An insurer is not liable for a pillion rider under a liability-only policy absent additional premium.

The claimant, travelling as a pillion rider on a TVS Victor motorcycle, was injured when it collided with a Yamaha Crux motorcycle on 21 September 2015.

The Tribunal found the riders of both motorcycles equally negligent and awarded compensation of ₹11,05,300 with interest at 6% per annum, making each vehicle’s owner liable for 50% and directing the respective insurers to indemnify them.

The insurer of the TVS Victor appealed, contending that its liability-only policy did not cover the pillion rider; the insurer of the Yamaha had already satisfied its share of the award.

Whether the Tribunal’s direction requiring the TVS Victor’s insurer to indemnify the owner for the claimant’s 50% share of the compensation should be set aside because the policy did not cover the pillion rider’s risk.

Under Section 147 of the Motor Vehicles Act, 1988, as applied in Oriental Insurance Co. Ltd. v. Sudhakaran K.V., an insurer’s liability under a liability-only policy does not extend to a two-wheeler pillion rider unless the requisite premium is paid; such a pillion rider is not treated as a third party where the accident results from the negligence of the two-wheeler’s rider.

It also relied on Hanumantha Nayak v. Umesh, which held that where an act policy did not cover a pillion rider, the owner—not the insurer—was liable for that share of the compensation.

The policy showed that the owner had paid ₹538 for basic third-party liability and ₹50 for compulsory personal-accident cover for the owner-driver, but no premium to cover the pillion rider.

The Court therefore held that the policy did not cover the claimant’s risk and that the Tribunal had erred in fastening liability on the insurer without addressing that exclusion.

It distinguished Sunitha and Shobha, which involved occupants of cars or a goods vehicle, and followed the reasoning in Sudhakaran and Hanumantha Nayak that the insurer could not be directed to pay and recover where the pillion rider’s risk was not covered.

The direction requiring the TVS Victor’s insurer to indemnify the owner for 50% of the compensation was set aside, and the owner was held liable for that 50% share with interest; the remainder of the Tribunal’s award was left undisturbed.

The insurer’s deposited amount was ordered to be refunded on proper identification.