Gliders Used For Sightseeing Are Covered By Insurance

Gaurav Mitra explains how the Supreme Court of India held that gliders used for sightseeing would be covered by insurance.

I. Introduction

1. The Regulatory framework with respect to Insurance in India is primarily governed by the Insurance Act, 1938 and the Insurance Regulatory and Development Authority Act, 1999 (“IRDA Act”). While the Insurance Act, 1938 governs all forms of insurance and also regulates the insurance business in India, The IRDA Act, 1999, seeks to provide an establishment of an authority that protects the interest of all insurance policy holders and further regulates and promotes the orderly growth of the insurance industry.

2. As is common knowledge, owing to the lack of adequate risk planning, adventure sports do not fall within the purview of insurance policies in India. However, it is pertinent to highlight at this juncture that although the aforesaid is not covered in insurance policies, there seems to be an ambiguity with respect to sightseeing that is also undertaken as an activity by several tourists on vacation.

3. In this regard, it is apposite to take note of the most recent judgment passed by the Supreme Court in Bharti AXA General Insurance Co. Ltd v. Priya Paul & Another ¹ . Vide this judgment, the Supreme Court, inter alia interpreted whether a ‘glider’ comes within the definition of aircraft in so far as insurance policies are concerned and as a natural consequence covered by insurance.

II. Factual background

4. In the year 2013, Priya Paul (“ Respondent No.1”) had gone on a vacation with her family ². During this vacation, the family had visited the Pemberton Soaring Centre (a gliding facility at Pemberton in British Columbia) for the purposes of sightseeing ³. Her son was one of the first people within the family to go sightseeing on a two seater glider plane (Stemme S10-VT) that was flown by a pilot at the facility. ⁴

Unfortunately, this glider that her son was on, exploded pursuant to its collision with a Cessena 150 aircraft; killing all persons who were onboard on both aircrafts. ⁵

5. Subsequently, Respondent No.1, as a natural corollary, filed a claim with Bharti AXA General Insurance Co. Ltd (“Appellant”), on the strength of a Smart-Personal Accident – Individual Insurance Policy (“the Policy”) that had been taken by her son (“the deceased”). ⁶

6. However, the claim was rejected by the Appellant on the ground that the deceased was neither travelling in a standard aircraft nor was he a fare-paying passenger in any regular scheduled airline or air charter company. Hence, this excluded the accident from the purview of the Policy. ⁷

7. At this juncture, it is pertinent to highlight that the Appellant while rejecting Respondent No. 1’s claim, relied on the definition of accident under the policy and also clauses relating to the scope of insurance and general exclusions. The relevant clauses are reproduced as follows ⁸:

• “7. General Exclusions of the Policy
  • Provided always that the company shall not be liable under this policy for:
  • ix) Any claim in respect of accidental death or permanent disablement of the insured/insured person.
  • iii) Whilst engaging in aviation or ballooning whilst mounting into, dismounting from or travelling in any aircraft or balloon other than as a passenger (fare paying or otherwise) in any duly licenses standard type of aircraft anywhere in the world.
  • (xiii) Insured/insured person whilst engaging in speed contest or parasailing, ballooning, parachuting, skydiving, paragliding, hang gliding, mountain or rock climbing, necessitating the use of guides or ropes. Potholing, abseiling, deep sea diving using hard helmet and breathing apparatus, polo, snow and ice sports.
  • (xiv) Insured/insured person whilst flying or taking part in aerial activities (including cabin crew) except as a fare-paying passenger in a regular scheduled airline or air charter company.”

8. Bring aggrieved by the aforesaid repudiation of her claim, Respondent No.1 preferred a complaint before the National Commission Disputes Redressal Commission, New Delhi (“NCDRC”) which, vide judgment dated 22.05.2017 ⁹, allowed the complaint of Respondent No.1 and directed the Appellant herein to pay an amount of Rs. 1 core along with an 8% interest per annum to Respondent No.1. However, being unsatisfied with this judgment passed by the NCDRC, the Appellant preferred an appeal before the Supreme Court.

III. Issues for consideration before the Supreme Court

9. Upon hearing the parties, the Supreme Court was of the view that the following questions arose for consideration ¹⁰:

• a. Whether the glider involved in the accident was an aircraft?
• b. Whether it was a standard aircraft?
• c. Whether the aircraft was duly licensed?
• d. Whether the Pemberton Soaring Centre was an air charter company or regular schedule airline? [limited to whether the Pemberton Soaring Centre was an air charter company]
• e. Whether the deceased was traveling on the glider as a fare-paying passenger?

IV. The Supreme Court’s Findings

10. The Supreme Court on 07.02.2020 finally adjudicated upon the matter and affirmed the decision of the NCDRC making the following observations:

• a. With respect to the first issue, the Supreme Court took into consideration the definition of the ‘aircraft’, under the Aircraft Act, 1934 and the Aeronautics Act, 1985 of Canada. A perusal of the two definitions, indicated that a glider was very much a part of the definition of an aircraft. Further, apart from these Statutes, the glider had also been defined as a ‘non-power driven heavier than air aircraft which derives its lift in flight from aerodynamic reactions on surfaces that remain fixed during flight’ under the Aircraft Rules 1937 ¹¹. It is also pertinent to highlight that it also made a note of the fact that the terms “aircraft” and “glider” had not been defined within the Policy. Therefore, on the basis of these definitions and observations, the Supreme Court held that the glider in question ought to be regarded as an aircraft under the Policy.
• b. With regard to the second issue of whether the glider was a standard type of the aircraft, the Supreme Court primarily noted that the Policy does not find any mention of what constituted a ‘standard type of aircraft’ and therefore, there seemed to be no context in which the said term has been envisaged in the Policy. Further, the Supreme Court also observed that, had the Appellant intended to draw a distinction between powered or non-powered, motorised or non-motorised for it to be a standard type of aircraft, the Appellant ought to have envisioned the same in the concerned Policy. However, on account of the said distinction not being envisaged in the Policy, the Supreme held that the glider was a ‘standard type of aircraft’.
• c. In so far as the third issue with respect to the aircraft being duly licensed was concerned, the Supreme Court placed reliance on the aviation inspection report of the Transport Safety Board of Canada (“TSBC Report”) which stated that the glider was certified, equipped and maintained in terms of the prevalent regulations and approved procedures and was in fact complaint with the same. The TSBC Report also made note of the fact that the pilot of the glider was certified and qualified for the flight as per requisite regulations and also extensively referred to the glider as an ‘aircraft’. Therefore, the Supreme Court was in agreement with the NCDRC’s finding that the aircraft in question was duly licensed.
• d. With respect to the fourth issue of whether the Pemberton Soaring Centre was an air charter company, the Supreme Court relied upon the definitions adopted by the International Civil Aviation Organisation (“ICAO”) since, the policy found no mention of the same. Basis the definition of charter and single use charter/ own use charter given by the ICAO, the Supreme Court was of the opinion that the Pemberton Soaring Centre gave out the entirety of the aircraft on hire for the duration of the aerial journey thereby constituting a practice of own-use charter. Hence, while keeping in mind the fact that the Pemberton Soaring Centre was a incorporated company and also the fact that the Appellant had not defined an ‘air charter company’ in its Policy, the Supreme Court affirmed the finding of NCDRC which held that the Pemberton Soaring Centre is an air charter company within the meaning of Policy.
• e. The fifth issue of whether the deceased was a fare-paying passenger on the glider, was also decided in the affirmative by the Supreme Court. The Supreme Court observed that the journey that was undertaken on the glider was for a fixed consideration and hence, the NCDRC was right in finding the deceased to be fare-paying passenger.

V. Conclusion

11. This judgment is a significant one as it clarifies that a glider which is used for sightseeing shall come within the meaning of an aircraft. Therefore, repudiation of claims by insurance companies on the basis that gliders used for sightseeing do not come within the purview of insurance policies are not tenable in law and hence, ought to be rejected.

12. Undisputedly, this decision is a welcome change in insurance jurisprudence as, it not only does away with the misassumptions in respect to a glider (used for sightseeing) not falling within the purview of the definition of an aircraft but also gives much-needed respite to all policy holders claiming their insurance on this ground.

13. Pertinently, it is also apposite to highlight that, although the aforementioned judgment had been laid down by the Supreme Court in the context of the specific clause mentioned in the insurance policy under challenge. However, what is essential to bear in mind, is that, the insurance policy and also the specific exclusions under challenge appear in all standard type of insurance policy/ contract found across the board and consequently availed by customers. Therefore, the ratio laid by the Supreme Court in this judgment shall have a wider ramification in the field of insurance jurisprudence.