Oriental Insurance Co. Ltd. vs Tarawati and Others

N.K. Kapoor, J.—This judgment shall dispose of L.P.A. No. 791 of 1986 and cross Objection No. 2 of 1987 filed by claimant-respondents 1 to 5.

Oriental Insurance Company Limited has preferred this appeal against the judgment of the learned Single Judge dated 22.8.1996 as it has been made liable for the entire amount awarded to the claimants by the Motor Accident Claims Tribunal.

Motor Accident Claims Tribunal while determining the amount which the claimants were entitled to on account of damages and compensation and from whom, awarded a sum of Rs.1,40,000/- and apportioned the same between the truck driver, truck owner and the Insurance Company. Insurance Company was held liable to the extent of Rs.50,000/-

Claimants feeling aggrieved by the award of the Motor Accident Claims Tribunal preferred an appeal and the learned Single Judge vide impugned judgment while affirming the compensation amount held the Insurance Company liable for the whole amount, which is now under challenge.

Precise submission of the learned counsel for the appellant is that the liability of the Insurance Company is to be determined in terms of Insurance policy. A perusal of the insurance policy, which is already on record, clearly stipulates the amount for which the Insurance Company is liable. In the present case it is fixed at Rs.50,000/-. According to the counsel, even otherwise as per Section 95(2) of the Motor Vehicles Act, 1939 liability of the Insurance Company to compensate an injured or on account of death does not exceed Rs.50,000/-. So, the learned Single Judge has erred in law in coming to the conclusion that the liability of the Insurance Company is unlimited. Counsel placed reliance upon the decisions of the apex Court in New India Assurance Co. Ltd. v. Ram Lal and Ors. 1988 A.C.J. 755 and National Insurance Co. Ltd., New Delhi Vs. Jugal Kishore and Others, .

Counsel for the respondents on the other hand argued that since no defence was set up by the Insurance Company, learned Single Judge rightly came to the conclusion that the Insurance Company cannot derive any benefit from merely placing the insurance policy on record. Counsel further urged that no such plea was set up by the Insurance Company in the written statement.

Having heard the learned counsel for the parties for a while, we are of the view that the appeal merits acceptance. Concededly, the insurance policy as placed on record at the time of adducing evidence before the Motor Accident Claims Tribunal. As per insurance policy Insurer owned its liability to the extent of Rs.50,000/- only. Precisely for this reason Motor Accident Claims Tribunal determined the liability of the Insurance Company to the extent of Rs.50,000/- only. Since the Insurance Company had undertaken to indemnify the insured to the extent of Rs.50,000/-, we find no justification for the learned Single Judge to make the liability of the Insurance Company to be unlimited i.e. for the whole of compensation awarded. View taken by the learned Single Judge is contrary to the view taken by the apex Court in the aforesaid two judgments. Respectfully following the decisions of the apex Court, we accept the appeal of the Insurance Company as prayed for i.e. limiting the liability of the Insurance Company to the extent of Rs.50,000/- only.

Counsel for the claimants, however, argued that the award of the Motor Accidents Claims Tribunal which though has merged in the judgment of the learned Single Judge deserves to be modified to the extent that claimants be held to be entitled to interest at the rate of 12% per annum from the date of filing of the petition till the payment is made. We find no merit in this submission of the learned counsel for the claimants. Motor Accident Claims tribunal while determining the compensation amount awarded interest at the rate of 6% per annum on the compensation amount with effect from the date of the order of the award till the compensation amount is paid. Motor Accident Claims Tribunal exercised its discretion. We find no infirmity in this approach of the Motor Accident Claims Tribunal. Otherwise too, this point was not pressed before the learned Single Judge and since no further step has been taken by the claimants, we are not inclined to entertain the same at this stage. No other point has been pressed.