Madhya Pradesh High Court
New India Assurance Co. Ltd. vs Chandravati And Ors. on 13 May, 1996
Equivalent citations: 1996ACJ1273
Bench: A.K. Mathur, Chief Justice
JUDGMENT S.K. Kulshrestha, J.
1. This appeal has been filed by the insurance company under Clause 10 of the Letters Patent against the judgment of the learned single Judge dated 16.4.1987 passed in M.A. No. 323 of 1977 (Krishnachand Gupta v. Chandravati).
2. The respondent Nos. 1, 2 and 3, the heirs of the deceased Gaya Prasad, had filed claim under Section 110-A of the Motor Vehicles Act, 1939, for compensation in the sum of Rs. 50,000/- on the ground that Gaya Prasad, a passenger in the said bus of whom the respondent No. 1 was the widow and respondent Nos. 2 and 3 were the children, had received fatal injuries while going from Satna to Simariya as a result of an accident. It was alleged that a truck bearing registration No. MPJ 5422 was coming from the opposite direction but on account of the rashness and negligence of the driver of the bus in which the said Gaya Prasad was travelling, at the last moment, the driver swerved the vehicle resulting in the bus turning turtle. Gaya Prasad was thrown out and he died due to the injuries thus received. The said claim was made against the respondent Nos. 4 and 5 as the owner and driver of the bus respectively and the present appellant as the insurance company which had covered the liability under the policy issued by it.
3. The claim was contested by the appellant on various grounds including that the liability of the insurance company under the policy and the statute, both, was limited to a maximum of Rs. 2,000/- per passenger.
4. After recording the evidence, the learned Tribunal awarded a compensation of Rs. 21,000/- but restricted the recovery thereof to the extent of Rs. 2,000/- against the present appellant in accordance with the provisions of Section 95(2)(b) of the Act at the relevant time. The appeal was filed by the owner and driver of the bus against the said order dated 8.12.1976 of the Motor Accidents Claims Tribunal, Satna, in Claim Case No. 33 of 1970 and the learned single Judge of this court by his impugned judgment set aside the direction of the Tribunal restraining the liability of the insurance company to Rs. 2,000/- and the insurance company was directed to indemnify the owner and the driver for the total compensation. It is against this direction that the appellant has preferred this appeal.
5. The only point which falls for our consideration is as to whether the liability of the insurance company in relation to the death of a passenger would be restricted to a sum of Rs. 2,000/- as provided in Section 95(2)(b) of the Act as it stood at the relevant time or that the same would be co-extensive with the liability of the insured. The effect of the statutory restriction of liability contained in Section 95(2)(b) was considered by this court in Tillumal v. Ramkali Devi M.A. No. 11 of 1988, in which by order dated 28.3.1995, it was held that the liability of the insurance company was limited to the extent provided in Section 95(2)(b)(ii) of the Act which as per the provisions prevalent at the date of the accident in the said case, was a sum of Rs. 15,000/-. In para 9 of said judgment, while considering the liability of the insurance company, this court observed as follows:
In the appeal filed by the insurance company, the only contention which has been urged by the learned Counsel for the insurance company is that since the deceased Y.N. Sharma was travelling in the said bus, therefore, the insurance company's liability is limited to the extent as provided under Section 95(2)(b)(ii) of the Motor Vehicles Act, 1939. The contention of the learned Counsel for the insurance company appears to be justified. The liability of the insurance company is limited to the extent of Rs. 15,000/- per passenger. Therefore, to this extent, the learned Counsel for the insurance company is right in contending that the insurance company cannot be saddled with whole liability as its liability is extended to Rs. 15,000 per passenger, whereas the learned Judge has found both, i.e., owner of the bus and insurance company jointly and severally liable, which is not correct. We are inclined to uphold the objection of the insurance company that in view of Section 95(2)(b)(ii) of the Motor Vehicles Act, the liability of the insurance company shall be to the extent of Rs. 15,000/- per passenger only. Therefore, the appeal of the insurance company is allowed.
The question fell for consideration of this court again in United India Insurance Co. Ltd. v. Nolan Bai L.P.A. No. 63 of 1987; decided on 14.2.1996 and this court while considering the extent of liability of the insurance company observed in para 5 of the judgment as follows:
While there is no denying the fact that it is open to the insurance company to charge extra premium to cover the risk in excess of its statutory liability, we find that neither in the claim application nor in the written statement filed jointly by the owner and the driver, any plea has been raised to indicate that in relation to the vehicle in question, any extra risk had been covered by the insurance company. Though we disapprove the failure of the insurance company to produce the policy in question, yet in the absence of any plea as aforesaid, it is not possible to saddle the insurance company with any liability in excess of its statutory obligations. In fixing the liability, the learned single Judge has mainly relied upon the decision of the Supreme Court in Motor Owners' Insurance Co. Ltd. v. Jadavji Keshavji Modi 1981 ACJ 507 (SC) and holding that the insurance company was liable to the maximum limit of its liability in relation to any one accident. We are afraid that in view of the decision of the Supreme Court in M.K. Kunhimohammed v. P.A. Ahmedkutty 1987 ACJ 872 (SC), we cannot subscribe to the said view expressed by the learned single Judge.
6. Learned Counsel for the respondent referred to the decision of the Rajasthan High Court in Raj Kumar v. Kanhaiya Lal 1993 ACJ 395 (Rajasthan), in contending that notwithstanding the restriction contained in Section 95(2) of the Act as it stood then, the liability of insurance company was co-extensive with that of the owner. The said judgment of the Rajasthan High Court was with reference to the liability of the insurance company relating to damage to the property of the third party which even as per the policy of the company was unlimited. In the present case, there is no suggestion that the appellant insurance company had covered any liability beyond the statutory limits and, therefore, the said judgment relied upon by the learned Counsel will have no application to the facts of the case.
7. In the result, the order of the learned single Judge insofar as it makes the liability of the appellant insurance company co-extensive with that of the insured is, set aside and it is held that the liability of the insurance company will be restricted to a sum of Rs. 2,000/- in accordance with the provisions of Section 95(2)(b) of the Act as it stood on the relevant date.
8. The appeal is, thus, allowed but in the facts and circumstances of the case, we leave the parties to bear their own costs of this appeal.