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2023 Supreme(Kar) 915
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
Hanchate Sanjeevkumar, J.
M/s National Insurance Company Limited - Appellant
Vs.
Karnataka State Road Transport Corporation, Transport House, Central Office, K.S.R.T.C, Bangalore Rep By Its Divisional Manager, Tumkur Division, Tumkur - Respondent
Miscellaneous First Appeal No. 5440 OF 2012 (MV-I)
Decided On : 20-06-2023
Advocate Appeared:
For the Appellant :Sri. Lakshmi Narasappa, Advocate For Sri. A.M. Venkatesh, Adv.
For the Respondent: Sri. K. Nagaraju Adv.
IMPORTANT POINT
Under a package policy, the liability of the Insurance Company is unlimited, as per the provisions of Section 147(2) of the Motor Vehicles Act.
Headnote:
Insurance Company - Motor Vehicles Act - Section 147(2) - The court discussed the provisions of Section 147 of the Motor Vehicles Act, which deals with the requirement of policies and limits of liability. It emphasized that under a package policy, the liability of the Insurance Company is unlimited, irrespective of the premium paid. The court held that the Insurance Company is entirely liable to pay the damages assessed by the Tribunal.
Fact of the Case:
The appeal was filed by the Insurance Company challenging the Judgment and Award passed in a motor vehicle accident case. The Insurance Company argued that its liability is limited to Rs.6,000 as per Section 147(2) of the Motor Vehicles Act. The claimant sought compensation for damages caused to a bus in a collision with a lorry.
Finding of the Court:
The court found that the Insurance Policy issued to the lorry was a package policy, making the Insurance Company entirely liable for the damages, as the liability under a package policy is unlimited. The court dismissed the appeal and confirmed the Judgment and Award passed by the Tribunal.
Issues: The main issue was the extent of the Insurance Company's liability for the damages caused in the accident, based on the provisions of Section 147(2) of the Motor Vehicles Act.
Ratio Decidendi: The court's decision was based on the interpretation of Section 147(2) of the Motor Vehicles Act, emphasizing that under a package policy, the liability of the Insurance Company is unlimited, irrespective of the premium paid.
Final Decision: The appeal was dismissed, and the Judgment and Award passed by the Tribunal were confirmed. The Insurance Company was held entirely liable for the damages assessed by the Tribunal.
JUDGMENT :
This appeal is filed by the Insurance Company challenging the Judgment and Award dated 14.03.2012 passed in MVC No.1001/2008, on the file of the Addl. Senior Civil Judge and MACT-XI at Tumkur, on the ground that the liability of the Insurance Company is only Rs.6,000/- towards damage caused to the property of third party.
2. Brief facts:
When the bus bearing Registration No.KA-06-F-0135 was plying from Sira to Soregunte, on 19.12.2006 at 10.00., near Managi gate, the driver of the bus stopped the bus at the bus stop. A lorry bearing Registration No.TN-24-A-7569 came from behind in a rash and negligent manner and dashed the bus, as a result, the rear left side of the bus was completely damaged. The owner of the bus was earning Rs.4,000/- per day by plying the bus. As a result of the damage, the bus was idle for four days in the workshop, resulting in loss of revenue of Rs.16,000/-. Further, repair costs was about Rs.12,105. Hence, it is submitted that there is total loss of Rs.28,105/- and prayed for compensation of Rs.28,105/-.
Respondent No.1 is the owner and Respondent No.2 is the Insurance Company. The policy is a package policy. Hence, the Tribunal held that the Respondents 1 and 2 are jointly and severally liable to pay compensation of Rs.28,105/- with interest at 6% p.a., from the date of award till realization. The Insurance Company is in appeal challenging the said Judgment.
3. Heard the learned counsel for the parties and perused the records.
4. Learned counsel for the appellant-Insurance Company submitted that the Insurance Company is only liable for Rs.6,000/- as per Clause ‘B’ of sub-section (2) of Section 147 of the Motor Vehicles Act (in short ‘M.V.Act’) and for the remaining amount, the owner of the offending vehicle is liable. Therefore, by placing reliance on the Clause ‘B’ of sub-section (2) of Section 147 of the M.V.Act since the Insurance Company is liable only for Rs.6,000/-, prays for modification of the Judgment and Award by directing the owner to pay the balance amount on the premium amount paid by the driver.
5. On the other hand, learned counsel for respondent No.1-KSRTC submitted that in the present case, the Insurance Policy issued to the Lorry No.TN-24/A-7569 is package policy. Therefore, when admittedly the insurance policy is a package policy, the liability of the Insurance Company is unlimited. Therefore, the Insurance Company is entirely liable to pay the damages. Therefore, prays to dismiss the appeal filed by the Insurance Company.
6. In the present case, the accident is between the KSRTC bus and the lorry. The KSRTC bus got damaged in the said accident. Therefore, the KSRTC has filed a claim petition claiming damages. Accordingly, the Tribunal has determined compensation of Rs.28,105/- by fastening liability on the appellant/Insurance Company. Considering the submission made by the learned counsel for the appellant/Insurance Company whether the liability of the Insurance Company is limited or not, what is the nature of policy issued in respect of lorry is to be considered. Admittedly, as per Ex.R1-Insurance Policy, the policy is package policy. It is not only covering risk as per Section 147 of the M.V.Act, but the coverage of risk in package policy is higher and unlimited.
7. Section 147 of the M.V.Act deals with requirement of policies and limits of liability. That means, irrespective of the premium paid, it is obligation on the part of the Insurance Company to issue insurance policy covering the risk to the third party or to persons enumerated therein for injury or death caused or third party property is damaged. Since Section 147 of M.V.Act is compulsorily covering risks, that means, it is compulsory coverage statutorily to third party or to persons stated therein irrespective of amount of premium collected. Under these circumstances, if insurance policy is issued as statutory policy/liability only policy, then the Insurance Company is correct as liability is only at Rs.6,000/-. But ad
