Private car occupant coverage turns on whether the insurance policy is an Act policy or a comprehensive package policy.

Liability for injuries to an occupant in a private car depends on whether the insurance cover is only an Act policy or a comprehensive/package policy. The Motor Vehicles Act requires compulsory third-party insurance, but the text distinguishes Act policies from package policies and notes that earlier exclusions for persons not covered by the statutory policy apply to Act policies. It further states that regulatory circulars indicate a comprehensive/package policy covers occupants in a private car, so liability turns on the actual policy wording. The finding fastening liability on the insurer was set aside and the matter remitted for fresh examination of the policy terms and additional evidence if needed.

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Issues: Whether the insurer was liable to indemnify the owner for injuries suffered by an occupant in a private car under the policy issued for the vehicle, and whether liability depended on whether the policy was an Act policy or a comprehensive/package policy.

Analysis: The statutory scheme under Sections 146 and 147 of the Motor Vehicles Act, 1988 requires compulsory insurance for third-party risk, but the Court distinguished an Act policy from a comprehensive/package policy. Earlier decisions holding that gratuitous passengers, owners, or persons not covered by the statutory policy are outside the insurer's liability were held applicable to Act policies. The Court further relied on the regulatory position reflected in the TAC and IRDA circulars that a comprehensive/package policy covers occupants in a private car, and therefore the insurer's liability in such cases turns on the actual terms of the policy. As the tribunal and High Court had not examined the full policy wording, it was necessary to determine whether the policy was truly a package policy.

Conclusion: The finding fastening liability on the insurer was set aside and the matter was remitted to the tribunal to examine the policy and take additional evidence if necessary; if the policy is a comprehensive/package policy, the insurer will be liable.

Final Conclusion: The appeal succeeded to the limited extent of requiring fresh adjudication on the policy coverage, while the other findings remained undisturbed.

Ratio Decidendi: Liability for an occupant in a private car depends on whether the policy is merely an Act policy or a comprehensive/package policy, and a comprehensive/package policy covers such occupant risk.

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