New India Assurance Co. Ltd. vs Mohammad Yusuf and Others

Amitav Kumar Gupta, J.—This appeal has been preferred against the judgment/award dated 27.7.2007 passed by Addl. District Judge-cum-Spl. Judge-cum-Addl. Claim Tribunal, Hazaribagh in Claim Case No. 137/1989, whereby liability to pay the compensation of Rs. 2,79,500 was fastened upon owner with a direction to Insurance Company to pay the awarded compensation. Learned Counsel for the appellant-Insurance Company has assailed the impugned order on the grounds that the accident took place on 23.4.1989 and as such the provisions of Motor Vehicle Act, 1939 is applicable and in terms of Section 95(2) the Insurance Company liability is limited to Rs. 50,000 only, even in case of a Comprehensive Insurance Policy, in the absence of any specific agreement and non-payment of separate premium to cover third party risk. It is urged that the Insurance Company cannot be held liable to pay any amount higher than the statutory amount of Rs. 50,000. Learned Counsel for the appellant has placed reliance on the decision in the case of New India Assurance Co. Ltd. Vs. C.M. Jaya and Others, . It is argued that the learned Tribunal has failed to appreciate that Rs. 240 paid as extra premium towards Comprehensive Policy cannot in any way be interpreted to mean that additional premium was paid for covering third party risk.

On the said ground, learned Counsel for the appellant-Insurance Company has submitted that the impugned order whereby the liability has been fastened upon the Insurance Company to pay the entire compensation amount is against the provisions of Section 95(2) of the Motor Vehicles Act, 1939 and in the teeth of the decision rendered by the Hon''ble Apex Court in the case of C.M. Jaya (supra).

On the other hand learned Counsel for the respondent-claimant has submitted that the learned Court below has considered the decisions which has been relied upon by the appellant-Insurance Company. It is contended that the respondent-claimant had preferred M.A. No. 362 of 2007 for enhancement of the compensation amount and the Division Bench of this Court had upheld the award and did not interfere with the findings of the Court below. Learned Counsel while relying on the decision in the case of Dilip Kumar Saha Vs. Runnu Sarkar and Another--> has submitted that in similar circumstances in the said decision it was held that when the owner paid Rs. 240 as the premium covering liability to public risk whereas for coverage of Act only liability the premium payable under the tariff was only Rs. 200. It was held that the respondent-Insurance Company is liable to indemnify the owner of the vehicle for the entire liability in respect of the claim. In the said decision the provisions of Section 11(1)(a) of the policy was considered regarding liability towards third party.

Heard. On perusal of the impugned order it is evident that the Tribunal has considered the material evidence and the decision in the case of CM. Jaya (supra). It found that as per the Insurance Policy Ext.-A, the Insurance Company has charged extra premium of Rs. 240 for liability to public risk and also considered the stipulation in Clause II(1)(a) of the policy regarding the limits of liability and rightly held that the liability of the Insurance Company under the policy was unlimited since it had undertaken to indemnify the insured of the entire liability under the Motor Vehicles Act, 1939. This aspect of the matter was also discussed in the case of New India Assurance Co. Ltd. Vs. Nanak Chand Ben and Others, .

In view of the provisions of Section 95(2), M.V. Act, 1939 and the Insurance Policy on record it is apparent that it was a comprehensive policy and Rs. 240 was paid for covering liability to public risk. Thus impugned order does not suffer from any infirmity or illegality warranting any interference by this Court.

As the Insurance Company has already paid Rs. 7,500 as interim compensation and Rs. 50,000 has been paid subsequently by the order of this Court, hence the Insurance Company shall pay the remaining amount with interest @ 9% in terms of the order of the learned Tribunal within two months from the date of this order.

Let the LCR be sent to the Court concerned. In the result, the appeal is hereby dismissed.