K. Gian Chand Jain And Co. vs New India Assurance Co. Ltd. And ...
2003 Latest Caselaw 1166 Del

JUDGMENT

S.K. Mahajan, J.

1. ADMIT.

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

3. The appellant has filed this appeal challenging only that part of the award of the Motor Accident 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 Accident Claims Tribunal claiming compensation for the death of one Mr. J.M. Harnal husband of respondent No. 2 and father of respondents 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 tribunal by the impugned award awarded total compensation of Rs. 10,07,500/- to the claimants, namely, respondents 2 to 4 but the liability of the insurance company was limited to Rs. 1,50,000/-. It was held by the tribunal that a bare perusal of Section 95(2)(1) show 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 respondent No. 1 was limited to Rs. 1,50,000/- under Section 95 of the Motor Vehicles Act.

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. 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 exhibit 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 show 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 the unlimited liability to third party and after giving no claim bonus of 30%. 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 either before the tribunal or before this Court by the insurance company as to what was the basic premium for covering third party risk under the Act and what was the extra premium required to be paid for covering unlimited liability to the third party. A sum of Rs. 180/- paid to cover unlimited third party risk in the previous year clearly shows that by accepting the same premium of Rs. 180/- in the year in question the insurance company like the previous year had undertaken unlimited liability to pay to the third party in the year in question as well and the insurance company could not restrict its liability to Rs. 1,50,000/-. Though it is mentioned in the policy that limit of the company's liability would be such as is necessary to meet the requirements of the Motor Vehicles Act, however, the requirements of the Act would be met by payment of unlimited amount on the issued paying extra premium.

6. As already noticed above, the insurance company has not produced the tariff to show as to what was the basic premium required to be paid to cover the risk under Section 95 of the Act of 1939 and what was the extra premium required to be paid to cover unlimited liability and in the absence of such documents, in my opinion, the tribunal has clearly erred in limiting the liability of the insurance company to Rs. 1,50,000/-. I have, therefore, no hesitation in holding that in view of the insured having paid a sum as was paid in the previous year and conditions of both the policies being the same and the insurance company having undertaken to cover unlimited liability in the previous year, the liability of the insurance company under the policy of insurance in the year in question would also be unlimited. I, accordingly, allow this appeal and direct the insurance company to satisfy the award passed by the tribunal.

7. The amount deposited by the appellant be refunded to him.