Rajesh Balia, J.
1. Heard learned counsel for the parties. This appeal is by the insurance company to limit its liability towards third party to indemnify the insured within the precincts of the statutory liability fixed under the Motor Vehicles Act, 1939 (in short 'the Act of 1939'), which was in force at the time the accident in question had taken place.
2. This is the second time in this case the insurance company is before this court.
3. The accident in question took place on 20.9.1984 resulting in the death of one Prabhu Ram whose legal representatives are respondent Nos. 1 to 9. The respondent No. 10 is driver and the respondent No. 11 is owner of the vehicle.
4. The Motor Accidents Claims Case No. 119 of 1984 was lodged by the claimants and by award dated 27.4.1988, a sum of Rs. 1,04,000 was determined as compensation payable to the claimants which the owner of the vehicle was liable to pay to the dependants/legal representatives of the deceased, Prabhu Ram. That part of the award is not in dispute, that is to say, legal liability of the owner towards claimants arising from the accident is not in issue in this appeal.
5. The vehicle in question was insured with the present appellant, insurance company and it was held liable to indemnify the owner for the entire sum under the policy.
6. Aggrieved with the aforesaid award dated 27.4.1988 passed by M.A.C.T., the insurance company appealed before this court for limiting its liability to Rs. 50,000, the statutory liability fixed under the Act of 1939. The insurance company did not succeed before this court; either before the learned single Judge or before the Division Bench in Special Appeal. The matter was taken to Supreme Court.
7. The Supreme Court vide its order dated 17.4.2003 noticed that in the written statement filed by the insurance company, it was alleged that its liability is limited only to the extent of Rs. 50,000. Despite that allegation, no issue was framed in that respect. It appears that the insurance policy had not been filed before the Motor Accidents Claims Tribunal later on. During the pendency of appeal, the insurer has filed an attested copy of the policy issued to the insured and on the strength of said document, it was urged on behalf of appellant insurance company that since liability of the insurer is limited only to the extent of Rs. 50,000, the view taken by High Court is erroneous. Considering these pleas, it was opined that:
'It is true that in case the liability of the insurer is limited, it could not be saddled with the unlimited liability. Since the question whether the appellant has limited liability is a question of fact and Tribunal has not dealt with the said question, it would be appropriate if the matter is sent back to the Tribunal to decide the said question.'
8. Consequently, the judgment and order under challenge of this court was set aside and the matter was remanded to the Tribunal with direction that the Tribunal shall hold an inquiry as regards the liability of the insurance company. It was left open for the parties to file fresh documents and lead other evidence as they may be advised, within three months from the date of aforesaid order.
9. Pursuant thereto, the Motor Accidents Claims Tribunal framed a fresh issue 'whether non-applicant No. 3, National Insurance Co. Ltd. is liable only to the extent of Rs. 50,000 or its liability is unlimited'. After considering the material, which was brought on record by the parties during the proceedings after remand from the Supreme Court, it was found by the Tribunal that a premium for the 'Act only policy' was Rs. 200, the premium charged from the owner of the vehicle in the present case is Rs. 240, which was captioned under 'liability to public risk Act only', which under the insurance jargon considered as 'third party risk policy' by charging higher than the 'Act only policy' and on that premise, it came to the conclusion that the insurance company has charged additional premium for public risk and its liability towards 'third party risk' was unlimited. Consequently, the insurance company was held liable for the entire claim to the extent the owner was liable in respect of injury caused to the third party.
10. The award dated 17.6.2003 made after remand was subject matter of Misc. Appeal No. 838 of 2003 at the instance of the insurance company. The same has been dismissed by the learned single Judge on 16.2.2004 and affirmed the award of the Tribunal holding the liability of the insurance company to be unlimited. Hence, the insurance company is in this appeal.
11. The contention raised on behalf of insurance company is that merely charging of higher premium by the insurer does not lead to any conclusion that the insurance company's liability to indemnify the insured in respect of the third party risk is unlimited. He invited attention of the court to the decision of the Supreme Court in the case of National Insurance Co. Ltd. v. Keshav Bahadur, 2004 ACJ 648 (SC), which makes reference to other cases also referred to by the learned counsel, namely, National Insurance Co. Ltd. v. Jugal Kishore, 1988 ACJ 270 (SC) and New India Assurance Co. Ltd. v. CM. Jaya, 2002 ACJ 271 (SC).
12. Learned counsel for the respondents relied on the decision of the Supreme Court in New India Assurance Co. Ltd. v. Shanti Bai, 1995 ACJ 470 (SC) and the decision of this court in National Insurance Co. Ltd. v. Rukmani Devi, 1999 WLC (Raj)(UC) 462 and Devi Lal v. Sunanda Devi, 2001 DNJ(Raj) 813.
13. The contention of the appellant draws attention to difference between 'Act only policy' and 'third party policy' under taking liability to public risk.
14. The principle, which is well settled from the catena of Supreme Court decisions, is that merely charging of higher premium or even taking a comprehensive policy does not necessarily cover the third party risk to the unlimited extent unless terms of the policy so provide for. The principle enunciated with reference to provisions of the Act of 1939 was summarized by the Apex Court in Keshav Bahadur's case, 2004 ACJ 648 (SC), as under:
'In case insurer appellant not taking any higher liability by accepting higher premium, the liability is neither unlimited nor higher than the statutory liability fixed under section 95 (2) of the Act. Even if a vehicle is the subject matter of comprehensive insurance and a higher premium is paid on that score, limits of the liability with regard to third party risk does not become unlimited or higher beyond the statutory liability fixed. For this purpose, a specific agreement has to be arrived at between the insured and the insurer and separate premium has to be paid in respect of additional amount of liability undertaken by the insurer in that regard.'
15. In summarising this proposition, the court referred to the decisions of Apex Court in Jugal Kishore, 1988 ACJ 270 (SC) and CM. Jaya, 2002 ACJ 271 (SC), the latter being a Constitutional Bench decision. The same view was expressed by the Apex Court in Shanti Bai's case, 1995 ACJ 470 (SC), relied on by the learned counsel for the respondents as has been noticed by the Supreme Court in Keshav Bahadur's case, 2004 ACJ 648 (SC).
16. In Keshav Bahadur's case, 2004 ACJ 648 (SC), before the Supreme Court the contention was precisely the one which was raised before us that in the Schedule of premium heading B, Liability to public risk' it was indicated to be Rs. 240, where as 'Act only policy' indicated premium to be Rs. 200. On that premise, the courts below have held liability of the insurance company to be unlimited. Relying on this part of the judgment, the learned counsel for the appellant vehemently urged that in the present case the insurance company charged Rs. 240 in heading B 'Liability to public risk' and, therefore, pursuant to decision in Keshav Bahadur's case (supra), liability of the insurance company cannot exceed Rs. 50,000 towards third party risk.
17. Before coming to the conclusion, it is imperative to look at the ratio. The ratio of the case is not that if the insurance company has charged Rs. 240 under heading B, 'Liability to public risk', liability is Rs. 50,000, but the ratio is that even by charging higher premium it must dependon terms of the policy issued whether the insurance company in lieu of that higher premium has extended its liability to third party risk beyond the public liability fixed by the statute or it has only accepted that liability under the statute and, therefore, it becomes imperative before reaching any conclusion to look in each case the terms of the policy and the limits of liability undertaken by the insurance company.
18. In the case before the Apex Court the limits of liability which was undertaken by the insurance company was noticed and quoted as under:
'Limits of liability:
(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)Limit of amount of the company's liability under section II-1 (ii) in respect of any one claim or series of claims arising out of the one event; Rs. 50,000.'
In view of the aforesaid terms of liability in which the court found that since even after charging the premium at Rs. 240, the liability, which the insurance company has taken under clause (b), was not exceeding Rs. 50,000 of one claim or series of claims arising out of one event and under clause (a) the limit of amount of the company's liability was to satisfy the requirement of the Motor Vehicles Act, 1939. Since there was no term to extend, the limit of liability beyond Rs. 50,000, the 'third party risk' coverage was not beyond what was under the terms of policy.
19. In the aforesaid state of affairs, the contention of the insurance company that its liability was limited under the policy maximum to the extent of Rs. 50,000 to the third party risk was accepted by the Supreme Court.
20. This brings us to the facts of the present case. There is no dispute about the finding that the premium charged by the insurance company was in excess of 'Act only policy' and was under heading B 'Liability to public risk', which was indicated at Rs. 240 along with other premium with which we were not concerned presently. The terms of the policy which defined the liability to third parties at page 2 of the footing is vitally different than what was before the Supreme Court in Keshav Bahadur's case, 2004 ACJ 648 (SC). On the principal clause, the terms of liability may be quoted below:
'1. Subject to the limit 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-
(i) 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:
Provided always that:
(a) The company shall not be liable in respect of death, injury or damage caused or arising beyond the limits of any carriageway or thoroughfare in connection with the bringing of the load to the motor vehicle for loading thereon or taking away of the load from the motor vehicle after unloading therefrom.
(b) Except so far as is necessary to meet the requirements of section 95 of the 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 95 of the Motor Vehicles Act, 1939, in relation to 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.
(d) The company shall not be liable in respect of damage to property belonging or held in trust by or in the custody or control of the insured or a member of the insured's household or being conveyed by the motor vehicle.
(e) The company shall not be liable in respect of damage to any bridge and/or weighbridge and/or viaduct and/or to any road and/or anything beneath by vibration or by the weigh of the motor vehicle and/or load carried by the motor vehicle.
(f) The company shall not be liable in respect of damage to property caused by sparks or ashes from the motor vehicle or caused by or arising out of the explosion of the boiler of the motor vehicle.
(g) The company shall not be liable in respect of death or bodily injury caused by or arising out of the explosion of the boiler of the motor vehicle unless such death or injury is caused by or arises out of the use of the motor vehicle in a public place in India within the meaning of the Motor Vehicles Act, 1939.'
A perusal of the aforesaid terms show that under principal clause, the insurance company accepted its liability towards third party injuries co-extensive with legal liability of the owner of vehicle. By providing various clauses under provisos it limited its liability to Act only liability in respect of matters covered by one or other of the provisos. Under none of the provisos limit of liability towards bodily injury or death caused to a third party has been restricted to statutory liability though liability to indemnify passengers has been limited to statutory liability. So also liability towards employees has been also limited to the extent provided under Workmen's Compensation Act.
21. No exception has been made to restricting liability undertaken by the insurance company to the extent the insured will become legally liable to pay in respect of death or bodily injury to third party caused by or arising out of use. Therefore, in our opinion, under policy the appellant specifically undertook unlimited liability to indemnify the insured towards the third party by not excluding the liability of the insured in respect of claims arising out of death or bodily injury caused to the third party. Therefore, Motor Accidents Claims Tribunal as well as learned single Judge were right in their conclusion. The liability of the insurance company on demand of additional premium was unlimited towards third party under the terms of the policy.
22. Accordingly, the appeal fails and is hereby dismissed with no orders as to costs.