The New India Assurance Co. Ltd. vs Wahid Khan & Ors.
2010 Latest Caselaw 2749 Del

 *                   IN THE HIGH COURT OF DELHI AT NEW DELHI

+                       F.A.O. No.193 of 1995 & C.M. Appl. No.2476 of 1995

%                                                                             24.05.2010

         THE NEW INDIA ASSURANCE CO. LTD.               ...... Appellant
                             Through: Mr. Pankaj Seth, Advocate.

                                            Versus

         WAHID KHAN & ORS.                                       ......Respondents
                                       Through: Mr. Manjeet Chawla, Adv. for R-1 & 2.

                                                             Reserved on: 19th May, 2010
                                                           Pronounced on: 24th May, 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. This appeal has been filed by the insurance company assailing the award dated

16th March, 1995 on the ground of liability of insurance company affixed by the court to

pay the compensation.

2. There is no dispute that the vehicle in question was insured. The learned Tribunal

had awarded a total compensation of Rs.1,44,000/- to the legal heirs of the deceased who

died in the accident. The insurance company has taken a plea that its liability was limited

to Rs.15,000/- as the deceased was a passenger and he was insured only upto Rs.15,000/-.

3. After the claim was filed, the insurance company had received notice of the claim

wherein particulars of the insurance policy were given by the claimants. The insurance

company admitted that the vehicle in question was insured with it. The insurance

company in the written statement itself had taken a stand that its liability was limited. It

is settled law that if a stand is taken by the defendant/insurance company in the pleading

that its liability was limited, the onus to prove that its liability was limited was on the

insurance company. The insurance company did not place on record even the copy of the

insurance policy, what was the premium charged and what were the terms and conditions

of policy. Under these circumstances, the Tribunal held that the insurance company

miserably failed to show that its liability was limited to Rs.15,000/- and held that it was

the liability of the insurance company to pay the damages as assessed.

4. It is argued by counsel for the appellant that even if there was no proof adduced

by the insurance company before the Tribunal, the Tribunal should have presumed that

the insurance of the vehicle was subject to statutory liability and since the statutory

liability was limited, the liability of the insurance company should also have been held as

limited.

5. The contract of insurance is the contract between the insured and the insurance

company. By this contract, the insurance company indemnifies the insured against the

liabilities which the insured may incur due to accident either to the persons or to the

property. Where it is admitted that there was such a contract indemnifying the insured

and a plea is raised that under the contract the insurance company was not liable to make

payment or that the liability was limited, the onus would be on the insurance company to

prove such terms and conditions of the contract as were relevant in support of stand and

then claim the benefit of those provisions. If the terms and conditions of the contract are

not proved and admission is made that there was a contract of insurance, there is no law

which requires the Tribunal to presume that the liability of the insurance company would

have been limited.

6. The Motor Vehicles Act only prescribes that a vehicle cannot be brought on road

unless it is insured minimum to the extent provided under the Motor Vehicles Act but

there is no presumption that every insured person would get his risk insured only to that

limited extent as was necessary for the insured to bring vehicle on the road. Rather

presumption is that every owner of the vehicle would get himself indemnified against

complete Third Party Risk before plying a vehicle on the road. I, therefore, consider that

this plea that Tribunal should have presumed the liability of the insurance company only

limited to the minimum risk as provided under the Act, is not tenable.

7. I find no force in the appeal. The appeal is hereby dismissed.

SHIV NARAYAN DHINGRA J.

MAY 24, 2010 'AA'