The liability of the insurance company for damages to the property of the third party is not restricted to Rs. 2,000/- under section 96(2) read with section 95(2)(d) of the Motor Vehicles Act, as the insurer is at liberty to cover higher risks under the Policy of Insurance.

Headnote:
MOTOR VEHICLES ACT - SECTION 110(1) - SECTION 110-A(1)(AA) - SECTION 110F - COMPENSATION - JURISDICTION - INSURANCE - LIABILITY - A composite suit for recovery of compensation under the Workmen's Compensation Act and damages to the plaintiff's property arising out of an accident is not barred by section 110F of the Motor Vehicles Act, as the plaintiff had an option to institute the claim before the Motor Accidents Claims Tribunal or to refer it to the Civil Court for adjudication under the proviso to section 110(1). The liability of the Insurance Company for damages to the property of the third party is not restricted to Rs. 2,000/- under section 96(2) read with section 95(2)(d) of the Act, as the insurer is at liberty to cover higher risks under the Policy of Insurance.
Fact of the Case:

The plaintiff, Maharashtra State Road Transport Corporation, filed a suit against the defendants, the owner and driver of a tanker, and their insurance company, claiming compensation for damages to its staff car and the death of two of its employees in an accident caused by the tanker. The defendants denied liability, alleging that the accident was caused by the negligence of the driver of the staff car.
Finding of the Court:

The trial court found that the accident was caused by the negligence of the tanker driver and awarded compensation to the plaintiff for the damages to the staff car, idle charges, and the amount paid to the dependants of the deceased employees under the Workmen's Compensation Act. However, the court restricted the liability of the insurance company to Rs. 50,000/-.
Issues: 1. Whether the suit was barred by section 110F of the Motor Vehicles Act, as the plaintiff had an option to institute the claim before the Motor Accidents Claims Tribunal. 2. Whether the liability of the insurance company for damages to the property of the third party was restricted to Rs. 2,000/- under section 96(2) read with section 95(2)(d) of the Act.
Ratio Decidendi: 1. The proviso to section 110(1) of the Motor Vehicles Act allows the plaintiff to choose between instituting the claim before the Motor Accidents Claims Tribunal or referring it to the Civil Court for adjudication. Since the plaintiff had exercised its option to institute the whole claim before the Civil Court, the suit was not barred by section 110F. 2. The liability of the insurance company for damages to the property of the third party is not restricted to Rs. 2,000/- under section 96(2) read with section 95(2)(d) of the Act, as the insurer is at liberty to cover higher risks under the Policy of Insurance.
Final Decision: The appeal was partly allowed. The order passed by the trial court regarding the liability of the defendant No. 3 Insurance Company was modified, and it was held that the Insurance Company was also liable for the whole of the decretal amount, which included costs of the suit and the future interest on Rs. 72,176-49 ps.

JUDGMENT - C.S. DHARMADHIKARI, J.:---This is an appeal filed by the appellant against the judgment and decree passed by the Civil Judge, Senior Division, Alibag dated 30th September, 1981 in Special Civil Suit No. 26 of 1979 directing the appellant-original defendant No. 1 to pay an amount of Rs. 72,176-49 Ps. towards the claim made by the Maharashtra State Road Transport Corporation arising out of an accident in which the Ambassador car of the Corporation was badly damaged and two of its employees died on the spot and the third one suffered certain injuries. It is not disputed that on 15th of March, 1978 Sarvashi Shirodkar and Sawant were in the car belonging to the Corporation and Shri Muley was at the wheel. According to the plaintiff-Corporation, the car was being driven with due care and in a moderate speed obeying all the relevant rules and regulations. When it came near Mile Stone No. 137/6 of Bombay-Konkan-Goa Road in village Lohar Mal, there was a narrow culvert on the road. At that time the tanker owned by the appellant-defendant No. 1 Sharda Prasad Singh and driven by the defendant No. 2 was coming from the opposite direction and was proceeding to Bombay side. Seeing that the tanker was coming at an excessive and uncontrollable speed, the driver of the staff car swerved it to the extreme left side of the road and halted it to enable the tanker to pass through the culvert. However, as the tanker was being driven in a rash and negligent manner, the driver could not control it. As a result of it, the tanker dashed against the off-side front portion of the staff car with great force resulting in the staff car being dragged for about 15 feet from the culvert. The tanker capsized on the eastern side of the road with its head towards Ratnagari side. The staff car was dragged backward for about 15 feet diagonally across the road and ultimately capsized on the same side of the road with its head towards Bombay side. Due to the impact and dragging of the staff car, the two occupants namely Shirodkar and Muley diet on the spot and the third occupant Shri Sawant sustained injuries. According to the plaintiff, the accident took place because the defendant No. 2, the driver of the tanker drove it in a rash and negligent manner. It was the case of the plaintiff that as a result of this accident the staff car was smashed and the plaintiff was required to incur an expenditure of Rs. 23,000/- for its repairs. Since the staff car remained idle for about 10 months, the plaintiff was put to loss to the extent of Rs. 10,000/-. The plaintiff had also to pay a sum of Rs. 23,100 to the dependants of Shri Shirodka and Shri Muley under the provisions of the Workmen's Compensation Act. The plaintiff was required to grant leave to Shri Sawant for a period of 103 days on account of his disability due to the multiple injuries sustained by him in the accident and thereby incurred expenses to the extent of Rs. 1,476-49 Ps. Thus the plaintiff had claimed in the suit Rs. 32,000/- by way of damages and idle charges qua the staff car and Rs. 47,678/- paid to the dependants of the deceased under the provisions of a Workmen's Compensation Act.

2. The dependants denied the various allegations made in the plaint. Defendant No. 1 admitted that he is the owner of the tanker and the defendant No. 2 was the driver. They also admitted that defendant No. 3 is the Insurance Company with which the tanker involved in the accident was insured at the relevant time. However, according to the defendants, the tanker was being driven at a moderate speed with due care and caution as per the traffic rules. It was on the correct side of the road. However, it was the driver of the staff car who was driving the car rashly and negligently. Thus the accident took place because of the rash and negligent driving of Shri Muley, the driver of the staff car. Therefore, the claim made by the plaintiff was denied in toto. On the basis of these pleadings, the learned Judge of the t

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1983 Supreme(Bom) 316

The liability of the insurance company for damages to the property of the third party is not restricted to Rs. 2,000/- under section 96(2) read with section 95(2)(d) of the Motor Vehicles Act, as the insurer is at liberty to cover higher risks under the Policy of Insurance.

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