Basudev Guru vs Smt Basantipanigrahi And Others

A.K. Mohapatra, J.

1.Being aggrieved by order dated 3rd May, 1994 passed by the learned Single Judge in M.A.No.386 of 1989 holding that the liability of the insurer is

limited to the extent of Rs.50,000/- in view of the provision contained in section 95(2)(b)(i) of the Motor Vehicle Act, 1939 and the balance amount of

the awarded amount is payable by the owner insured of the vehicle, the owner of the vehicle has preferred the present appeal.

2.The factual backdrop of the present case, bereft of unnecessary details, is that the present Appellant was the owner of the Bus bearing registration

No.ORS 9225 and the said bus was duly insured with the Oriental Insurance Company Ltd. (Respondent No.6). One Daitari Panigrahi, who was

working as a Teacher in the Modipara M.E.School under Sambalpur Municipality and was earning a monthly income of Rs.1700/-, is the husband of

Respondent No.1 and father of Respondent Nos. 2 to 5. On 3rd April, 1986 at about 4 P.M., the above named Daitary Panigrahi was going by his

bicycle and he was on the left side of the main road, Sambalpur leading from Modipara Chhak to Hospital road. When he took a turn to go to

Modipara side, the Bus bearing Registration No.ORS 9225 belonging to the Appellant, being driven in a rash and negligent manner, knocked down the

deceased and as a result of which Daitary died on the spot.

3.After the death of late Daitary, his widow-Respondent No.1 and children, Respondent Nos. 2 to5 filed a Claim Case in the Court of the learned 2nd

Motor Accident Claims Tribunal, Northern Division, Sambalpur bearing Claim Case No.146 of 1986 claiming a compensation amount of Rs.1,50,000/-

from the opposite parties.

4.The Appellant and the Respondent No.6, Opposite Parties in the claim petition, filed their separate written statements denying the allegations made

by the claimants.

5.On the basis of the pleadings of the parties, the learned M.A.C.T.(ND), Sambalpur framed three issues to adjudicate the claim, which are given

hereunder:

i) Whether the accident took place due to rash and negligent driving of the Bus driver bearing ORS 9225 resulting in the death of Daitari Panigrahi on 03.04.1986 ?

ii) Whether the applicants are entitled to any compensation? If so, from whom and to what extent?

iii) To what relief, the parties are entitled?

6.To establish their case, claimant-applicants examined four witnesses, whereas the Opposite Parties did not adduce any evidence, be it oral or

documentary.

7.The learned 2nd M.A.C. Tribunal, Sambalpur relying upon the ocular evidence of A.W.No.2 arrived at a finding that there is no escape from the

conclusion that the accident resulting in the death of the deceased was due to the rash and negligent driving of the bus in question. Hence the Issue

No.1 was answered affirmatively in favour of the claimant-applicants. So far as the Issues Nos. 2 and 3 are concerned, those two issues were taken

up together and after discussing the evidence, learned 2nd M.A.C. Tribunal, Sambalpur passed the award dtd.12.01.1989 holding that the claimant-

applicants are entitled to get a total compensation of Rs.1,49,000/-. In reply to the question as to who shall be liable to pay the compensation amount,

learned 2nd M.A.C. Tribunal, Sambalpur presumed that the liability of the insurer, Opposite Party No.2 being unlimited, the Opposite Party No.2 is

liable to indemnify the insured and to pay the entire compensation amount to the claimant-applicants. Accordingly directed Opposite Party No.2 to pay

the entire compensation amount of Rs.1,49,000/- within a period of two months from the date of his judgment to the claimant-applicants.

8.The Respondent No.6, insurer preferred an appeal bearing M.A.No.386 of 1989 before a learned Single Judge Bench of this Court challenging the

award dtd.12.01.1989 passed in Misc. case No.146 of 1986. After hearing the parties, this Court vide order dated 3rd May, of the M.V.Act, 1939, 2nd

M.A.C. Tribunal, Sambalpur could not have saddled the entire liability of Rs.1,49,000/- on the insurer alone. Further, the award of the learned 2nd

M.A.C. Tribunal, Sambalpur was modified to the extent that the Respondent No.6-Insurance Company’s liability is limited to the extent of

Rs.50,000/- only and the balance amount of Rs.99,000/- would be paid by the present Appellant and further modified the rate of interest from 12% as

granted by the learned 2nd M.A.C. Tribunal, Sambalpur to 6% per annum from the date of application till date of payment is made.

9.As stated earlier, neither the insurer nor the insured filed any evidence before the learned 2nd M.A.C. Tribunal, Sambalpur. Even a copy of the

insurance policy/premium receipt was not filed by either of them in the learned Tribunal below. However, during pendency of the M.A.No.386 of

1989 before this Court, the Appellant-Insurance Company had filed a Misc.Case No.89 of 1994 to adduce additional evidence in the appeal. Such

additional evidence includes a copy of the insurance policy. It is relevant to mention here that, despite having opportunity, no objection, whatsoever,

was raised by anyone of the Parties to the said Misc. Case seeking introduction of additional evidence in M.A.No.386 of 1989. The learned Single

Judge, however, observed that such additional evidence shall be considered at the time of final hearing of M.A.No.386 of 1989 by order dated 15th

July, 1997.

10.Challenging order dated 3rd May, 1994 passed in M.A.No.386 of 1989 passed by the learned Single judge, the present Appellant, the Bus owner,

has filed the present A.H.O. questioning the legality and validity of order dated 3rd May, 1994.

11.Heard Mr.C.A.Rao, learned Senior Advocate for the Appellant and Mr.G.P.Dutta, Advocate for the Respondent No.6 and perused the records

placed before us.

12.Mr.C.A. Rao, Senior Advocate appearing on behalf of the Appellant  (insured) made a valiant attempt to assail order dated 3rd May, 1994

passed by the learned Single Judge in M.A.No.386 of 1989 on the ground that the insurance policy taken by the insured covers unlimited liability

arising on account of a claim by a 3rd party and that the Appellant is not liable to pay any amount as directed by the learned Single Judge of this court

in the M.A.. It is further stated by him that the Respondent No.6 -insurer has accepted a sum of Rs.240/- under “T.P. Policy†and not “Act

only Policy†and that the same covers the public risk. Mr.Rao, learned Senior Advocate, further submitted that the T.P. Policy covers the liability of

3rd party for unlimited amount for which an extra premium of Rs.40/- has been paid to the insurer.

The Appellant insured has also filed a petition bearing Misc. case No.88 of 1994 in the present AHO for additional evidence. Since no objection

was raised by any party, the same is allowed and taken on record. The present Appellant has filed the schedule of rates of the Insurance Company

involved in the present case. The document under the heading “Benefits Under Motor Insurance†provides three categories of insurance policies.

Under the second category i.e. Liability to the Public Risk (Third Party Insurance), the following note is given;

“Indemnity against legal liability for claims by the public in respect of accident, personal injury or damage to property caused by the insured vehicle and W.C.

liability to paid driver, cleaner or attendant whilst engaged on the vehicle as per limitations mentioned in the policy.â€​

The insured Appellant had taken a liability to public risk policy by paying extra premium of Rs.240/-.and this fact is evident from the copy of the

insurance policy filed before this court. Therefore, under the public risk policy, the liability of the insurer is subject to the conditions/ limitations in the

policy. When the Appellant has not paid any extra premium for unlimited third party liability as the said column in the premium receipt had been left

blank, the liability of the insurer is subject to the statutory limits prescribed under the Motor Vehicle Act, 1939.

14.In course of his argument, learned counsel appearing for the insured placed a strong reliance on a judgment of this Court in National Insurance

Co. Ltd-vrs-Krushna Chandra Das and others, reported in 1989(II) OLR 120 R. elying on Paragraph-5 of the said judgment, it was submitted by

him that the claimants are entitled to get the entire compensation amount as directed by the learned 2nd M.A.C. Tribunal, Sambalpur from the insurer

without being affected by the limits provided under section 95(2)(b)(i) of the M.V.Act, 1939.

15.On a careful reading of the judgment relied on by the learned counsel for the Appellant reported in 1989(2) OLR 120, it is seen that the deceased in

the said case was a 3rd party pedestrian who died unfortunately in an accident caused by a bus. Learned Single Judge, who was adjudicating the said

matter referred to Section 95(2)(b)(i) of M.V.Act, 1939 and has arrived at a conclusion that a Pedestrian is not such a person in respect of whom

liability has been limited under section 95(2)(b)(i) of the Act and therefore, the learned Single Judge was inclined to hold that the Claimants in respect

of an accident caused by a vehicle in which passengers carried are entitled to get compensation from the insurer without being affected by the limits

provided in Section 95(2)(b)(i) of the M.V.Act, 1939.

16.Mr.G.P.Dutta, learned counsel appearing for the insurer Respondent No.6, defended the order passed by the learned Single Judge in M.A.No.386

of 1989. Mr. Dutta furthersubmitted that the insurance policy under which the claim is made does not cover unlimited liability towards 3rd party.

Moreover, the attention of the Court was drawn to a copy of the Policy to support his contention that the liability towards 3rd party is not unlimited in

this case as the extra premium that was required to be paid by the insured for such coverage has not been paid by the insured in the present case. In

fact, a close scrutiny of the insurance policy which has been filed by the insurer before the learned Single Judge along with a Misc.Case reveals that a

total sum of Rs.1008/- has been paid by the insured as premium to the insurer. Further, the schedule of premium doesn’t reveal whether any

amount has been paid under the heading “Add for increased T.P.limits†and the said heading in the premium receipthas been left blank. This

clearly shows that no extra amount was paid by the insured to the insurer for unlimited 3rd party policy.

Mr.C.A. Rao, learned counsel for the Insured relied upon the judgment of the Hon’ble Supreme Court in the matter ofN ational Insurance

Co. Ltd., New Delhi, -vrs.- Jugal Kishoreand othersreported in AIR 1988 SC 71 9to advance his argument on the issue that in all such cases

where the Insurance Company concerned wishes to take a defence, in a claim petition, that its liability is not in excess of statutory liability, it has to file

a copy of the insurance policy along with its evidence. He further submitted that the Insurance Company having not filed the copy of the insurance

policy before the learned M.A.C. Tribunal, Sambalpur, the insurer is estopped to take the defence as stated hereinabove. It is true that the copy of the

insurance policy had not been filed before the learned Tribunal by the Insurance Company at the first instance. However, in the appeal before the

learned Single Judge, the Insurance Company sought to include in the evidence a copy of the insurance policy by filing a petition for acceptance of

additional evidence. Although the insured was a party before the learned Single Judge, no objection was filed to such an application. Moreover, the

learned Single Judge had passed an order indicating that the evidence shall be considered at the time of final hearing of the appeal. Therefore, once

the learned Single Judge has accepted the evidence and passed order indicating that the same will be considered at the time of final hearing that too

without any objection by the insured, it is no more open to the insurer to take a stand that the insurer is estopped to take a plea that the liability is

limited under section 95(2)(b)(i) of the M.V.Act. Moreover, it is the insured who has taken a stand in the present appeal that the liability of the insurer

is beyond the statutory limit of Rs.50,000/- and therefore, the insured was under the legal obligation to file a copy of the policy, both as a custodian of

the insurance policy as well to support his assertion that the liability of the insurer is beyond Rs.50,000/- as provided under section 95(2)(b)(i) of the

M.V.Act, 1939, to support his contentions in this regard.

18.Learned counsel appearing for the Insurer while supporting the impugned order has relied upon two judgments of the Hon’ble Supreme Court.

First, i.e. AIR 1988 S.C. 719 (Jugal Kishore’s Case) to establish that the liability of the Insurance Company as against 3rd party claim has been

restricted within the statutory limit as provided under Section 95(2)(b)(i) of the MV.Act, 1939. He has also placed his reliance upon a judgment of the

constitution bench of the Hon’ble Supreme Court of India in the matter of New India Assurance Co.Ltd. -vrs.-C.M.Jaya and others, reported

in AIR. 2002 S.C. 651. In C.M.Jaya’s case (supra), a constitution Bench of the Hon’ble Supreme Court was considering the question of

Law i.e. “the question involved in this appeal is whether in a case of Insurance policy not taking any higher liability by accepting a higher premium,

in case of payment of compensation to a 3rd party, the insured would be liable to the extent limited under Section 95(2) or the insured will be liable to

the entire amount and he may ultimately recover from the insurerâ€. After analyzing several judgments by the Hon’ble Supreme Court including

Jugal Kishore’s case (supra), in Paragraph-8 of the said judgment has arrived at the following conclusion;

“8. In the light of what is stated above, we do not find any conflict on the question raised in the order of reference between the decisions of two Benches of three

learned Judges in Shanti Bai and Amrit Lal Sood aforementioned and, on the other hand, there is consistency on the point that in case of an insurance policy not

taking any higher liability by accepting a higher premium, the liability of the Insurance company is neither unlimited nor higher than the statutory liability fixed under

Section 95(2) of the Act. In Amrit Lal Sood’s case, the decision in Shanti Bai is not noticed. However, both these decisions refer to the case of Jugal Kishore and

no contrary view is expressed.â€​

19.In view of the legal position discussed hereinabove, the law laid down by a Single Judge Bench of this Court in 1993 (II) OLR page 11 is no more a

good law as the same has been impliedly overruled by a constitution Bench of the Hon’ble Supreme Court in AIR 2002 SC 651. In view of the

final legal position and the materials available on record, the submissions made by the learned counsel for the Appellant that the Respondent No.6

(insurer) had in the present case undertaken an unlimited liability policy towards 3rd party claims does not have any substance. The liability under the

policy in the instant case, was the same as the statutory liability contemplated by Section 95(2)(b)(i) of the M.V.Act, 1939 as it stood at the relevant

point of time. Therefore, the learned Single Judge has not committed any illegality under the impugned order by restricting the liability of the insurer to

Rs.50,000/-as provided under section 95(2)(b)(i) of the M.V.Act, 1939.

20.The impugned order dated 3rd May, 1994 passed in M.A.No.386 of 1989 by the learned Single Judge does not call for any interference by this

Court. Accordingly, the appeal preferred by the Appellant insured is hereby dismissed. However, there shall be no order as to cost.

………………………………….