The main legal point established in the judgment is the interpretation of the liability of the insurance company under the Motor Vehicles Act, 1988, and the proviso to section 147(2) of the Act, which limits the liability to the extent specified in the policy of insurance in terms of section 95(2) of the old Act.

BALASUBRAMANYAN, C. J.

( 1 ) THIS appeal has been filed by the insurance company. The insurance company had insured the bus bearing registration No. OSP 2081 belonging to respondent No. 2 herein. In an accident that occurred, respondent No. 1 suffered injuries. He thereupon approached the Motor Accidents Claims Tribunal, Puri, with Misc. Case No. 654 of 1989 claiming that he had suffered injuries in the accident and that he was entitled to compensation of Rs. 60,000. As usual in this case also, the owner of the vehicle, respondent No. 2 herein remained ex pane. The insurance company filed a written statement contesting the claim. It disputed the liability. The insurance company also sought permission to take all defences available, in case the owner of the vehicle did not contest the proceeding. The compensation claimed was contended to be highly exaggerated and arbitrary. The Tribunal had raised the necessary issues. On behalf of claimant, two witnesses were examined as PWs 1 and 2. No one was examined on behalf of the insurance company. The documents produced on behalf of the claimant were marked Exhs. 1 to 6. The Tribunal held that respondent No. 1 herein suffered injuries due to an accident as claimed. The Tribunal awarded compensation of Rs. 1,20,000 double the amount claimed in the application, if one goes by the original application filed by the claimant as found in the file. It is not seen that the claim was amended at a later stage. The Tribunal held that the insurance company was liable to indemnify, as the bus was insured with it and the insurance was valid and subsisting at the time of the accident. Thus, the award was passed for Rs. 1,20,000 as against the appellant as well.

( 2 ) INSURANCE company appealed against the award. It raised the contention that the finding that claimant had suffered grievous injuries was clearly illegal and unsupported by evidence. Inadmissible materials were relied on. The estimate of damages had no basis. The liability of insurance company was limited to Rs. 50,000. A point was also raised that the alleged accident took place on 13. 7. 1989, Motor Vehicles Act, 1988, had come into force on 1. 7. 1989, the insurance policy was issued under the motor Vehicles Act, 1939 and it covered the period 8. 2. 1989 to 7. 2. 1990 with a limited liability of Rs. 50,000 for third party risk. Hence, going by the proviso to section 147 (2) of the Motor Vehicles Act, 1988, the liability of the insurance com-pany was limited to a sum of Rs. 50,000 in any event. In support of the last argument, the decision of the Supreme Court in New india Assurance Co. Ltd. v. Shanti Bai, 1995 ACJ 470 (SC) and other decisions were relied on. The insurance company had also filed an application under Order 41, rule 27 of the Civil Procedure Code producing the certified copy of the policy involved. The learned single Judge, by the judgment under appeal, held that the liability had been undertaken by the insurance company under the Motor Vehicles Act, 1988 even though the accident came within the purview of the proviso to section 147 (2) of the Act and hence the insurance company cannot claim that its liability was limited. The learned single Judge also held that in view of the decision of the Supreme court in Shankarayya v. United India insurance Co. Ltd. , 1998 ACJ 513 (SC), it would not be open to the insurance company to challenge the award on merits, namely, on the question of negligence and on the question of quantum. The learned single Judge also held that in any event, there was no reason to interfere with the findings in that behalf. Thus, the appeal filed by the insurance company was dismissed challenging this decision of the learned single Judge, this appeal is filed.

( 3 ) THE Motor Vehicles Act, 1988 came into force with effect from 1. 7. 1989. The policy in this case was issued while the motor Vehicles Act, 1939 was in force. In other words, it had to be consistent with the provisions of that Act. There is