ORDER

1. This order will dispose of Civil appeal No. 477 of 2007 and Civil Appeal No. 479 of 2007, as both arise from the same accident. In view of the order that we propose to make, we shall notice the facts only from Civil appeal No. 479 of 2007. Puran Singh, deceased had taken an insurance policy on 29th June, 1994 in respect of his vehicle bearing registration No. UP-01-1489 for the period 29.6.1994 to 28.6.1995. The relevant clause in the policy on the basis of which the Insurance Company denies its liability is as under :-

“Subject to the limits of liability as laid down in the Schedule here to the company will indemnify the insured against all sums including claimant's cost and expenses which the insured shall become legally liable to pay in respect of death to any person caused by or arising out of the use (including the loading and/or unloading) of the motor vehicle.”

2. The other relevant condition of the policy relied upon by the insurer is as under :-

“IMT 12 Legal liability to passengers excluding liability for accidents to employee of the insured arising out of and in the course of their employment.

In consideration of an additional premium of Rs.... and notwithstanding anything to the contrary contained in Section 11-1(c) but subject otherwise to the terms exceptions conditions and limitations of this Policy the company will indemnify the insured against liability at Law for compensation (including Legal costs of any claimant) for death of or bodily injury to any person other than a person excluding under Section 11-1(b) being carried in or entering or mounting or alighting from the Motor Vehicle but such indemnity arising out of one cause.

Provided always that in the event of an accident occurring whilst the Motor Vehicle is carrying ore than the number of person mentioned in the schedule hereto as being the License carrying capacity of that vehicle in addition to the conductor if any then the insured shall repay to the company rateable proportion of the total amount which would be payable to the Company by reason of this endorsement if not more than the said number of persons were carried in the Motor Vehicle.........”

3. On 22nd February, 1995, the insured vehicle was involved in an accident in which the owner thereof, Shri Puran Singh was travelling. The vehicle overturned and Puran Singh died as a result of the injuries caused in the accident. The legal heirs of the deceased owner of the insured Jeep filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 (in short 'the Act') for compensation before the Motor Accident Claims Tribunal (in short 'the MACT'), Almora, against the appellant – Insurance Company. It was alleged that at the time of the accident, one Chandan Singh was driving the vehicle. The appellant contested the claim of the legal heirs of the deceased. In the written statement filed before the MACT, it was pleaded that the application for compensation was not maintainable inasmuch as the deceased was the owner of the vehicle and was not a passenger in the Jeep and therefore, third party claim could not be granted to the legal representatives of the deceased. The MACT allowed the claim petition and awarded compensation in the sum of Rs.3,20,000/- in favour of the claimants of the legal heirs of the deceased, by Award dated 28.9.2001.

4. Feeling aggrieved by the Award, the Insurance Company filed First Appeal under Section 173 of the Act in the High Court of Uttaranchal at Nainital being Appeal from Order No. 1541 of 2001. The High Court dismissed the aforesaid appeal on 28th August, 2004. The High Court noticed that in the appeal, the Insurance Company apart from taking the usual defence of violation of policy condition, had also challenged the Award on the point of quantum of compensation. It was pleaded that the Tribunal has wrongly determined the income of the deceased and therefore, granted the compensation contrary to the well settled principles for determination of compens