1. These appeals are placed before us pursuant to the order of reference made in New India Assurance Co. v. C.M. Jaya and Ors. ((1999) 2 SCC 47), which reads:

"The question involved in these appeals is whether in a case of insurance policy not taking any higher liability by accepting a higher premium, in case of payment of compensation to a third party, the insurer would be liable to the extent limited under S.95(2)or the insurer would be liable to pay the entire amount and he may ultimately recover from the insured. On this question, there appears to be some apparent conflict in the two three-Judge Bench decisions of this Court- (1) New India Assurance Co. Ltd. v. Shanti Bai (JT 1995 (2) SC 95 = (1995) 2 SCC 539) and (2) Amrit Lal Sood v. Kaushalya Devi Thapar UT 1998 (2) SC 484 = (1998) 3 SCC 744).

2. In the latter decision, unfortunately the decision in New India Assurance case (supra) has not been noticed though reference has been made to the decision of this court in National Insurance Co. Ltd. v. Jugal Kishore (JT 1988 (1) SC 265 = (1998) 1 SCC 626) which was relied upon in the earlier three-Judge Bench judgment. In view of the apparent conflict in these two three