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2013 DIGILAW 1050 (ALL)

New India Assurance Co. Ltd. v. Shashi Bala Devi

2013-04-08

RAJES KUMAR

body2013
Rajes Kumar, J.;— Heard Sri Rajiv Chaddha, learned counsel for the appellant. List has been revised. No one appears on behalf of the respondent. Though respondent no. 1 is represented by Sri Tarun Verma, Advocate. Despite the notice being sent by registered post to respondent nos. 2 to 5, no one has put in appearance. Therefore, the present appeal is being decided ex-parte against respondent nos. 2 to 5. It appears that respondent no. 3 is the owner of the bus, bearing registration no. U.S.M. 8305. The Tribunal vide order dated 30.5.1992 has awarded compensation at Rs. 95,000/- along with interest @ 12% and directed the appellant to pay the amount. Learned counsel for the appellant submitted that the accident took place on 16.8.1983. The deceased was the passenger of the bus. Under the policy the limited liability premium has been paid and, therefore, in view of Section 95 (2) (b) of the Old Motor Vehicles Act, 1939 (hereinafter referred to as the ("Act"), the Insurance Company is liable for the payment of Rs.15,000/- only and the balance amount is payable by the owner of the vehicle. He submitted that the insurance policy is on record and the submission has also been made by the appellant before the Tribunal that under the policy the Insurance Company is liable for Rs.15,000/- only but the same has been rejected on the ground that the insurance policy has not been filed by the Insurance Company but has been filed by the claimants and that such plea has not been taken in the written statement. Learned counsel for the appellant submitted that while fixing the liability it is upon the Tribunal to look into that what is the statutory liability under the Act. The policy is on record. Therefore, the liability on the Insurance Company has to be fixed in accordance to the policy. Whether such plea has been taken by the Insurance Company in the written statement or insurance policy has not been filed by the Insurance Company but has been filed by the claimants is wholly irrelevant. He further submitted that interest awarded @ 12% is also excessive. I have considered the submission of the appellant and find substance. There is no dispute that the insurance policy is on record. Whether it has been filed by the claimants or by the Insurance Company is wholly irrelevant. He further submitted that interest awarded @ 12% is also excessive. I have considered the submission of the appellant and find substance. There is no dispute that the insurance policy is on record. Whether it has been filed by the claimants or by the Insurance Company is wholly irrelevant. The Tribunal while fixing the liability has to see the policy and fix the liability in accordance to law. The insurance policy reveals that the premium was paid for limited liability and, therefore, in accordance to Section 95 (2) (b) of the Act there was a statutory liability of Rs.15,000/- only of the Insurance Company in respect of passengers travelling in the bus. The order of the Tribunal is modified to this extent. The Apex Court in the case of National Insurance Company Limited Vs. Jugal Kishore and others, reported in (1988) 1 S.C.C. has held that comprehensive policy only entitles the owner to claim reimbursement of the entire amount of loss or damage suffered upto the estimated value of 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. In the case of New India Assurance Co. Ltd. Vs. Shanti Bai and others, reported in (1995) 2 S.C.C. 539, the Apex Court while dealing with Section 95 (2) of the Act has held as follows : "These provisions were interpreted by this Court in the case of National Insurance Co. Ltd. v. Jugal Kishore. This Court observed that even though it is not permissible to use a vehicle unless it is covered at least under an "Act only" policy, it is not obligatory for the owner of a vehicle to get it comprehensively insured. In case, however, it is got comprehensively insured, a higher premium is payable depending on the estimated value of the vehicle. Such insurance entitles the owner to claim reimbursement of the entire amount of loss or damage suffered upto the estimated value of the vehicle calculated according to the Rules and Regulations framed in this behalf. In case, however, it is got comprehensively insured, a higher premium is payable depending on the estimated value of the vehicle. Such insurance entitles the owner to claim reimbursement of the entire amount of loss or damage suffered upto the estimated value of the vehicle calculated according to the Rules and Regulations framed in this behalf. It has further observed as under : "Comprehensive insurance of the vehicle and payment of higher premium on this score, however, does not mean that the limit of the liability with regard to third party risk becomes unlimited or higher than the statutory liability fixed under sub-section (2) of Section 95 of the Act. For this purpose a specific agreement has to be arrived at between the owner and the Insurance Company and separate premium has to be paid on the amount of liability undertaken by the Insurance Company in this behalf." In the present case, therefore, a comprehensive policy which has been issued on the basis of the estimated value of the vehicle of Rs.2,50,000/- does not automatically result in covering the liability with regard to third policy risk for an amount higher than the statutory amount." The Apex Court has further held that "mere fact that the insurance policy is comprehensive policy, will not help the respondents in any matter." The Constitution Bench of the Apex Court in the case of New India Assurance Co. Ltd. Vs. C.M. Jaya and others, reported in 2002 (3) T.A.C. 434 (S.C.) has held as follows : "Thus, a careful reading of these decisions clearly shows that the liability of the insurer is limited, as indicated in Section 95 of the Act, but it is open to the insured to make payment of additional higher premium and get higher risk covered in respect of third party also. But in the absence of any such clause in the insurance policy, the liability of the insurer cannot be unlimited in respect of third party and it is limited only to the statutory liability. This view has been consistently taken in the other decisions of this Court. But in the absence of any such clause in the insurance policy, the liability of the insurer cannot be unlimited in respect of third party and it is limited only to the statutory liability. This view has been consistently taken in the other decisions of this Court. In the light of what is stated above, we do not find any conflict on the question raised in the order of reference between the decisions of two Benches of three learned Judges in Shanti Bai and Amrit Lal Sood aforementioned and, on the other hand, there is consistency on the point that in case of an insurance policy not taking any higher liability by accepting a higher premium, the liability of the Insurance Company is neither unlimited nor higher than the statutory liability fixed under Section 95 (2) of the Act. In Amrit Lal Sood's case, the decision in Shanti Bai is not noticed. However, both these decisions refer to the case of Jugal Kishore and no contrary view is expressed. In the premise, we hold that the view expressed by the Bench of three learned Judges in the case of Shanti Bai is correct and answer the question set up in the order of reference in the beginning is as under : "In the case of Insurance Company not taking any higher liability by accepting a higher premium for payment of compensation to a third party, the insurer would be liable to the extent limited under Section 95 (2) of the Act and would not be liable to pay the entire amount." Further I see that the interest awarded @ 12% is also excessive. In the cases of Tejinder Singh Gujral v. Inderjit Singh and another, reported in 2007 (1) T.A.C. 15 (SC) as well as National Insurance Co. Ltd. v. Keshav Bahadur and others, reported in 2004 (2) T.A.C. 1 (SC), the Apex Court has allowed interest @ 9% per annum and following the aforesaid two decisions, the Division Bench of this Court in the case of National Insurance Co. Ltd. v. Salil Prakash Gupta, reported in 2012 (3) T.A.C. 359 has also awarded interest only @ 9% and modified the order of the Tribunal to that extent. Ltd. v. Salil Prakash Gupta, reported in 2012 (3) T.A.C. 359 has also awarded interest only @ 9% and modified the order of the Tribunal to that extent. Having regard to the facts and circumstances and the decisions, referred herein above, I am of the view that the interest awarded @ 12% is excessive and it is accordingly reduced to 9%. The order of the Tribunal is modified to this extent also. In view of the above, the appeal is allowed in part. The order is modified to the extent that the appellant is liable to pay Rs.15,000/- only and the balance amount is payable by the owner of the vehicle-respondent no. 3 and interest in stead of 12 %, 9% is allowed. The office is directed to remit back the statutory amount deposited by the appellant to the concerned Tribunal within four weeks. _____________