Oriental Insurance Co. Ltd. vs Allahdin and Others

Mansoor Ahmad Mir, J.—Common questions of law are involved in all the appeals titled above and required to be determined by a

common judgment. Accordingly, I deem it proper to decide all the appeals titled above by this common judgment.

CIMANos. 102/2001, 106,107, 108, 109, 110, 111, 112, 113 of 2001, 235/2003,236, 237, 238, 239, 240, 241, 242, 243,244, 245, 246,

247, 248, 249, 250, 251, 252, 253, 254, 255, 256, 257, 258, 259, 260, 261, 262, 263, 264, 265, 266, 267, 268, 269, 270, 271, 272, 273,

274, 275, 276, 277, 278, 279, 280, 281 of 2003 are the out come of claim petitions which came to be filed by the victims of vehicular accident

which was allegedly caused by the Driver namely, Karnail Singh while driving Bus No. JK02E 9657 rashly and negligently on 19th June 1998 near

Nandani at National Highway. For short hereinafter these cases shall be referred to as ""Nandni cases"".

CIMA Nos. 102/2001 and 106 to 113/2001 are directed against award(s) dated 31.5.2001, 28.4.2001, 28.4.2001, 28.4.2001, 28.4.2001,

29.6.2001, 28.4.2001, 28.4.2001, 29.6.2001 passed by the Motor Accident Claims Tribunal, Udhampur in claim petition Nos. 109/Claim,

114/claim, 113/claim, Ill/claim, 115/claim, 136/claim, 107/claim, 112/claim, 84/claim, respectively. The other appeals referred to hereinabove of

Nandni's case are directed against the award dated 31.5.2003 passed in claim petition Nos. 222/claim, 393/claim, 241/claim, 206/claim,

322/claim, 347/claim, 502/claim, 261/claim, 391/claim, 308/claim, 176/claim, 389/claim. 416/claim, 282/claim, 288/claim, 681/claim, 175/claim,

220-A/claim, 680/claim, 230/claim, 394/claim, 367/claim, 474/claim, 108/claim, 387/claim, 538 & 332/claims, 267/claim, 501/claim, 478/claim,

353/claim, 562/claim, 291/claim 279/claim, 346/claim, 256/claim, 281/claim, 354/claim, 477/claim, 395/claim, 280/claim, 680/claim, 290/claim,

316/claim, 392/claim, 620/claim and 289/claim respectively by Motor Accident Claims Tribunal, Udhampur.

CIMA Nos. 41/2005, 63/2005, 67/2005, 68/2005, 69/2005 and 70/2005 are directed against the award dated 15.12.2004 passed by Motor

Accident Claims Tribunal, Jammu in six claim petitions Nos. 592/claim, 753/claim, 79/claim, 656/claim, 615/claim and 556/claim came to be filed

by the victims of the vehicular accident caused by the driver namely, Prem Nath rashly and negligently, as alleged, while driving the offending

Vehicle Bus bearing No. JKR 8725 on 16th November 1999 at Bani-Jandroli which shall be hereinafter referred to as ""Bani cases.

CIMA Nos. 100/2003, 115/2003, 116/2003, 117/2003, 118/2003, 119/2003, 120/2003, 121/2003 and 161/2003 are the out come of

vehicular accident which was allegedly caused by the Driver namely, Suram Singh of the offending Vehicle Bus bearing No. JKU-4571 on 02-04-

2000 rashly and negligently at Jhajjar Kotli, which shall be hereinafter referred to as ""Jhajjar Kotli"" cases. It appears that victims of the Jhajjar

Kotli accident file claim petition Nos. 84/claim, 176/claim, 48/claim, 77/claim 76/claim, 49/claim, 117/claim, 116/claim and 30/claim respectively

before Motor Accident Claims Tribunal, Jammu which came to 'be granted vide award dated 28.2.2003 which is impugned in CIMANos.

100/2003 and 115 to 118/2003.

CIMA Nos. 140/2004, 141/2004, 142/2004, 147/2006 are the out come of vehicular Accident which was allegedly caused by the Driver of

the offending Vehicle Mini Bus bearing No. JK02C-3896 near Goli Bagh District Doda rashly and negligently, which shall be referred to as ""Goli

Bagh Cases"". It appears that the victims of vehicular accident filed claim petition Nos. 91/claim, 109/claim, 141/claim and 137/claim before Motor

Accident Claims Tribunal, Doda which came to be granted vide award(s) vide award dated 21.4.2004, 21.4.2004 and 20.4.2004 respectively by

Motor Accident Claims Tribunal, Doda in claim petitions which are impugned in CIMA Nos. 140/2004, 141/2004 and 142/2004 and 147/2006.

CIMA Nos. 18/2006, 20, 22, and 24 of 2006 are the out come of vehicular Accident which was allegedly caused by the Driver namely of the

offending Vehicle Matador bearing No. JK06 602 rashly and negligently near Khaleni District Doda, which shall be referred to as ""Khaleni Case"".

It appears that the victims of vehicular accident filed claim petitions before Motor Accident Claims Tribunal, Jammu and the award dated

16.12.2005 came to be passed in claim petition Nos. 706/claim, 712/claim, 705/claim and 707/claim which is impugned in these appeals. It is

averred in the claim petitions that the driver had driven the Vehicle Matador bearing No. JK06-602 rashly and negligently.

CIMA No. 154/2005 is directed against the award dated 1.6.2005 passed by Motor Accidents claims Tribunal, Rajouri in claim petition No.

122/claim titled Shah Begum and Ors. v. Sangeet Kumar and Anr. The claimants have averred in the claim petitions that driver had driven the

vehicle Matador bearing No. JK02H-8981 rashly and negligently on 3.7.2005 and caused accident near Kallar District Rajouri.

Heard. Perused. Considered. Three points of law required to be determined.

That Insured, owner(s) has/have committed breach because the driver(s) while driving the offending vehicle(s) at the time of accident was/were

carrying more than specified number of passengers which was beyond permissible capacity of the offending vehicle(s).

that whether the insurer is not liable as per the terms and conditions of the insurance policy read with the mandate of Sections 147 and 149 of

the Motor Vehicles Act in the given circumstances of the case(s).

If issues 1 and 3 are decided against the insurer then in that event question arises whether the insurer can be saddled with the liability only to the

extent of claim of permissible number of passengers as per the terms and conditions contained in the route permit and registration certificate read

with Insurance policy.

In some appeals, learned Counsel for appellants have also challenged the quantum of compensation granted in some of the claim petitions. That

aspect will be dealt with after determining the first three questions.

In order to return a finding on the question formulated hereinabove, it is necessary to notice Section 149 Sub-clause (2) of Motor Vehicles Act

herein which reads an under.

No sum shall be payable by an insurer under Sub-section (1) in respect of any judgment or award unless, before the commencement of the

proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the

bringing of the proceedings or in respect of such judgment or award so long as execution is stayed thereon pending an appeal, and an insurer to

whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the

following grounds, namely:

(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:

(i) a condition excluding the use of the vehicle-

(a) for hire or reward, where the vehicle on the date of contract, of insurance a vehicle not covered by a permit to ply for hire or reward, or

(b) for organized racing and speed testing, or

(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or

(d) without side-car being attached where the vehicle is a Motor Cycle, or

(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been

disqualified for holding or obtaining a driving licence during the period of disqualification8 or

(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotions, or

(b) that the policy if void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false

in some material particular.

This provision of law prescribes that what are the defences available to the insurer. These defences are very limited. Insurer cannot raise a plea

or defence which is not provided and prescribed by the said provisions of law.

If a breach is alleged, it is for the insurer to plead and prove the breach. Further it is also to be proved that breach was the cause of accident.

Division Bench of this Court has observed in a case titled National Insurance Co. Ltd. v. Abdul Gaffar Pandith reported in 2004 2 SLJ 692 that a

breach is to be pleaded and proved. Mere breach is not enough and insurer cannot escape from the liability. It is profitable to reproduce para 7

herein;

In the recent case of National Insurance Co. Ltd. Vs. Swaran Singh and Others, , a three -Judge Bench of the Apex Court has held that breach

of policy conditions, for example, disqualification of driver or invalid driving licence of the driver has to be proved to have been committed by the

insured for avoiding liability of the Insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant

time, are not in themselves defence available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the

insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the manner of fulfilling the condition of the

policy regarding use of vehicles by duly licensed driver or one who was not disqualified to drive at the relevant time. Thus the Insurance Company

must not only prove, as a part of its defence, that the person driving the vehicle was disqualified or that he did not hold a valid driving licence, it is

also required to establish that the insured i. e. the owner of the vehicle had made positive breach of the condition. As a matter of fact, the Supreme

Court went to the extent of holding that where the insured is able to prove breach on the part of the insured concerning the policy condition

regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, ""the insurer would not be allowed to avoid

its liability towards insured unless the said breach or breaches of the condition of driving licence is/are so fundamental and bound to have

contributed to the cause of the accident.

Apex Court in a case titled National Insurance Co. Ltd. Vs. Swaran Singh and Others, held as under:

it is beyond any doubt or dispute that u/s 149(2) of the Act an insurer, to whom notice of the bringing of any proceedings for compensation has

been given, can defend the action on any of the grounds mentioned therein.

However, Clause (a) opens with the words ""that there has been a breach of a specified condition of the policy"", implying that the insurer's

defence of the action would depend upon the terms of the policy. The said sub-clause contains three conditions of disjunctive character, namely,

the insurer can get away from the liability when (a) a named person drives the vehicle;(b) it was being driven by a person who did not have a duly

granted licence and (c) driver is a person disqualified for holding or obtaining a driving licence"". 38. A provision of a statute which is penal in nature

vis-'-vis a provision which is beneficent to a third party must be interpreted differently. It is also well known that the provisions contained in

different expressions are ordinarily constructed differently.

105...

iii. The breach of policy condition e.g. disqualification of driver or invalid driving licence of the driver, as contained in Sub-section (2) (a) (ii) of

Section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving

licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the

insured or the third parties. To avoid its liability toward insured, the insurer has to prove that the insured was guilty of negligence and failed to

exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver or one who was not

disqualified to drive at the relevant time.

vi. Even where the insurer is able to prove breach on the part of the insured concerning the policy conditions regarding holding of a valid licence by

the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the

said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The

Tribunals in interpreting the policy conditions would apply "" the rule of main purpose"" and the concept of ""fundamental breach"" to allow defences

available to the insured u/s 149(2) of the Act.

Apex Court has also observed in a case titled Punam Devi and Another Vs. Divisional Manager, New India Assurance Co. Ltd. and Others, that

breach is to be pleaded and proved. It is profitable to reproduce para 2, of the judgment herein.

In National Insurance Co. Ltd., Chandigarh Vs. Nicolletta Rohtagi and Others, it was held that the insurance company cannot challenge the

quantum of compensation awarded by the Tribunal. The only ground open to insurer is contained in Section 149(2) of the Motor Vehicles Act. In

National Insurance Co. Ltd. Vs. Swaran Singh and Others, , this Court has held that ""Mere absence, fake or invalid driving licence or

disqualification of the driver for driving at the relevant time, are not in themselves defence available to the insurer against either the insured or the

third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise

reasonable care in the manner of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver or one who was not

disqualified to drive at the relevant time."" In the present case the insurer has not led any evidence that the driver of the vehicle had no licence. The

burden of proof that the driver had no licence was open to the insurer which it failed to discharge.

Applying the test to extent case, it is admitted that insurer appellants have failed to plead and prove the breach.

In order to avoid liability, the Insurer was/were under legal obligations to prove that the cause of accident(s) was over-loading.

Apex Court in a case titled B.V. Nagaraju Vs. M/s. Oriental Insurance Co. Ltd., Divisional Officer, Hassan, held that mere carrying more

passengers in a vehicle cannot be said to be a fundamental breach and the insurer cannot use the same as a weapon for avoiding liability. It is

profitable to reproduce para 8 of the judgment herein.

The National Commission went for the strict construction of the exclusion clause. The reasoning that the extra passengers being carried in the

goods vehicle could not have contributed, in any manner, noticed and rejected sans any plausible account, even when the claim confining the

damage to the vehicle only was limited in nature. We, thus, are of the view that in accord with the Standi's case, the aforesaid exclusion term of the

insurance policy must be read down so as to serve the main purpose of the policy, that is, to indemnify the damage caused to the vehicle, which we

hereby do.

High Court of Uttranchal in a case titled Saroj and Others Vs. New India Assurance Co. Ltd. and Others, has also taken the same view. It is

profitable to reproduce para 13 of the judgment herein.

We have perused the evidence on record. The accident was admitted by opposite party No. 1. The burden to prove this fact that the vehicle

was overloaded was upon the insurance company. Even assuming that there were eight persons in the vehicle at the time of accident, the insurance

company cannot escape its liability as there was no evidence on record that the accident took place on account of overloading.

High Court of Himachal Pradesh has also taken the same view in a case titled National Insurance Co. Ltd. Vs. Anjana Shyam and Others,

Kerala High Court has also taken the same view in a case titled Parukutty Vs. K.S.R.T.C., . Rajesthan High Court has also taken the same view in

a case titled National Insurance Company Ltd. v. Smt. Radha Bai and Ors. reported in 2005 (3) ACJR 60. It is profitable to reproduce paras 17

and 18 of the judgment reported in 2005 ACJ 17 herein.

. Thus, to say the least, Hon'ble the Supreme Court has in very categoric terms held that, carrying passengers, more than the number specified in

the permit, will not be violation of the purpose for which the permit is granted.

18.The defence precisely available to the insurer u/s 149(2)(c) is that the vehicle should be used for the purpose not allowed by the permit under

which the vehicle is used, where the vehicle is transport vehicle. That being the position, the judgment in State of Maharashtra and Others Vs.

Nanded-Parbhani Z.L.B.M.V. Operator Sangh, governs the present case on all the fours.

Admittedly, the insurer-appellants have not led any evidence to prove that the overloading was the cause of accident. Keeping in view the ratio

laid down by the High Courts in the judgments referred to herein, the appellants-insurer have failed to prove that the overloading was the cause of

accident. There is not an iota of evidence on the file which could be made the basis for holding that the owner had committed breach and that

breach was the cause of accident(s).

The question which now needs to be adjudicated upon is whether the 'overloading' can be used as a weapon by the insurer to avoid liability?

Sub Clause 2 of Section 149 of Motor Vehicles Act referred to hereinabove is a complete answer. It provides and mandates that what are the

limited defences available. I am of the considered view that overloading is not such a breach which can be said to be a breach in terms of Section

149(2) of Motor Vehicles Act. It may be a breach of condition of registration certificate or route permit but it cannot be used as a weapon for

avoiding liability in terms of mandate of provisions referred to hereinabove. Himachal Pradesh High Court has in a case titled Oriental Fire and

Genl. Ins. Co. Ltd. Vs. Kanhaiyalal and Others, laid down the same test. It is profitable to reproduce para 9 of the judgment herein.

Whether carrying of passengers more than the prescribed or permitted seating capacity is a ground, which can be taken by an insurer to absolve

itself of its liability to pay has to be decided only with reference to the conditions finding a mention in Clauses (a) and (b) of Sub-section (2) of

Section 149 of the Act. The legislature has very advisedly limited the grounds of defences only to such breaches of specified conditions of the

policy which the legislature itself has mentioned Clause (a) and (b) of Sub-section (2) of Section 149 of the Act. In Clause (a), there are as many

as four situations which are related to a condition excluding the use of vehicle as well as the condition excluding the driving of the vehicle by an

unauthorized person or a condition excluding liability for the injury caused or contributed by conditions of war, civil war, riot or civil commotion.

Similarly, in Clause (b), the legislature has advisedly laid down and prescribed that an insurer is entitled to defend the action if the policy of

insurance is void on the ground that it was obtained by non-disclosure of a material fact or by representation of a fact which was false in any

material particular. It is therefore, manifestly clear that the overloading of Bus even though it might be a breach of a condition of the registration

certificate or the route permit, yet cannot be made the basis of a defence by an insurer because such a breach does not find any mention in either

Clause (a) or Clause (b) of Sub-section (2) of Section 149 of the Act. By now, through a catena of pronouncements of law by various judgments

of the Apex Court it has conclusive been established that an insurer is entitled to avoid its liability to pay only if its defence fall within the ambit of

Sub-section (2) of Section 149 of the Act and that an insurer, otherwise then by Section 170 of the Act, cannot be permitted to traverse beyond

these limited defences available to it u/s 149(2) of the Act.

It is necessary to notice herein that all offending vehicles were meant for carrying passengers as per the Route permits. Keeping in view the

pleadings of the parties all these offending vehicles were used at the relevant point of time for carrying passengers. Thus the offending vehicles

came to be used for the same purpose for which the permit was granted. It is not the case of the insurer-appellants that the offending vehicles were

used for different purpose other than permitted by registration certificate and route permit. Thus, it cannot be said to be a, breach and, ground for

avoiding liability. Kerarla High Court in a case titled Parukutty Vs. K.S.R.T.C., has taken the same view. It is profitable to reproduce para 7 of the

judgment herein.

The second contention is regarding overloading of Autorickshaw. In United India Insurance Co. Ltd. Vs. Sabeer Ali and Others, , it was held

that merely because the vehicle was overloaded it cannot be stated that the vehicle was used for a purpose other than the purpose for which the

permit is granted. The purpose for which the Autorickshaw was registered was to carry passengers and as a Taxi vehicle and mere loading of the

vehicle will not oust the liability of the inusrer's company as there is no violation of Section 149(2)(a)(i)(c) (see B.V. Nagaraju Vs. M/s. Oriental

Insurance Co. Ltd., Divisional Officer, Hassan, ).

High Court of Uttranchal has also taken the same view in a case titled National Insurance Co. Ltd. Vs. Anjana Shyam and Others, . It is

profitable to reproduce paras 12 and 13 of the judgment herein.

12...Carrying or more passengers than the number given in the insurance policy may be irregular but is not so fundamental a breach as to put an

end to the contract of insurance and it cannot also be a defence open to the appellant-insurance company to allege that the overloading of the

passengers in the ill-fated Bus was the direct cause of the accident for which the State Government is liable to contribute the amounts of

compensation awarded by the Tribunals below. In B.V. Nagaraju Vs. M/s. Oriental Insurance Co. Ltd., Divisional Officer, Hassan, it is held that

when in terms of the insurance policy that the insured vehicle was entitled to carry six workmen, excluding the driver and if those six workmen

when traveling in the vehicle, are assumed not to have increased any risk from the point of view of the insurance company on occurring an

accident, how could those added persons be said to have contributed to the causing of it is the poser, keeping apart the load it was carrying. Their

Lordhips further held that merely lifting a person or two, or even three, by the driver or the cleaner of the vehicle, without the knowledge of the

owner, cannot be said to be such a fundamental breach that the owner should, in all events, be denied indemnification. The misuse of the vehicle

was somewhat irregular though but not so fundamental in nature so as to put an end to the contract of insurance, unless some special circumstances

or factors existed which, by themselves had gone to contribute to the causing of the accident.

13...Under Section 149(2)(a)(i)(c) of the Motor Vehicles Act, 1988, the defence which the appellant insurance company can raise is in respect of

the breach of specified or enumerated conditions of the insurance policy one of which being, viz. , if the vehicle allowed by permit has been used

for a purpose other than the specified purpose. As noticed above, the purpose of permit of the ill-fate bus was to carry the passengers and,

therefore, there is no violations of statutory provisions by the insured and as such the defence that more than 42 +2 passengers specified under the

policy of insurance were carried at the time of the accident in the ill-fated bus is not available u/s 149(2)(a)(i)(c) of the Motor Vehicles Act to the

appellant insurance company against third party risk as the vehicle was not used for the purpose not authorized by the permit. For taking this view,

we are supported by a Division Bench judgment of the Madhya Pradesh High Court in Radhey Shyam Agarwal and Another Vs. Gayatri Devi and

Others, and the judgment of the Apex Court in B.V. Nagaraju Vs. M/s. Oriental Insurance Co. Ltd., Divisional Officer, Hassan, .

Rajesthan High Court in a case titled National Insurance Company Ltd. v. Smt. Radha Bai and Ors. reported in 2005 ACJ 60 has taken the

same view. It is profitable to reproduce para 5 of the judgment herein.

Before the learned Tribunal, the appellant-insurer contested its liability on the ground of their being breach of policy conditions, i.e. Bus was

carrying passengers beyond the capacity specified in the permit, being 40 (38+2), while more than 60 passengers are said to have been carried.

On the relevant controversy issue No. 3 was framed by the learned Tribunal, and the same was decided by the learned Tribunal after considering

the evidence of Assistant Divisional Manager of the appellant, the permits being Exts. 6 and 7, and the factum of prosecution having being lodged

against the owner for offence u/s 66 and 192 of the Motor Vehicles Act and it was found on the authority of the judgment of Hon'ble Supreme

Court in State of Maharashtra and Others Vs. Nanded-Parbhani Z.L.B.M.V. Operator Sangh, that it cannot be said that the Bus was not being

used for the purpose for which permit was granted.

Apex Court has also observed in a case titled State of Maharashtra and Others Vs. Nanded-Parbhani Z.L.B.M.V. Operator Sangh, that

carrying of more passengers is not a violation and, cannot be said that the vehicle came to be used for different purpose other than permitted by the

route permit and Registration certificate.

Having glance of the above discussion, I am of the considered view that the offending vehicle(s) was/were used, as passenger Vehicle(s) at the

relevant point of time and, not for different use other than specified and permitted. Thus, the insurer cannot escape from the liability.

Now, coming to the third question formulated hereinabove that whether the liability of the insurer is only to the extent claim(s) of permissible

number of passengers. It means that the argument of the insurer-appellants is that the risk of prescribed number of passengers mentioned in the

route permit was only covered and not beyond that as per the terms and conditions of the insurance policy. I am of the view that this argument is

devoid of any force for the following reasons.

It was for the insurer to plead and prove the contents and conditions of the insurance policy. The insurer-appellants have failed to prove that

insurance policy was only for specified number of passengers. Thus, only on this ground the argument of learned Counsel for insurer/appellants

merits to be turned down. However, I deem it proper to return finding on this issue as well. It is worthwhile to reproduce Sub-clause (c) of Section

145 of Motor Vehicles Act 1988 herein.

c. ""liability' , wherever used in relation to the death of or bodily injury to any person, includes liability in respect thereof u/s 140.

The word ""any person"" is used in this provision of law. It means that risk of any passenger who is traveling in the passenger vehicle, is covered.

It is also profitable to reproduce Clause (a) and (b) of Sub-clause (1) of Section 147 of Motor Vehicles Act, 1988 herein.

In order to comply with the requirement of this Chapter, a policy of insurance must be a policy which-

(a) is issued by a person who is an authorized insurer, or

(b) insurer 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, including owner of the goods or his

authorized representative carried in the vehicle] 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:

The word ""any passenger"" is also used in the Section 147 refereed hereinabove. This means that liability of insurer vis-a-vis passenger(s) is not

limited only to the specified and permitted seating capacity. It is for the insurer to plead and prove the terms and conditions of insurance policy.

Insurer-appellants have not proved the contents and conditions of the insurance policy.

Keeping in view the mandate of sections 145, 147 and 149 of the Motor Vehicles Act, one comes to the inescapable conclusion that insured

must have a insurance policy, covering the risk of death of or bodily injury to any passenger, of public service vehicle. It is not mandate of the said

provisions of law that the insured has to obtain insurance policy covering the risk only of the permissible number of passengers and not beyond

that. If it will be held that liability of insurer is only to the extent of seating capacity of passengers that will, be against the concept of granting of

compensation to the victims of the vehicular accident and, also defeat the purpose, aim and object of the said social legislation for which the

legislation is aimed at. Himachal Pradesh High Court has also laid down the same test in a case titled National Insurance Co. Ltd. v. Reena Devi

and Ors. reported in 2006 ACJ 60. It is profitable to reproduce para 10 of the judgment herein.

Insofar as the question of the policy of insurance being followed only to cover the liability with respect to thirty passengers is concerned, first of all

a bare look at Section 147(1)(b)(i) will show and demonstrate unmistakably the clear legislative intent that every policy of insurance must be a

policy which insures the insured against the death of or bodily injury to any passenger of a public service vehicle. This, read with Clause (a) of Sub-

section (2) of Section 147 of the Act clearly underscores the paramount and imperative legislative requirement that the liability has to be unlimited

in every case and unlike the provisions of the Motor vehicles Act, 1939 the legislative prescription as well as legislative intent behind the Motor

Vehicles Act, 1988 clearly is to ensure that every policy of insurance is unlimited in nature and content and that it is neither restricted nor limited in

its operation. This legal position apart, as far as the facts of the present cases go, apart from the mere ipse dixit of the appellant we have no

material on record whatsoever whereby even remotely the appellant has been able to establish that the policy issued by it covered the risk of only

30 passengers. The appellant did not produce any evidence, either documentary or oral, whereby it can be said that the appellant proved the fact

that the policy issued by it covered the limited risk with respect to 30 passengers and no more.

This Court has held in case National Insurance Co. Ltd. v. Mst. Zaina and Ors. reported in 2001 SLJ 242, that it cannot be held that the

liability of insurance Company is limited to the extent of permissible number of passengers. It is profitable to reproduce para 8 of the judgment

herein.

Mr. Kawoosa admits that there is no dispute whatsoever, regarding the factual aspects of the case and that he does not question the quantum of

compensation award in any of the appeals and the mode and manner of arriving at the awarded compensation(s). he further submits that the

statement of facts and narration of dates and other details are correctly reflected and figure in the impugned awards. What Mr. Kawoosa

strenuously contends is that the liability of the Insurance Company is limited to five passengers and the Driver and the vehicle was carrying double

that load when it met with the fatal accident, in which all the ten passengers and the Driver died. Therefore, the liability of the Insurance Company

is confined to the five passengers and the driver and not unlimited as held by the Tribunal. There is no special, con tract between the Insurance

Company and the insured to cover unlimited liability by the Company. By carrying more passengers, there has been breach of policy and therefore

the appellant-Insurance Company cannot be foisted with unlimited liability. All these contentions were raised earlier before the learned Single

Bench in earlier said appeal u/s 173 of Motor Vehicle Act and therefore, the LPA bench against the judgment of learned Single Judge. However,

these contentions were turned down by the Bench. The LPA Bench, to which I was a party, held that merely because the Taxi car carried more

passengers than permissible, would not absolve Insurance Company of liability, more so when the violation of terms of policy, in the facts and

circumstances of the case could not be inferred. It was further observed that in any case, it was no so fundamental as to allow the Insurance

Company to eschew liability altogether. The court in the context of wider scope on application of norms of meaningfully interpreting the provisions

of Section 147 and 149 of the Motor Vehicles Act, held that in the facts and circumstances of the case, claimants were entitled to claim

compensation from the Insurance Company and that the Tribunal had rightly awarded the compensation.

Having regard to the above discussion, the finding is to be returned in favour of the claimants and owner(insured) and against the insurer-

appellants. Accordingly, the question is answered.

Learned Counsel for the appellants have also disputed the quantum of compensation granted in number of claim petitions. I am of the

considered view that insurer cannot challenge the quantum of the compensation and, be allowed to avoid the liability. But the insurer has to satisfy

the award while keeping in view the purpose of granting compensation. The Courts are under legal obligations to come down heavily. Apex Court

in case titled New India Assurance Co. Ltd. Vs. Kiran Singh and Others, held that insurer cannot be allowed to defeat the purpose of social

legislation. It is profitable to reproduce para 6 of the judgment herein.

Insurance is a covenant of good faith, where both parties are convenanted to abide by the terms and conditions of the policy. In the premises

aforesaid, it is clear that the company has made a deliberate attempt to escape the liability by introducing a copy of the policy other than the

insured. Often, the terms and conditions are being respected more in breach than observance. Insurance company must bear in mind that they are

the trustee of the public. Keeper of the public coffer. Often, even genuine claims are being hotly contested in a routine manner by dragging the

parties to Courts, wasting numerous time and money for the claimants to get their claims settled. The Act like Motor vehicles Act being a beneficial

legislation aimed at quick redressal of the victims of accidents arising out of the use of the Motor Vehicles, the attitude routinely adopted by the

insurance company would render the object of the Act frustrated. If such instances are brought to the Court, the Court would be obliged to dismiss

the appeal with heavy costs. Apart from deprecating such practices.

Apex Court in a case titled New India Assurance Co. Ltd. Vs. Kiran Singh and Others, has held that the insurer cannot challenge quantum of

compensation. It is profitable to reproduce para 5 of the judgment herein.

It is contended that the multiplier of 43 applied by the Tribunal is erroneous. In this connection, the learned Counsel for the appellant had

referred to the decision of this Court in U.P. State Road Transport Corporation and Others Vs. Trilok Chandra and Others, , wherein this Court

has held that the multiplier should not be more than 18. The Tribunal while applying the 43 multiplier had considered the age of the deceased being

27 years and if he had not died in the accident he would have lived up to the age of 70 years and one day he would have been promoted to the

post of Chief Engineer. Keeping the aforesaid background in view, the High Court was of the view, that if the multiplier is reduced and multiplicand

is enhanced not much difference would be caused to the amount fixed by the Tribunal. Even otherwise it is a trite law that the insurance company is

not capable to challenge the quantum of compensation.

Applying the test, it is hereby held that insurer cannot dispute and challenge the quantum of the compensation.

However, I have examined and perused the record and impugned award(s), I am of the considered view that the compensation awarded in all

the claim petitions is just and not excessive in any way.

Viewed thus, all the appeals along with all CMPs are dismissed and impugned awards are up-held. Registry to place copy of the judgment in

each appeal file and, claim petition. Send down the record.