The Uttarakhand High Court has held that where a comprehensive/package insurance policy specifically covers passengers, the vehicle owner travelling as a passenger cannot be denied compensation merely because of his ownership of the vehicle. The Court observed that the terms of the particular insurance policy expressly provided coverage for nine passengers for which a separate premium was charged.

Justice Pankaj Purohit was hearing an appeal against the judgment of the Motor Accident Claims Tribunal, which had dismissed a compensation claim arising from the death of Laxman Singh in a road accident.

The respondent-insurance Company contended that since the deceased himself was the owner of the vehicle, he was not a third party and was, therefore, not entitled to claim compensation under the policy.

The Court agreed that the owner of the vehicle is not a third party and, in the absence of specific coverage, the insurer would not be liable for the owner's own death. However, it noted that the policy was a “Passengers Carrying Commercial Vehicle Policy B Package” for the Tata Spacio, which had a seating capacity of nine persons. Thus, the policy specifically contemplated liability towards passengers travelling in the vehicle.

The Court further noted that the deceased was not driving the vehicle at the time of the accident and was travelling in it while some other person was driving. It held that merely because the deceased was the owner of the vehicle, his status as a passenger/occupant could not be disregarded.

“… merely because the deceased happened to be the owner of the vehicle, his status as a passenger/occupant cannot be disregarded, particularly when the policy itself specifically provides coverage for passengers,” the Court remarked.

Distinguishing Dhanraj v. New India Assurance Co. Ltd. (2004), the Court observed that there was no material in that case showing that the policy specifically covered the risk of death and injury to the owner, whereas the present policy contained an express provision relating to liability towards nine passengers.

The Court also referred to the Supreme Court's decision in National Insurance Co. Ltd. v. Smt. Thungala Dhana Laxmi, noting that it supported giving effect to coverage under a comprehensive/package policy where the owner was travelling as an occupant.

The Court accordingly held that the Tribunal erred in treating ownership of the deceased as sufficient to reject the claim. It assessed the total compensation as ₹8,34,800.

Case Title: Smt. Poonam Devi & Ors. v. The New India Assurance Company & Anr. [Appeal from Order No. 208 of 2013]

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