New India Assurance Co. Ltd. vs Dhanesh Kumar And Ors.
1993 Latest Caselaw 231 Del

JUDGMENT

Usha Mehra, J.

1. M/s. New India Assurance Company has filed this appeal under Section 110-D of the Motor Vehicles Act (hereinafter called the Act) against the award dated 31st August, 1979 by the motor Accident Claim Tribunal (hereinafter called the Tribunal). In short the facts of the case are that the deceased Dr. Ishwar Dass Kumar on 1st August, 1970 at about 8.00 P.M. at Shyama Prasad Mukherjee Marg was crossing the road from Garden side towards Railway Station. The offending taxi No. DLT-2856 driven rashly, recklessly and negligently by Hans Raj, respondent No. 1, came and hit Dr. Ishwar Dass Kumar with its front. The deceased was removed to hospital in the same taxi by the people present there is unconscious state. Because of that impact Dr. Ishwar Dass Kumar died in the hospital. Sunder lal and Janak Raj are stated to be the eye witnesses. Janak Raj appeared as PW 3. He testified that it was the offending taxi which hit the deceased with the front central part of the taxi. Janak Raj and Sunder Lal removed the deceased to Irwin Hospital in the same taxi. An other eye witness Satish, PW 5, corroborated the testimony of Janak Raj. In the FIR Ex. PW 2/1 the taxi number and the name of the driver had been given by Shri Sunder Lal. It is Janak Raj who had witnessed the accident and this fact find mention in the FIR Ex. PW 2/1. Janak Raj by his testimony proved on record that the taxi driver, respondent No. 1, drove the same in a rash and negligent manner and it is he who caused the accident. The defense taken by the respondent No. 1 that the deceased was already lying on the road when he reached at the spot, did not find favor with the Tribunal. I have also perused the evidence and I see no reason to disagree with the same. From the testimony of Janak Raj, it is fully established that the accident was caused to Dr. Ishwar Dass Kumar, by respondent No. 1 who drove his taxi in a rash and negligent manner. There is no reason to disbelieve the testimony of Janak Raj. The evidence of the respondent has not been corroborated by any other witness, rather the Driver Hans Raj choose not to appear in the witness box, therefore, adverse inference has to be drawn against him. This shows that his defense is after thought and had been taken in order to deprive the claim of the claimants. The Tribunal rightly came to the conclusion that it was the offending taxi driven by respondent No. 1, which caused the accident.

2. So far as the dependency income is concerned, the Counsel for the appellant has not been able to assail the same. I see no reason to disagree with the observation of the Tribunal in arriving at the dependency income and for applying the multiplier of 10 years.

3. The only question which has been urged and argued at length by the Counsel for the appellant is that the liability of the Insurance Company is limited. Mr. Sabharwal contended that the Insurance Policy was valid from 24th September, 1969 to 23rd September, 1970. According to the terms and conditions of the policy the appellant was liable to pay only Rs. 20,000/-. The Tribunal having made the appellant to pay more than Rs. 20,000/- has exceeded his jurisdiction and acted in violation of the terms and conditions of the policy.

4. I have given my thoughtful consideration to the weighty arguments advanced by both the parties at the Bar. Admittedly Insurance Policy is a contract of insurance. But the point for determination is whether appellant's liability must be held to be limited to Rs. 20,000/- as per the policy as it existed on the date on which the policy came into being or in accordance with the legal provisions as it stood on the date of the accident, the accident having taken place during the currency of the policy.

5. Chapter VIII of the Act deals with the insurance of motor vehicle against third party risk and Section 94(1) of the Act bar against the person using a motor vehicle at public place, unless the vehicle is insured. Section 95 of the Act lays down the requirements of Insurance Policy and the limit of liability there under. Sub-section (1) of Section 95 deals with person or class of persons to whom a policy of insurance must insure to the extent specified Sub-section (2)(a) of Section 95 reads as under:-

Section 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 up to the following limits namely -

(a) where the vehicle is a good 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, or bodily injury to, employees (other than the driver), not exceeding six number, being carried in the vehicle.

This Sub-section was amended by Amendment Act 56 of 1969 which was notified on 2nd March, 1970 which substituted the liability from Rs. 20,000/- to Rs. 50,000/- i.e. the statutory liability. On account of this amendment liability stood increased.

6. Admittedly, as per the term of the policy and the relevant legal provision as it existed on the date when the policy was got issued the liability of the Insurance Company was Rs. 20,000/- but with the coming into force of the amendment to Sub-section (2) of Section 95, the statutory liability was extended to Rs. 50,000/- as per the legal provisions as it stood on the date of the accident. As already discussed above, the Insurance Policy was got issued in this case on 24th September, 1969 for one year covering the period from 24th September, 1969 to 23rd September, 1970. The accident took place on 1st August, 1970 i.e. during the currency of the policy.

7. The amended Act, increasing the statutory liability will cover the risk on the date of the accident and not on the date when the policy was issued as held by the Supreme Court in the case of Padma Srinivasan v. Premier Insurance Company Ltd.,1 1982 A.C.J. 191. It has been held by the Supreme Court that the liability is determinable under Chapter VIII at the relevant time, i.e. to say, at the time when liability arises. Since the liability of the insurer to pay a claim under a motor accident policy arises on the occurrence of the accident and not until then, one must necessarily have regard to the state of the law obtaining at the time of the insurer's liability under the statutory policy. For determining the application of the appropriate law is not the date on which the policy of insurance came into force but the date on which the cause of action accrued for enforcing liability arising under the terms of the policy. That was considered to be a reasonable manner in which to understand and interpret the contract of the insurance entered into by the insurer and the insurer. The provision of Chapter VIII, means the provisions enforced at any given time, the given time being the date on which the right of sue accrues or, correspondingly, the liability arises. On the other hand Mr. Sabharwal placed reliance on the decision of the Supreme Court in the case of National Insurance Company Ltd. v. Jugal Kishore and Ors.,2 (1988-2) 94 P.L.R. 128 (SC), to convass that the comprehensive insurance of the vehicle will not entitle the insured to an unlimited amount with regard to the third party risk because unlimited or higher risk than the statutory liability can only be fastened on the Insurance Company if additional premium had been charged by the Company. Since it is a contract, therefore, the terms of the contract only will be applicable. The amendment will have no bearing on the contractual liability of the Insurance Company. I am afraid this Judgment is of no help to Mr. Sabharwal because the Supreme Court in that case observed that since the appellant did not undertake in the policy any liability in excess of the statutory liability, the award against it would be only in accordance with the statutory liability. The Supreme Court in the case of National Insurance Company Ltd. (supra) was interpreting as to what the word 'comprehensive' means. But that is not the case in hand. Here the contention of the claimant all along had been that in the Insurance Policy itself the company had mentioned that liability will be as per Section 95. Therefore, it is the statutory liability which was covered initially and with the amendment of the Act the statutory liability automatically stood increased. To my mind, the judgment of the Supreme Court in the case of Padma Srinivasan (supra) is on all force applicable to the facts of this case. It was not for the claimant to prove that additional premium was paid or not. The question of additional premium could have arisen if the claim of the claimant had been that there is an unlimited liability. But that is not the case in hand. The claimant's case is that the Insurance Company is liable for the statutory liability which statutory liability got enhanced and extended because of the amended Act 56 of 1969.1 find force in this submission.

8. For the reasons stated above I find no merit in the appeal. The same is accordingly dismissed with costs. Trial Court file be sent back.