Sujata V. Manohar, J. -- 1. Leave granted.

2. This appeal by special leave arises from a judgment and order dated 11.2.1994 passed by the High Court of Madhya Pradesh in Miscellaneous Appeal No. 444 of 1991. The appellant before us is the New India Assurance Company Ltd. It has issued a comprehensive insurance policy in respect of a bus which was used for carrying passengers for hire and bearing Registration No. CIK-8108 owned by Respondent 4. This insurance policy was in force at the material time.

3. On 3.1.1989 this bus, while it was being driven by Respondent 5, met with an accident. The deceased, Laxman Singh, who was sitting on the roof top of the bus with the permission of the bus driver, Respondent 5, hit a tree on account of the alleged rash and negligent driving of the said bus by Respondent 5. He was admitted to hospital and died on 7.1.1989 on account of the injuries received in the accident. The legal heirs of Lax man Singh, who are Respondents 1 to 3 before us, filed a claim for compensation amounting to Rs. 7,81,000 before the Motor Accident Claims Tribunal, Narsinghpur. The Motor Accident Claims Tribunal, by its order dated 10.4.1991, awarded to Respondents 1 to 3 compensation of Rs. 1,10,000 together with interest at the rate of 12% per annum from the date of the presentation of the petition and directed the appellant and Respondents 4 and 5 to pay the same.

4. Being aggrieved by this order, the appellant filed Miscellaneous Appeal No. 444 of 1991 before the High Court of Madhya Pradesh. The High Court, by its order dated 11.2.1994, dismissed the appeal of the appellant and confirmed the findings of the Tribunal. The present appeal arises from this order of the Madhya Pradesh High Court.

5. The short question that we have to consider is whether the appellant is liable to pay compensation to the tune of Rs. 1,10,000 together with interest thereon at the rate of 12% from the date of the presentation of the petition to Respondents 1 to 3. The appellant contends that its liability in this regard is limited to Rs. 15,000.

6. The insurance policy taken out by the owner of the said bus i.e. Respondent 4 herein, and which was in force at the relevant time, was a comprehensive policy. This policy has been produced before us. It shows that the insured estimated value of the vehicle is Rs. 2,50,000. In the Schedule of Premium, there is an additional payment of Rs. 600 in respect of 50 passengers. The claim against this amount states: "for LL to passengers as per Ednt. No. I.M.T. 12". The appellant-Company has contended that it had charged premium at the rate of Rs. 12 per passenger in respect of 50 passengers to cover its limited liability under section 95 of the Motor Vehicles Act, 1939 which was then in force.

7. Section 95 forms part of Chapter VIII of the Motor Vehicles Act, 1939 which deals with insurance of motor vehicles against third party risks. Under section 95, in order to comply with the requirements of this Chapter, a policy of insurance must be a policy which, inter alia, insures the person or classes of persons specified in the policy to the extent specified in sub-section (2). Under section 95 (1) (b) (ii), the insurance policy must cover the death or 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. Sub-section (2) (b) provides as follows:

"95. (1) (2) Subject to the proviso to sub-section (1), a policy of insurance shall cover any liability incurred in respect of anyone accident upto the following limits, namely --

(a) (b) 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, (i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all;

(ii) in respect of passengers, a limit of fifteen thousand rupees for each individual passenger;" These were the provisions at the relevant time. These p