The main legal point established in the judgment is that the liability of the insurer under a motor vehicle policy is limited to what is mandatorily required to be covered by the Motor Vehicles Act, and any additional coverage must be obtained by paying an additional premium and obtaining an appropriate policy.

R.JAYASIMHA BABU, J.

The insurer is the appellant. The Policy it had issued was in respect of a motor vehicle which had mounted on it a drilling rig. The Policy contained Endorsement No.37, which reads as follows:-

"37. Mobile Cranes/Drilling Rigs.

It is hereby declared and agreed notwithstanding anything to the contrary contained in this policy that in respect of the Motor Vehicle the Company shall be under no liability.

(a) Under Section I of this Policy in respect of loss or damage resulting from overturning arising out of the operation as a tool of such vehicle or of plant forming part of such vehicle or attached thereto except or loss or damage arising directly from fire, explosion, self ignition or lightning or burglary, housebreaking or theft.

(b) Under Section II except so far as is necessary to meet the requirements of the Motor Vehicles Act, 1988, in respect of liability incurred by the Insured arising out of the operation as a tool of such vehicle or of plant forming part of such vehicle or attached thereto."

2. Section II referred to therein is the Section dealing with liability to third parties, Section I being loss or damage to the vehicle. The liability to third parties was thus covered under the policy only in so far as it was necessary to meet the requirements of the Motor Vehicles Act, 1988. Any liability incurred by the insured arising out of the "operation as tool of such vehicle or of plant forming part of that vehicle or attached thereto" was excluded from the coverage.

3. The insured had under this policy insured the lorry which he had valued at Rs.1,50,000/-. He had also insured the drilling rig mounted on it, which he had valued at Rs.4,50,000/-. The premium paid was Rs.6,150/- for "own damage". For "liability" the amount paid was Rs.335/-, which included Rs.75/- for five workmen.

4. The liabilities covered by the Policy were liabilities required to be covered by the Act. Section 147 sets out the requirements of Policies and the limits of the liability. The proviso to Section 147 (1) (b) sets out some of the liabilities that the insured may incur, but which would still not be mandatorily required to be covered by the policy for purposes of compliance with Section 147. The exclusion extends to the death or bodily injury to the employees of the owner, except the person driving the vehicle, in case of a public service vehicle its conductor or the ticket examiner, and in case of a goods carriage, the employees being carried in the vehicle.

5. The claim made against the appellant/insurer was on account of injuries suffered by the claimant, who had been working as a coolie in the bore well lorry which was covered by the Policy. In paragraph 3 of his claim petition, the claimant had stated thus:-

"On 2.12.1992 at about 5.00 P.M. When the said bore-well lorry was in operation at Suryapet Town behind RTC Bus stand in Andhra Pradesh State, all of a sudden air pipe got separated and thrown out. The said pipe caused grievous injuries on his left eye and left side nose. Immediately he was taken to Government Hospital at Suryapet, Hyderabad for treatment. Inspite of best treatment his left eye sight has been completely affected. His left side nose portion was also sustained fracture injuries. ..... The disability sustained by him is 100 per cent. .. The applicant was drawing wages at Rs.1500/- per month and was 20 years of age at the time of the accident."

Compensation was claimed in the sum of Rs.1,00,000/-.

6. The claim was contested by the insurer, who relied on the endorsement in the policy to which reference has already been made. The Tribunal having held that the insurer was nevertheless liable, an appeal was preferred to the learned single Judge, who affirmed the order of the Tribunal, which had awarded a sum of Rs.21,505/-, after holding that the insurer had not examined and explained the special features of the exclusion clause and that in the absence of such examination and explanation the insurer could