1. Insurance company is the appellant which has been held liable by the Motor Accidents Claims Tribunal, Visakhapatnam, to pay an amount of Rs.1,25,200/- jointly and severally with the respondent No.7 - owner of the bus.
2. The facts giving rise to this appeal, in brief, are that on 20-6-1988 at about 7.40 a.m. the respondent No.6 by negligently driving the bus bearing No. AAV 419 dashed from behind the cycle of the deceased due to which the cyclist that is to say the deceased suffered serious injuries and died on the same day at about 5 p.m. in the K.G. Hospital, Visakhapatnam. The wife and children of the deceased laid a claim for Rs.2,00,000/- as compensation due to the sudden death of their bread-winner. They impleaded the Driver as respondent No. 1 in their claim petition but later abandoned the claim. The 2nd respondent remained absent after service of notice and he was proceeded ex parte. The appellant was impleaded as the third respondent. It denied the claim of the claimants in toto and alleged that its liability is limited to Rs.50,000/- only. On assessment of the evidence on record, the Motor Accidents Claims Tribunal reached the conclusion that the accident had occurred due to the sole negligence of the sixth respondent and the claimants are entitled to compensation of Rs.1,25,200/-. It also found that the insurance policy, Ex.B2, is a comprehensive insurance policy and, therefore, sub-section (2) of Section 95 of the Motor Vehicles Act, 1939 (for short, 'Act of 39') does not apply. It also held that even otherwise, the liability has been enhanced to Rs. 1,50,000/- by virtue of the amendment in Section 95(2)(a) of Act 47 of 1982. Holding so, it ordered that the appellant-insurance company is liable to pay the amount of compensation to the respondents Nos.1 to 5.
3. Feeling aggrieved by the impugned award, the Insurance Company has preferred this appeal.
4. Relying on the cases of National Insurance Co. Ltd v. Jugal Kishore andothers, : [1988]2SCR910 and New India Assurance Company Ltd. v. Still. Pudi Subbalaxmi and others, 1994 (1) An. WR 70, it has been contended by the learned Counsel of the appellant that the deceased cyclist was a third party and, therefore, the case of the appellant is covered under Clause (i) of Section 95(2)(b) of Act of 39 which provides that in case of death of a person other than a passenger carried for hire or reward, the Insurance Company is liable to pay a sum not exceeding Rs.50,000/-in all. The amendment has been made in Clause (a) of sub-section (2) of Section 95 of Act of 39 by the amendment Act of 47 of 1982 which is not applicable to the case on hand because the vehicle involved in the accident was a passenger bus and not a goods vehicle. It has further been urged that comprehensive insurance entitles the owner to claim reimbursement of the entire amount of loss or damage sufferred upto the estimated value of the vehicle calculated according to the rules and regulations framed in this behalf. Merely because the policy is a comprehensive policy, the limit of the liability with regard to third party risk does not become unlimited or higher than the statutory liability fixed under Section 95(2)(b)(i) of the Act of 39.
5. On the other hand, it has been strenuously urged on behalf of he claimants that is the respondents Nos.1 to 5 that no specific plea had been taken in the counter filed by the appellant insurance company that its liability is limited to Rs.50,000/- only and, therefore, no amount of evidence adduced in this behalf should be looked into and it is not open to the appellant to raise this contention at this stage. Reliance has been placed on the case of Vadakke M. Kelappan v. Vijayan and others, 1986 ACJ 669. It has been further argued that the appellant insurance company has not filed the complete insurance policy. The premium for covering the risk of 46 passengers at the rate of Rs.12/- per passenger comes to Rs.552/- but the appellant insurance company has charged Rs.564/- instead of Rs.552/- as shown in the policy, Ex.B2, under the head 'Schedule of premium' below thewords 'basic premium' and against the words 'Add: for LL passengers as per END.EMT 13 46 x Rs.12/- - Rs.564/-. Thus, it has received Rs.12/- more which could be taken as the additional premium for covering the unlimited risk of third parties, particularly when it has kept open certain blanks in this policy from which it could be inferred that there was no limitation on the liability of the appellant-insurance company. It has also been submitted that even if it is possible to take two views on account of the keeping open the printed blanks, the Court should be inclined to take the view which is favourable to the victim. Reliance has been placed on the cases of United India Fire & General Ins. Co. Ltd v. Manibehn and others., 1993 ACJ 941, and Usha Jain and others v. United India Insurance Co., Ltd. and others, 1997 ACJ 1311. Under these circumstances, the appeal is liable to be dismissed.
6. Though the 7th respondent, who is the owner of the crime vehicle, had been set ex parte by the Tribunal, he has made his appearance through his Counsel in this appeal and has adopted the aforesaid arguments advanced on behalf of the respondents Nos.1 to 5 - the claimants.
7. After hearing the arguments of the learned Counsel of the parties to the appeal, I thought it fit to take on record the original policy for rendering better judgment and, therefore, the policy produced by the learned Counsel of the 7th respondent, that is the owner of the vehicle, has been admitted and marked as Ex.B3.
8. On perusal of Para 7 of the counter filed by the appellant insurance company in the Court below, it is revealed that it is pleaded that if at all it is liable, its liability is restricted to Rs.50,000/- only. The Tribunal has also mentioned in Para 5 of its Award that the Insurance Company has pleaded that its liability is restricted to Rs.50,000/- only. Under these circumstances, even if there was omission of such pleading in the copies of the counter supplied to the respondents, probably due to bona fide mistake, it cannotbe said that the appellant cannot raise the plea of limited liability during the arguments. The case of Vadakke (supra) is, therefore, of no help to the respondents.
9. In the case of National Insurance Co., Ltd (supra), the Supreme Court has held that, a higher premium than for an 'act only' policy is payable depending on the estimated value of the vehicle for obtaining a comprehensive policy. Such insurance entitles the owner to claim reimbursement of the entire amount of loss or damage sufferred upto the estimated value to the vehicle depending upon the calculations according to the rules and regulations framed in this behalf. Comprehensive insurance of the vehicle and payment of higher compensation on this score, however, do not mean that the limit of the liability with regard to third party becomes unlimited or higher than the statutory liability fixed under sub-section (2) of Section 95 of the Act of 39. For this purpose, a specific-agreement has to be arrived at between the owner and the insurance company and separate premium is to be paid on the amount of liability undertaken by the insurance company in this behalf. (Underlining is mine).
10. Referring to observations made in the case of National Insurance Co., Ltd. (supra) which have been reproduced in the preceding para, the Apex Court, in the case of New India Assurance Co. Ltd v. Shanti Bai and others, 1995 ACJ 470, was pleased to observe that, in the absence of any special contract between the owner of the vehicle and the Insurance Company to cover unlimited liability in respect of an accident to a passenger, the policy covers only the statutory liability. The mere fact that the Insurance policy is a comprehensive policy will not help the respondents in any manner. In this case, the deceased was travelling on the roof top of the bus with the permission of the bus Driver at the relevant time and had died due to injuries sustained in the said accident. The owner has paid Rs.600/- as premium in respect of 50 passengers at the rate of Rs.12/- per passenger which wasfound to be clearly referable to the statutory liability of Rs.15,000/- per passenger under Section 95(2)(b)(ii) of the Act of 39. The Apex Court has limited the liability of the Insurance Company to Rs.15,000/- only.
11. The lower Court having lost sight of the law laid down by the Apex Court in the case of National Insurance Co., Ltd (supra) has fallen in error in holding that the liability of the appellant Insurance Company was unlimited merely because the policy, Ex.B2, was a comprehensive policy and the liability of Rs.50,000/- had been enhanced to Rs.1,50,000/- in Section 95(2)(a) of the Act of 39 by the amending Act 47 of 1982.
12. The question that now falls for determination is whether in the absence of prohibition of any law for the Insurance Company to take upon itself the responsibility to cover higher risk under the terms of the insurance policy, Ex.B3, the appellant Insurance Company had undertaken unlimited liability towards third party?.
13. In Page 1 of the policy, Ex.B3, the heading reads as 'Commercial Vehicles Comprehensive Policy (India)'. The relevant portion of Section II which relates to liability to third parties minus clauses (a) and (d) to (g), which do not appear to be necessary for the purposes of this appeal, reads as under:
'Section II - Liability to Third Parties
1. Subject to the 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--
(i) 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;
(ii) damage to property caused by the use (including the loading and/or unloading) of the Motor Vehicle.
Provided Always that:
(b) Except so far as necessary to meet the requirements of Section 92A and 95 ofthe Motor Vehicles Act, 1939, the Company shall not be liable in respect of death of or bodily injury to any person in the employment of the insured arising out of and in the course of such employment.
(c) Except so far as is necessary to meet the requirements of Section 92A and 95 of the Motor Vehicles Act, 1939, in relation to the liability under the Workmen's Compensation Act, 1923, the Company shall not be liable in respect of death of or bodily injury to any person (other than a passenger carried by reason of or in pursuance of a contract of employment) being carried in or upon or entering or mounting or alighting from the Motor Vehicle at the time of the occurrence of the event out of which any claim arises.'
14. At the top of the second page of the policy, Ex.B3, in the column bearing the heading 'Premium', it is clearly mentioned that the insurance policy covers 'T.P.' which means third party liability. Similarly, in the unnumbered column 2 and 5, it is mentioned that the insurance cover 'T.P.' Thereafter, the policy mentioned the following details:
SCHEDULE OF PREMIUM
B. Liability to Public RiskRs.Basic Premium240.00Add: for L.L. topassengers as per END IMT.13 46x12/-564.00Limit per passenger Rs.......
Limit per accident Rs........
as per M.V. Act, 1939 Add for L.L. to paiddriver and/
or Cleaner as per END IMT.168.00
8.00Add for increased T.P. limits
Section II l(i) Unlimited
Section II l(ii) Rs...... Add: for...... Less: 10% SpecialDiscount
Comprehensive Premium(A+B) (Rounded off to the nearest Rupee)820.00
15. Above the aforesaid Schedule of Premium, the policy, Ex.B3, bears the heading 'Limits of Liability' as also two clauses below it, which are as under:
'(a) Limit of the amount of the Company's liability under Section II-1(i) in respect of any one accident:Such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939.
(b) Limits of the amount of the Company's liability under Section II-1(ii) in respect of any one claim or series of claims arising out of one event Rs.50,000/-.'
16. In the case of P. Rajaiah v. M. Manikya Reddy and another, 1989 ACJ 555, the Insurance Company has received the basic premium of Rs.111/- as also the additional premium of Rs.360/- towards the liability of 60 passengers. The other conditions of the policy in that case were almost the same as the conditions of the policy, Ex.B3, of the case on hand and reproduced above. M. Jagannadha Rao J. (as he then was), interpreting the terms of the policy, on the strength of the observations made in the case of National Insurance Co., Ltd. (supra), held that the Insurance Company had not undertaken any liability in excess of the statutory liability which at the relevant time in the year 1981 was Rs.5,000/- per passenger subject to a maximum limit of Rs.75,000/-. So far as the reference to Rs.50,000/- under the policy was concerned, the said limit of Rs.50,000/- was undertaken only in respect of the liability recoverable under Section II(1)(ii) namely (damage to property caused by the use of the motor vehicle). The sum of Rs.50,000/-, therefore, was found to be referable to any claim in respect of bodily injury or death arising under Section II(1)(i). The agreed liability was found to be only the statutory liability.
17. In the case of United India Insurance Co., Ltd v. Atapati Venkata Subba Rao, 1991 ACJ 206, under similarcircumstances, the liability of the Insurance Company has been found to be only the statutory liability.
18. Again, in the case of New India Assurance Co., Ltd. (supra), the deceased was dashed by a tourist bus while he was proceeding on his scooter. The insurance policy, Ex.B1, under the head 'Limits of Liability', recited that limits of the amount of the Insurance Company's liability under Section II-1(i) in respect of any accident was such amount as was necessary to meet the requirements of the Motor Vehicles Act, 1939 and the limit of the amount of the Company's liability under Section II-1(ii) in respect of any claim or series of claims arising out of one event was Rs.50,000/-. Radhakrishna Rao, J (as he then was), on the construction of these terms of the policy and on reading the provisions of Section 95(2) of the Act of 39, held that the Insurance Company was liable to pay only Rs.50,000/-.
19. I am in complete agreement with the views taken by the learned single Judges of this Court in the cases of New India Assurance Co., Ltd. (supra), P. Rajaiah (supra) and United India Insurance Co., Ltd. (supra) and I hold that the statutory liability of the appellant-Company is only Rs.50,000/-and even according to the terms of the policy, Ex.B3, and the contrary view taken in the cases of United India Fire & General Ins. Co. (supra) and Usha Jain (supra) does not appear to be the correct view. Similarly, the view taken by the learned single Judge of the Madhya Pradesh High Court in the case of New India Assurance Co., Ltd v. Nanak Chand Ben and others, 1989 ACJ 169, as also the view taken by the Division Bench of the Madhya Pradesh High Court in the case of National Insurance Co., Ltd. v. Kamla Devi and others, 1995 ACJ 546, does not appear to be the correct law, particularly in the light of the contrary view taken by another Division Bench of the Madhya Pradesh High Court in the case of Vimla Gangotia and another v. National Insurance Co., Ltd, 1995 ACJ 53.
20. It appears that the appellant-Insurance Company has charged Rs.564/- as the additional premium for 47 passengers at the rate of Rs.12/- per passenger and the figure of 46 instead of 47 appears to be only a typographical error. The reason is that separate premium for Driver and Cleaner has been paid at the rate of Rs.8/- per head. Therefore, the seating capacity in the bus appears to be 47 passengers, 1 driver and 1 cleaner total 49 persons as shown in the 5th column at the top of the second page of the policy, Ex.B3, under the heading 'Carrying Capacity' and thus it cannot be said that extra premium of Rs.12/- had been charged to cover the unlimited liability of third parties. Under these circumstances, no other view can be taken except the view that the premium for 47 passengers at the rate of Rs.12/- per passenger has been taken and the figure 46, as noted above, is only due to typographical error. The blanks left in the schedule of the policy, Ex.B3, are of no help to the respondents-claimants and to the owner of the vehicle because I have found that the liability of the appellant-Insurance company is limited to Rs.50,000/- only, as no additional premium was paid by 7th respondent for covering unlimited liability.
21. In the case of Srisailam Devastanam v. Bhavani Pramilamma and others, : AIR1983AP297 , the contention of the learned Counsel of the appellant-Insurance Company that, in the original Policy, Ex.B1, the liability was limited to Rs.5,000/-, but it was not carried out in the policy, Ex.B1, was not accepted on the ground that it was beyond one's comprehension as to what prevented the appellant-Insurance Company from incorporating the same in the policy, Ex.B1 and, therefore, this Court has observed that it was not open for the appellant to contend for the same position before the appellate Court regarding the material omission in the policy, Ex.B1. Such is not the case here. Therefore, this case is of no assistance to the respondents. Similarly, in the case of the Divisional Manager United India Insurance Co.Ltd. v.Smt. T. Anjanamma and others, : 1996(2)ALT925 , the liability of the Insurance Company in the Policy, Ex.B3, per passenger was mentioned to be Rs.1,50,000/- but the Insurance Company without notice to the owner of the vehicle had rectified the mistake unilaterally after the expiry of the policy and during the pendency of the case and under these circumstances, Neelam Sanjiva Reddy, J., has found the appellant-Insurance Company liable to the extent of Rs.1,50,000/-. This case is distinguishable on facts and, therefore, is of no-help to the respondents.
22. In the case of Usha Jain (supra), the Division Bench of the Madhya Pradesh High Court has found that Rs.180/- was paid as premium to the Insurance Company for covering the third party liability which was unlimited. As noted above, no extra premium has been found to be paid by the owner of the accident vehicle to the Insurance Company for covering the unlimited risk of third party and, therefore, this case is also of no help to the respondents.
23. In the case of R. Uvaraja v. Parvathi Ammal and others, II (1986) ACC 58, the deceased was found to be a passenger in the bus. A learned single Judge of the Madras High Court held that unless the deceased was a passenger, the Insurance Company cannot call to its aid the Section 95(2)(b)(ii) and Section 4 of the Act of 39. The statutory liability of the Insurance Company under Section 95(2)(b)(i) was Rs.50,000/- only at the relevant time and the Tribunal has assessed the compensation at Rs.34,600/- but had found that the deceased was equally responsible for the accident. Holding so, the Tribunal has awarded a compensation of Rs. 17,300/- only. Under these circumstances, the learned single Judge has held that the Insurance Company alone is liable to pay the entire claim, that is Rs.17,300/- to the heirs of the deceased-third party. This case is, therefore, of little assistance to the respondents and, on the other hand, it helpsthe case of the Insurance Company that the liability of a third party, according to Section 95(2)(b)(i) of the Act of 39 is limited to Rs.50,000/- only.
24. In the result, the appeal is allowed. The Award passed by the Claims Tribunal is modified. The appellant-Insurance Company is held liable to pay the compensation awarded to the extent of Rs.50,000/- (Rupees Fifty Thousand only) with interest at the rate of twelve per cent per annum from the date of petition till realisaton with proportionate costs. On the recovery or deposit of this amount, the Claims Tribunal shall disburse the same as per its order in Para 3 of the Award. The parties shall bear their own costs of appeal.