The New India Assurance Co. Limited vs Simmar Singh, Driver and Others

N.K. Kapoor, J.—This judgment shall dispose of L.P.A. Nos. 169, 170, 171 and 172 of 1986 as these raise common question of law and fact. Learned Single Judge top disposed of appeal, cross objections filed by the claimants as well as cross-objections filed by the truck owner by a common judgment.

In an accident between a motor cycle and the truck bearing No. PUN-1781 Ram Singh, who was driving the motor cycle was killed while the pillion rider Gian Singh sustained serious injuries. Heirs of Ram Singh as well as the injured filed the claim petition before the Motor Accident Claims Tribunal. Tribunal awarded a compensation of Rs. 1,08,000/- to the widow and children of Ram Singh whereas he Tribunal awarded a sum of Rs. 36,000/- to Gian Singh for the injuries suffered by him in this accident. As noticed earlier, claimants, the Insurance Company as well as the Truck owner challenged the order of the Tribunal by preferring an appeal/cross-objections.

Counsel representing the Insurance Company raised objections with regard to the liability fastened upon the Insurance Company by the Motor Accident Claims Tribunal. According to the counsel, the liability of the Insurance Company was limited i.e. Rs. 50,000/- in each case. To support it, reliance was placed upon Section 95(2) of the Motor Vehicles Act, 1939 (hereinafter to be referred as ''the Act''). This argument was repelled by the learned Single Judge on the sole ground that as the precise objection had not been taken by the Insurance Company in its written statement, Company is estopped from raising such a plea. Insurance Company with a view to meet this objection of the Court also filed an application seeking amendment of the written statement with a view to incorporate the specific objection i.e. liability of Insurance Company being limited the Tribunal could not make the Company liable exceeding the amount mentioned in the policy. The learned Single Judge declined this prayer of the appellant on the ground that on account of lapse of time possibility that owner of truck might have disposed of his assets so as to frustrate the claim of the claimants cannot be ruled out and so amendment, if allowed, may frustrate the award of Tribunal. Resultantly, the appeal was dismissed as well as the objections filed by the truck owner. However, the cross-objections of heirs of Ram Singh was partly allowed.

Today, the learned counsel of the appellant argued that the matter in issue has ; been determined by the Full Bench in F.A.O. No. 1154 of 1988 ( United India Insurance Company Ltd. Vs. Kamla Rani and Others, decided on 29.5.1997. According to the counsel as per Section 95(2)(a) of the | Act the liability of the Insurance Company is limited to the extent of Rs. 50,000/- and so the learned Single Judge indeed has erred in law in holding the Company to be liable for the total amount of the award passed by the Tribunal. Reliance has also been placed upon the decision in Shri Puran Chand v. Shri Balbir Singh and others (1986) 89 P.L.R. 561.

Counsel for the respondents on the other hand argued that the Insurance Company in its written statement did not raise the plea as to its limited liability. Precisely on this account the learned Single Judge declined the appellant to urge this point or permit him to amend the written statement at this late stage. Moreover, even the policy of Insurance Company has neither been tendered in evidence nor accepted.

We have heard the learned counsel for a while and have also perused the judgment of the learned Single Judge. Plea of the Insurance Company as to its limited liability has not been considered on the sole ground that no such plea had been raised in the written statement. Prayer to seek amendment of written statement has also been declined being belated. We are unable to support the view taken by the learned Single Judge on both the counts. As regards the appellant''s contention that the liability of Insurance Company is limited, same in fact was not disputed by the claimants. Otherwise too, as per Insurance Policy exhibit R-l the same stands proved. In view of this accepted position even if there had been no such plea, in the first instance the Motor Accident Claims Tribunal and subsequently in appeal, the learned Single Judge out to have made reference to the terms of the policy-exhibit R-l. There is no denying the fact that the terms of this policy were reduced into writing as per various provisions of the Act, which specifically limits the liability of the Insurance Company. Section 95(2)(a) reads as:-

"(2) 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 following limits, namely:-

(a) Where the vehicle is a goods vehicle a limit of fifty thousand rupees in all, including the liabilities, if any, arising under the Workmen''s Compensation Act, 1923, (8 of 1923) in respect of the death of, or bodily injury to, employees (other than the driver), not exceeding six in number, being carried in the vehicle."

This precise point came up for consideration before this Court in Shri Puran Chand''s case (supra) and the Court held as under:-

"Obviously the insured and the insurer are at logger-heads in this regard. The mandate of the Division Bench is clear. For whatever be the reasons which cause failure of the Insurance Policy, it cannot now be over-looked that the insurance policy had all the same been brought on the record and once it is on record and admitted in evidence, its terms cannot be lightly ignored. All what it says is that there is a subsisting contract between the insurer and the insured that the former has agreed to indemnity the latter to the extent indicated in the policy, i.e. for Rs. 50,000/-. Thus, in the peculiar circumstances of this case, even if the amendment of the written statement is not allowed and the cross-objections are not allowed to be amended, it is the case of the insured itself that there is an indemnity in his favour to the extent of Rs. 50,000/-. The rigour of the ratio of Shri Ajit Singh''s case (supra) cools down on the peculiar facts of this case and thus there is no difficulty in apportioning the compensation."

Since there were conflicted decisions of this Court the matter was referred to the Full Bench. While examining the liability of the Insurance Company in the light of Section 95 of the Act Shri T.H.B. Chalapathi, J. speaking for the Bench held as under:-

"Thus according to the terms of the policy, the liability of the Insurance Company is limited to meet the requirements of Section 95 of the Motor Vehicles Act, 1939. The accident in this case took place on 22nd March, 1978. There is no dispute that at the time when the accident took place, the liability of the Insurance Company under Sub-section (2) of Section 95 of the Act was limited to Rs. 50,000/-. Thus, reading Section 95(2) of the Act with the terms of the policy exhibit R-1 as extracted above, the liability of the Insurance Company has to be limited only to Rs. 50,000/. It is for the applicant-insured to show that the Insurance Company ,undertook an unlimited liability in respect of the death of a passenger. The provisoto Section II of the terms of the Policy will apply to Clauses 1(i) and 1(ii), Therefore, under Clause (c) as extracted above, the liability of the Insurance company was limited to the statutory amount as fixed u/s 95(2) of the Act. We are, therefore, of the opinion that the learned Single Judge rightly limited the liability of the Insurance Company to Rs. 50,000/- only. Therefore, the Letters Patents Appeal filed by the owners of the vehicle is liable to be dismissed."

Following the decision of the Full Bench, we accept the appeal of Insurance Company and so limit the liability of the appellant-company to the extent of Rs. 50,000/- only.