Kerala High Court
Oriental Insurance Co. Ltd. vs V. Saji on 8 October, 1997
Equivalent citations: 1998ACJ383
JUDGMENT P.A. Mohammed, J.
1. This appeal has been filed by the insurer of an offending vehicle involved in a motor accident which took place on 21.5.1987. The claimant who is respondent No. 1 in this appeal filed a petition seeking compensation of Rs. 1,07,000/- for the injuries sustained by him in the above accident. The offending vehicle was owned by respondent No. 2. In the course of the inquiry the appellant insurer contended that its liability was limited to Rs. 50,000/-. In support of the contention Exh. Bl policy dated 19.9.1986 was produced before the Tribunal. However, learned Tribunal passed an award for Rs. 59,738/- with interest which was directed to be indemnified by the appellant.
2. There is no dispute in this appeal either with regard to the quantum of the compensation awarded or with regard to negligence of the driver of the offending vehicle. The only dispute before us relates to the extent of liability of the appellant for the compensation awarded.
3. Counsel appearing for the appellant contended that in view of the provisions contained in Section 95(2)(b)(i) of the Motor Vehicles Act, 1939 (for short 'the Act'), appellant is liable to indemnify only to the extent of Rs. 50,000/-. The above section is contained in Chapter VIII of the Act which deals with the insurance of motor vehicles against third party risks. Section 94 mandates that no person shall use the motor vehicle in a public place unless there is a policy of insurance complying with the requirements provided in the Chapter. Sub-section (2) of Section 95 contains such requirements of policies and Sub-section (2) contains limits of liabilities arising out of insurance. Clause (b) of Sub-section (2) of Section 95 of the Act is as follows:
(b) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment,
(i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all;
(ii) in respect of passengers, a limit of fifteen thousand rupees for each individual passenger.
However, the distinction between Clauses (a) and (b) must be clearly delineated and perceived before we embark on the inquiry whether Clause (b)(i) of Section 95 would apply in the facts of the present case. Clause (a) deals with the limits of liability of the insurer in respect of any one accident in the case of a goods vehicle whereas Clause (b) deals with the limits of liability of the insurer in respect of any one accident in the case of a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment. Thus, Clause (b) will apply in the case of a passenger vehicle in respect of which its owner had obtained a policy of insurance as required under Chapter VIII. However, Clause (b) contains two Sub-clauses (i) and (ii). Sub-clause (i) deals with liability in the case of non-passengers whereas Sub-clause (ii) deals with liability in the case of passengers. In other words, the limits of liability to pay compensation in respect of death or disablement resulted from an accident arising out of the use of a passenger vehicle in the case of non-passenger and passenger are specified in the Sub-clauses (i) and (ii). Non-passenger, no doubt, is a third party; he may be a pedestrian or he may be a driver or a passenger of a non-offending vehicle involved in the accident. They all will come within the meaning of the word 'persons' contained in Sub-clause (i) of Clause (b). If the victims of the accident are non-passengers, the liability is limited to fifty thousand rupees in all and in the case of passengers it is limited to fifteen thousand rupees for each individual passenger. In the present case, the claimant is not a passenger carried by the offending vehicle. While riding a motor cycle he was knocked down by the offending vehicle and in the course of the said accident he had sustained injuries in respect of which compensation had been claimed.
4. While marshalling the contention, counsel invited our attention to the provisions contained in Exh. B1 policy. The specific reference has been made to the following clause contained under head 'limits of liability' in Exh. B1 policy.
Such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939.
No doubt, Exh. B1 policy is the primordial evidence produced by the appellant. However, the limits of liability have not been specifically stated anywhere in Exh. B1. Therefore, it can be determined only with reference to the 'amount as is necessary to meet the requirements' of the Act. It necessarily evinces the limit of liability of the insurer under Exh. B1 policy is as specified in the provisions contained in Section 95(2)(b)(i) of the Act. A cumulative reading of the above provision and the relevant terms of liability contained in Exh. B1 would indubitably settle that the liability of the appellant is limited to the extent of Rs. 50,000/- in this case.
5. The Supreme Court in National Insurance Co. Ltd. v. Jugal Kishore 1988 ACJ 270 (SC), had occasion to interpret the meaning of the clause 'such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939' as contained in Section 95 as it stood then. After referring to the relevant provisions in the Act and also the provisions contained in the insurance policy, it said:
A perusal of the policy, therefore, indicates that the liability undertaken with regard to the death or bodily injury to any person caused by or arising out of the use (including the loading and/or unloading) of the motor vehicle falling under Section II (1)(i) has been confined to 'such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939.' This liability, as is apparent from Clause (b) of Sub-section (2) of Section 95 of the Act, was at the relevant time Rs. 20,000/- only. The details of the premium also indicate that, no additional premium with regard to a case falling under Section II (1)(i) was paid by the owner of the vehicle to the insurance company.
It is an admitted fact in this case that no additional premium was paid by the insured to the insurer so as to make the liability unlimited. Further, it could be seen that there was no special contract between them so as to make the liability different from what is contained in Section 95(2)(b)(i) of the Act. Only because Exh. B1 policy is described as 'commercial vehicle comprehensive policy' it does not mean that the limit of liability with regard to third party risk becomes unlimited or higher than the statutory liability fixed under Section 95(2)(b) of the Act. When a vehicle is comprehensively insured and a higher premium than what is prescribed for 'Act only' policy is paid the owner can claim reimbursement of the entire amount of loss or damage suffered up to the estimated value of the vehicle. But the obtaining of comprehensive insurance of vehicle and payment of higher premium in that behalf will not make the limit of liability with regard to third party risk unlimited or higher than the statutory liability under Section 95(2)(b) unless there is a special contract between the insurer and insured in that behalf. Therefore, the liability of the appellant cannot under any circumstance be fixed on an amount higher than Rs. 50,000/-. Necessary consequence is that the balance amount of Rs. 9,738/- will have to be satisfied by the owner of the offending vehicle, the respondent No. 2 in this case.
6. Notwithstanding the above, counsel for the respondent No. 2 has brought to our notice a decision of the Supreme Court in British Indian General Insurance Co. Ltd. v. Maya Banerjee 1986 ACJ 946 (SC) and pleaded that the insurance company should be directed to indemnify the entire amount applying the principle laid down in the aforesaid decision. Of course, the Supreme Court in the particular facts of that case refused to interfere with the direction that the insurer would pay the entire amount of Rs. 30,000/- awarded by the Tribunal even though the liability of the insurer was declared to be to the extent of Rs. 20,000/-. The obvious reason given by the Supreme Court for doing sc is that it may be difficult for the widow of the victim to recover the compensation from the owner. On a perusal of the above decision, we have firstly noticed that the Supreme Court had decided the said case on 21.7.1986 and the claim arose in the year 1961. That means about 25 years had elapsed when the final decision was rendered by it. Secondly, we have found that the respondent before the Supreme Court was a widow who could not take effective steps to recover the balance amount from the owner of the vehicle at such a distance of time. Therefore, it cannot be said what has been laid down by the Supreme Court in Maya Banerjee's case, supra is a proposition which has a general applicability and absolute operation. Further the special circumstances stated by the Supreme Court for refusing to interfere are absent in the present case. If such cir cumstances are available in this case, we would have refused to interfere with the award passed by the Tribunal. No such circumstances exist in the facts of the present case.
7. In the present case, the insurer has deposited only Rs. 50,000/- with interest and they have satisfied their liability as per the award. Under these circumstances, we do not find our way to accept the contention of the respondent No. 2. The said contention is, therefore, negatived. The case. appeal is allowed to the extent indicated above.