New India Assurance Co. Ltd. Vs. V.L. Venugopal and anr. - Court Judgment

SooperKanoon Citationsooperkanoon.com/384419
SubjectMotor Vehicles
CourtKarnataka High Court
Decided OnJun-26-1997
Case NumberM.F.A. No. 893 of 1988
JudgeM.F. Saldanha, J.
Reported in1999ACJ1255
AppellantNew India Assurance Co. Ltd.
RespondentV.L. Venugopal and anr.
Appellant AdvocateK. Suryanarayana Rao, Adv.
Respondent AdvocateSyed Abdul Kuddus and ;K.L. Manjunath, Advs.
Excerpt:
- - i can use no other expression and it is a sad reflection because on the one hand, the claims in the majority of cases pertain to persons who have died or who have been injured and the claimants are poor and illiterate and they hardly know what their lawyers are doing.m.f. saldanha, j.1. the only point raised by the appellant's learned counsel is that even though the insurance company did not lead any specific evidence by examining its representative before the tribunal to clarify the position that its liability was limited to rs. 20,000, that the tribunal was still in error in having held that the liability of the insurance company for the injury to the passenger was unlimited. the appellant's learned advocate submitted that annexure to the insurance policy was undoubtedly not signed on behalf of the insurance company but that this would make no difference because the statutory liability of the insurance company under the act at that time was limited to rs. 15,000 and if the terms of the policy were to be scrutinised it would be seen that an additional premium was paid for 50 passengers as a result of which liability of the insurance company stood at rs. 20,000. the appellant's learned advocate drew my attention to a decision of the supreme court in new india assurance co. ltd. v. shanti bai, : [1995]1scr871 , wherein the supreme court while examining a similar situation looked at the figures reflected in the policy for purposes of ascertaining as to what would be the limitations of the liability of the insurance company. even though the learned member of the tribunal has held very correctly that the insurance company did not lead any rebuttable evidence, etc., the fact of the matter remains that the document was before the tribunal and had this been properly scrutinised, the liability under this head would have been limited to rs. 20,000. the submission of the appellant's learned advocate is therefore justified.2. i need to point out here that in case after case, this court had found that the manner in which these proceedings are conducted before the tribunals leaves much to be desired. i make no distinction between the persons who are conducting the cases on behalf of the claimants and those who conduct them on behalf of the insurance company because the levels of professionalism are abnormally low, the cases go by default and the manner in which they are conducted would come squarely within the definition of the term professional negligence. i can use no other expression and it is a sad reflection because on the one hand, the claims in the majority of cases pertain to persons who have died or who have been injured and the claimants are poor and illiterate and they hardly know what their lawyers are doing. on the other hand, those who appear on behalf of insurance companies do not seem to realise that they owe a duty to their clients because there is public money involved and this cannot be indiscriminately frittered away. this court is now required to issue a stern warning because in the ultimate analysis the lawyers who are conducting the cases get away with this professional misconduct and the claimants and the insurance companies are ultimately the victims of what has happened. in numerous instances the claims have gone by default and in numerous other instances the insurance companies have been left with no option except to pay up large amounts of money as in the present case. there is no reason why the representative of the insurance company should not have been examined to clarify the position, and the default necessitated an order from the court for unlimited liability.3. the respondents' learned advocate vehemently submitted that if the insurance company has not produced the requisite material that they cannot now be permitted to get away from that position and to get out of their liability. under the normal circumstances, i would have upheld this argument except for the fact that the supreme court decision referred to by me does require the court to look at the documents and arrive at a correct conclusion.4. the last aspect of the matter is as to whether the liability of the insurance company is limited to rs. 20,000 as submitted by the appellant's learned counsel since that is the amount of the additional premium paid and whether this is in addition to the statutory liability. the appellant's learned advocate submitted that where an additional premium is paid, the additional premium is only in order to enhance or increase the liability over and above the statutory liability which is in any case there. he, therefore, submitted that the additional premium in this case would protect the insured to the extent of rs. 20,000 instead of rs. 15,000 had he not paid the additional premium. this position is disputed by the respondents' learned advocate who submits that additional premium should confer an additional cover over and above the statutory liability. on this point, after giving careful thought to the issue, it is my considered view that the additional premium would confer an additional cover which is over and above the statutory cover. if there had been no additional payment of premium, the statutory cover would have been there in any case. the purpose of paying an additional premium, in other words, provides the insured with an extra cover, and that extra cover is not to be construed as merging with the statutory liability. the position needs to be clarified because the original premium dehors the additional premium represents the premium for statutory cover limited to rs. 15,000 per passenger. where the additional premium is paid, it confers a separate and an additional cover which has nothing to do with the original cover because the additional premium is paid apart from and in addition to the normal premium which includes the statutory cover. under these circumstances, on the facts of the present case the liability of the insurance company would stand limited to rs. 35,000 and not rs. 20,000 as has been submitted.5. the appeal partially succeeds. the award stands modified to the extent that the unlimited liability of the insurance company stands limited to the extent of rs. 35,000 in the aggregate.6. the appeal succeeds to this extent. no order as to costs. the insurance company shall deposit the balance amount with the tribunal to the extent of its liability within a period of eight weeks from today.
Judgment:

M.F. Saldanha, J.

1. The only point raised by the appellant's learned Counsel is that even though the insurance company did not lead any specific evidence by examining its representative before the Tribunal to clarify the position that its liability was limited to Rs. 20,000, that the Tribunal was still in error in having held that the liability of the insurance company for the injury to the passenger was unlimited. The appellant's learned advocate submitted that annexure to the insurance policy was undoubtedly not signed on behalf of the insurance company but that this would make no difference because the statutory liability of the insurance company under the Act at that time was limited to Rs. 15,000 and if the terms of the policy were to be scrutinised it would be seen that an additional premium was paid for 50 passengers as a result of which liability of the insurance company stood at Rs. 20,000. The appellant's learned advocate drew my attention to a decision of the Supreme Court in New India Assurance Co. Ltd. v. Shanti Bai, : [1995]1SCR871 , wherein the Supreme Court while examining a similar situation looked at the figures reflected in the policy for purposes of ascertaining as to what would be the limitations of the liability of the insurance company. Even though the learned Member of the Tribunal has held very correctly that the insurance company did not lead any rebuttable evidence, etc., the fact of the matter remains that the document was before the Tribunal and had this been properly scrutinised, the liability under this head would have been limited to Rs. 20,000. The submission of the appellant's learned advocate is therefore justified.

2. I need to point out here that in case after case, this Court had found that the manner in which these proceedings are conducted before the Tribunals leaves much to be desired. I make no distinction between the persons who are conducting the cases on behalf of the claimants and those who conduct them on behalf of the insurance company because the levels of professionalism are abnormally low, the cases go by default and the manner in which they are conducted would come squarely within the definition of the term professional negligence. I can use no other expression and it is a sad reflection because on the one hand, the claims in the majority of cases pertain to persons who have died or who have been injured and the claimants are poor and illiterate and they hardly know what their lawyers are doing. On the other hand, those who appear on behalf of insurance companies do not seem to realise that they owe a duty to their clients because there is public money involved and this cannot be indiscriminately frittered away. This court is now required to issue a stern warning because in the ultimate analysis the lawyers who are conducting the cases get away with this professional misconduct and the claimants and the insurance companies are ultimately the victims of what has happened. In numerous instances the claims have gone by default and in numerous other instances the insurance companies have been left with no option except to pay up large amounts of money as in the present case. There is no reason why the representative of the insurance company should not have been examined to clarify the position, and the default necessitated an order from the court for unlimited liability.

3. The respondents' learned advocate vehemently submitted that if the insurance company has not produced the requisite material that they cannot now be permitted to get away from that position and to get out of their liability. Under the normal circumstances, I would have upheld this argument except for the fact that the Supreme Court decision referred to by me does require the court to look at the documents and arrive at a correct conclusion.

4. The last aspect of the matter is as to whether the liability of the insurance company is limited to Rs. 20,000 as submitted by the appellant's learned Counsel since that is the amount of the additional premium paid and whether this is in addition to the statutory liability. The appellant's learned advocate submitted that where an additional premium is paid, the additional premium is only in order to enhance or increase the liability over and above the statutory liability which is in any case there. He, therefore, submitted that the additional premium in this case would protect the insured to the extent of Rs. 20,000 instead of Rs. 15,000 had he not paid the additional premium. This position is disputed by the respondents' learned advocate who submits that additional premium should confer an additional cover over and above the statutory liability. On this point, after giving careful thought to the issue, it is my considered view that the additional premium would confer an additional cover which is over and above the statutory cover. If there had been no additional payment of premium, the statutory cover would have been there in any case. The purpose of paying an additional premium, in other words, provides the insured with an extra cover, and that extra cover is not to be construed as merging with the statutory liability. The position needs to be clarified because the original premium dehors the additional premium represents the premium for statutory cover limited to Rs. 15,000 per passenger. Where the additional premium is paid, it confers a separate and an additional cover which has nothing to do with the original cover because the additional premium is paid apart from and in addition to the normal premium which includes the statutory cover. Under these circumstances, on the facts of the present case the liability of the insurance company would stand limited to Rs. 35,000 and not Rs. 20,000 as has been submitted.

5. The appeal partially succeeds. The award stands modified to the extent that the unlimited liability of the insurance company stands limited to the extent of Rs. 35,000 in the aggregate.

6. The appeal succeeds to this extent. No order as to costs. The insurance company shall deposit the balance amount with the Tribunal to the extent of its liability within a period of eight weeks from today.