The main legal point established in the judgment is that the liability of the insurer is limited to the quantum indemnified in terms of the policy, and the insurer is entitled to recover the excess amount from the insured.

ARIJIT PASAYAT, J.

( 1 ) LEAVE granted.

( 2 ) CHALLENGE in this appeal is to the order passed by a learned Single Judge of the Punjab and Haryana High Court. By the impugned judgment, the High Court held that though the liability of the appellant (hereinafter referred to as the "insurer") was limited to Rs. 50,000/- yet it was to first pay the amount awarded to the claimants and recover amount in excess of Rs. 50,000/- from the owner and driver of the offending vehicle. 2. Factual position in a nutshell is as follows: one Karan Singh, conductor of the bus no. DEP-3514 lost his life in an accident which took place on 14. 7. 1984. The bus belonged to M/s Mewat Transport Company Private Limited (hereinafter referred to as the "insured" ). The bus was driven by deceased Karan Singh and it dashed in a tanker no. HRG-2852. The impact was so intense and severe that several persons sitting in the bus died, while many others sustained injuries. The widow, minor children and parents of aforesaid karan Singh lodged claim petition claiming compensation of rs. 1,40,000/ -. The Tribunal took several claim petitions together and in respect of the claim under consideration awarded compensation of Rs. 57,600/- along with 12% interest p. a. from the date of institution of the claim petition. It was, however, held that liability of the insurer was limited to rs. 50,000/ -.

( 3 ) THE claimants filed appeal before the Punjab and haryana High Court. By the impugned order the High Court enhanced claim of compensation to Rs. 1,25,200/ -. It was held, as was done by the Tribunal, that the liability of the insurer was limited to Rs. 50,000/- in terms of the insurance policy. However, it was held that the entire amount was to be paid by the insurer to the claimants and it was entitled to recover the amount in excess of Rs. 50,000/- from the owner and the driver of the vehicle.

( 4 ) IN support of the appeal, learned counsel for the appellant submitted that having held that the liability of the insurance company was limited to Rs. 50,000/-, the High court was not justified in directing payment of the entire amount by it and to recover the differential amount.

( 5 ) THERE is no appearance on behalf of the respondents.

( 6 ) IT would be appropriate to take a note of what was held by the Constitution Bench of this Court in New India assurance Co. Ltd. V. C. M. Jaya and Ors. (2002 (2) SCC 278 ). In that case it was held, inter alia, as follows:

"in the circumstances, we hold that the liability of the appellant, insurance-company is limited to Rs. 50,000/-, as held by the tribunal. In the view we have taken, it is unnecessary to go into the question relating to either maintainability of cross-objections before the High Court against the appellant alone or as to the enhancement of compensation when the owner and driver have not filed appeal against the impugned judgment. "

( 7 ) THE questions that were considered by the Constitution bench are as follows:

"the question involved in these appeals is whether in a case of insurance policy not taking any higher liability by accepting a higher premium, in case of payment of compensation to a third party, the insurer would be liable to the extent limited under Section 95 (2) or the insurer would be liable to pay the entire amount and he may ultimately recover from the insured. On this question, there appears to be some apparent conflict in the two three-Judge Bench decision of this Court - (1) New India Assurance co. Ltd. v. Shanti Bai (1995 (2)SCC 539) and (2) Amrit Lal Sood v. Kaushalya devi Thapar (1998 (3) SCC 744 ). 2. In the latter decision, unfortunately the decision in New India Assurance case (supra) has not been noticed though reference has been made to the decision of this Court in national Insurance Co. Ltd. v. Jugal Kishore [ (1998) 1 SCC 626], which was relied upon in the earlier three-Judge Bench Judgment. In view of the apparent conflict in these two three-Judge Bench decisions, we think it approp