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SUPREME COURT OF INDIA
A.M. Ahmadi, Yogeshwar Dayal, JJ.
New India Assurance Company Ltd. - Appellant
Versus
Anil Mathew and Ors. - Respondents
Special Leave Petition (C) No. 1359 of 1994
Decided On : 09-05-1994
Insurance - Liability Limitation - The court set aside the condition imposed by the High Court, ruling that the insurance company's liability was limited to Rs. 50,000/- and interest and proportionate costs or Rs. 80,000/-, whichever is higher.
Fact of the Case:
The High Court imposed a condition for the insurance company to pay the entire amount of the award and then recover the surplus over and above Rs. 50,000/-, interest, and proportionate costs from the owner of the vehicle.
Finding of the Court:
The court found the condition imposed by the High Court to be too harsh and unsustainable, and set it aside. The insurance company was directed to pay Rs. 50,000/- and interest and proportionate costs or Rs. 80,000/-, whichever is higher.
Issues: The issue was the imposition of a condition by the High Court regarding the liability of the insurance company and the recovery of surplus amount from the owner and driver of the vehicle.
Ratio Decidendi: The court ruled that the condition imposed by the High Court was unsustainable and set it aside, limiting the insurance company's liability to Rs. 50,000/- and interest and proportionate costs or Rs. 80,000/-, whichever is higher.
Final Decision: The appeal was allowed, and the court directed that the original claimants would be entitled to execute the balance award against the owner and driver of the vehicle. No order was made as to costs.
JUDGMENT :
A.M. Ahmadi and Yogeshwar Dayal, JJ.
Special leave granted. Heard learned Counsel on both sides.
2. The High Court, we are afraid, imposed an unsustainable condition for permitting production of the copy of the policy which was not produced in the original proceedings in which the insurance company had raised the contention that its liability was limited to Rs. 50,000/- and interest thereon. The High Court imposed a condition that regardless of the question of liability the insurance company will pay the entire amount of the award and thereafter recover the surplus over and above Rs. 50,000/-, interest and proportionate costs from the owner of the vehicle. Such a condition, in our opinion, is too harsh to be sustained.
3. Therefore, while issuing notice we limited the scope of the inquiry in this appeal to this part of the direction of the High Court We find difficult to sustain it. We, therefore, set aside that part of the order and direct that the insurance company will be liable to pay Rs. 50,000/- and interest and proportionate costs or Rs. 80,000/-, whichever is higher. The direction that the insurance company will deposit the balance amount also and then recover the same from the owner and driver of the vehicle is set aside. The appeal will stand allowed to the above extent. Needless to say that original claimants will be entitled to execute the balance award against the owner and driver of the vehicle.
4. There will be no order as to costs.
Appeal allowed.
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