JUDGMENT

Sethi, J.-Leave granted.

2. What is the extent of liability of an insurance company towards the third party as per Section 95(1)(b) of the Motor Vehicles Act, 1939 (hereinafter called "the Act") and what are its rights in case of payment of an amount in excess of the limits of the liability under the insurance policy vis-à-vis the insured?, are the questions to be determined in this appeal. It has been argued on behalf of the insurance company that under the terms of the insurance policy in the instant case, the company was not liable to pay more than Rs.50,000/-, being the limit of its liability. The excess amount of the award was to be paid by the insured for which the Tribunal was not competent to issue directions against the appellant-company. On the other hand counsel for the insured has submitted that as per avoidance clause in the insurance company, the appellant-company was liable to indemnify the whole extent of liability towards the claim notwithstanding the limit of liability of the insurance.

3. In this case the claim petition was filed by the legal heirs of C. Abdul Shukkoor, who died in a road accident on 6.7.1988. The accident was caused by an auto-rickshaw b