United India Insurance Co. vs Smt. Panmeshwari Devi And Ors.
2006 Latest Caselaw 2188 Del

JUDGMENT

J.P. Singh, J.

1. This appeal by the United India Insurance Company has been preferred against the judgment/award dated 6.7.2000 passed by Motor Accident Claim Tribunal (MACT) Delhi, awarding a sum of Rs. 79,200/- to the widow and four children of the deceased. Interest @ 12% per annum was also allowed from the date of filing of the petition till realization of the amount.

2. I have heard Mr. Vishnu Mehra, learned Counsel for the appellant, and Mr. S.K. Mishra, learned Counsel for the respondents. None appeared for respondent No. 6 (Driver) and respondent No. 7 (owner) despite service by publication. They were ex-parte even before the MACT. I have gone through the impugned award and the record.

3. Briefly the facts are that late Dayanand, an agriculturist, aged about 40 years was traveling in a bus on 11.9.1986. The bus was operating under DTC. As Dayanand was getting down the bus from the front door, the driver suddenly started the bus at high speed. Dayanand fell down and was crushed under the wheel of the bus. The learned Judge MACT examined the site plan of the accident spot, post mortem report and oral evidence and held that the accident was the result of rash and negligent driving.

4. Widow of the deceased and four children claimed Rs. 10 lacs as compensation. The claim was contested by the insurance company who is appellant in this Court. The following issues were framed:

1. Whether the R-1 was rash and negligent in driving bus No, DEP-6602 on the date, time and place as alleged in the petition? OPP.

2. If so, whether Sh. Daya Nand died due to injuries in the accident as alleged in the petition? OPP.

3. Whether the petitioners are the LRs of the deceased, if so, the only LRs of the deceased? OPP.

4. Whether the Insurance Co. is not liable to pay compensation as per pleas taken by it in its WS? OPR3.

5. To what amount of compensation are the petitioners entitled?

6. Relief.

5. Learned Counsel for the appellant has submitted that may be the learned Counsel appearing for the Insurance company did not press issue No. -4 as mentioned by learned Judge MACT but then why the evidence produced by the Insurance company on this issue has been discussed by the MACT in para 20 and 21 of the impugned judgment and it has been held that liability of the company was unlimited. Learned Counsel has argued that the finding is erroneous and against the record. The learned Judge MACT has opined in para 20 and 21 of the impugned judgment that no specific averments were made in the written statement that liability of the company was limited only to Rs. 15,000/-. However, learned Counsel for the appellant has argued that in para 22 of the written statement the company had averred that the liability of the company was subject to the provisions of the Motor Vehicles Act 1939 and the terms of the policy, which terms limit the liability of the appellant to Rs. 15,000/- only.

6. The learned Judge MACT observed that original policy and proposal form were not produced, only a copy was produced but the person who had prepared the copy was not examined and therefore held that liability of the company was unlimited.

7. Ex.PRW-1/1 is the copy of the Insurance policy. It gives details of premium regarding liability to public risk as follows:

  Basic premium                                      Rs. 240/-
Premium for 48 passengers (@ Rs. 12 per passenger) Rs. 576/-
Premium for 2 drivers                              Rs. 32/-
Premium for 2 cleaners                             Rs. 75/-
 Total            Rs. 923/-
 Premium for damage to the bus                 Rs. 1800/-
        Total                                      Rs. 2723/-
        Less 5% discounts                          Rs. 270/-
        Grand Total                                Rs. 2453/-
 

8. Learned Counsel for the appellant has submitted that the premium for limited liability of Rs. 15,000/- was Rs. 12/- per passenger and if the insured wanted to have the cover for unlimited liability he was to pay Rs. 50/- per passenger as premium, as per Ex.PRW1/3 which is the schedule of the tariff. He has submitted that the relevant column in the insurance policy regarding unlimited liability has been left blank.

9. Perusal of the statement of the witness RW-1 produced on behalf of the Insurance company shows that he has categorically stated on oath that the liability of the company was limited to Rs. 15,000/- only. In my view, this statement was in support of the pleadings in para 22 of the written statement in which it was clearly stated that liability, if any, of the respondent company will be subject to the provisions of Motor Vehicles Act 1939 and the terms of the policy. (emphasis added). In the cross examination no suggestion whatsoever was given to the witness that the liability of the company was unlimited. Moreover no objection was raised to the exhibiting and proof of the copy of the Insurance Policy.

10. Learned Counsel for the appellant has cited the judgment titled New India Assurance Company Ltd. v. C.M. Jaya and Ors. reported in I (2002) ACC 299 (SC) wherein it has been held as under:

Thus, a careful reading of these decisions clearly shows that the liability of the insurer is limited, as indicted in Section 95 of the Act, but it is open to the insured to make payment of additional higher premium and get higher risk covered in respect of third party also. But in the absence of any such clause in the insurance policy the liability of the insurer cannot be unlimited in respect of third party and it is limited only to the statutory liability. This view has been consistently taken in the other decisions of this Court.

11. Learned Counsel for the respondents has submitted that the insurance company can, in the present facts and circumstances of the case, recover the amount from the insured and the driver but should first pay the claimants and has cited the judgment titled Oriental Insurance Company Ltd. v. Cheruvakkara Nafeessu and Ors. (2001) 2 SCC 491 in support. In the case before the Supreme Court the accident took place on 6.7.1988 which was prior to coming into force of the new Motor Vehicles Act 1988, on 1.7.1989. The insurance policy had an avoidance clause as in the present case. The Supreme Court of India referring to Section 96 of the old Act and after discussing the law on the issue held that the liability of the Insurance Company was limited and directed the insurance company to make the payment of the award amount and then recover the excess amount from the insured by executing the award against the insured to the extent of such excess.

12. Considering all facts and circumstances, I am of the opinion that the liability of the company was limited to Rs. 15,000/- and direct the appellant-company to pay the entire amount to the claimants with interest @ Rs. 12% per annum up to the date when it complied with the order of deposit dated 16.12.2002 passed by this Court. The amount lying deposited in the Court be released to the claimants and be utilised as per directions in the order passed by the MACT and thereafter the appellant is allowed to recover the excess amount in execution of this modified award, from respondent No. l (in MACT and respondent No. 6 in this Court) namely Ishwar Singh (Driver) and the owner namely Baljeet Singh (respondent No. 2 in MACT and respondent No. 7 in this Court) jointly and/or severally with interest @ 12% per annum till realization with costs. The appeal is thus partly allowed with costs. The counsel's fee is fixed at Rs. 3300/-. Decree sheet be prepared accordingly. Tribunal file be sent back with a copy of this judgment.