A package policy covering pillion riders makes the insurer liable for their accident claims.

On 25 February 2012, Subramanya Swami was a pillion rider on a motorcycle that fell near Shamanur on the NH Bypass; he later died from his injuries.

The Tribunal found that the accident resulted from the motorcycle rider’s rash and negligent riding and awarded the deceased’s dependants ₹5,04,000, holding the owner and insurer jointly and severally liable.

The insurer appealed the liability finding, while the dependants appealed seeking enhanced compensation.

The Court noted that the deceased was 39 years old and worked as a cable operator, but his claimed monthly income of ₹25,000 was not proved

1. Whether the Tribunal erred in holding the insurer liable to pay compensation

2. Whether the claimants were entitled to enhanced compensation

Under Sections 166 and 173(1) of the Motor Vehicles Act, a claim for compensation may be adjudicated by the Tribunal and its award challenged on appeal

A. Sridhar v. United India Insurance Co. Ltd. was relied on for the proposition that a vehicle’s fall alone does not establish negligent driving where the accident was not caused by negligent driving of another vehicle; Oriental Insurance Co. Ltd. v. Sudhakaran K.V. concerned a pillion rider’s claim under an “Act Liability only” policy without specific cover

For assessment of compensation, National Insurance Co. Ltd. v. Pranay Sethi supplied the applicable principles: future prospects are added to income, and compensation includes consortium and other conventional heads, with periodic enhancement of those heads

The Court rejected the insurer’s reliance on A. Sridhar because the accident there involved a motorcycle skidding on an oil spill, whereas the Tribunal had found that this accident resulted from the rider’s rash and negligent riding.

It distinguished Sudhakaran because the motorcycle here had a package policy that included additional premium for pillion-rider cover; the insurer’s challenge to liability therefore failed.

On quantum, the Court adopted the 2012 notional monthly income of ₹7,000, added 40% future prospects, deducted one-quarter for personal expenses given five dependants, and applied a multiplier of 15, producing ₹13,23,000 for loss of dependency.

It then assessed ₹2,00,000 for consortium and ₹30,000 for funeral expenses and loss of estate, with a further 20% enhancement to the conventional heads, yielding total compensation of ₹15,99,000.

The compensation was enhanced from ₹5,04,000 to ₹15,99,000, with interest at 6% per annum from the date of the claim petition until deposit, excluding 245 days’ delay in filing the appeal.

The insurer was directed to deposit the balance within six weeks; the judgment also specified the release and fixed-deposit arrangements for the claimants’ shares.