Madhya Pradesh High Court
National Insurance Co. Ltd. vs Kamladevi And Ors. on 19 April, 1994
Equivalent citations: I(1995)ACC169
JUDGMENT S.K. Chawla, J.
1. This appeal being heard by Single Bench, was heard by us, analogously with D.B. Appeals M.A. No. 17/91 and 18/91.
2. The only question canvassed in this appeal was that in the award of Rs. 33,500/-granted as compensation by First Additional Motor Accident Claims Tribunal, Gwalior, in Claim Case No. 52/86 for the death of a passenger named Rakesh in Bus No. CPH 8232 which met with an accident, the liability of the appellant/Insurance Company was not joint and several to the extent of full amount of the award along with owner and driver of the bus, but was limited to the payment of Rs. 15,000/-, being the extent of statutory liability required to be covered under Section 95(2)(b)(ii) of the old Motor Vehicles Act, 1939, which was then in force. Shri B.N. Malhotra, learned Counsel for the Insurance Company relied on the decisions in Economic Roadways Corporation and Anr. v. K.S. Murali and Ors. , M.K. Khunhimohammed v. P.A. Ahmedkutty and Ors. 1987 ACJ 872, National Insurance Co. Ltd. v. Jugal Kishore and Ors. 1988 ACJ 270 and Oriental Fire & General Insurance Co. Ltd. v. Veena Pruthi and Ors. 1989 ACJ 1163. Suffice to say that those are decisions which turned on the interpretation of the terms of Insurance policies involved in those cases. They are not authority for the interpretation of the terms of the Insurance policy which was taken out in the present case.
3. A look at the policy in the present case (copy Ex. D-1-C) would show that the Insurance Company inter alia undertook to indemnify the insured against all sums, including claimant's costs and expenses, which the insured shall become legally liable to pay in respect of death of or bodily injury to any person caused by or arising out of the use of the motor vehicle to the extent of "such sum as is necessary to meet the requirements of the Motor Vehicles Act 1939" (see Section II-1(i) and last but one column of the Schedule stating the limits of liability mentioned in the policy), the expression "such sum as is necessary to meet the requirements of the Motor Vehicles Act, 1939" in the policy cannot be read as requirements of Section 95 only but that expression would cover the entire liability of the owner, when incurred under the provisions of the Motor Vehicles Act, 1939. Had there been an intention to limit the liability of the Insurance Company to limits given in Section 95, there was nothing to prevent the use of the words "Section 95" or to the mention of the sum of Rs. 15,000/- per passenger as liability, in the above term. The award for the entire sum of compensation having been given under the provisions of the Motor Vehicles Act, 1939 the above expression would mean that the Insurance Company agreed to indemnify for the entire sum, as the liability there for was incurred by the owner under the provisions of the Motor Vehicles Act, 1939. Decisions in New India Assurance Co. Ltd. v. Nanak Chand Ben and Ors. in 1989 ACJ 169 (M.P.), New India Assurance Co. Ltd. v. Ramkumar in 1990 MPLJ 44 and Anupama v. Laxman Rao in 1988 MPLJ 886 has been in points.
4. Secondly it will further appear from the policy, copy Ex. B-1-C, that the Insurance Company besides the basic premium for liability to public risk, charged extra premium of Rs. 636/- towards legal liability as 53 passengers. There is no warrant for reading the words "legal liability" as liability of the Insurance Company under Section 95 of the Act. The legal liability should mean whatever legal liability is incurred on account of accident caused to the passengers. Endorsement I.M.T. 13 stating legal liability to passengers contained in the policy does not also mention any limit. If the liability was limited to any amount, it is usual to refer that limit in endorsement I.M.T. 13.
5. Thirdly, the Insurance Company in the present case charged Rs. 50/- as extra payment for unlimited liability to third party. A passenger in the bus whose owner is insured may also be taken to be a third party qua the insurer see Kishori v. Chairman, Tribal Service Co-operative Society, Sendhwa and Ors. in 1988 JLJ 222 and Nanak Chand Ben's case (supra).
6. For the foregoing reasons, interpreting the terms of the policy, copy Ex. D-1-C, we hold that the Insurance Company in the present case undertook liability for indemnification of the owner to unlimited extent. The liability of the Insurance Company was not limited to only Rs. 15,000/- per passenger, as was then provided in Section 95(2)(b)(ii) of the Motor Vehicles Act, 1939.
7. In the result, the appeal is dismissed. No interference in the award granted by the Claims Tribunal is warranted. The appellant shall pay the costs of respondent No. 2 in this appeal. Counsel fee Rs. 300/- (Rupees three hundred), if certified.