A division bench comprising justices R Subbiah and AD Jagadish Chandira gave the order while allowing an appeal by United India Insurance Co. Ltd, Neyveli.
Referring to an IRDA note in the policy, the judges said that the policy to compensate vehicle owners by virtue of the personal accident cover was introduced 15 years ago. In 2002, Rs one lakh envisaged under it might have been enough to meet medical expenses of the injured owner to a certain extent.
However, 15 years had lapsed and medical treatment costs had sky-rocketed, the judges said and directed IRDA to enhance the compulsory personal accident cover from the existing Rs one lakh to at least not less than Rs 15,00,000.
The bench directed IRDA to have consultation with all stakeholders before enhancing the premium for getting compensation under the compulsory personal accident cover.
The judges also directed IRDA to undertake and complete such an exercise within six months from the date of receipt of a copy of the judgement.
The enhanced amount would add to some succour or solace to victims of road accidents, who are vehicle owners, who may incidentally sustain physical injury or die, they said.
"It is unfortunate that the owner of the vehicle, who pays premium amount for risks that may be confronted by the third party or due to any other factor, is not getting adequate compensation in the event of his or her death or bodily injury, the judges said.
The matter relates to an appeal by the insurance firm, challenging the award of total compensation of Rs 51,37,125 and the April 28, 2015 decree by the Motor Accident Claims Tribunal (Subordinate Judge), Neyveli, by which the claim petition filed by the legal heirs of a deceased motorist was allowed.
The insurance company submitted that under Section 147 of Motor Vehicles Act,the risk of the deceased, who is the vehicle owner, was not required to be covered by them.
If at all the claimants/respondents were entitled, it could only be to a maximum amount of Rs one lakh and nothing more, it said and sought dismissal of the petition.
As the court felt IRDA's assistance was necessary for disposal of the appeal, the bench directed it to depute one of its counsel to assist the court in the matter.
IRDA's counsel drew the court's attention to provisions of Section 146 of MVA and submitted that it was not necessary to provide insurance coverage for the owner of the vehicle, who sustained injury or died due to his/her own negligence.
This section mandates that vehicle owners get compulsory insurance for motor vehicles against liability for death/ bodily injury to persons/property caused by use of vehicle.
The bench, while referring to various Supreme Court orders, allowed the appeal by United India Insurance and said it cannot be fastened with any liability under provisions of MVA for death of the victim, who was the owner of the vehicle, when no other motor vehicle was involved in this case.
"Therefore, the question of the insurer being liable to indemnify the deceased/owner of the vehicle does not arise," the court said.
Since the victim was the owner of the two-wheeler and not a third party, the claim petition filed by the claimants would not come within the purview of Section 146 or 147 of MVA for the purpose of payment of compensation, the judges said.
"Therefore, we hold that the impugned judgement and decree of the Tribunal cannot be sustained. The appeal filed by the insurance company deserves only to be allowed."
At the same time, it is needless to mention that the claimants were entitled for payment of Rs one lakh only towards personal accident cover proportionate to the premium paid by the deceased, the bench said.
"We are pained to observe that as per the Indian Motor Tariff, compensation payable to the legal heirs in case of death or bodily injury suffered by the owner of the vehicle is restricted to Rs 1,00,000 only in case of two-wheeler and Rs 2,00,000 in case of four-wheeler, by virtue of compulsory personal accident cover mooted by the statutory authorities in charge of regulating the Motor Insurance Policies," it said.