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Judgment
Dr. Couto, J.—These two appeals can be conveniently disposed of by a common judgment since they are directed against two judgments both dated October 1, 1983, passed by the learned Presiding Officer of the Motor Vehicles Claims Tribunal, Margao, in applications u/s 110A of the Motor Vehicles Act, 1939, arising out of the same accident.
The facts that led to the said applications were that the sons of the applicants came to die in an accident that took place on November 12, 1980, at about 5 p.m. at Margao. A truck, bearing No. GDS 4214, driven by respondent No. 2, Mohan Tukaram Mane, dashed against the deceased and caused their deaths.
The learned Presiding Officer of the Claims Tribunal recorded a finding that the accidents was due to the rash and neligent driving of the said respondent, Mane, and, ultimately, awarded a compensation of Rs. 56,000 to the applicant, Jao Rosario Vaz, and the same compensation to the applicant, Jose Joaquim Vaz. He held that the said compensation was to be paid jointly and severally with interest at 6 per cent. per annum from the date of the claim till complete satisfaction by the owner of the vehicle, the driver and the insurance company, the appellant herein.
Being aggrieved by this decision, only the insurance company approached this court with the present appeals. It was the case of the company its liability is restricted in terms of the insurance policy to Rs. 50,000 only in both the cases. However, at the time of the hearing, this stand was given up and the insurance company accepted its liability up to the limit of Rs. 50,000 in each of the cases. Elaborating, Mr. Afonso, learned counsel appearing for the appellant, contended that in terms of the insurance policy, the liability of the company has been specifically restricted to Rs. 50,000. Therefore, the Tribunal was wrong in holding that the respondents in the applications, including the insurance company, were jointly and severally liable to pay the full amount of compensation awarded by it. He further submitted that the decision of the Madras High Court in Oriental Fire and General Insurance Co. Vs. V. Ganapathi Ramalingam, , relied upon by the Tribunal hold the company liable for the payment of the full compensation, does not lay down any law and is exclusively based on a concession made by counsel appearing for the insurance company and not merits. Therefore, according to Mr. Afonso, the said decision of the Madras High Court is not an authority to hold that the liability of an insurance company goes even beyond the contractual limit as per the insurance policy. Finally, relying upon the decision of the Division Bench of this court in Surindersingh Aleg and another Vs. M.G. Gurunathan and others, he submitted that there is no doubt whatsoever that the liability of the insurance company is restricted to the amount agreed upon in the insurance policy.
It was, however, contended, by Mr. Usgaoncar, learned counsel appearing for the respondent, Powar, that there are no grounds whatsoever for interference by this court with the impugned judgments. According to him, section 95 of the Motor Vehicles /act clearly indicates that the limits fixed in the said section are applicable only when the compensation is to be paid to the occupants of the vehicles involved in the accidents and not vis-a-vis third parties as the liability of the insurance company as regards such parties is unlimited and unrestricted. Reliance in support of this submission was placed on the decision of a learned single judge of the Rajasthan High Court in Smt. Chand Kanwar Vs. Mannaram and Others, .
Section 95 of the Motor Vehicles Act deals with the requirements of insurance policies and limits of liabilities. Its sub-section (1) reads as under :
"95. Requirements of policies and limits of liability. - (1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which -
(a) is issued by a person who is an authorised insurer or by a co- operative society allowed u/s 108 to transact the business of an insurer, and
(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)-
(i) against any liability which may be incurred by him in respect of the death of, or bodily injury to, any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;
(ii) against the death of, or bodily injury to, any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place."
Sub-section (2), in its turn, lays down that subject to the proviso to sub-section (1), a policy of insurance shall cover any liability incurred in respect of any one accident up to the limits specified in the said provision of law. Mr. Usgaoncar urged that it is clear from clause (b) of section 95(1) that the insurance policy must cover, in the first place, a person or a class of persons and, secondly, as regards third parties, the insurance policy has to be against any liability of the insurance company and as far as the occupants or passengers are concerned up to the limits fixed in sub-section (2), Learned counsel further contended that as regards third parties, the liability of the insurance company is restricted by the objects of the Act itself and not by a particular section of the law, placing in this connection reliance on the decision of the Supreme Court in New Asiatic Insurance Co. Ltd. Vs. Pessumal Dhanamal Aswani and Others,
Although the argument advanced by Mr. Usgaoncar is undoubtedly subtle and a liberal interpretation is to be given to the provisions of the law in order to administer proper justice, the fact remains that the said interpretation cannot be accepted in as much as it is against the express wording of the relevant provision. The aforesaid clause (b) of section 95 (1) of the Motor Vehicle Act indeed specifically and clearly provides that the insurance policy must be a policy which insures the persons or class of persons specified in sub-section (2), only to the extent specified in sub-section (22), and further that such insurance would be (i) against any liability which may be incurred by him in respect of the death of, or bodily injury to,. any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; and (ii) against the death of, or bodily injury to, any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place. Mr. Usgaoncar, however, placing special emphasis on the word "any" occurring in sub-clause (i) of clause (b), contended that this word indicates that the intention of the Legislature was to restrict the liability of the insurance company to limits specified in sub- section (2) in respect of the occupants of the insured vehicle only, for on the one hand the word "any" does not indeed occur in sub-clause (ii), and, on the other, this circumstance read in conjunction with sub-section (2) (a) corroborates that that was the real intention of the Legislature. This according to him, becomes quite clear as sub- section (2) opens with the expression "subject to the proviso to sub- section (1) " and not with the expression "subject to what is provided in sub-section (1)". There is, however, no merit in this submission, The wording of clause (b) of section 95(1) is indeed clear and undoubtedly the expression "to the extent specified in sub-section (2) " occurring therein governs the quantum of the liability of the insurance company in the two hypotheses which are contemplated in sub- clauses (i) and (ii). Sub-section (2) merely provides that the limitations of the liability are subject to the proviso to sub-section (1). This proviso lays down that a policy shall not be required to cover a liability in respect of death arising out of and in the course of hims employment other than a liability arising under the Workmen''s Compensation Act in respect of the death of, or bodily injury to, any such employee engaged in driving the vehicle, or if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle; or it it is a goods vehicle, being carried in the vehicle; or except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of, or bodily injury to, persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises. The expression "subject to the proviso to sub-section (1) " in sub-section (2) has thus no relevance for the interpretation of clause (b) of section 95(1). Therefore, the expression "any liability" occurring in sub-clause (i) appears to have been deliberately used to make it clear that irrespective of the liability that the insured person has incurred as a result of the accident in relation to a third party, the quantum of the liability of the insurance company will be always restricted to the limitations provided in sub-section (2).
In Smt. Chand Kanwar Vs. Mannaram and Others, , a learned single judge of the Rajasthan High Court held a different view. However, we may point out that the decision in Smt. Chand Kanwar Vs. Mannaram and Others, is on the facts of that case and mainly based on the interpretation of a clause inserted in the insurance policy as regards the limits of its liability. It has been specifically agreed in that clause that the limit of the amount of the company''s liability u/s II-I (ii) of the insurance policy in respect of one claim or a series of claims arising out of one event was of Rs. 50,000. The judge, bearing in mind that the insurance policy was a comprehensive one and the observations of the Supreme Court in Pessumal''s case [1964] 34 Comp Cas 693, held the view that a liberal interpretation was to be given to the said clause in order to administer social justice. In Pessumal''s case [1964] 34 Comp Cas 693, their Lordships of the Supreme Court observed as under (at page 699) :
"Chapter VIII of the Act, it appears from the heading, makes provision for insurance of the vehicle against third party risks, that is to say, it provisions ensure that third parties who suffer on account of the user of the motor vehicle would be able to vet damages for injuries suffered and that their ability to get the damages will not be dependent on the financial condition of the driver of the vehicle whose user led to the causing of the injuries. The provisions have to be construed in such a manner as to ensure this object of the enactment."
And further as follows (at page 702) :
"Thus, the contract between the insured and the company may not provide for all the liabilities which the company has to undertake vis-a-vis the third parties, in view of the provisions of the Act. We are of the opinion that once the company had undertaken liability to third parties incurred by the persons specified in the policy, the third parties'' right to recover any amount under or by virtue of the provisions of the Act is not affected by any condition in the policy. Considering this aspect of the terms of the policy, it is reasonable to conclude that proviso (a) of para. 3 of section II is a mere condition affecting the rights of the insured who effected the policy and the persons to whom the cover of the policy was extended by the company, and does not come in the way of third parties'' claim against the company on account of its claim against a person specified in para. 3 as one to whom cover of the policy was extended."
These observations were, however, made by their Lordships of the Supreme Court while interpreting the clauses of the insurance policy and not while addressing themselves to the correct meaning and import of section 95 (1) of the Motor Vehicles Act. Therefore, in our view, the authority in Smt. Chand Kanwar Vs. Mannaram and Others, is clearly distinguishable.
The decision of the Madras High Court in Oriental Fire and General Insurance Co. Vs. V. Ganapathi Ramalingam, , relied upon by the learned Tribunal to hold the company and other respondents in the compensation application jointly and severally concessions made by learned counsel of the company. No Law has been discussed and laid down. Hence, the said decision is not an authority for the proposition that the insurance company is liable for the payment of the full amount of the compensation in case the insurance policy is comprehensive in nature. We may also mention here that the decision of the Division Bench of this court in Surindersingh Aleg [1986] 60 Comp Cas 1001 is not at all attracted to the facts and circumstances of the case, as the Division Bench merely interpreted sub-section (4) of section 96 of the Motor Vehicles Act and has not at all dealt with section 95.It has been indeed argued in that case that insurance company is liable in the first instance to pay the full amount of the compensation awarded by the Tribunal, but if its liability is restricted to a lower amount in terms of the insurance policy, the insurance company will be in such a case entitled to recover the excess paid from the owner of the vehicle. The Division Bench addressing itself to this question and to this question alone, did not accept this contention and held that in any event and at any stage, the liability of the insurance company was restricted to Rs. 50,000 only.
It is common ground and it is not disputed that the insurance policy in the present case is a comprehensive one and further that a limit of Rs. 50,000 had been agreed upon between the insurance company and the insured, that is to say the owner of the vehicle. It is thus manifest that the Tribunal was wrong in holding that the insurance company was jointly and severally liable for the payment of the full amount of compensation awarded. The Tribunal ought to have restricted the liability of the insurance company to the limit of Rs. 50,000 as agreed to in the policy.
The result, therefore, is that these appeals succeed and, consequently, the liability of the insurance company in each of the cases is restricted to Rs. 50,000. The awards are otherwise confirmed, the compensation above Rs. 50,000 being payable jointly and severally by the respondents, Mane and Powar. Costs by respondents Nos. 2 and 3.