New India Assurance Co. Ltd. vs Shashikalabai W/O Bhimrao Salone ...
2004 Latest Caselaw 1237 Bom

JUDGMENT

D.G. Karnik, J.

1. This appeal is directed against the judgment and order dated 23-3-1993 passed by the Motor Accident Claims Tribunal, Parbhani (for short, the Tribunal) in Claim Application No. 6 of 1989.

2. The respondent No. 6 herein is the owner of the motor truck bearing registration No. MTT6521. At the relevant time, the said truck was being driven by the respondent No. 7. The respondents Nos. 1 to 5 are the heirs of Bhimrao Salone, who died in an accident involving the said truck bearing No. MTT 6521. The appellant is an insurance company with whom the said motor truck was insured.

3. Deceased Bhimrao had gone to purchase vegetables at the market at Parbhani and was walking on the road. At that time, the respondent No. 7, who was driving the motor truck bearing registration No. MTT 6521 rashly and negligently, knocked down Bhimrao, who died on the spot. The respondent Nos. 1 to 5 being the widow and the children of deceased Bhimrao, filed a claim for recovery of compensation against the respondent No. 6 the owner, the respondent No. 7 the driver and the appellant insurance company. The Tribunal held that the respondent No. 7 was driving the truck in rash and negligent manner and the death of Bhimrao was caused in the motor accident which was caused on account of the negligence of respondent No. 7. The Tribunal held that the deceased was earning salary of Rs. 1,800/- p.m. Taking into consideration the age of the deceased, the Tribunal awarded compensation of Rs. 2,13,000/- to the respondents Nos. 1 to 5. The appellant and the respondents Nos. 6 and 7 were held to be jointly and severally liable to pay the said compensation. That judgment is impugned in this appeal.

4. Before me, the learned counsel for the appellant did not dispute the correctness of the finding that the respondent No. 7 was negligent and that the respondents Nos. 6 and 7 were, therefore, liable to pay the compensation. The learned counsel also did not dispute that the appellant was the insurer of the said truck having undertaken the statutory liability under the Motor Vehicles Act, 1939 (for short, the Act). He, however, contends that under Section 95(2)(a) of the Act, the liability of the appellant was restricted to Rs. 1,50,000/-. He, therefore, contends that the Tribunal erred in passing the decree in excess of Rs. 1,50,000/- against the appellant.

5. The learned counsel for the appellant fairly states that the contention that the liability of the appellant was restricted to the extent of Rs. 1,50,000/- under the policy of insurance was not specifically taken before the Tribunal. However, relying upon the decision of the Division Bench of this Court in the case of Marine and General Insurance Co. Ltd. v. Dr. Balkrishna Ramachandra Nayan, 1976 ACJ 288, the learned counsel for the appellant contends that an opportunity be given to the appellant to raise this point. He further invites my attention to ground Nos. 5 and 13 in the appeal memo in which a specific contention is raised that the liability of the appellant insurance company was restricted to Rs. 1,50,000/- only. In the case of Marine and General Insurance Co. Ltd. (supra), Vaidya, J. has held that though the contention that the liability of the Insurance Company was limited under Section 95(2) was not raised before the Tribunal, in fairness, an opportunity should be given to the insurance company to raise such a point if it was open to it at law to do so subject to payment of costs and also on its depositing the amount which according to them was payable under the award. Mridul, J. in his concurring judgment, did not disagree with this statement. In view of the judgment of the Division Bench of this Court, the Insurance Company is allowed to raise the contention about limit of its liability under Section 95 of the Act subject to payment of costs. Accordingly, it would be appropriate that the insurance company would pay the costs of this appeal notwithstanding the final result.

6. Shri Kulkarni, learned counsel invites my attention to the copy of the insurance certificate which was produced on record. The certificate mentions the limit of liability to be the amount of company's liability in respect of any one accident to be such amount as was necessary to meet the requirements of the Motor Vehicles Act, 1939. In other words, the company had only undertaken to indemnify the respondent No. 6 to the extent of its liability under the Act. Section 95(2)(a) of the Act, at the relevant time stood thus :

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

(a) where the vehicle is a goods vehicle, a limit of one lakh and fifty thousand rupees in all, including the liabilities, if any arising under the Workmen's Compensation Act, 1923 (8 of 1923) in respect of the death of, or bodily injury to, employees (other than the driver) not exceeding six in number, being carried in the vehicle."

7. Admittedly, the vehicle involved in the accident was a goods vehicle. Therefore, the limit of liability which the Insurance Company was compulsorily required to cover under Section 95(2) of the Act was Rs. 1,50,000/- in respect of any one accident. Therefore, though the respondents Nos. 6 and 7 would be liable to pay the entire amount of Rs. 2,13,000/- to the respondents Nos. 1 to 5, the limit of liability of the appellant was limited to Rs. 1,50,000/- under the Statute. The appellant had not undertaken unlimited liability under the policy or certificate of insurance. In the circumstances, it must be held that the appellant is liable to pay the compensation of Rs. 1,50,000/- only.

8. For these reasons, the first appeal is partly allowed. The judgment and order passed by the Motor Accident Claims Tribunal, Parbhani directing the respondents Nos. 6 and 7 herein i.e. owner and driver to pay the amount of Rs. 2,13,000/- and interest thereon, is confirmed. As regards the appellant Insurance Company it is ordered that the appellant Insurance Company jointly and severally with respondent Nos. 6 and 7 would be liable to pay to the respondents Nos. 1 to 5 herein a sum of Rs. 1,50,000/- together with interest thereon at the rate of 12% p.a. from the date of the application (i.e. 10-3-1989) upto the date of payment or deposit of the money in the Court. The money, if any deposited by the appellant in the Court and withdrawn by the respondents Nos. 1 to 5, be appropriated towards the decree. The money, if any deposited by the appellant and not allowed to be withdrawn but invested in the bank, may now be paid to the appellant along with the accrued interest to the extent of the liability of the appellant. In the event, the appellant company fails to deposit/pay the balance amount due, if any, within a period of two months, the appeal filed by it shall stand dismissed and it would be liable to pay the full decretal amount, as per the award of the Tribunal. The appellant Insurance Company shall pay costs of this appeal to the respondents Nos. 1 to 5, which are quantified at Rs. 5,000/-.