New India Insurance Co. vs Madhu Sudan Sharma And Ors.
2004 Latest Caselaw 1262 Del

JUDGMENT

R.S. Sodhi, J.

1. This appeal is directed against the Award dated 17.11.1987 of the Motor Accident Claims Tribunal, whereby the Tribunal has awarded a sum of Rs.70,000/- along with 12% interest from the date of filing of the petition till its realization payable by the Insurance Company.

2. In this appeal the Insurance Company has challenged the award on the ground that it has covered risk to the third party only in respect of 'Act only liability' and is not unlimited.

3. In the present case, the policy RW1/1 which is the only basis for the court to have arrived at any conclusion even though not proved in accordance with law shows that the Insurance Company had charged a basic premium of Rs.276/- together with 1/2 % of Insured Estimate Value (I.E.V.) of the insured vehicle which was Rs.30,000/- and a premium of Rs.150/- has been paid. A sum of Rs.108/- has been paid on account of legal liability to passengers. Another sum of Rs.10/- for legal liability for driver and conductor and for riot risk Rs.75/- has been paid.

4. It is contended by counsel for the Insurance Company that the comprehensive policy of which basic premium is Rs.276/- does not cover the risk of the third party as being unlimited but is restricted to 'Act only liability', namely, Rs.50,000/-. He submits that the Supreme Court in New India Assurance Co. Vs. C.M.Jaya, 2002 (1) SCALE has upheld the judgment in New India Assurance Co. Ltd. Vs. Shanti Bai and Ors. while dissenting from the judgment in Amrit Lal Sood and Anr. Vs. Kaushalya Devi Thapar and Ors. , has held that comprehensive insurance of the vehicle and payment of higher premium on this score, does not mean that the limit of liability with regard to third party risk becomes unlimited or higher then statutory liability fixed under Sub Section (2) of Section 95 of the Motor Vehicles Act. For this purpose a specific agreement has to be arrived at between the owner and the Insurance Company and separate premium has to be paid on the amount of liability undertaken by the insurance company in this behalf.

5. In the present case, as already stated a sum of Rs.276 plus 1/2 % IEV which comes to Rs.426/- has been paid. The 'Act only Liability' premium is Rs.65/- and liability to public risk was Rs.78/- for the vehicle in question. 1/2 % of the insured estimate value of Rs.30,000/- is Rs.150/- which has been paid.

6. The contention of counsel that the excess amount paid towards comprehensive policy does not extend to third party risk is not acceptable. Obviously, in the present case, a sum of Rs.276 has been paid which is in excess of Rs.78/- and or Rs.65/-. That being the case this liability of the Insurance Company which has charged a higher premium than for 'Act only Liability' policy covers the third party for unlimited liability.

7. The judgment under challenge which holds the Insurance Company liable is upheld. FAO 30/1988 is disposed of accordingly.