The liability of the Insurance Company under a policy of insurance is not limited to the amount awardable under the Workmen's Compensation Act, and the Insurance Company is liable to pay the full amount of compensation awarded under the Motor Vehicles Act.

( 1 ) THE claimants are the legal representatives of a person who was in the employment of the owner of the motor vehicle on the date of accident. He was working as a cleaner. The finding of the Tribunal is that the driver was guilty of rash and negligent driving. The said finding was not challenged. The Motor Accidents Claims Tribunal awarded a sum of Rs. 25,000. 00towards compensation, but held that liability of the Insurance Company is limited to Rs. 18,000. 00 only and is recoverable from the owners. The Tribunal limited the liability of the Insurance Company under the proviso to S. 95 (1) (b) (ii) of the Motor Vehicles Act, 1939 saying that the Insurance Company is liable only to the extent of the amount that can be awarded under the Workmen s Compansation Act, 1923. The owner of the vehicle has now preferred this appeal. The main contention in the appeal was that under the policy, Ex. B. 5 the Insurance Company had covered the liability in respect of the death of the driver and the cleaner to the extent of Rs. 50,000. 00 and the Tribunal was in error in limiting their liability to the amount award-able under the provisions of Workmen s Compensation Act. This matter came up before our learned Brother Ramanujulu Naidu J. Before the learned single Judge, reliance was placed by the Insurance Company on the decision in New India Assurance v. K. Sunkamma, (1980) 2 APLJ 271, wherein it was held that the liability of the Insurance Company was limited to the liability arising under the Workmen s Compensation Act. The learned single Judge felt that the decision in New India Assurance v. K. Sunkamma requires reconsideration holding that under the policy of insurance, Insurance Company was liable to pay compensation up to a tune of Rs. 50. 000. 00 and their liability cannot be limited to the amount of compensation that would have been awarded under the Workmen s Compensation Act. The learned single Judge referred the matter to the Division Bench.

( 2 ) IN order to decide this question it is necessary to refer the provisions of Section 95 of the Motor Vehicles Act, 1939. Section 95. Requirements of Policies and limits of liability: (1)In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which- (a) is issued by a person who is an authorised insurer or by a co-operative society allowed under S. 108 to transact the business of an insurer, and (b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)- (i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; (ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place: Provided that a policy shall not be required- (i) to cover liability in respect of the death arising out of and in the course of his employment, of the employee of a person incurred by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen s Compensation Act, 1923 (8 of 1923) in respect of the death of, bodily injury to, and such employee- (a) engaged in driving the vehicle, or (b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets in the vehicle, or (c) If it is a goods vehicle, being carried in the vehicle, or (ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises, or (iii)