The Divisional Manager, Representing United India Insurance Co. Ltd. Vs. Gokula Moharana and anr. - Court Judgment

SooperKanoon Citationsooperkanoon.com/536091
SubjectMotor Vehicles;Civil
CourtOrissa High Court
Decided OnMar-07-2003
Case NumberA.H.O. No. 16 of 1999
JudgeP.K. Balasubramanyan, C.J. and ;A.S. Naidu, J.
Reported in2003(I)OLR413
ActsMotor Vehicles Act, 1939 - Sections 95(2); Motor Vehicles (Amendment) Act, 1988 - Sections 147(2)
AppellantThe Divisional Manager, Representing United India Insurance Co. Ltd.
RespondentGokula Moharana and anr.
Appellant AdvocateA.K. Mohanty, Adv.
Respondent AdvocateS.C. Mishra, ;D. Mangaraj for Respondent No. 1, ;B.N. Rath, ;M.K. Panda, ;A.K. Rath for Respondent No. 2
Cases ReferredOriental Insurance Co. Ltd. v. Cheruvakkara Nafeessu and Ors.
Excerpt:
Notice (8): Undefined variable: kword [APP/View/Case/amp.ctp, line 120]
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 120]
motor vehicles - compensation - liability of - respondent no.1 suffered injuries in alleged motor accident - he filed claim for compensation - claim tribunal held that respondent no.1 suffered injuries due to accident - awarded compensation double amount as against claimed in application - it is not seen that claim was amended at later stage - insurance company filed appeal -dismissed - hence, present second appeal - held, tribunal may have jurisdiction in appropriate case to award more than what is claimed, it has to give reasons for making such award - no such reason is given in present case - therefore, it is hold that award can be restricted to amount claimed - appeal allowed in part and it is held that liability of insurance company is limited to claimed amount with interest as.....
Notice (8): Undefined variable: kword [APP/View/Case/amp.ctp, line 123]
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 123]
p.k. balasubramanyan, c.j.1. this appeal has been filed by the insurance company. the insurance company had insured the bus bearing regn. no. osp-2081 belonging to respondent no. 2 herein. in an accident that occurred, respondent no. 1 suffered injuries. he thereupon approached the motor accident claims tribunal, puri with misc. case no. 654 of 1989 claiming that he had suffered injuries in the accident and that he was entitled to compensation of rs. 60,000/-. as usual, in this case also, the owner of the vehicle, respondent no. 2 herein remained exparte. the insurance company filed a written statement contesting the claim. it disputed the liability. the insurance company also sought permission to take all defences available, in case the owner of the vehicle did not contest the.....
Judgment:
Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]

P.K. Balasubramanyan, C.J.

Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]

1. This appeal has been filed by the Insurance Company. The Insurance Company had insured the bus bearing Regn. No. OSP-2081 belonging to Respondent No. 2 herein. In an accident that occurred, respondent No. 1 suffered injuries. He thereupon approached the Motor Accident Claims Tribunal, Puri with Misc. Case No. 654 of 1989 claiming that he had suffered injuries in the accident and that he was entitled to compensation of Rs. 60,000/-. As usual, in this case also, the owner of the vehicle, respondent No. 2 herein remained exparte. The Insurance Company filed a written statement contesting the claim. It disputed the liability. The Insurance Company also sought permission to take all defences available, in case the owner of the vehicle did not contest the proceeding. The compensation claimed was contended to be highly exaggerated and arbitrary. The Tribunal raised the necessary issues. On behalf of the claimant, two witnesses were examined as P.Ws. 1 and 2. No one was examined on behalf of the Insurance Company. The documents produced on behalf of the claimant were marked Exts. 1 to 6. The Tribunal held that respondent No. 1 herein suffered injuries due to an accident as claimed. The Tribunal awarded compensation of Rs. 120,000/- double the amount claimed in the application, if one goes by the original application filed by the claimant as found in the file. It is not seen that the claim was amended at a later stage. The Tribunal held that the Insurance Company was liable to indemnify, as the bus was insured with it and the insurance was valid and subsisting at the time of the accident. Thus, the award was passed for Rs. 1,20,000/- as against the appellant as well.

Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]

2. The Insurance Company appealed against the award. It raised the contention that the finding that the claimant had suffered grievous injuries, was clearly illegal and unsupported by evidence. Inadmissible materials were relied on. The estimate of damages had no basis. The liability of the Insurance Company was limited to Rs. 50,000/-. A point was also raised that the alleged accident took place on 13.7.1989, the Motor Vehicles Act, 1988 had come into force on 1.7.1989, the Insurance Policy was issued under the Motor Vehicles Act, 1939 and it covered the period 8.2.1989 to 7.2.1990 with a limited liability of Rs. 50,000/- for third party risk. Hence, going by the proviso to Section 147(2) of the Motor Vehicles Act, 1988, the liability of the Insurance Company was limited to, a sum of Rs. 50,000/-. in any event. In support of the last argument, the decision of the Supreme Court in New Indian Assurance Co. Ltd. v. Shanti Bai and Ors., 1995 ACJ 470 and other decisions were relied on. The Insurance Company also filed an application under Order 41. Rule 27 of the Code of Civil Procedure producing the certified copy of the policy involved. The learned Single Judge, by the judgment under appeal, held that the liability had been undertaken by the Insurance Company under the Motor Vehicles Act, 1988 even though the accident came within the purview of the proviso to Section 147(2) of the Act and hence the Insurance Company cannot claim that its liability was limited. The learned Single Judge also held that in view of the decision of the Supreme Court in Shankarayya and Anr. v. United India Insurance Co. Ltd. and Anr., (1998) 3 SCC 140, it would not be open to the Insurance Company to challenge the award on merits. namely, on the question of negligence and on the question of quantum. The learned Single Judge also held that in any event, there was no reason to interfere with the findings in that behalf. Thus, the appeal filed by the Insurance Company was dismissed challenging this decision of the learned Single Judge, this appeal is filed.

Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]

3. The Motor Vehicles Act, 1988 came into force with effect from 1.7.1989. The policy in this case was issued while the Motor Vehicles Act, 1939 was in force. In other words, it had to be consistent with the provisions of that Act. There is no case for the claimant or the owner of the vehicle, that there was any special contract between the owner and the Insurance Company to cover any liability outside the limit prescribed by Section 95 (2) of the Motor Vehicles Act, 1939. Since the accident occurred within four months of coming into force of the Act of 1988, under the proviso to Section 147(2) of the Act, the liability could only be in terms of Section 95(2) of the Motor Vehicles Act, 1939. For the proviso clearly states that any policy of insurance issued with any limited liability and in force immediately before the commencement of the Motor Vehicles Act, 1988, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy, whichever is earlier. The learned Single Judge has also very clearly held that if any policy had been issued by the Insurance Company with any limited liability and was in force immediately after the commencement of the 1988 Act, such policy shall continue to be effective. A Constitution Bench of the Supreme Court has also recently held in New India Assurance Co. Ltd. v. CM. Jaya and Ors., 2002 (I) SCALE 183 that in terms of Section 95 (2) of the Motor Vehicles Act, 1939, the liability of the insurer was limited, but it was open to the insured to make payment of additional higher premium and get a higher risk covered in respect of third party also. But in the absence of any such additional contract or clause in the insurance policy, the liability of the insurer cannot be unlimited in respect of a third party and it was limited to the statutory liability. There is no case for the owner of the vehicle that there was any special contract with the Insurance Company in this case. The claimant also made no attempt to establish any such special contract. As noticed, the policy was issued before the Motor Vehicles Act. 1988 came into force. The policy could therefore be only consistent with the 1939 Act.

Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]

4. It is argued on behalf of the claimant that the policy though issued before coming into force of the Motor Vehicles Act, 1988 on 1.7.1989, referred to Motor Vehicles Act, 1988 and hence the policy must be understood as a policy that covered the liability under the 1988 Act. It is difficult to accept the submission. An enactment comes into force only when it is brouglit into force or the enactment itself prescribes the date on which it should be deemed to have come into force. Mere enactment of an Act is not sufficient to bring it into force. The Motor Vehicles Act, 1988. contemplated the issuance of a notification. Section 1(3) of 1988 Act provided that it shall come into force on such date as the Central Government may by notification in the Official Gazette appoint. There is no dispute that the Act came into force with effect from 1.7.1989 as per notification dated 22.5.1989. The policy involved in the case, in our view, can therefore be understood only as a policy covered by the 1939 Act and the reference to the Act of 1988 or an Act that had not come into force, cannot enable one of the contracting parties to rely on that fact to claim something on the basis of an enactment that was not even in force when the contract of insurance was entered into. In our view, the learned Single Judge was in error in holding that the Insurance Company had undertaken liability under the Motor Vehicles Act. 1988, even though the contract of insurance was entered into and the policy was issued when that enactment had not come into force at all and the liability was covered by the Act of 1939. A reference to a non-existent Act cannot make one of the parties liable under that Act. The relevant, date for ascertaining the extent of the rights and obligations can normally be only the date of the contract. Hence, we find that the mere reference to the Motor Vehicles Act. 1988 cannot tilt: the extent of liability in the rise It also appears to us that the view of the learned Single Judge that the insurance company was not entitled to appeal on its liability regarding the quantum or negligence may not be fully sustainable This was rally a case of its questioning the extent of its liability and was not merely on the quantum. Before the Tribunal the owner of the vehicle had not contested and he had remained ex parte. The Tribunal had permitted the Insurance Company to pursue its objections and to cross examine the witnesses and adduce evidence if it wanted and had thus permitted it to contest the proceeding. This right to contest, as noticed by the Supreme Court in the recent decision, would carry with it the right to appeal against the award, in any event, to the extent of enabling it to claim that its liability was limited by Section 95 (2) of the Motor Vehicles Act, 1939. We are therefore of the view that the Insurance Company is entitled to raise the contention that its liability was limited. We may notice incidentally that though in the original application for compensation, the claim is only for Rs. 60,000/-. the Tribunal is seen to have awarded a sum of Rs. 1,20,000/- The normal rule is that what is to be awarded is only what is claimed and not anything more, unless special circumstances arc established in a given case. We find no such special circumstance available in this case. No such circumstance is discussed. Hence, we hold that the appeal is maintainable.

Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]

5. The accident occurred on 13.7.1989 within 15 days of the coming into force of the 1988 Act on 1.7.1989. The policy had been issued when the 1939 Act was in force and there was a limit on liability of the Insurance Company under Section 95 (2) of the Act of 1939 in the absence of a special contract. The proviso makes it clear that the liability of the Insurance Company is limited, if there was any limitation in terms of the 1939 Act or in the policy. It is seen that the Supreme Court in National Insurance Company Limited v. Beharilal and Ors. (2000) 7 SCC 137 after noticing the proviso to Section 147(2) of the Act. has held that the proviso to Sub-section (2) of Section 147 of the 1988 Act, does not limit the policy of the insurance, to payment, of compensation to the extent specified in the policy of insurance in terms of Section 95 (2) of the old Act which was in force before the commencement of the new Act, for a period of four months after the commencement of the new Act or till the date of expiry of such a policy, whichever is earlier. It has been held that the Insurance Company is liable for payment of the whole amount of award under Section 147(2) of the Motor Vehicles Act, 1988, even though the policy was issued under the old Act but the accident took place after the enforcement of the new Act. How far this view can co-exist with the view of the Constitutional Bench in New India Assurance Co. Ltd. v. C. M. Jaya and Ors., 2002 (I) SCALE 183 is not clear. But when the liability is under a policy issued when, the 1939 Act was in force and when that liability is statutorily limited by Section 95 (2) of that Act, in the absence of a special contract, it can well be held that the liability is limited as per the proviso. Otherwise, the proviso to Section 147(2) of the Act may become redundant. But it is not for us to venture into that aspect since we are bound by the decision of the Supreme Court, referred to above. We may notice here that in another subsequent decision in Oriental Insurance Co. Ltd. v. Cheruvakkara Nafeessu and Ors., 2001 ACJ 1, the Supreme Court has held that the Insurance Company was liable to pay the entire amount awarded, with a right to recover from the insured, the excess amount over and above the liability statutorily covered and limited under the policy. That is to say, that the Insurance Company is entitled to recover the amount in excess from the owner, the insured. But. when the Statute has limited the liability and that position has been upheld by the Constitution Bench of the Supreme Court in the recent decision, the Insurance Company can certainly plead that it is liable for nothing more than the liability fixed by the Statute. Learned counsel for the Insurance Company wants us to consider that question. We cannot venture into any such consideration in view of the fact that we are bound by the view expressed by the Supreme Court on this question. But in view of the decision of the Constitution Bench referred to above and our finding that the Insurance Policy issued in this case can only be understood as a Policy Contract under the Motor Vehicles Act, 1939, the finding can be that the liability of the Insurance Company in this case is limited by Section 95 (2) of the 1939 Act. But we are not resting our decision on that aspect in view of the Supreme Court decision.

Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]

6. In this case, the owner of the vehicle had not appealed against the award. So. the award of Rs. 1,20,000/- as against the owner of the vehicle need not be interfered with. The claim was only for Rs. 60,000/- but the Tribunal has awarded Rs. 1,20,000/-. Though in an appropriate case, the Tribunal may have jurisdiction to award more than what is claimed, it has to give reasons for making such an award. No such reason is given. But, we hold that as against the Insurance Company, the award can be restricted to the amount claimed.

Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]

7. In the result, the appeal is allowed in part and it is held that the liability of the Insurance Company is limited to Rs. 60,000/- with Interest thereon as awarded by the Tribunal. The claimant will be entitled to recover the balance amount with interest thereon from the owner of the vehicle. If the Insurance Company has deposited any amount in excess of what is payable by it as found herein, the Insurance Company would be entitled to withdraw the amount deposited in excess. In the circumstances of the case, we direct the parties to suffer their respective costs.

Notice (8): Undefined variable: query [APP/View/Case/amp.ctp, line 144]