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IN THE HIGH COURT OF ALLAHABAD
M. N. Shukla and N. N. Mithal, JJ.
NATIONAL INSURANCE CO.LTD. - Appellant
Versus
NARENDRA KUMAR - Respondents
F. A. F. O. 506 Of 1975
Decided On : 02/28/1980
MOTOR VEHICLES ACT - INSURANCE - LIABILITY OF INSURANCE COMPANY - LIMIT OF LIABILITY - CONTRACT TO THE CONTRARY - BURDEN OF PROOF - SECTION 95 (1) AND (2) (A), 96 (1), 106 OF THE MOTOR VEHICLES ACT, 1939.
Fact of the Case:
A motor truck collided with a motor bicycle resulting in the death of the motorcyclist and injuries to the pillion rider. Claims for compensation were filed by the injured pillion rider, the deceased's parents, and the deceased's widow and daughter. The Motor Accidents Claims Tribunal awarded compensation to the claimants, holding the truck owner, driver, and the insurance company jointly liable. The insurance company appealed, arguing that the total compensation could not exceed the maximum limit of Rs. 50,000/- prescribed by Section 95 (2) (a) of the Motor Vehicles Act.
Finding of the Court:
The court held that the insurance company's liability was not limited to the statutory limit of Rs. 50,000/- as the insurance policy could have been taken for a higher amount. The court interpreted Section 95 (1) and (2) (a) of the Motor Vehicles Act to mean that the minimum liability of the insurance company is prescribed by the Act, but the parties are free to enter into a contract for a higher amount of insurance coverage.
Issues: 1. Whether the total compensation awarded by the Tribunal exceeded the maximum limit of Rs. 50,000/- prescribed by Section 95 (2) (a) of the Motor Vehicles Act. 2. Whether the insurance company's liability was limited to the statutory limit of Rs. 50,000/-.
Ratio Decidendi: 1. The court interpreted Section 95 (1) and (2) (a) of the Motor Vehicles Act to mean that the minimum liability of the insurance company is prescribed by the Act, but the parties are free to enter into a contract for a higher amount of insurance coverage. 2. The court held that the insurance company's liability was not limited to the statutory limit of Rs. 50,000/- as the insurance policy could have been taken for a higher amount. 3. The court placed the burden of proof on the insurance company to show that the policy was drawn up strictly in terms of the Motor Vehicles Act and that the insurance company could not be made liable for a higher amount than the one prescribed by the Act.
Final Decision: The court dismissed the insurance company's appeal and upheld the Tribunal's award of compensation.
( 1 ) THESE three connected appeals under Section 110-D of the Motor Vehicles Act arise out of a single accident which occurred on 17-12-1972 in village Pinjokhra near Sugarcane Purchasing centre on Saharanpur-Shadra Road within police station Kandhala in the district of muzaffarnagar in which a motor truck owned by Veern Sain and Brij Mohan, respondents Nos. 3 and 4 and driven by Dharam Veer, respondent No. 5 collided with the motor bicycle owned and driven by Raj Kumar deceased with Narendra Kumar, respondent in one of the appeals (seated on the carrier) coming from the opposite direction. The motor cycle was badly damaged and serious injuries were caused to Raj Kumar and Narendra Kumar out of whom the former succumbed to his injuries and the latter survived. It was alleged that the truck was being driven rashly and negligently by the driver and that was the cause of the accident. The petition was resisted by the owner of the truck and the Naitonal Insurance Company Ltd. The claimant narendra Kumar who was injured in the accident filed a claim for Rs. 54,000/- as compensation. The father, mother and the daughter of the deceased preferred a claim for a sum of Rs. 85,000/ -. The third claim was made by the widow and the daughter of the deceased for a sum of Rs. 1,00,000/- as compensation. The Motor Accidents Claims Tribunal by its impugned orders directed Veern Sain Dharam Veer and the General Assurance Society Ltd. to pay a sum of Rs. 34,000/- to Narendra Kumar, a sum of Rs. 55,000/- to Smt. Sarla Devi and Kumari Lalita and a sum of Rupees 20,000/- to father and mother of the deceased respectively. Thus, the co-owners of the truck, the driver and the National Insurance Company Ltd. were made jointly liable for the various amounts of compensation, totalling Rs. 1,90,000/ -. It is only the National Insurance company Ltd. which has preferred these appeals and the other respondents have submitted to the award.
( 2 ) SRI J. N. Chatterji, learned counsel for the appellant in all the cases has urged only one contention before us, namely, that all the claims having arisen out of a single incident the total amount of compensation could not exceed the maximum limit of Rs. 50,000/- prescribed by section 95 (2) (a) of the Motor Vehicles Act. In order to appreciate the validity of the above submission it is necessary to refer to the various provisions of the Motor Vehicles Act. Chapter viii deals with the insurance of motor vehicles against third party risk. Section 95 (1) reads:
"95 (1 ). In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which - (a) is issued by a person who is an authorised insurer or by a co-operative society allowed under section 108 to transact the business of an insurer, and (b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) - (i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; (ii) against the death of OF bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place provided that a policy shall not be required - (i) to cover liability in respect of the death, arising out of and in course of his employment, of the employees of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment, other than a liability arising out under the Workmens Compensation Act, 1923, in respect of the death of or bodily "injury to, any such employee - (a) engaged in driving the vehicle, or (b) if it is a public service vehicle engaged as a conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods vehicle, being carried in the vehicle, or (ii) except where the vehicle
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