A third party cannot maintain a suit directly against an Insurance Company for damages sustained due to the negligence of the insured unless the insured becomes insolvent.

( 1 ) THE plaintiff is the appellant. He filed a suit for recovery of Rs. 5,300 as damages sustained by him on account of the rash and negligent driving of the motor bus belonging to the first defendant by his driver as a result of which the bus fell into a canal and the plaintiff received very serious and grievous injuries. It is found by the Court below in paragraph 8 of the judgment that the accident was true and that the plaintiff received the injuries as a result of the rash and negligent driving by the first defendant s driver. The suit was, however, dismissed by the learned Subordinate Judge on the ground that it was barred by time.

( 2 ) TWO questions arise for decision in the appeal: (i) whether the suit as against the and defendant, the Insurance Company, is barred by limitation; (2) whether the suit is maintainable directly as against the Insurance Company. It is the case of both parties that the accident took place on 26th March, 1947 and that the suit was instituted on 27th March, 1950, 26th March being a public holiday. It is clear that, under Article 22 of the Limitation Act, the suit as against the first defendant (the owner of the bus) is barred by limitation.

( 3 ) THE main question that arises for consideration in the appeal is whether the plaintiff, who was travelling by the bus and who sustained the injuries, has a direct recourse as against the Insurance Company, under the insurance policy effected by the first defendant with the second defendant. The plaintiff relied on Article 86 (b) of the Limitation Act and contended that, as the suit was instituted within three years from the date of the accident the suit is in time. Article 86 (a) relates to a suit on a policy of insurance when the sum insured is payable after proof of the death has been given to or received by the insurers. Columns 2 and 3 provide a period of three years from the date of the death of the deceased. Article 86 (b) on which reliance is placed runs as follows : description of suit. Period of limitation. Time from which period begins tq run. On a policy of insurance when the sum insured The date of the occurrence is payable after proof of the loss has been causing the loss, given to or received by the insurers. I have no doubt, on a reading of Article 86 (b), that the suit contemplated is only a suit by the insured as against the Insurance Company. The third party, who sustained the injury and who obtained a judgment as against the insured, may execute the decree as against the insured and not proceed as against the Insurance Company under section 96 of the Motor Vehicles Act, in which event, the insured has a right to proceed as against the Insurance Company and enforce the policy of insurance. It is in such cases that a period of three years is provided. It does not apply to suits by third parties as against the Insurance Company Sri Chandrasekhara Sasfry,the learned advocate for the appellant, relied upon the omission of the word assured in Article 86 (b ). I do not think that the omission of the word assured makes any difference. I am inclined to take the view that Article 86 (b) relates only to suits by the assured or in the right of the assured. I therefore agree with the Court below that the suit by the third party is not covered by Article 86 (b) of the Act. As the suit as against the first defendant is barred by limitation the suit as against the insurance Company would also be barred.

( 4 ) APART from resting my judgment on the question of limitation, I hold that the suit as against the Insurance Company by the third party is not maintainable. Though an issue in specific terms has not been raised on this point, I am inclined to take the view, on a reading of sections 96 and 97 of the Motor Vehicles Act, that the suit, by the third party is unsustainable. Section 96 (1) provides that if, after a certificate of insurance has been issued under section 95 (4) in favour of the person by whom a policy has been effected, judgment

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