Insurance companies cannot limit liability if the same premium indicates coverage for unlimited third-party risks, irrespective of policy claims.

1. Admit.

2. With the consent of the parties, the matter has been heard and disposed of by this order.

3. Appellant has filed this appeal challenging only that part of the award of the Motor Accidents Claims Tribunal where it is held that the liability of the insurance company under the policy of insurance was limited to a sum of Rs.1,50,000. The claimants had filed an application before the Motor Accidents Claims Tribunal claiming compensation for the death of one J.M. Harnal, husband of respondent No. 2 and father of respondent Nos. 3 and 4 and son of respondent No. 5 in the road accident caused by the rash and negligent driving of the offending vehicle owned by the appellant and insured with respondent No. 1. The Claims Tribunal by the impugned award awarded total compensation of Rs.1,07,500 (Sic.) to the claimants, namely, respondent Nos. 2 to 4 but the liability of insurance company was limited to Rs.1,50,000. It was held by the Tribunal that a bare perusal of S.95 (2) (a) shows that where the vehicle involved was a goods vehicle, the policy of insurance shall cover liability up to Rs.1,50,000 and the vehicle in question being a Matador Tempo admittedly a goods carrying vehicle and nothing having been proved that additional premium was paid to cover unlimited liability of the insurance company, the liability of the respondent No. 1 was limited to Rs.1,50,000 under S.95 of the Motor Vehicles Act , 1939.

4. The contention of learned counsel appearing on behalf of the appellant is that since the appellant had paid a premium of Rs.180 to cover the third party risk, there was no question of the insurance company limiting its liability to Rs.1,50,000. It is submitted that on acceptance of Rs.180 to cover the third party risk, the insurance company had undertaken unlimited liability to pay to the third party in case of an accident caused by the offending vehicle. The learned counsel has referred to the statement of the witness who had appeared on behalf of the insurance company and had stated that even for the earlier year the vehicle was insured with their company and Exh. RX was the correct policy of the previous year issued by the company. He also admitted that the policy issued for the previous year was for unlimited liability to the third party. He also admitted that no claim bonus was given in continuation of the previous policy and that schedule of premium in the said two policies was the same. Though it is stated by him that no additional premium was paid by the insured to cover unlimited liability to the third party, however, it is admitted by him that clauses in both the policies were the same.

5. A perusal of the policies issued for the year in question and the previous year shows that premium charged for both the years was the same. In the earlier year, the insurance company had charged Rs.180 to cover third party risk and in the year in question as well the insurance company had charged Rs.180 to cover third party risk. In the earlier year, the insurance company had charged a total sum of Rs.907 to cover unlimited liability to third party and after giving the no claim bonus of 30 per cent, the insurance company charged Rs.714 in the year in question. It clearly shows that the risk covered by the insurance company in the year in question was the same as the risk covered by the previous year's policy. In case the liability in the previous year was unlimited, there is no reason as to why the company could have restricted its liability to pay Rs.1,50,000 under one accident in the year in question. It is not denied that by charging extra premium, the company can cover more risk than what has been prescribed in the Act. Nothing was produced earlier before the Tribunal or before t