An occupant not proved to be an employee is entitled only to the policy’s personal-accident cover.

The claimants, parents of the deceased, sought compensation after their son died in a car accident while travelling in a Bolero owned by the third respondent and insured by Bajaj Allianz.

They alleged that he was employed as the company’s Legal Officer and claimed that the insurer was liable under the policy.

The Tribunal awarded Rs. 26,45,000 and held the insurer liable for the full amount, although the policy schedule did not include the IMT-29 endorsement.

The insurer appealed, contending that the deceased’s employment-related travel was not covered without the additional premium; the claimants cross-objected, seeking enhancement.

Whether the claimants proved that the deceased was employed by the vehicle’s owner and was travelling as its employee.

Whether the insurer was liable to pay the full compensation awarded by the Tribunal, or only the personal-accident cover under the policy.

Whether the claimants were entitled to enhancement of compensation.

Under the Motor Vehicles Act, 1988, an appeal from a Tribunal award lies under Section 173.

The court considered Section 147 in addressing arguments about compulsory insurance for vehicle occupants, but concluded that this deceased passenger could not be treated as a third party vis-à-vis the vehicle’s owner and insurer.

The insurer’s liability was governed by the policy terms: the schedule included personal-accident cover of Rs. 1,00,000 for each of seven passengers, but did not include IMT-29 cover.

For calculating dependency, the court applied the multiplier and deduction approach and added 40% future prospects, referring to Sarla Verma v. Delhi Transport Corporation [(2009) 6 SCC 121].

The appointment letter was conditional on the deceased reporting for duty, but there was no evidence that he did so or that a completed employment arrangement existed; the supporting voucher was unsigned.

The court therefore found that the claimants had not proved his employment or that he travelled as an employee.

As he was neither proved to be an employee nor treated as a third party, the insurer’s liability for the full third-party compensation award could not stand.

The policy nevertheless expressly provided personal-accident cover for passengers, making the insurer liable for Rs. 1,00,000 under that cover.

For the cross-objection, the court assessed the deceased’s notional monthly income at Rs. 17,000, added 40% for future prospects, deducted 50% for personal expenses, and applied a multiplier of 18.

It set aside the filial-consortium award, retained the award for loss of love and affection, and added Rs. 15,000 for loss of estate.

The total compensation was enhanced to Rs. 27,00,400, with interest at 7.5% per annum from the date of petition until deposit.

The insurer was held liable for Rs. 1,00,000 under the passenger personal-accident cover; the vehicle owner was directed to pay the balance of Rs. 26,00,400 with interest within 12 weeks of receiving the web copy of the judgment.