1993 Supreme(Guj) 162

Gujarat High Court
Judgename :A.N.Divecha, C.V.Jani, M.B.SHAH
NEW INDIA ASSURANCE COMPANY LIMITED - Appellant
Versus
KAMLABEN WD/o.SULTANSINH HAKUMSINH JADAV - Respondent
C.A.61 of 1979
Decided On : 04/26/1993

Headnote:Motor Vehicles Act ,1939 - Sec.95(2)(b)(ii)(4) - Liability of Insurance Company - Limited to Rs.10,000/- where vehicle is a motor cab and Rs.5,000/- in any other kind of vehicle - Limits provided is maximum - Provision however deals with passenger vehicle only having a specified registered capacity to carry passenger - It has no application where passenger is travelling by goods vehicle by paying fare.

       Further limit is provided by sub-clause (4) of clause (ii) in respect of each passenger by providing that, subject to the limits aforesaid, Rs. 10,000/- for each individual passenger where the vehicle is a motor cab and in any other case the liability is extended to Rs. 5,000/- for each individual passenger. Therefore, there is no substance in the contention of learned advocate that sub clause (4) of clause (b)(ii) would govern a situation where the passenger is travelling in a goods vehicle by paying fare. The said sub-clause only provides an outer limit of liability with regard to each passenger in a case where the vehicle is registered to carry passengers as provided in sub-clauses (1) to (4). Sub-clauses (1), (2) and (3) provide aggregate liability of insurance coverage for a vehicle. Sub-clause (4) provides second outer limit of Rs. 10,000/- for each individual passenger where the vehicle is a motor cab and Rs. 5,000/- for each individual passenger in the case of any other vehicle. Sub-clause (4) is interconnected with the provisions of sub-clauses (1), (2) and (3) and it is not residuary sub-clause. It provides second outer limit of insurance coverage for the passengers carried in a vehicle registered to carry a particular number of passengers.

       [Para 8]

       The limit prescribed in S. 95(2)(b)(ii)(4) was only the minimum liability prescribed by law. The amount mentioned in that provision provides the maximum amount payable by an insurer in respect of each passenger who has suffered on account of the accident. This appears to us to be a fair construction of S. 95(2) of the Act as it existed at the time when the accident took place.

       [Para 9]

       The contention that risk of the passenger who is travelling by a goods vehicle by paying fare is covered by Section 95(2)(b)(ii)(4) is rejected on the ground that the said Section deals with `passenger vehicle only having a specified registered capacity to carry passengers.

       [Para 40]

       Motor Vehicles Act, 1939 - Sec.95(2)(a) & (c) - Liability of insurance company - Passenger travelling in goods vehicle by paying fare - In case of accident clause (a) of Sec. 95(2) is attracted to indemnify the insured - Clause (c) of Sec. 95(2) has no application because it provides insurance cover for vehicles other then goods vehicle & passenger vehicle

       The extent of statutory limit of the Insurance Company to indemnify the insured in case where the passenger is travelling by a goods vehicle by paying fare would be covered by clause (a) of sub-section (2) of Section 95 which provides limit for insurance coverage for `goods vehicle and not by clause (c) of sub-section (2) of Section 95 which provides limit of insurance coverage for the vehicle other than `goods vehicle and `passenger vehicle. Upto 1st October 1982 statutory limit was Rs.50,000/-. After amendment in clause (a) of sub-section (2) of Section 95, from 1st October 1982 the limit for statutory coverage is Rs.1,50,000/- for `goods vehicle.

       [Para 40]

       Motor Vehicles Act, 1939 - Sec.96(2)(b) - In order to disclaim liability - Grounds required to be established - Indicated.

       In order to successfully disclaim his liability on the ground mentioned in Section 96(2)(b), has to establish:

       (i)

       that on the date of the contract of insurance, the insured vehicled was expressly or implicitly not covered by a permit to carry any passenger for hire or reward,

       (ii)

       that there was a specified condition in the policy which excluded the use of the insured vehicle for the carriage of any passenger for hire or reward,

       (iii)

       that the vehicle was, in fact, used in breach of such specified condition on the occasion giving rise to the claim by reason of the carriage of the passenger therein for hire or reward, and

       (iv)

       that the vehicle was used by the insured or at his instance in breach of specific conditions including a condition that in the goods vehicle passengers for hire or reward were not to be carried. It it is done without knowledge of the insured by the drivers acts or omission, the insurer would be liable to indemnify the insured.

       [Para 40]

       Compensation - Directions for payment - In view of prevailing malpractices in cases of lump sum payment - Slight modification in mode of payment - Indicated.

       Further having regard to the prevailing malpractices in the case of payment of compensation in lump sum, it would be just and proper to slightly modify the directions for depositing the amount in the nationalised Banks as under :

       (i)

       Normally, the Claims Tribunal should direct the Insurance Company to pay the amount of compensation periodically by quarterly instalments by calculating interest at the rate of 15 per annum on the total amount of compensation determined by it and to pay the principal amount at the end of 10 to 20 years having regard to the facts of each case.

       (ii)

       A further provision be made in case where the compensation amount is large or in case the claimants are illiterate and/or poor to pay the corpus after the prescribed period by 2 or 3 instalments depending upon the circumstances in each case.

       (ii-a)

       It would be open to the Insurance Company to make the necessary arrangement through the General Insurance Corporation of India for making payment of annuity or periodical instalments as per the direction of the Motor Accidents Claims Tribunal.

       (iii)

       If the concerned Insurance Company or the General Insurance Corporation of India is not ready and willing to pay the amount in the aforesaid manner, it may be directed to deposit the amount of compensation with the Life Insurance Corporation of India. The Life Insurance Corporation of India may be directed, on receiving the said deposit, to provide for payment by an appropriate annuity to the claimants. Learned advocate Mr. B.R. Shah, after obtaining instructions from the concerned authority, has stated that the Life Insurance Corporation of India is having a large net-work and would pay the amount with interest by appropriate scheme of annuity.

       (iv)

       In the case of MINOR claimants, the Tribunal shall order that the amount of compensation shall be kept with the Insurance Company till the minor attains the age of 21 years but in any case not before expiry of 10 years from the date of the award.

       (v)

       In personal injury cases if treatment is necessary the Claims Tribunal on being satisfied about the same may after recording reasons for such satisfaction direct the Insurance Company to pay such amount to the claimant as is necessary for incurring the expenses for such treatment. This permission should be granted strictly after verifying the necessity of medical expenses.

       (vi)

       These directions would also apply in the case of liability arising under Section 92 of the Act or under Section 140 of the Motor Vehicles Act,1988 - that is to say, in case of `no fault liability.

       These guidelines for keeing the amount with the Insurance Companies or depositing it with the Life Insurance Corporation of India are not exhaustive. It would be open to the Claims Tribunal to find out such other modes of investment and disbursement of compensation by annual instalments ranging from 10 years to 20 years depending upon the facts and circumstance of each case with a specific direction that in no set of circumstances the claimants or their authorised agents would be permitted to withdraw the corpus.

       [Para 40]

       Interpretation of statute - Where language of Statute is clear and capable of only one interpretation and where language is ambiguous & equivocal - Principle applicable - Indicated.

       While interpreting the Section, if the language is clear and capable of only on interpretation, the words of the Section are required to be interpreted from the language used by the legislature by ignoring the harsh consequences flowing therefrom. However, in a case where language is ambiguous and equivocal but which permits the meaning serving the purposes of both i.e. the Legislature and the society, then benign provision is to be interpreted accordingly. To do otherwise would amount to nullifying the benign provision.

       [Para 7]