Himachal Pradesh High Court
Oriental Fire And Genl. Ins. Co. Ltd. vs Sharda Vig And Ors. on 3 July, 1996
Equivalent citations: 1997ACJ1002
Author: Arun Kumar Goel
Bench: Arun Kumar Goel
JUDGMENT
Kamlesh Sharma, Actg. C.J.
1. This appeal at the instance of insurer, Oriental Fire & Genl. Ins. Co. Ltd. against the award dated 9.1.1990 passed by Motor Accidents Claims Tribunal-I, Kangra Division at Dharamsala (hereinafter called 'the Tribunal') whereby an amount of Rs. 4,40,000/- (Rupees four lakh and forty thousand) was awarded to respondent-claimant Nos. 1 to 4, widow and children of Inder Mohan Vig, who died in an accident on 20.9.1987, when his motor cycle No. PAH 4116, on which he was a pillion rider, collided with truck No. HPM 1142 at a place Haathi Bhed about 7 kilometres from Kangra, which was driven by respondent No. 8 Suman Kumar and owned by respondent No. 5 Jagjit Singh Gurdeep Singh. The award amount is held payable by respondent No. 5 Jagjit Singh Gurdeep Singh, respondent No. 5 (ii) Gurdeep Singh, respondent No. 8 Suman Kumar and the appellant insurance company, who alone has challenged the award by way of this appeal.
2. We have heard learned Counsel for the parties and gone through the record. It is not in dispute that the challenge available to the appellant insurance company is limited. So far the first challenge that its liability stood discharged since the truck stood transferred before the accident without the consent of the appellant insurance company as well as intimation to it, is concerned, we have decided this point against the appellant insurance company in a connected appeal F.A.O. (MVA) No. 54 of 1990 upholding the findings of the Tribunal that respondent No. 5 Jagjit Singh Gurdeep Singh through its sole proprietor respondent No. 5 (ii) Gurdeep Singh continued to be the owner of the truck in question.
3. Second point that the liability of the appellant insurance company is limited to the statutory liability of Rs. 1,50,000/- as contemplated under Section 95 (2) (a) of the Motor Vehicles Act, 1939 (hereinafter called 'the Act') is concerned, it needs consideration. Section 95 of the Act provides for requirements of policies and limits of liability. The relevant portion of this provision is as under:
95. Requirements of policies and limits of liability.-(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which-
(a) is issued by a person who is an authorised insurer or by a co-operative society allowed under Section 108 to transact the business of an insurer, and
(b) insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2)-
(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;
(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:
Provided that a policy shall not be required-
XXX xxx xxx Explanation.-For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of the use of vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.
(2) Subject to the proviso to Sub-section (1), a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits, namely-
(a) where the vehicle is a goods vehicle, a limit of fifty thousand rupees (sic. one lakh and fifty thousand rupees) in all, including the liabilities, if any, arising under the Workmen's Compensation Act, 1923, in respect of the death of, or bodily injury to, employees (other than the driver), not exceeding six in number, being carried in the vehicle...
4. Under Clause (i) of Sub-section (1) of Section 95 of the Act a policy of insurance must be a policy which insures the persons or classes of persons specified in the policy to the extent specified in Sub-section (2) against any liability which may be incurred by the insured in respect of death of or bodily injury to any person or damage to any property of third party caused by or arising out of the use of private vehicle in a public place. No doubt Sub-section (2) of Section 95 of the Act provides that policy of insurance shall cover any liability incurred in respect of any accident in the case of goods vehicle up to the limit of Rs. 1,50,000/- in all including the liability, if any, arising under the Workmen's Compensation Act, 1923 in respect of the death of or bodily injury to employees other than the driver, not exceeding six in number, being carried in the vehicle. Interpreting this provision in National Insurance Co. Ltd. v. Jugal Kishore 1988 ACJ 270 (SC), learned Judges of the Supreme Court held that notwithstanding the limits provided in Sub-section (2) of Section 95 of the Act, it was open to the insurer to take policy covering higher risk than contemplated by Clause (a) of Sub-section (2) of Section 95 of the Act. For coming to this conclusion the learned Judges had followed law laid down in Pushpabai Purshottam Udeshi v. Ranjit Ginning and Pressing Co. 1977 ACJ 343 (SC), where it was held that the insurer can always take policies covering risks which are not required to be covered under Section 95 of the Act. It was observed that in case the vehicle is comprehensively insured by paying higher premium depending upon the estimated value of the vehicle, the insurer can claim reimbursement of the entire amount of loss or damage suffered up to the estimated value of the vehicle calculated according to the rules and regulations framed in this behalf. It was further explained that "Comprehensive insurance of the vehicle and payment of higher premium on this score, however, do not mean that the limit of the liability with regard to third party risk becomes unlimited or higher than the statutory liability fixed under Sub-section (2) of Section 95 of the Act. For this purpose a specific agreement has to be arrived at between the owner and the insurance company and separate premium has to be paid on the amount of liability undertaken by the insurance company in this behalf." The case of National Insurance Co. Ltd. v. Jugal Kishore (supra) has been further followed in recent judgment of the Supreme Court in New India Assurance Co. Ltd. v. Shanti Bai 1995 ACJ 470 (SC).
5. Therefore, in view of the above referred law laid down by the Supreme Court it is to be seen whether in the present case there is any limit of the liability of the appellant insurance company as per the insurance policy which is brought on record as Exh. R.A. In the insurance policy the vehicle has been styled as public carrier. Section II of the policy deals with liability to third party and Sub-section (1) minus the proviso thereto, reads as under:
(1) Subject to the limits of liability the company will indemnify the insured against all sums including claimant's cost 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 (including the loading and/or unloading) of the motor vehicle.
(ii) damage to property caused by the use (including the loading and/or unloading) of the motor vehicle.
6. The Schedule to the policy undertakes the amount of premium paid including (A) own damage basic and (B) liability to public risk but it does not provide limits of liability as was in the case of National Insurance Co. Ltd. v. Jugal Kishore 1988 ACJ 270 (SC), whereby the liability undertaken with regard to death of or bodily injury to any person was confined to such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939, as such, in the present case only section II of the insurance policy pertaining to liability to third parties is relevant, which is widely worded and covers the entire liability of the owner of the vehicle. Limits to this extensive liability are provided in the proviso to the aforesaid section which does not cover the case like the present one. Therefore, we hold that the Tribunal has correctly held that in view of the unrestricted liability in respect of the third party risk as provided in Section II of the insurance policy, the appellant insurance company is liable to indemnify the insured in respect of the entire liability including costs and other expenses which the insured is liable to pay under the award.
7. In-the result, the appeal has no merit and it is rejected. No order as to costs.