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2006 DIGILAW 529 (GAU)

Oriental Insurance Co. Ltd. v. Gunamai Saikia

2006-06-05

ANIMA HAZARIKA, D.BISWAS

body2006
JUDGMENT D. Biswas, J. 1. This letter patent appeal is directed against the Judgment and Order dated 10.01.2001 passed by the learned Single Judge in MA(F) No. 177/03. By the impugned judgment, the learned Single Judge allowed the appeal with the following directions: 2. This appeal shall stand allowed in view of the fact that the vehicle in question was duly insured with respondent No. 2 and the learned Tribunal in MAC Case No. 1/85 apportioned the amount at the following rate: i) 58 thousand to the Insurance ii) 35 thousand to the owner. 3. This cannot be done once a vehicle is insured the Insurance Company is liable for the entire amount. If any authority is required for this protection of law one may look at AIR 1972 A & N 42 (Rameswar Hazarika v. P.K. Baruah and Anr.). 4. This disposes of the appeal. 2. Mr. D. Sur, learned Counsel for the appellant Insurance Company submitted that the vehicle involved in the accident was insured with them for the limited liability of compensation of Rs. 15,000/- against payment of fixed premium of Rs. 12/- per passenger. The Tribunal awarded compensation of Rs. 93,000/- per passenger out of which Rs. 58,000/- is to be paid by the Insurance and the balance amount of Rs. 35,000/- by the owner. The learned Single Judge by the judgment under appeal fastened the entire liability with the Insurance Company relying upon a decision of this Court in Rameswar Hazarika v. P.K. Baruah and Anr. reported in AIR 1972 Gau72. 3. Mr. Sur, learned Counsel submitted that since the Insurance was obtained for a limited liability of Rs. 15,000/-against fixed premium of Rs. 12/- per passenger, the Insurance Company cannot be directed to pay more than the contractual amount. Mr. Sur relied upon a decision of the Hon'ble Supreme Court in New India Assurance Company Ltd., Appellant v. Shanti Bai and Ors. Respondents reported in [1995] 1 SCR 871. 4. The policy in question is appended with the Memo of Appeal as Annexure-II. From this document, it appears that the vehicle with the registration No. ASU-914 was insured covering 32 passengers on payment of a premium of Rs. 384/-. It appears that a fixed premium of Rs. 12/- was paid per passenger. There is no dispute at the Bar about other terms and conditions as available in the insurance policy. 5. From this document, it appears that the vehicle with the registration No. ASU-914 was insured covering 32 passengers on payment of a premium of Rs. 384/-. It appears that a fixed premium of Rs. 12/- was paid per passenger. There is no dispute at the Bar about other terms and conditions as available in the insurance policy. 5. The decision in Smt. Shanti Bai (supra) was rendered by the Hon'ble Supreme Court almost on identical background of the case at hand. For better appreciation, we may quote hereinbelow the observation of the Hon'ble Supreme Court in para-9, which reads as follows: 9. In the present case, the premium which has been paid at the rate of Rs. 12/- per passenger and is clearly referable to the statutory liability of fifteen thousand rupees per passenger under Section 95(2)(b)(ii) of the Motor Vehicles Act, 1939. In the present case, there is no special contract between the appellant-Company and respondent No. 4 to cover unlimited liability in respect of an accident to a passenger. In the absence of such an express agreement, the policy covers only the statutory liability. The mere fact that the insurance policy is a comprehensive policy will not help the respondents in any manner. As pointed out by this Court in the case of National Insurance Co. Ltd. v. Jugal Kishore [1988] 2 SCR 910 (supra), comprehensive policy only entitles the owner to claim reimbursement of the entire amount of loss or damage suffered up to the estimated value of the vehicle. It does not mean that the limit of liability with regard to third party risk becomes unlimited or higher than the statutory liability. For this purpose, a specific agreement is necessary which is absent in the present case. Reference in this connection may also be made to the case of M.K. Kunhimohammed v. P.A. Ahmedkutty [1987] 3 SCR 1149. The appellant-Company is, therefore, entitled to succeed to the extent that it has been directed to pay to respondents 1 to 3 any amount in excess of Rs. 15,000/-. 6. It would appear from above that in the absence of a special contract between the insurer and the insured to cover unlimited liability in respect of an accident to a passenger, the insurer will be liable for the amount for which the policy is obtained. For balance amount, it is the owner who would be liable. 15,000/-. 6. It would appear from above that in the absence of a special contract between the insurer and the insured to cover unlimited liability in respect of an accident to a passenger, the insurer will be liable for the amount for which the policy is obtained. For balance amount, it is the owner who would be liable. The Insurance Company, in the instant case, in view of the terms and conditions of the policy is liable to pay Rs. 15,000/- to the claimant and the owner is liable to pay the balance amount of Rs. 78,000/-. 7. The appeal is allowed to the above extent. The Judgment and Order dated 10.01.2001 accordingly stands modified. The appellant Insurance Company is to pay Rs. 15,000/- per passengers as compensation and the balance shall be recoverable from the owner There will be no order as to cost. Appeal allowed.