Delhi High Court
Veena Pruthi & Ors. vs Oriental Fire & Genl. Insurance ... on 25 November, 2009
Author: Pradeep Nandrajog
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on: 6thOctober, 2009
Judgment Delivered on: 25th November, 2009
+ LPA 30/1989
VEENA PRUTHI & ORS. ..... Appellants
Through: Mr. Ashok Popli, Adv. with
Mr. Navneet Goyal, Adv.
versus
ORIENTAL FIRE & GENL. INSURANCE
CO. LTD. ..... Respondent
Through: Mr. V.P.Chaudhary, Sr. Adv. with
Ms. Sushma, Adv. for R-1
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MR. JUSTICE SURESH KAIT
1. Whether the Reporters of local papers may be
allowed to see the judgment?
2. To be referred to the Reporter or not? No
3. Whether the judgment should be reported in the
Digest? No
PRADEEP NANDRAJOG, J.
1. 7th April, 1975 was an unfortunate day in the life of
Late Jai Kishan Pruthi. Proceeding towards Azadpur on a two-
wheeler scooter bearing registration No.DHU-6689, at around
9:00 PM, he was hit by truck bearing registration No.HRB-4969
driven by Mahender Singh. Jai Kishan Pruthi was fatally injured
and no medical aid could be given to him inasmuch as by the
time he was brought at the casualty of Irwin Hospital, New Delhi
he had died.
2. The offending truck was owned by Hukam Chand and
in respect thereof he had obtained a policy of insurance from the
Oriental Fire & General Insurance Company Ltd.
3. The widow and minor children of Jai Kishan Pruthi filed
a claim petition seeking compensation under the Motor Vehicles
Act 1939. Holding in their favour that the death of Jai Kishan
Pruthi was a result of the offending truck being rashly driven by
the driver thereof, the learned Tribunal assessed comensation in
sum of Rs.1,34,500/- and directed that the insurance company
would pay the entire awarded sum.
4. The insurance company had taken up a defence that
in terms of Section 95 of the MV Act 1939, its liability to pay
under the policy of insurance was limited to Rs.50,000/-.
5. The original policy of insurance was obviously in the
hand of the owner of the vehicle i.e. Hukam Chand. He never
produced the policy which he had obtained and as a result
thereof the original never saw the light of the day. The
insurance company examined one witness Sh.H.R.Bajaj its
Branch Manager who appeared as RW-1 and proved the office
copy consisting of only one page i.e. the last, pertaining to the
policy issued. The said document was marked as Ex.R-1/1.
6. The one page document Exhibited as R-3/1,
evidenced that premium received was in sum of Rs.135/-
consisting of 2 parts. Rs.125/- towards basic premium and
Rs.10/- as premium for the insurance cover being extended for
the driver and the cleaner.
7. The said document further evidences that the
licensed carrying capacity of the truck is 10 tonnes. The make of
the truck is „TMB‟ and the engine is of 90 Horse Power.
8. The learned Judge MACT negated the defence of the
insurance company that its liability was limited to Rs.50,000/-,
holding as under:-
"19. The next question to be decided is about the
liability of the respondents. The liability of the
respondents 1 and 2 i.e. driver and the owner of the
truck, is unlimited. So far as Insurance Company is
concerned, it is statutory liability under Section 95 of
the Motor Vehicles Act, 1939 is fixed at Rs.50,000/-
which can be increased by means of a contract of
insurance between the parties. It was, therefore, for
the Insurance Co-respondent, if it wanted its liability to
be limited to Rs.50,000/-, to have produced on record
the insurance policy. The original policy of Insurance
was, in the ordinary course of events, must have been
issued to the owner of the truck but he said owner
during the present proceedings was neither called
upon to produce the same on record. The Insurance
Company produced its witness RW-1 H.R.Bajaj who
produced an attested true copy of the Insurance Policy
in question and got it proved and exhibited as R-3/1
which was objected to by the learned counsel for the
petitioners and the said objection was kept open
without being decided. This witness stated in the
examination chief that the original policy was with the
insured-respondent No.1. He stated that the office
copy of the insurance policy brought by him on the
day of his deposition consisted of one sheet only and
that the terms and conditions were not contained
therein although there was a reference about them. In
my view, objection by the learned counsel for the
petitioners qua the admissibility of the duplicate copy
of the insurance policy and its exhibition as R-3/1 was
rightly taken and is liable to be sustained for a couple
of reasons. Firstly, the original insurance policy is
neither stated to have been lost nor destroyed. It was,
therefore, incumbent upon the Insurance Company to
have called upon on the owner-respondent No.2 to
produce the original insurance policy which would
have enlightened on the entire state of affairs qua the
statutory limited liability or otherwise of the Insurance
Company in respect of the vehicle involved in the
accident. The insurance policy in original was as per
the statement of RW-1 was available with the insured
respondent. The non-production of the insurance
poli9cy on record gives rise to presumption against
the plea of limited liability of the Insurance Co. and
law in this regard has been laid down in Sham Lal Vs.
New India Assurance Co. Ltd. (1979 A.C.J. 208 Madhya
Pradesh High Court). Further, the alleged duplicate
copy of the insurance policy was incomplete inasmuch
as RW-1 in his cross examination admitted that the
terms and conditions of the insurance were not
contained in the office copy of the insurance policy
brought by him and, therefore, by no standard, it
could be said certainty that the Insurance Company
had limited its liability to the statutory limit prescribed
under Section 95 of the Motor Vehicles Act, 1939."
9. It is apparent that the learned Judge MACT did not
deal with the issue as to whether the basic premium in sum of
Rs.125/- pertained to the statutory minimum liability prescribed
under the MV Act 1939 qua third parties i.e. Rs.50,000/- or was it
a case of unlimited liability.
10. The insurance company was aggrieved by the award
and hence filed a first appeal. The claimants were also
aggrieved by the award as they felt that the compensation
awarded was inadequate. The appeal filed by the insurance
company as also the cross objections filed by the claimants were
decided by the learned Single Judge vide order dated 10 th
February, 1989.
11. Whether or not the police stood proved and what was
the effect of R-3/1 being proved and the further issue as to
whether premium paid in sum of Rs.125/- related to the policy
being unlimited, the learned Single Judge opined as under:-
"It is an admitted fact that the owner of the offending
vehicle did not produce the original policy although he
was claiming that the entire liability was that of the
Insurance Company. The Insurance Company
produced the office copy of the policy. Usually, in the
file pertaining to the insurer only the last page of the
policy is annexed as the rest of the terms are standard
terms. The Tribunal held that the sheet produced by
the Insurance Company without the terms and
conditions cannot be accepted in evidence. The
approach of the Tribunal was wholly erroneous. The
Tribunal ought to have weighed the circumstances and
evidence before it. When the owner had not produced
the original copy, it was erroneous on the part of the
Tribunal to hold the Insurance Company also jointly
and severally liable for the entire amount. As stated
above, the normal practice of the Insurance
Companies is to keep the relevant page or pages on
the file of each insurer, showing how much of the
premium is paid and risk of what nature is covered.
The Tribunal also overlooked the fact that it is
supposed to make a summary enquiry where it cannot
insist upon the technical rules of evidence. I have,
therefore, no hesitation to accept the office copy of
the policy produced by the Insurance Company.
The copy of the policy would show that the basic
premium paid by the owner was Rs.125/-. According
to the tariff (of which a copy was produced and which
is taken on record) in case of liability to public risk in
regard to vehicles used for carriage of goods for hire
or reward as in the case of a truck, the basic premium
is Rs.125/-. In case of „Act Only‟ liability the basic
premium is Rs.84/-. Counsel for the owner submitted
that if the basic premium is Rs.84/- the excess amount
of Rs.41/- would make it a case of unlimited liability for
the insurance company. Having seen various
provisions of the Tariff, it is clear that the argument is
thoroughly misconceived. The Insurance Company
had not claimed or accepted that it was a case of „Act
Only‟ liability. It has specifically stated that it was a
public risk liability of which the basic premium is
Rs.125/-. This is shown at page 77 of the Tariff. At
page 120-A a chart is given, showing the quantum of
the liability over and above a ceiling and the
corresponding additional premium required to be paid.
For example it is stated that Rs.39/- is an additional
premium for unlimited personal liability where the
damage to the property is Rupees One lakh. The
quantum of liability is proportionately increased with
the corresponding increase in the premium paid. It is
not shown by the owner from the tariff that anything
above Rs.125/- was charged in the present case, such
as the sums mentioned as additional premium at page
120-A of the tariff. The appeal of the Insurance
Company is, therefore, to be accepted. The cross-
appeal of the owner and the driver is rejected. The
Insurance Company shall be liable to pay Rs.50,000/-
towards compensation and proportionate interest.
The Insurance Company has already paid Rs.50,000/-
to the claimants. The owner and the driver are jointly
and severally responsible for payment of the balance
amount with 9% simple interest from the date of
application till the date of realisation."
12. We note that the cross appeal referred to as the one
filed by the owner and the driver is actually cross objections filed
by the claimants. Needless to state the same have been
dismissed without any adjudication on the issue of the quantum
of compensation.
13. In view of the fact that the claimants have not been
able to realize the sum awarded in excess of Rs.50,000/- from
the owner of the vehicle, learned counsel for the claimants
submitted during hearing of the appeal that if this Court were to
allow the appeal and hold that the liability of the insurance
company is unlimited in that even suitable directions may be
passed pertaining to the cross objection filed by the claimants. If
not, the issue be closed.
14. It is apparent that the learned Single Judge did not
decide on the cross objections filed by the claimants for the
reason it hardly mattered whether the compensation was
enhanced if it was held that the liability of the insurance
company is limited to Rs.50,000/-. The reason being that in view
of the stay granted in appeal in favour of the insurance company
directing that the award in excess of Rs.50,000/- be not
executed, the claimants were unable to locate the owner of the
truck and recover the balance amount. What was the practical
use to enhance the sum awarded?
15. On the issue whether the policy was proved, we
concur with the view taken by the learned Single Judge that the
original policy of insurance is always handed over to the owner
of the vehicle. The last sheet is one which is retained by the
insurance company which contains the necessary particulars
pertaining to the premium which has been received. We further
note that Ex.R-3/1 i.e. the document proved by the insurance
company clearly records that the policy is subject to IMT
Nos.2(A) and 16. It is the office copy of the insurance company.
The document Exhibited is a true copy thereof, the original office
copy was produced. It records that the basic premium charged
is Rs.125/- and Rs.10/- has been charged on account of
insurance coverage for the driver and the cleaner. The said
document clearly records under the caption „Liability‟:
Limit of the amount of the Company's liability under
Section II-1(i) in respect of any one accident: Such
amount which is necessary to meet the requirements
of the Motor Vehicles Act, 1939.
Limit of the amount of the Company's liability under
Section II-1(ii) in respect of any one claim or series of
claims arising out of one event: Rs.50,000/-".
16. The learned Single Judge has referred to the tariff
applicable in the year in question but has not reproduced the
same. We do so.
17. The tariff in question as notified by the Tariff Advisory
Committee, inter alia, reads as under:-
"Note - In the event of cover being granted under
Extra Benefit Item 7 on sheet 123 of the Tariff, the
words "and also the liability under the Workmen‟s
Compensation Act, 1923, in respect of the carriage of
more than six persons employed in connection with
the loading and unloading of the vehicle" shall be
inserted after the figure Rs.50,000/- under Regulation
9 (i) (a) or the wording under Regulation 9 (i) (b)."
(ii) Limit of Liability under Section II-1 (ii).
(a) Goods or Passenger carrying }Rs.50,000/-
vehicles ... ... ... ...
(b) Vehicles other than described in }Rs.1,50,000/-
(a) Above ... ... ... N.B.- Where
additional
premium
has been
paid for
increased
limits,
insert the
increased
amount in
question."
18. Pertaining to commercial vehicles the tariff stands
recorded as under:-
Class "A(2)" - GOODS CARRYING VEHICLES - GENERAL CARTAGE
Vehicles used for the carriage of goods for hire or reward.
Endorsement No.26 must be used - See Regulation 4,
Licensed Comprehensive Liability to the "Act Only"
Carrying Public Risks Liability
Capacity of
the Vehicle Town Mof. Town Mof. Town Mof.
Not Rs.261 + Rs.286+ Rs.78 Rs.87 Rs. 65
exceeding ½% on ½% on
508 Kgs. I.E.V. I.E.V.
Not Rs.336+ Rs.496+ Rs.78 Rs.87 Rs. 65
exceeding ½% on ½% on
2032 Kgs. I.E.V. I.E.V.
Not Rs.411+ Rs.611+ Rs.78 Rs.87 Rs. 65
exceeding ½% on ½% on
3048 Kgs. I.E.V. I.E.V.
exceeding ½% on ½% on
5080 Kgs. I.E.V. I.E.V.
5080 Kgs. rate plus rate plus
Rs.150/- Rs.150/-
for each for each
additional additional
1016 1016
Kgs. or Kgs. or
part part
thereof thereof.
N.B. - Section 1 of all Comprehensive Policies must be subject to
a compulsory excess of
(i) in respect of 3 wheeled vehicles with licensed
Carrying capacity no exceeding 508 Kgs. ... Rs.200/-
(ii) in respect of all other vehicles ... ... Rs.500/-
See „Note‟ to Endorsement No.26 Special Exclusions
(Commercial Vehicles Policies only) on sheet 177 of
the Tariff."
19. It is thus apparent that pertaining to vehicles licensed
carrying capacity whereof exceed 5080 kgs., the tariff applicable
for an act only liability requires premium to be paid in sum of
Rs.84/-. In case of policy being extended to cover liability to the
public risk, the applicable tariff i.e. the premium payable would
be Rs.97/- or Rs.125/- depending upon whether the liability to
the public risk is intended to be in towns or Mufasil areas.
20. Liability to public risk would mean that the policy
provides indemnity to the insured against legal liability for claim
by the public in respect of accidental personal injury or damage
to the property caused by the insured vehicle.
21. The tariff in question refers to the liability to the
public risk as under:-
"1. Liability to the Public Risks
The indemnity granted to the insured may be
increased in respect of the undernoted vehicles by payment
of an additional premium on the following scale. In cases
where the limits of Indemnity provided under the standard
policy exceedRs.50,000/- such limits may be increased in
accordance with the scale at an additional premium
equivalent to the difference between the scale rates for
such standard Policy limits and those for the required
increased limits.
(a) All Commercial Vehicles except those rateable
under Class A (2) and Class "E".
Vehicles Trailers
Unlimited personal Additional Premium Rs.4 Rs. 2
injury
Rs.1,50,000
property damage
Unlimited personal Additional Premium Rs.12 Rs. 5
injury
Rs.3,00,000
property damage
Unlimited personal Additional Premium Rs.16 Rs. 7
injury
Rs.4,00,000
property damage
Unlimited personal Additional Premium Rs.20 Rs. 9
injury
Rs.5,00,000
property damage
Unlimited personal Additional Premium Rs.24 Rs. 11
injury
Rs.6,00,000
property damage
Unlimited personal Additional Premium Rs.28 Rs. 13
injury
Rs.7,00,000
property damage
Unlimited personal Additional Premium Rs.32 Rs. 15
injury
Rs.8,00,000
property damage
Unlimited personal Additional Premium Rs.36 Rs. 17
injury
Rs.9,00,000
property damage
Unlimited personal Additional Premium Rs.40 Rs. 19
injury
Rs.10,00,000
property damage
Note: The property damage limit in respect of vehicles
rated under Class "E" may be increased in accordance with
the above scale by charging 50 per cent of the above
rates."
22. It is thus apparent that where premium paid is
Rs.125/- and the policy extends to cover the liability to the public
risk the same would be restricted to Rs.50,000/- unless
additional premium as per table above is paid.
23. Thus, learned Single Judge has correctly held that in
the instant case the premium charged is basic premium in sum
of Rs.125/- as Ex.R-3/1 specifically states that the policy issue is
a public risk liability policy, the inevitable conclusion has to be
that the liability of the insurance company has to be restricted to
Rs.50,000/-.
24. On the proof of Ex.R-3/1, we concur with the learned
Single Judge that the last page retained by the insurance
company is the only relevant page to be kept for the reason rest
of the contents of a policy of insurance are nothing but the
reproduction of the relevant parts of the tariff notified by the
Tariff Advisory Committee. The proof of said document is the
following testimony of RW-1:-
"I have brought the attested true copy of Insurance
Policy bearing No.NG/10209/1/4/NB/1119. It was
issued a 20/12/1974. It is valid from 20/12/74 to
19/12/75 for a years in respect of Truck No.HRB-4969
owned by Hukam Chand. It has been attested as true
copy by the Asstt. Administration Officer on 7/12/78.
Sh.Madan Lal Mago. I have seen him writing and
signing and as such I can identify the signatures. The
Original policy is with the insured respondent No.1. It
is Ext.R-3/1 (objected to).
The original policy was not prepared in my presence
nor do I know who had signed it. The copy of the
original is in our record which I have brought. It bears
the signatures of the officer dt.21/12/74. When the
policy was acquistely issued covering the period from
20/12/74 to 19/12/75. The office copy brought by me
consists of one sheet only. The terms and conditions
are contained with it. Though there is reference about
it. It is incorrect to suggest that the unlimited third
party was covered under the policy."
25. The appeal is dismissed.
26. No costs.
(PRADEEP NANDRAJOG)
JUDGE
(SURESH KAIT)
JUDGE
November 25, 2009
mm
