Delhi High Court
The New India Assurance Co. Ltd. vs Mst. Suraiya Begum & Ors. on 1 June, 2010
Author: Shiv Narayan Dhingra
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ F.A.O. No.70 of 1995
% 01.06.2010
THE NEW INDIA ASSURANCE CO. LTD. ...... Appellants
Through: Mr. Salil Paul, Advocate.
Versus
MST. SURAIYA BEGUM & OTHERS ......Respondents
Through: None
Reserved on: 26th April, 2010
Pronounced on: 1st June, 2010
JUSTICE SHIV NARAYAN DHINGRA
1. Whether reporters of local papers may be allowed to see the
judgment?
2. To be referred to the reporter or not?
3. Whether judgment should be reported in Digest?
JUDGMENT
1. The New India Assurance Company Limited by way of present appeal
has assailed an award dated 28th November, 1994 wherein learned Motor
Accident Claims Tribunal awarded compensation of Rs. 2,30,000/- in favour
of the claimants and directed the insurance company to pay the entire award
holding that the insurance company had failed to prove that its liability was
limited.
2. It is not disputed by the Appellant Company that it has not brought on
record of the Tribunal the insurance policy. It is submitted that the insurance
company could not produce the carbon copy/original insurance policy in
question as the same got misplaced and was not traceable. However, the
same got traced after passing of award and was being filed along with the
appeal and a prayer was made that this carbon copy should be considered by
the Court under order XXXI Rule 27 of CPC.
3. The only issue involved in this Appeal is whether the liability of the
insurance company was limited or unlimited. As per the carbon copy placed
on record of the appeal, the insurance company has charged premium of Rs.
240/- towards Liability to "Public Risk" apart from premium for own
damages, I.E.V. and Premium for driver and cleaner and Riot & Strike.
Thus it has to be seen whether by charging premium of Rs. 240/-, the
insurance company indemnifies the insurer only to the extent of 1,50,000/-
as is pleaded by the insurance company or its liability was unlimited.
4. This Court had treated this issue in Neeta Trehan & Ors Vs. Gopal Krishan
& Ors FAO No. 257/1991 decided on 17.5.2010 wherein it was observed as under :
14. The issue arises whether this insurance
cover obtained by the insured was limited to a
liability of Rs.1,50,000/- being the minimum
liability for which a vehicle was required to be
insured by the owner or this premium covered
wider liability. Counsel for the appellants has
drawn my attention to the judgment in Veena
Pruthi's case (supra) given by the Division Bench
of this court where the Division Bench of this court
held that if the premium was Rs.125/-, the liability
would be limited to Rs.1,50,000/- and not
unlimited. On the same logic it is stated that if the
premium was Rs.240/- for class A(2) vehicle, the
liability of insurance company would be limited to
Rs.1,50,000/-.
15. Where obtaining of an insurance cover is
made mandatory by statute, the contract is to be
interpreted in the light of statutory provisions. In
case of motor vehicles, obtaining of an insurance
cover by the owners of vehicles is a statutory
requirement. Thus, an insurance policy has to be
interpreted keeping in view the statutory
provisions and the rules of tariff as framed by the
Advisory Board. Under the tariff rules, two
separate tariffs are provided for 'Act Only
Liability' and for 'Public Risk'. It cannot be said
that the Advisory Board provided tariff for 'Act
Only Liability' as a superfluous phenomenon. The
Advisory Board was having in mind that where the
owner wants to take an insurance policy covering
the minimum liability under Section 95 of the Act,
then the premium should be different. If the owner
wants wider liability then the premium should be
different and that is the reason that for 'Act Only
Liability', a premium of Rs.200/- was provided and
for 'Public Risk', a premium of Rs.240/- was
provided. Public risk is a wider term and takes
into account the entire risk faced by the owner for
bringing vehicle on road. If there had been no
compulsion under the Act to obtain an insurance
policy, the only insurance cover which owner
could have obtained from an insurance company
for covering public risk would have been this that
he would pay Rs.240/- and get the public risk
covered. If the Act would have not prescribed any
limit, the public risk would naturally have been
unlimited. The Act prescribed that every owner of
vehicle should get insurance cover covering a
minimum amount. Beyond that, the Act did not
provide anything. It is under these circumstances
that the Tariff Advisory Committee prescribed
separate premium for 'Act Only Policy' and
separate premium for a 'Public Risk Policy'. I,
therefore, consider that the 'Public Risk' premium
would cover unlimited amount of risk and would
not cover a limited amount of risk.
18. There is another aspect to be kept in mind.
When an owner approaches insurance agent for
insurance, he is told what would be the tariff
payable by him and on payment of tariff, an
insurance certificate or cover note is issued. The
contract of insurance, thus, stands concluded on
receipt of tariff/premium in terms of the tariff
schedule as laid down by Advisory Board.
Insurance policy is subsequently mailed to owner
by insurance company. If insurance company
unilaterally inserts a clause in the policy which is
contrary to tariff regulations, such a clause is not
binding. All insurance policies are in the shape of
one standard performa used for different kinds of
coverage. If while sending insurance policy to
owner the company official does not score off non-
applicable clauses or inserts a limited liability
clause which is contrary to the tariff charged from
owner, such a clause is not binding.
5. In view of the fact that insurance company had charged Rs. 240/- as
premium whereas premium for "Act Only Liability", as per tariff rules was
Rs. 200/-, I consider that the insurance company had unlimited liability. The
premium scheduled as given and tariff rates are as under:
CLASS A(2) - GOODS CARRYING VEHICLES-GENERAL
CARTAGE (PUBLIC CARRIER)
PREMIUM FOR
Licensed Carrying„Own Damage‟ Liability „Act
Capacity of the Cover to the Only‟
Vehicle Public
Risks
(a) Not exceeding Rs.340 Plus Rs.120/- Rs.100/-
1016 Kgs. (1 Ton) 1.05% on I.E.V.
(b) Not exceeding Rs.550 Plus Rs.240/- Rs.200/-
3048 Kgs. (3 Tons) 1.10% on I.E.V.
(c) Not exceeding Rs.850 1.10% on Rs.240/- Rs.200/-
5080 Kgs. (5 Tons) I.E.V.
(d) Exceeding 5080 Rs.850 plus Rs.240/- Rs.200/-
Kgs. (5 Tons) Rs.200 for each
additional 1016
Kgs. (1 Ton) or
part thereof plus
1.10 on I.E.V.
N.B.: Vide Note to IMT Endorsement No.26 special Exclusions
(Commercial Vehicles Policies only)
6. I find no force in the plea of the insurance company that its liability was
limited only to Rs. 1,50,000/- and not to the entire award amount as
awarded by the Tribunal. The appeal is hereby dismissed. No order as to
costs.
SHIV NARAYAN DHINGRA J.
June 1, 2010
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