Delhi High Court
The New India Assurance Co. Ltd. vs Smt. Swaran Khanna & Ors. on 29 September, 2011
Author: Reva Khetrapal
UNREPORTED
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO 208/1994
THE NEW INDIA ASSURANCE CO. LTD. ..... Appellant
Through: Mr. Pankaj Seth, Advocate
versus
SMT. SWARAN KHANNA & ORS. ..... Respondents
Through: Mr. Vikram Nandrajog and
Mr. Sushil Jaiswal, Advocates
for the respondents No.1 and 2
% Date of Decision : September 29, 2011
CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL
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
: REVA KHETRAPAL, J.
1. The short question which arises for decision in the present
appeal is whether the liability of the appellant-Insurance Company
was limited to the extent of ` 50,000/- only or it was unlimited third
party liability as held by the learned Motor Accidents Claims
Tribunal by its judgment and award dated 10th June, 1994.
2. The appellant-Insurance Company was the respondent No.3 in
the Claim Petition filed under Sections 110A and 92A of the Motor
Vehicles Act, 1939 by the legal representatives of the deceased
Ramesh Kumar Khanna, who died as a result of a road accident,
which took place on 10.03.1986. In the written statement filed by the
appellant, it was asserted that its liability was limited to ` 50,000/- as
the policy issued by it insuring the offending vehicle, being a taxi
bearing No.CHZ 1, was an „Act Only Policy‟. In order to substantiate
its aforesaid assertion, the appellant-Insurance Company adduced the
evidence of its Branch Manager RW1 Shri M.S. Bindra, who proved
the original policy of insurance produced by the respondent No.3 as
Ex.RW1/1. RW1, in his testimony, testified that no extra premium
had been charged and that ` 180/- was charged from the insured to
cover third party risk to meet the requirements of Section 95 of the
Motor Vehicles Act, 1939. In the policy Ex.RW1/1, which was
proved in evidence by RW1 Shri Bindra, the limit of the amount of
the Company‟s liability for damage to property was stated to be
` 1,50,000/-. The learned Tribunal taking note of this fact held that
the liability of the Insurance Company with regard to physical injury
to third party was, therefore, unlimited. This conclusion was arrived
at by the learned Tribunal on the basis of an excerpt of the „Tariff‟
produced by the Insurance Company, which is reproduced
hereinbelow:-
"ADDITIONAL PREMIUM IN RESPECT OF THIRD
PARTY & INDEMNITY LIMITS.
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 case where the limits or indemnity provided
under the standard policy exceed Rs.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 required increased limits.
Limits of liability Scales of rates Scale of rates
applicable to all applicable to goods
commercial carrying vehicles
vehicles except (i) General Cartage
goods carrying Class A(2)
vehicles -General
Cartage Class
A(2) & (ii) Motor
Trade Road Risk
only Class E.
Per Per Per vehicle Per
vehicle Trailer Trailer
personal injury
Rs.150000/-
property damage
personal injury
Rs.300000/-
property damage.
Per unlimited Above rate plus Above rate plus
personal injury and Rs.2.50 Rs.5/-.
for every Additional
Rs.100000/0 or part NB. For vehicles
thereof, for property designed as
damage in excess of commercial vehicle
Rs.3,00,000/- and used for
commercial and
private purposes
excluding use for
hire or reward.
Note:
The property damage limits in respect of Whether unlimited
vehicles rated under Class „E‟ may be personal injury is
increased in accordance with the above required to be
scale by charging 50 per cent of the covered under an
above rates. "Act only" policy in
respect of vehicles
rated under
Regulation 2 of the
Commercial Vehicles
Tariff and registered
as such this may be
granted by charging
50% of the rates
shown in the first
item of Schedule for
vehicles appearing
at (a) above.
3. The learned Tribunal also noted that Shri Bindra did not
produce the „Tariff‟ and the Insurance Company filed only the
excerpt of the „Tariff‟ relating to additional premium in respect of
third party indemnity liability which has been reproduced above. It
held that in the absence of the „Tariff‟, it could not be said that
` 180/- charged by the Insurance Company was the basic premium to
cover only statutory liability. According to the excerpt of the „Tariff‟
reproduced above, if the limit of liability with respect to damage to
property is ` 1,50,000/-, the liability relating to physical injury, which
includes death, is unlimited. In the policy Ex.RW1/1, which RW1
admitted to be the original policy, the limit of amount of Company‟s
liability for damage to property was set out as ` 1,50,000/-. It,
therefore, followed that the liability of the Insurance Company with
regard to physical injury to third parties was unlimited.
4. Before the Tribunal, it was contended on behalf of the
Insurance Company that Shri Bindra (RW1), in his cross-
examination, had clearly stated that the limit of liability with regard to
property damage was only ` 50,000/- as shown in the true copy of the
policy (Mark „Z‟) and that by mistake in the original policy the figure
of ` 1,50,000/- was typed against the column "Limits of amount of
Company‟s liability under Section II-1(ii)". The learned Tribunal
rejected the aforesaid contention of the learned counsel for the
Insurance Company that the correct figure of the limit of liability of
Insurance Company was ` 50,000/- as stated by Shri Bindra in his
cross-examination and it was due to a typing error that in the original
policy, Ex.RW1/1 the amount was mentioned as ` 1,50,000/-, on the
ground that RW1 Shri Bindra in the same breath admitted that the
copy of the policy Mark „Z‟, in which the amount was mentioned as
` 50,000/-, was not prepared alongwith the original policy Ex.RW1/1.
The Tribunal noted that copy of the policy Mark „Z‟ was prepared
later on, and the doubt expressed by the learned counsel for the
claimants/respondent Nos. 1 and 2 that the amount of ` 50,000/- was
recorded in the copy to escape unlimited liability, could not be said to
be baseless. The Tribunal accordingly held that the liability of the
Insurance Company qua third party was unlimited and the Insurance
Company was, therefore, liable to pay the entire amount of
compensation to the claimants/respondents No. 1 and 2.
5. Mr. Pankaj Seth, the learned counsel for the Insurance
Company, vehemently contended that the findings rendered by the
learned Tribunal in respect of the insurance policy in question were
altogether erroneous. He contended that the learned Tribunal had
completely misread and misunderstood the contents of the original
policy of insurance Ex.RW1/1, inasmuch as it was nowhere
mentioned in the said policy that any additional premium was charged
by the appellant-Insurance Company for increasing the limits of
liability in respect of personal injury beyond the statutory liability.
6. Mr. Vikram Nandrajog, the learned counsel for the claimants/
respondents No. 1 and 2, on the other hand, contended that the
findings rendered by the learned Tribunal with regard to the insurance
policy Ex.RW1/1 were unassailable in view of the facts that firstly,
the Insurance Company did not care to produce the „Tariff‟ and,
therefore, it cannot be held that the premium of ` 180/- paid by the
insured was basic premium to cover statutory liability; secondly, the
liability of the Insurance Company with regard to property damage
was shown as ` 1,50,000/- in the original policy Ex.RW1/1 which
was in excess of the statutory liability, and which clearly showed that
extra premium had been charged to cover third party risk beyond
statutory limit; and lastly, the reliance placed by the appellant-
Insurance Company on the copy of the policy Mark „Z‟ was
misplaced in view of the fact that the Tribunal had before it the
original policy which was proved in evidence by the witness of the
Insurance Company, RW1-Shri Bindra. The subsequent effort to
show that the figure of ` 1,50,000/- in the copy of the policy Mark
„Z‟ was a typing error could not be countenanced in view of the fact
that RW1 Shri Bindra in the course of his cross-examination admitted
that copy Mark „Z‟ in which the amount was mentioned as ` 50,000/-
was not prepared along with the original policy Ex.RW1/1.
7. It may be mentioned at this juncture that the record of the
learned Tribunal which was requisitioned by this Court was reported
to have been destroyed and accordingly this Court did not have the
advantage of perusing either the original policy Ex.RW1/1 or copy
Mark „Z‟. Since, however, the essential facts are not in dispute, this
Court has no difficulty in arriving at the conclusion that there is no
infirmity in the findings rendered by the learned Tribunal for the
reasons explained hereinbelow.
8. RW1 Shri M.S. Bindra, who appeared in the witness box to
substantiate the assertion of the appellant-Insurance Company that its
liability was limited to the extent of ` 50,000/- only, failed to produce
the „Tariff‟. The „Tariff‟ alone could have shown that no extra
premium had been paid by the insured and its non-production must
necessarily lead to adverse inference being drawn against the
Insurance Company. This Court, nevertheless, perused the relevant
part of the „Tariff‟ pertaining to Class B(2) passenger carrying
vehicles, which is reproduced hereunder:-
"Class:B-(2):- PASSENGER CARRYING
VEHICLES FOR HIRE (EXCLUDING
PASSENGER RISK)
(a) Taxis or Private Car Type Vehicles
plying for public hire.
(b) Private Type Taxis let out on Private
Hire direct from the Owner with or
without meters and driven by the Owner
or an employee of the Owner.
(c) Private Car type vehicles let out on
Private Hire and driven by the Hirer or
any driver with his permission.
(d) Private Car type vehicles owned by
Hotels and hired by them to their guests.
Own Damage Liability to Act only
the Public Liability
Risks
Rs.275 + Rs.120 Rs.100
0.75% on
I.E.V.
9. From the aforesaid extract of the „Tariff‟, it is amply clear that
` 100/- was the premium for an „Act Only Policy‟ while in the instant
case a sum of ` 180/- had been paid. Then again, the original policy
Ex.RW1/1 shows that the limit of the amount of the Company‟s
liability for damage to property in the said policy was ` 1,50,000/-,
and if this be so, it follows from the excerpt of the „Tariff‟ produced
by the appellant-Insurance Company itself before the learned
Tribunal, which is reproduced in the order of the learned Tribunal,
that the liability of the Insurance Company with regard to third party
injury was unlimited. The subsequent explanation rendered by the
appellant - Insurance Company that the correct figure was ` 50,000/-
and not ` 1,50,000/- sought to be proved by the production of true
copy of the policy (Mark „Z‟) was rightly rejected by the learned
Tribunal in view of the admission made by RW1 Shri Bindra, the
witness of the appellant-Insurance Company, that the copy of the
policy Mark „Z‟ was not prepared contemporaneously along with the
original policy Ex.RW1/1.
10. In view of the aforesaid, the appeal fails and is accordingly
dismissed.
11. There will be no order as to costs.
REVA KHETRAPAL
(JUDGE)
September 29, 2011
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