IMPORTANT POINT
If a person in the process of boarding or alighting from the vehicle suffers injury, he would be entitled to the coverage within the limit of liability fixed under the statute at the relevant point of time.

JUDGMENT

A.M. Ahmadi, CJI. - Special leave granted.

2. Syed Abu Thakir on 3.8.1982 suffered injuries while alighting from the bus belonging to the appellant and died on the way to the hospital. The respondent No. 1 is the widow and the respondent No. 2, the minor son of the deceased while the respondents 3 & 4 are his father and mother respectively. The respondent No. 5 was the insurer of the vehicle while the respondent No. 6 was the driver of the bus at the relevant time. The respondents 1 to 4 filed a claim for compensation against the appellant and the respondents 5 and 6. The District Judge, Mudurai, acting as a Tribunal under the Motor Vehicles Act, 1939, hereinafter called the Act , awarded compensation of Rs, 92,000/- and held that since the deceased was a passenger at the time of the accident the liability of the Insurance Company was limited to Rs. 10,000/- only. The appellant filed an appeal contending that the Insurance Company was liable to pay the entire compensation. The respondents 1 to 4 also filed an appeal. The High Court dismissed both the appeals. Hence this appeal by special leave.

3. The sole question that arises for consideration is whether the victim was a passenger within the meaning of Section 95(2)(b)(ii) of the Act. The findings of the District Judge, Mudurai and that of the High Court are that the victim fell down from the bus while alighting therefrom due to the rash and negligent act of the driver in starting the bus before he had got down. Both the Courts rejected the plea of contributory negligence on the part of the deceased. The quantum of compensation, i.e., Rs. 92,000/- is not challenged before us.

4. The plea of the Insurance Company is that the deceased was a passenger in the bus and therefore its liability was limited to Rs. 10,000/- as per the provisions of Section 95 of the Act. The plea of the appellant on the other hand is that the victim/deceased was a third party and hence the Insurance Company was liable to meet the entire claim.

5. The High Court, after examining the provisions and case law on the subject, observed that there was a divergence of opinion on the question whether in a situation as the present one, the deceased could be said to be a passenger in the bus. Examining the provisions of Section 95(1) of the Act, the High Court observed that the liability arising out of an event leading to injury or death of a person alighting from a bus, as in the present case, was necessarily to be covered by the insurance policy, the victims of such accidents were passengers for whom the liability of the Insurance Company at the relevant time was limited to only Rs. 10,000/-.

6. It will be proper here to extract the relevant part of Section 95(1) of the Act :

95. Requirements of policies and limits of liability.--(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which--

(a) ... ... ...

(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)--

(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;

(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place :

Provided that a policy shall not be required--

(i) ... ... ...

(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim ar