Punjab-Haryana High Court
The Oriental Insurance Co. Ltd. Through ... vs Smt. Urmila Devi Widow Of Sh. Ram Kumar ... on 25 April, 2013
Author: K. Kannan
Bench: K. Kannan
FAO No.1078 of 1993 -1-
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT
CHANDIGARH
X Obj No.108-CII of 2012 in
FAO No.1078 of 1993
Date of Decision.25.04.2013
The Oriental Insurance Co. Ltd. through its Branch Manager, Kaithal
.....Appellant
Versus
Smt. Urmila Devi widow of Sh. Ram Kumar Sharma and others
.......Respondents
2. FAO No.1079 of 1993
The Oriental Insurance Co. Ltd. through its Branch Manager, Kaithal
.....Appellant
Versus
Smt. Krishna Devi widow of late Shri Bhagwati Prasad and others
.......Respondents
Present: Mr. Bhupesh, Advocate
for the appellant.
Mr. Jagdish Manchanda, Advocate
for the respondents in FAO No.1078 of 1993.
None for the respondents in FAO No.1079 of 1993.
CORAM:HON'BLE MR. JUSTICE K. KANNAN
1. Whether Reporters of local papers may be allowed to see the
judgment ? Yes
2. To be referred to the Reporters or not ? Yes
3. Whether the judgment should be reported in the Digest? Yes
-.-
K. KANNAN J.(ORAL)
1. The appeal is by the insurance company pleading for restriction of liability on the ground that the accident had taken place on 04.08.1989 that was within a period of four months from the date of composition of the Motor Vehicles Act, 1988 and the policy had been issued under old Act of 1939. The terms of the policy had restricted the liability to only ` 1,50,000/- and since no additional premium had been FAO No.1078 of 1993 -2- paid by the owner on coming to the force of the Act, the liability would stand restricted only to the liability as contracted under the old Act.
2. The Tribunal while adjudicating the issue of liability of the insurance company made reference to the fact that the insurance company had produced only a copy of the policy and that was not properly proved. The policy had been produced by the Manager of the insurance company and the original must have been only with the insured and if the insurance company was, therefore, filing a carbon copy of the policy, the Tribunal ought to have accepted the same and proceeded to determine compensation on the basis of the terms of the policy issued.
3. Even in the manner of determination of compensation, the issue of whether the liability incurred by the insured shall be fully covered by the insurer will have to be seen through the provision of Section 147 (2) since the accident took place after the coming into force of the 1988 Act. Since the accident has taken place within a period of four months, the limited liability shall still continue except in situations provided under Section 147(1) proviso which detail situations of employer's liability under Workmen's Compensation Act or contractual liability. If the insured's vehicle is a transport vehicle and if the policy had been extended only under the previous Act of 1939, the proviso to Section 147(2) will operate. Section 147(2) is reproduced as below:-
"147(2) Subject to the proviso to sub- section (1), a policy of insurance referred to in sub- section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely:--
(a) save as provided in clause (b), the amount of liability incurred;
(b) in respect of damage to any property of a third party, a FAO No.1078 of 1993 -3- limit of rupees six thousand:
Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier."
4. Learned counsel appearing on behalf of the respondents refers to a judgment of the Supreme Court in National Insurance Company Ltd. Vs. Behari Lal 2000(7) SCC 137 which was dealing with the situation of a coverage under Section 147 (2) (a) and held that the proviso under Section 147(2) cannot apply. This case relates to the involvement of transport vehicle and the application of proviso to Section 147(2) and the claim was for Rs.1,50,000/- as assessed for a passenger in a passenger bus and the insurer contended that the liability shall be restricted to Rs.15,000/-. Referring to Section 217(2) of the 1988 Act that repealed the 1939 Act, which created a fiction that reference to the old Act in any document must be understood s reference to the New Act, the Court held that Section 147(2) proviso shall not be read as a proviso to Section 217(2) also. The judgment approved of some interpretation of some High Courts on this issue, including a decision of this Court in National Insurance Company Ltd. Vs. Puja Roller Flour Mills (P) Ltd. 1997(2) PLR 199 and another decision of the Gujarat High Court in Kacharabhai Limbachia V. Ratan Singh 1998(1) ACJ 326. But diametrically opposite view was taken by the Supreme Court in reversing the judgment of this Court in Puja Roller Flour Mills (P) Ltd. in a later decision reported on the same cause title in (2005) 11 SCC 386. In Puja Roller Flour Mills (P) Ltd., the restriction of liability of the insurer to Rs.1,50,000/- was approved FAO No.1078 of 1993 -4- and the appeal by the insurer was allowed. The earlier judgment in Behari Lal was not referred to in the later case. As a later judgment of equal strength of Bench and that which seems to me to be an understanding of the bare provision of Section 149(2) proviso, I respectfully follow Puja Roller Flour Mills (P) Ltd.'s case and I set out below the reasons for such a course.
5. In Behari Lal, in the manner of interpretation Section 147(2) proviso that allowed for continuance of policy terms restricting liability of the insurer, the Supreme Court was relying on New India Assurance Co. Ltd. Vs. Satpal Singh 2000(1) SCC 237 that dealt with the effect of provisions for compulsory coverage of owner of good travelling in a goods carriage under the amended provisions of the Motor Vehicles Act. Satpal Singh (supra) was held to be wrongly decided and not laying down the correct interpretation about the applicability of the amended provision in New India Assurance Co. Vs. Asha Rani (2003) 2 SCC 223. The basis of the judgment of Behari Lal, therefore, is fractured. The other reasoning formed in the judgment is through a reliance on the judgment of the Supreme Court in Padma Srinivasan Vs. Premier Insurance Co. 1982(2) SCC 613 that dealt with the law applicable to limit of liability of the insurer shall be the law that was in force on the date of accident. There was a fair interpretation to a welfare legislation that allowed for enforcement of a larger liability on the insurer for the benefit of the claimant. There was no provision in 1939 amendment Act, which was in consideration in the said case like a specific provision that is incorporated under Section 147(2) proviso. By holding that the liability of the insurer issued under Section 1939 Act FAO No.1078 of 1993 -5- will not be restricted even for four months from the date of commencement of 1988 Act, the legal provision itself was negated and rendered effectte. The proviso ought to have full play and cannot be wished away without striking down the provision. It has not been struck down.
6. There has been a dilemma expressed in judgment of several High Courts on how to cope with the conflict in decisions in Behari Lal and Puja Roller Flour Mills. In United India Insurance Co. Ltd. Vs. Shilpa and others 2009 ACJ 806, the Rajasthan High Court preferred Behari Lal because it observed that the said judgment specifically dealt with the issue by elaborate consideration of earlier judgments particularly the three member judgment in Padma Srinivasan, while Puja Roller Flour Mills did not embark on elaborate consideration. With respect, the Court failed to note that in Padma Srinivasan, there was no provision like Section 147(2) proviso to contend with. In Shankar Vs. Oriental Insurance Co. Ltd. 2006 ACJ 902, the Madras High Court also preferred Behari Lal without setting out a theoretical justification for its preference. I rely on Puja Roller Flour Mills for what it does. It gives effect to the plain and natural reading of a straight forward provision such as Section 147(2) proviso. This need not be read as a further proviso to Section 217(2), as was loathed to be done in Behari Lal. It is a proviso to what the Section 147 specifically deals with: the limit of liability of insurer in certain cases and what the policy of insurance shall contain.
7. Learned counsel appearing on behalf of the respondent also relies on a judgment of the Supreme Court in Maitri Koley and another FAO No.1078 of 1993 -6- Vs. New India Insurance Co. and others 2003(9) JT 159. The case was with reference to liability under Section 1939 Act and the accident was with reference to incident of 01.04.1986. There had been an amendment in the provisions of 1939 Act in the year 1988 and the liability was increased from ` 50,000/- to ` 1,50,000/-. The entire consideration of the case was with reference to whether the liability was restricted as ` 50,000/- or ` 1,50,000/-. Here the question is of interpretation of Section 147(2) proviso in the manner that this Court has dealt with above. The decision in Maitri Koley's case has, therefore, absolutely no application.
8. The liability cast on the insurance will have to stay at ` 1,50,000/- as was provided under the terms of the contract and it was in accordance with the 1939 Act. The amount in excess of the liability as determined will have to be borne only by the owner and driver jointly and severally and the right of the enforcement will be obtained against the owner being vicariously liable for the accident. The liability of the insurance company is restricted to the above extent only and the appeal filed by the appeal in FAO No.1078 of 1993 is allowed to the above extent.
9. There is cross objection filed in FAO No.1078 of 1993 at the instance of the claimants seeking for enhancement of compensation. The deceased was an Assistant Sub Inspector and he was earning ` 2276/- per month. The salary certificate filed before the Tribunal showed the salary of the deceased as ` 2170/- per month. In terms of the law laid down by the Supreme Court in Sarla Verma Vs. DTC 2009 (6) SCC 121, there has to be a provision for future increase as well and FAO No.1078 of 1993 -7- providing for 50% increase considering the fact that he was less than 40 years of age, the average income must have been taken as ` 3255/- per month. Making a deduction of 1/4th considering the fact that there were six claimants when the petition was filed, the contribution to the family must have been ` 2441.25 and applying a multiplier of 15, the loss of dependency must have taken as ` 4,39,425/-. The wife shall be provided with ` 5,000/- towards loss of consortium and each one of the minor children shall be provided with compensation at ` 2500/-. I will also provide for ` 2500/- for funeral expenses and ` 5,000/- for loss to estate. That will mean an additional amount of ` 20,000/-. The total compensation payable will be ` 4,59,425/- which I will round off to ` 4,59,500/-. The amount in excess of what has already been awarded by the Tribunal will attract interest @7.5% from the date of petition till the date of payment. The additional entitlement shall be distributed only amongst the wife and three children. The liability shall be considered in the manner already laid down in the above case and the amount in excess of ` 1,50,000/- with interest shall be claimed by the claimants only against the insured or driver or both.
10. The award stands modified and the cross objection is allowed to the above extent.
11. The appeal in FAO No.1079 of 1993 is an appeal by the insurance company pleading for case of restriction of liability to ` 1,50,000/- with interest in the manner urged in other case. This was with reference to claim for compensation by yet another claimant where the Tribunal has assessed the compensation at ` 1,68,000/-. There is no cross objection nor there is any representation on behalf of the FAO No.1078 of 1993 -8- respondents. Consistent with the finding already rendered in the above appeal in FAO No.1078 of 1993, the liability shall stand restricted to ` 1,50,000/-. In other respects, the award of the Tribunal is confirmed and the appeal is allowed to the above extent.
(K. KANNAN) JUDGE April 25, 2013 Pankaj*