended that the claimants could not seek compensation in view of the relationship between the deceased and the owner of the motorcycle, namely, that of son and father. The Supreme Court placed reliance on section 147(1)(b) of the Act and held that the said provision covers only third party risk and that the risk of death of, or bodily injury to the owner of the vehicle would not be covered in the facts of that case since no additional premium had been paid in respect thereof.

20. Sadanand Mukhi (supra) was considered by the Supreme Court in Wakia Afrin (Minor) v. M/s. National Insurance Co. Ltd.( 2025 SCC OnLine SC 1591) wherein the Supreme Court reiterated the principle that statutory liability would not be applicable in the case of the owner/insured since the coverage was confined to third-party risks under section 147 read with section 149 of the Act. The Court relied on Oriental Insurance Co. Ltd. (supra) to hold that the liability of the Insurance Company is to the extent of indemnification of the insured against the claims of an injured person, a third person, or in respect of damage to property. Thus, the question of the insurer being liable to indemnify the insured would not arise if the insured cannot be fastened with any liability. The Supreme Court further relied on United India Insurance Co. Ltd. v. Davinder Singh((2007) 8 SCC 698), which, inter alia, held that an Insurance Company may refuse to compensate the owner of the vehicle towards his own loss.

21. In Wakia Afrin (supra), the Supreme Court noted the divergence of judicial views across precedents but agreed with the decision of the Three-Judge Bench in Minu B. Mehta v. Balkrishna Ramchandra Nayan(1977 2 SCC 441), which held that under section 166, the claimants have to prove the negligence of the driver to sustain a claim for compensation arising from death or injury in a motor vehicle accident and that the statutory liability arises only with respect to third parties or those specified under section 147.

22. In this connection, it may also be relevant to refer to the judgment of a Division Bench of the Karnataka High Court in G. Nagarathna v. G. Manjunatha(2024 Supreme(Kar) 1260), where the wife, son and parents of the deceased filed a claim petition under section 166 of the Act seeking compensation for the death of the deceased in a road accident. The High Court considered the rash and negligent driving of the deceased and held that the legal-heirs of the deceased cannot claim any compensation for the death since the deceased himself was the tortfeasor and the Insurance Company cannot be compelled to indemnify liability arising from the wrong. The Supreme Court on 02.07.2025 dismissed a Special Leave Petition from the Karnataka High Court’s order on 02.07.2025.

23. Considering the ratio laid down in the above decisions, particularly with respect to section 147 of the Act being restricted only to third-party claims, we are constrained to agree with the contentions advanced on behalf of the appellant/Insurance Company.

24. Chapter XI of the 1988 Act specifically relates to ‘Insurance of Motor Vehicles against Third Party Risks’. A conjoint reading of sections 147(1) and 165(1) of the Act makes it clear that the claims contemplated under these provisions relate to the insurer’s liability for death, bodily injury or damage to any property of a third party caused by an accident arising from the use of a motor vehicle in a public place. Section 147(2) has an overriding effect over other statutory provisions for the purpose of third-party insurance relating to death or grievous injury to a person.

25. Section 145(i) defines ‘third party’ as inclusive of the Government, the driver and any other co-worker on a transport vehicle. Section 145(g) is more in the nature of a broad definition as opposed to specifically naming persons who would qualify as third parties for the purpose of motor accident claims. Section 146 also deals with the ‘necessity for insurance against third-party risk’. Section 147 incorporates the ‘requirements of policies and limits of liability’ to the same effect.

26. Section 165(1) provides for the constitution of Motor Accident Claims Tribunals for the notified jurisdictional area for adjudication of claims for compensation in respect of accidents involving the death of, or bodily injury to, persons arising out of the use of motor vehicles, or damage to any property of a third party.

27. The scope of sections 147(1) and 165(1) becomes relevant when considered in the context of the Insurance Policy entered into between the deceased/insured and the Insurance Company, particularly where the claim is made by the injured owner of the vehicle or by the heirs of the deceased owner. In such cases, the Insurance Policy assumes paramount importance in determining whether the Policy covers the liability incurred by the insured in respect of death or bodily injury to a third person carried in the vehicle or damage to any property of a third person arising out of the use of the vehicle, or whether the Policy also covers the risk of injury to the owner himself/herself – and their legal heirs.

28. The Tribunal must also ascertain whether a case of personal accident insurance was executed in the facts of the case: Dhanraj (supra) and Oriental Insurance Co. Ltd v. Sunita Rathi & Ors.( (1998) 1 ACJ 121). In Sunita Rathi (supra), the Supreme Court made a distinction between the owner who was driving the vehicle himself and was not covered under the Policy and a driver of the vehicle who was covered by the Policy: New India Assurance Company Limited v. Meera Bai (supra). Oriental Insurance Co. Ltd. v. Jhuma Saha (supra) reiterated that the insurer is not liable to indemnify the insured in the case of death of the owner of the vehicle where no third party was involved.

29. In the present case, deceased owner’s wife and owner’s mother were not third parties but family members/kith and kin of the owner of the vehicle. In Jaayavarupu Rajamma (supra), the Andhra Pradesh High Court held that where the insurer/owner of the vehicle has no liability to third party, the Insurance Company will also shall not have liability to the third parties. In Dhanraj (supra), the Supreme Court relied on section 147 of the 1988 Act and observed that an Insurance Policy covers the liability incurred by the insurer in respect of death of, or bodily injury to any person carried in the vehicle or damage to any property of a third party caused by or arising out of the use of vehicle and that section 147 of the Act does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle.

30. The conclusion which is evident from the above decisions is that the heirs/dependants of the owner of a vehicle, in the event of the owner’s death, can only make a claim if the Policy covers the risk of injury or death to the owner personally and for which the premium has been paid. Mere nomenclature of the Policy as a ‘Comprehensive Policy’, as argued by the claimants in the present case, is not the determinant factor. A Policy of Insurance is essentially a contract between the insurer and the insured and hence the specific terms of the Policy would govern the liability of the insurer. In essence, the relevant Insurance Policy must cover the risk of death of the owner of the vehicle/insured, thereby enabling the kith and kin of the insured to sustain a claim for compensation under the terms and conditions of the Policy. As stated in the paragraphs above, the Insurance Policy executed between the appellant insurer and the father of the claimants did not contain any clause for coverage of death or injury to the family members of the insured.

31. In the case at hand, the Trial Court failed to consider the terms and conditions of the Insurance Policy marked as Ex.B1 and proceeded on the assumption that the Policy covered the death of the insured/owner of the vehicle without ascertaining whether the Policy indeed covered such a contingency. The Trial Court also failed to consider the scope and purport of section 147(1) of the Act which excludes death of, or injury to, the owner of the vehicle/insured and is confined to third-party risks.

32. The Circular issued by the Insurance Regulatory and Development Authority dated 16.11.2009 with reference to the liability of Insurance Companies in respect of occupant of a private car and pillion rider in a two-wheeler under standard motor package policy, relied on by counsel appearing for the respondent/claimants is not applicable or relevant to the present appeal. The captioned heading of the Circular states that the Circular was framed for ‘two-wheelers’. Moreover, section II of the Circular mentions ‘Liability of Third Parties’. The respondents contend that they are third parties and not ‘kith and kin’. However, this is admittedly erroneous since the claimants are family members of the insured and would not come within the umbrella of ‘Third Parties’. Hence, the Circular does not assist the case of the respondents/claimants.

33. Thus we accept the argument advanced on behalf of the appellant/Insurance Company that it has discharged its duty and liability by payment of compensation of Rs.15,00,000/- for the death of the owner-cum-insured, Rs.2,00,000/- for the death of the deceased wife of the insured and Rs.2,00,000/- for the death of the mother of the insured and that it cannot be fastened with any further liability. The impugned orders are hence contrary to law as well as the judicial precedents referred to above.

34. MACMA NOs.27 and 48 of 2025 are thus allowed and disposed of by setting aside the impugned orders dated 16.05.2024. Consequently, Cross Objection No.17 of 2026 in MACMA No.27 of 2025 is dismissed. All connected applications are closed. Interim orders, if any, shall stand vacated.