The New India Assurance Company Ltd. Vs. Smt. Sulochana Sahu and ors. - Court Judgment

G.B. Patnaik, J.

1. This is an appeal at the instance of the insurance Company under Section 110-O of the Motor Vehicles Act challenging the award of the Tribunal allowing compensation to the extent of Rs. 70,000/-.

2. On a petition being filed under Section 110 A of the Motor Vehicles Act by the dependents of the deceased, the Tribunal initiated the proceeding. It was alleged in the petition that on 16-10-1980 while the deceased was going towards his village Benguari on his bicycle and was on the extreme left side of the road, the offending vehicle bearing registration No. ORG 7171 which was being driven rashly by which the deceased was thrown out of the bi-cycle and died on the spot. The vehicle in question was being driven at such a high speed that after dashing the deceased it proceeded further and hit a culvert. It was also stated that the deceased was getting a monthly salary of Rs. 361.35 paise and was aged 33 years. The owner of the vehicle as well as the Insurnace Company were made parties to the proceeding. The owner filed the written statement denying the allegations made in the claim petition and alleged therein that the vehicle was moving slowly and cautiously, but suddenly the deceased came to the middle of the road and fall down in front of the vehicle. Though the insurer entered appearance but did not file any written statement.

3. On behalf of the claimants, four witnesses were examined and seven documents were exhibited. On behalf of the appellant, no oral or documentary evidence has been given. On consideration of thematerials on record, the learned Tribunal came to hold that the driver of the vehicle was negligent in causing the accident. So far as the quantum of compensation is concerned, after taking into consideration the age and the monthly income of the deceased, the amount which the dependents of the deceased were received, the pecuniary loss which the family sustained and all other vital considerations, the Tribunal awarded compensation to the tune of Rs. 70,000/- and further ordered that the said compensation would be paid by the insurer, the appellant. Against this award of the Tribunal, the insurer has preferred this appeal and no appeal has been preferred by the owner.

4. Mr. P. Roy, the learned counsel for the appellant contends that the maximum liability of the insurance company is fixed under Section 95(2) of the Motor Vehicles Act which is Rs. 50,000/- and, therefore, the Tribunal committed an error in directing that the entire amount of Rs. 70,000/- should be paid by the Insurance Company. He further contends that the quantum of compensation-awarded by the Tribunal is excessive. Mr. Roy, the learned counsel appearing for the owner-respondent 4 supported the contention of Mr. Roy, the learned counsel for the appellant that the amount of compensation is excessive and has been arbitrarily fixed. Mr. G.H. Panda, the learned counsel for the claimants-respondents though fairly conceded that the liability of the insurer being fixed under the Statute at Rs. 50,000/- the Tribunal committed an error in directing the entire compensation to be paid by the said Insurance Company, he however, vehemently objected to the second submission of the learned counsel for the appellant, since the insurer is not entitled to challenge the quantum of compensation and since the owner has not preferred any appeal against the award in question. The rival contentions require careful examination.

4A. So far as the first contention of Mr. Roy, the learned counsel for the appellant is concerned, there cannot be any manner of doubt that the limits of liability of the insurer as fixed under Section 95 of the Act cannot be extended by the Tribunal. Under Sub-section (2) of Section 95 a policy of insurance would cover any liability incurred in respect of any one accident upto the limit of Rs. 50,000/- where the vehicle is a goods vehicle. This sub-section provides for the coverage of the liability undertaken under the policy of insurance and it restricts the liability of the insurer to the extent provided therein. The provisions contained in Sub-section (2) were enacted to safeguard the interest of the Insurer. In view of the aforesaid statutory provision and the offending vehicle being a goods vehicle, the liability of the insurance company cannot be more than Rs. 50,000/- and, therefore, the direction of the Tribunal to the insurer to pay the entire compensation amount of Rs. 70,000/- is illegal and, therefore, cannot be sustained. The award to that extent, therefore, requires modification.

5. Coming to the second submission of the learned counsel for the appellant, however, I am of the opinion that it is not permissible for the insurer to contend that the amount of compensation awarded is excessive. An insurer can challenge an award on the grounds stated under Sub-section (2) of Section 96 of the Motor Vehicles Act. Challenge with regard to the quantum of compensation will not come in the said grounds mentioned in Sub-section (2) of Section 96. I find sufficient force in the contention of Mr. Panda, the learned counsel for the respondents in this regard which is fully supported by the Full Bench decision of this Court in the case of National Insurance Co. v. Magikhaie Das, AIR 1976 Orissa 175. After analysing the different provisions of the Motor Vehicles Act, it was held by this Court : --

'.........None of the grounds in the memorandum of appeal appertains to a defence raised within Section 96(2) of the Act and what is being mainly challenged is the quantum and liability on a ground not covered by Section 96(2) of the Act. On these grounds the insurer was not entitled to contest the claim nor the award. The appeal filed on its behalf, therefore, is not maintainable.'

In view of the aforesaid authoritative pronouncement of this Court, it must be held that the; insurer is not entitled to challenge the quantum of compensation though the owner of the vehicle is a party to the appeal being a respondent, but has not preferred any appeal against the award. In that view of the matter, the quantum of compensation arrived at by the Tribunal cannot be reduced and the insurer appellant is not entitled to urge that ground.

6. While, therefore, the amount of compensation passed by the Tribunal is upheld, but the direction that the entire amount should be paid by the insurer is modified and the insurer is directed to pay Rs. 50,000/-. The balance amount of Rs. 20,000/- is to be paid by the owner of the vehicle respondent 4. This miscellaneous appeal is accordingly disposed of.