The liability of an insurer for a third party is limited to Rs. 50,000/- unless it is proved that any extra premium was accepted by the insurer to indemnify liability beyond the statutory liability.

ARIJIT PASAYAT, J.

( 1 ) THE United India Insurance Co. Ltd. (hereinafter referred to as the 'insurer') calls in question the legality of award made by the Second Motor Accidents Claims Tribunal (S. D.) Berhampur (hereinafter referred to as the 'tribunal' ).

( 2 ) FACTUAL background as portrayed by the parties is as follows: - a claim was lodged under Section 110-A of the Motor Vehicles Act, 1939 (in short, the 'act') by Smt. Susila Panigrahy and her minor children (hereinafter referred to as the 'claimants'), claiming a compensation of Rupees 1,50,000/- from Labela Dharma Sahu (hereinafter referred to as the 'owner') and the insurer, on the ground that one Niranjan Panigrahy (hereinafter referred to as the 'deceased') lost his life on 20-2-1988 in an accident caused by a passenger bus bearing registration No. OCG 7882 belonging to the owner, which was the subject-matter of insurance by the insurer. According to them, the deceased was waiting for a bus, but before he could actually board it, the vehicle hit him as a result of which he fell down, sustained injuries and subsequently breathed his last. He was running a shop at Golantara selling fruits and vegetables and was earning about Rs. 1000/-per month and was contributing for maintenance of his family out of the said income. The deceased was aged about 45 years at the time of his death. The Tribunal held, that monthly income was about Rs. 1000/- per month after deducting 1/3rd for personal expenses, held that annual contribution would be in the neighbourhood of Rs. 9000/-, and adopting a multiplier of 11 fixed entitlement of claimants at Rs. 99,000/ -. It was held that liability of the insurer was unlimited, and accordingly liability was fixed on the owner, to be indemnified by the insurer. It was stipulated that the amount was to be paid with interest @ 6% from the date of claim within three months. A default rate of interest @ 12% was stipulated in case of failure to pay within the aforesaid period.

( 3 ) MR. Misra, learned counsel appearing for the insurer has urged the following points in support of appeal: (I) The deceased was to be treated as a passenger and therefore, liability as fixed by the Tribunal is not sustainable. According to him, even if for the sake of argument, it is conceded that the deceased was not a passenger and was a third party so far as the vehicle is concerned, yet liability could not have been fixed beyond Rs. 50,000/- in the absence of material being brought on record by either claimants or owner that the insurer understood any liability beyond the statutory liability. (II) Quantification of compensation is arbitrary. Fixation of annual contribution at Rs. 9,000/- and adoption of multiplier of 11 is arbitrary. (III) Stipulation regarding default rate of interest is contrary to law. Learned counsel for claimants however, submitted that until a person actually boards a bus, he cannot be treated to be a passenger. It is submitted that the insurer having not taken any specific plea about its liability, the Tribunal was justified in its conclusion about liability being unlimited.

( 4 ) I shall first deal with question as to whether the deceased could be taken to be a "passenger". Difficulty arises when the person has not actually boarded the vehicle legislative intent is clear from proviso (ii) to sub-section (1) of section 95 of the Act which reads as follows: -"95. Requirements of policies and limits of liability - (i) xx xx xx provided that a policy shall not be required. (ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being carried in or upon entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises, of xx xx xx"clause (b) of sub-section (2) of Section 95 inter alia, provides that subject to the provis