important points
Affording of insurance for more number of passengers than permitted by the registration certificate and the permit, would be illegal.
An insurance company cannot be compelled to make payment of amounts covered by decrees even in respect of those who are not covered by the policy and who have been loaded into the vehicle in violation of the permit, the condition of registration of the vehicle and a statute.

Headnote:(a)Motor Vehicles Act, 1988 – Section 147 (1) (ii) (b) – An insurance company can only insure such number of passengers as are shown in the certificate of registration and the maximum number of passengers that may be carried in a stage carriage as shown in the ‘Permit’. (Para 12)
       (b)Interpretation of Statutes – To ascertain the true meaning of a clause in a statute the court must look at the whole statute, at what precedes and at what succeeds and not merely at the clause itself – The apparent wide words of Section 147(1)(b)(ii) of the Motor Vehicle Act, 1988 have to be construed harmoniously with the other provisions of the Act, namely, Sections 58 and 72. (Para 12)
       (1846) 3 MIA 468 – Relied upon.
       (c)Motor Vehicles Act, 1988 – Section 147 (1) (ii) (b) – The expression ‘any passenger’ must be understood as passenger authorized to be carried in the vehicle and ‘use of the vehicle’ as permitted use of the vehicle – Affording of insurance for more number of passengers than permitted, would be illegal since in that case the manifest intention would be the overloading of the vehicle, something not contemplated by law. (Para 12)
       (d)Motor Vehicles Act, 1988 – Section 149 – An insurance company cannot be compelled to make payment of amounts covered by decrees even in respect of those who are not covered by the policy and who have been loaded into the vehicle in violation of the permit, the condition of registration of the vehicle and a statute. (Para 13)
       (e)Motor Vehicles Act, 1988 – Section 149 – Insured is covered only to the extent of the passengers permitted to be insured or directed to be insured by the statute and actually covered by the contract. (Para 15)
       (f)Motor Vehicles Act, 1988 – Section 149 – Purpose of the Act is to bring benefit to the third parties who are either injured or dead in an accident – However, when there is no means of ascertaining who out of the overloaded passengers constitute the passengers covered by the insurance policy as permitted to be carried by the permit itself, the practical and proper course would be to bind the insurance company to cover the higher of the various awards and compel it to deposit the higher of the amounts of compensation awarded to the extent of the number of passengers covered by the insurance policy – Thus higher of the 42 awards will be taken into account and it would be the sum total of those higher 42 awards that would be the amount that the insurance company would be liable to deposit – It will be for the Tribunal thereafter to direct distribution of the money so deposited by the insurance company proportionately to all the claimants, here all the 90, and leave all the claimants to recover the balance from the owner of the vehicle – In such cases the Tribunals will have to make appropriate orders to ensure that the amount could be recovered from the owner so as to ensure the satisfaction in full of the awards that may be passed ultimately. (Para 16)
       Facts of the case :
       A bus bearing registration No. HP-06-1245, owned by the Tehsil Cooperative Union and insured with the appellant met with an accident on 4.3.1996. The vehicle had a carrying capacity of 42 passengers, one driver and one conductor and in terms of Section 147(1)(b)(ii) of the Motor Vehicles Act was insured for the 42 passengers. The route permit of the vehicle was for carrying 42 passengers other than the driver and the conductor.
       On the day of the accident, the bus was overloaded. There were at least 90 passengers and the bus fell off the road into a nullah leading to the death of 26 including the one who was driving the vehicle and injuring 63 persons. The legal representatives of the deceased and the injured, all approached the Motor Accident Claims Tribunal claiming compensation and seeking its adjudging on applications made under Section 166 of the Motor Vehicles Act, 1988. The claim was resisted by the owner, the insured and by the insurance company. The insurance company mainly contended that the bus was overloaded; that it was being driven not by an authorized driver at the time of the accident; and that the insurance company had no liability. The Tribunal had brushed aside these objections and passed various awards on the various claims and made the insurance company liable for paying the amounts covered by all the awards exceeding the 42 covered by the insurance. Feeling aggrieved, the insurance company filed 38 appeals challenging the awards. The High Court dismissed the appeals filed by the insurance company. It also dismissed the three appeals filed by three different claimants seeking enhancement of compensation in their respective cases.
       Findings of the Court:
       When there is no means of ascertaining who out of the overloaded passengers constitute the passengers covered by the insurance policy as permitted to be carried by the permit itself, the practical and proper course would be to bind the insurance company to cover the higher of the various awards and compel it to deposit the higher of the amounts of compensation awarded to the extent of the number of passengers covered by the insurance policy
       Result : Appeals allowed to the extent indicated.

JUDGMENT

P.K. BALASUBRAMANYAN, J.—

1.Delay condoned and leave granted in SLP(C) No.14167 of 2001.

2.A bus bearing registration No. HP-06-1245, owned by the Tehsil Cooperative Union and insured with the appellant met with an accident on 4.3.1996. The vehicle had a carrying capacity of 42 passengers, one driver and one conductor and in terms of Section 147(1)(b)(ii) of the Motor Vehicles Act (hereinafter “the Act”) was insured for the 42 passengers. It goes without saying that the route permit of the vehicle was for carrying 42 passengers other than the driver and the conductor.

3.On the day of the accident, the materials indicate that the bus was overloaded. There were at least 90 passengers. The bus fell off the road into a nullah leading to the death of 26 including the one who was driving the vehicle and injuring 63 persons. The legal representatives of the deceased and the injured, all approached the Motor Accident Claims Tribunal claiming compensation and seeking its adjudging on applications made under Section 166 of the Motor Vehicles Act, 1988. The claim was resisted by the owner, the insured and by the insurance company. The insurance company mainly contended that the bus was overloaded; that it was being driven not by an authorized driver at the time of the accident; and that the insurance company had no liability. Alternatively, it was sought to be pleaded that the owner having permitted the vehicle to be overloaded had committed a fundamental breach of the contract of insurance and therefore the insurance company could repudiate the policy and hence was not liable for the compensation that may be adjudged. The Tribunal had brushed aside these objections and passed various awards on the various claims and made the insurance company liable for paying the amounts covered by all the awards exceeding the 42 covered by the insurance. Feeling aggrieved, the insurance company filed 38 appeals challenging the awards. In the appeals, an application was made seeking impleadment of the State of Himachal Pradesh. This was on the basis that the authorities under the State had failed to check the overloading of the bus and it was due to the negligence of the authorities of the State in not checking overloading and adherence to the conditions of the permit by the owner of the vehicle and the relevant provisions of the Act that the accident had occurred and hence the State must be found to be liable in contributory negligence and for that purpose it was just and necessary to implead the State as a party to the proceedings. An amendment of the written statement of the company was also sought for to introduce the plea that the bus carried 90 passengers at the time of the accident as against the sitting capacity of 42 including the driver and the conductor and in that situation the liability should be apportioned between the insurance company, the owner and the State and the insurance company could be found liable only to the extent of the insurance it had provided and it was bound to provide in terms of Section 147 of the Act and in terms of the conditions of the permit held by the owner of the bus. The Insurance Company also sought permission to raise other contentions which were not normally open to it, by invoking Section 170 of the Act. The High Court taking the view that overloading of the bus which had a permit to ply on the route with only 42 passengers, did not amount to violation of the route permit or any other law for which the State Government could be held to be contributorily negligent and that the insurance company was liable to pay the amounts as awarded by the Tribunal since it could not also question the quantum of compensation awarded. Thus, the High Court dismissed the appeals filed by the insurance company. It also dismissed the three appeals filed by three different claimants seeking enhancement of compensation in their respective cases. The insurance company has filed Civil Appeal Nos. 2422-2459 of 2001 challengin

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