Institute of Legal and Management Studies

The Supreme Court on July 14 referred to a larger bench the issue whether a passenger sitting in a car is covered under a third-party policy in insurance claims.

The bench of Justice Pankaj Mithal and Justice PB Varale was hearing a challenge by New India Insurance to the Kerala High Court Order, which upheld the compensation granted by the Motor Accident Compensation Tribunal to a passenger in an auto-rickshaw.

The passenger had died when the auto-rickshaw turned after hitting a sand rubble. The Motor Accidents Claims Tribunal held the insurer liable to compensate by treating the deceased as a 'third party'. The High Court approved the MACT's view.

Before the Supreme Court, the bench noted that the plea raises the issue of "whether under a third party policy, a person sitting in a car would be covered and entitled to compensation ?"

It further noted the issue of "whether the third party includes all other persons other than the insured, who is the first party and the insurer, who is the second party, has been referred to a larger Bench."

Observing the same, the bench issued notice in the plea and tagged it with other pending matters.

Notably, in 2022, a bench of Justices Hemant Gupta and Vikram Nath referred to a larger bench the issue of whether a pillion rider on a motorcycle is a "third party" in an Act-only policy(Mohana Krishnan S vs K.Balasubramaniyam | SLP(C) 3433/2020)

The Court also stayed the execution proceedings, subject to the condition that the insurance company deposits the entire compensation sum with updated interest before the MACT in six weeks.

Counsel for the petitioner : Mr. Aditya Kumar, Adv.; Ms. Ila Nath, Adv.; Mr. C. George Thomas, AOR

Case Details : THE DIVISIONAL MANAGER v. RADHA SANTHOSH & ORS.| SPECIAL LEAVE TO APPEAL (C) NO(S). 17630/2025