JUDGMENT: The present appeal is preferred by National Insurance Company Limited/appellant herein assailing the order, dated 28.12.2019, passed in M.V.O.P.No.508 of 2016 on the file of the Motor Accidents Claims Tribunal – cum - IV Additional District Judge, Vizianagaram, by which the Tribunal has awarded compensation for damage of vehicle for an amount of Rs.5,95,355/-. 2. Brief facts of the case are as follows: The parties herein are referred to as they were arrayed before the Tribunal for the sake of convenience. (a) The claimant, owner of Maruti Swift VDI Car bearing No.AP35-P-3936, while proceeding from Visakhapatnam to Vizianagaram on 05.12.2025, was dashed from behind by a lorry bearing No.AP27-Y-7299, driven by respondent No.1/driver. On account of severity of the accident, the car being driven by the claimant was damaged. The said vehicle was stated to be purchased in the year, 2012, for an amount of Rs.6,89,475/-. - (b) The incident was reported to Police, who registered Crime No.197 of 2015 for offence under Sections 279 and 336 of Indian Penal Code, 1860, against the driver of lorry i.e. respondent No.1 and later, on concluding the investigation, filed charge sheet against him and eventually as he pleaded guilty before the II Class Judicial Magistrate at Vizianagaram, a fine of Rs.1,200/- came to be imposed. (c) The claimant, after evaluating the damage caused to the car by the Licensed Surveyor and also the Body Shop owned by Varun Motors, having estimated the loss suffered, ultimately, laid a claim for compensation of Rs.5,95,355/-. The claimant, in the process, has disposed the damaged vehicle for Rs.80,000/-, and ultimately, has claimed the compensation keeping the same in consideration. Thereafter, the claim was resisted by only respondent No.3 – insurer of the offending vehicle. The respondent Nos.1 & 2, who were driver and owner of the offending lorry, remained ex-parte. (d) In the written statement filed by the insurer, it was specifically stated that it is not liable for any amount more than that stipulated under the policy towards third party damage, even if any amount is assessed beyond the restriction placed under the Statute, it is payable only by the owner of the offending vehicle alone. It is also stated that the amount of compensation claimed was clearly excessive, without considering the depreciation of the vehicle and disputed the surveyor’s report in valuing the loss. It is also stated that the amount of compensation claimed was clearly excessive, without considering the depreciation of the vehicle and disputed the surveyor’s report in valuing the loss. - (e) In order to prove the case of the claimant, he got examined as P.W.1, Manager of Body Shop of Varun Motors as P.W.2 and Licensed Surveyor as P.W.3 and got marked Exhibits A.1 to A.10 and Exhibit X.1. For respondents, none were examined, however, Ex.B.1, the policy between the insurer and offending vehicle, got marked. (f) Based on the pleadings and evidence brought on record, the Tribunal has framed following issues: 1. Whether the accident occurred due to rash and negligent driving of the Driver-R1 of Lorry bearing No.AP 27-Y-7299 causing damages to the Maruti Swift VDI Car bearing No.AP 35-P-3936 of the petitioner? 2. Whether the petitioner is entitled to compensation, if so, what amount and which of the respondents are liable to pay the same? (g) The claimant, besides his evidence as P.W.1, marked Exhibits A1 – F.I.R., A2 – Charge Sheet, A3 – Copy of Judgment, dated 12.01.2016, to support that the accident has occurred due to rash and negligent act of the driver of the lorry. As no other evidence rebutting the evidence let in by the claimant was either adduced or relied on, the Tribunal has concluded that the accident has occurred on account of rash and negligent act of the driver of the lorry in sustaining damages to the car. - (h) Having come to the said conclusion, it proceeded to determine the loss/damage caused to the car. The Tribunal has relied on Ex.A4 – Surveyor’s Report for assessing the loss sustained as the same was surveyed by the Licensed Surveyor. It had awarded an amount of Rs.3,26,174/- towards the cost of repairs as certified by the Surveyor, other expenses such as Survey Fee Bill under Ex.A4, Job Card Expenditure under Ex.A7, Towing charges under Ex.A8 and travelling and incidental expenses incurred by the claimant for attending to the repairs under Ex.A9 were also granted. It had also considered premature loss of vehicle and awarded an amount of Rs.1,61,981/-. After adding up of Rs.80,000/-, which was realized on account of sale of car, ultimately, the Tribunal has awarded Rs.5,95,355/-, payable by respondent Nos.1 to 3 along with interests at the rate of 9% per annum from the date of claim till realization. It had also considered premature loss of vehicle and awarded an amount of Rs.1,61,981/-. After adding up of Rs.80,000/-, which was realized on account of sale of car, ultimately, the Tribunal has awarded Rs.5,95,355/-, payable by respondent Nos.1 to 3 along with interests at the rate of 9% per annum from the date of claim till realization. (i) Assailing the same, the present appeal is preferred. 3. Heard Mr. T. S. Rayalu, learned counsel for the appellant and Mr. G. Sai Narayana Rao, learned counsel appearing for respondent No.1/claimant. 4. Learned counsel for the appellant/insurance company mainly contended that when there is a statutory limitation on the quantum of damages to be awarded for any third party risks under Sec 147(2)(b) of the Motor Vehicles Act, 1988, with a maximum cap of Rs.6,000/-, the Tribunal ought not to have imposed the entire liability of assessed damage to the subject vehicle on it. In support of the said plea, reliance has been placed on the judgment of a coordinate Bench of this Court in the case of The New India Assurance Company Limited Vs. B. Y. Ramaiah and others , [MACMA No.1473 of 2016, dated 19.02.2024] 5. He further contended that, as an alternative submission, the Tribunal ought not to have merely gone with by the estimate provided under Ex.A4 by Licensed Surveyor in computing the loss of damages without regard to the authenticity of the said report and also considering the aspect of general depreciation of the vehicle and besides adding up of the salvage value of the vehicle, as realized at the rate of Rs.80,000/-, for computing the total compensation, which is clearly perverse. - 6. Opposing the aforesaid submission, learned counsel for respondent No.1/claimant tried to sustain the impugned order passed by the Tribunal by contending that the insurer had liability to indemnify the loss sustained by the claimant and the amount as awarded by the Tribunal has to be paid by it in terms of the policy. Further that, the amounts as determined by the Tribunal are duly supported by the Survey Report and also evidence of Body Shop Manager of Varun Motors, where, with the assistance of proper technical persons, the loss has been properly assessed, therefore, it cannot be found fault with. 7. Further that, the amounts as determined by the Tribunal are duly supported by the Survey Report and also evidence of Body Shop Manager of Varun Motors, where, with the assistance of proper technical persons, the loss has been properly assessed, therefore, it cannot be found fault with. 7. Insofar as the addition of the amount, which is received by the claimant on disposal of the vehicle, learned counsel for the respondent fairly submitted that the said amount has since already been realized by the claimant ought not to have been once again included in the compensation payable. 8. Perused the record. 9. The point that arises for consideration before this Court is as to whether, in the facts and circumstances of the case, the Tribunal was justified in fixing, determining and awarding compensation and, in turn, directing to pay the same by not only the driver and owner of the offending vehicle but also insurer of the offending vehicle when the said liability is circumscribed by statutory limitation in terms of Section 147(2)(b) of the Act, 1988, and further whether the determination of quantum of damages is justified and suffers from perversity on account of non-consideration of relevant material. - 10. The claimant indeed purchased Maruti Swift VDI Car in the year, 2012, for Rs.6,89,475/- and has been using the same for his personal use. While he was returning from Visakhapatnam to Vizianagaram, he met with an accident on 05.12.2015. It is stated that the offending lorry has dashed the car from behind. In order to prove the manner in which the accident occurred and as to who were responsible for the same, the claimant got examined as P.W.1 and marked Exhibits A1 to A3, F.I.R., Charge Sheet and Copy of the Judgment, by which fine was imposed on the driver of the lorry. The Tribunal considering aforesaid evidence both oral and documentary has come to a conclusion that the accident has occurred on account of rash and negligent driving of respondent No.1 / the driver of the lorry. There is no challenge to aforesaid finding in the present appeal. - 11. The Tribunal considering aforesaid evidence both oral and documentary has come to a conclusion that the accident has occurred on account of rash and negligent driving of respondent No.1 / the driver of the lorry. There is no challenge to aforesaid finding in the present appeal. - 11. Learned counsel for the appellant has mainly canvassed two contentions, one, with respect to the Tribunal not restricting the claim qua the appellant to the maximum limit of Rs.6,000/- as provided under Section 147(2)(b) of the Act, 1988, and as alternative submission, even otherwise the amount determined by the Tribunal to be excessive and inclusion of the salvage amount to the total amount of compensation to be erroneous and perverse. 12. In order to answer the first issue raised above, it is opt to refer to Section 147 of the Act, 1988, which reads as under: “ 147. Requirements of policies and limits of liability . 12. In order to answer the first issue raised above, it is opt to refer to Section 147 of the Act, 1988, which reads as under: “ 147. Requirements of policies and limits of liability . (1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which— (a) is issued by a person who is an authorised insurer; and (b) insures 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: - Provided that a policy shall not be required— (i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen’s Compensation Act, 1923, in respect of the death of, or bodily injury to, any such employee— (a) engaged in driving the vehicle, or (b) if it is a public service vehicle engaged as a conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods carriage, being carried in the vehicle, or (ii) to cover any contractual liability. (2) Subject to the proviso to sub-section (1), a policy of insurance referred to in sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely:— (a) save as provided in clause (b), the amount of liability incurred; (b) in respect of damage to any property of a third party, a limit of rupees six thousand: Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.” 13. A plain reading of the aforesaid provision goes to show that the liability of the insurer in respect of damage to any property of a third party has been capped with maximum limit of Rs.6,000/-. This cap obviously is only made applicable to damage to any property but not in other cases such as claims on account of either death or injuries. The insurer, though, had raised aforesaid plea before the Tribunal, the Tribunal has not specifically dealt with the said aspect and rather proceeded on the premise that as the driver of the offending lorry, which was insured, was involved in accident and his negligence came to be proved, resulting in damage to the car, fastened the liability on the insurer in toto. - 14. Learned counsel for the appellant, addressing the aforesaid issue, has relied on in the case of The New India Assurance Company Limited and, in particular, para Nos.17, 18, 19 and 21, which reads thus: “17) A perusal of the above provision reveals that insofar as the compensation in respect of a third party liability regarding the death or bodily injury is concerned, there was no restriction at all, but insofar as the damage to the third party properties is concerned, the limit is Rs.6,000/-. 18) As seen from the order of the Tribunal though the Tribunal rightly held that the accident occurred was due to rash and negligent act of the driver of the offending vehicle. However, when a contention was canvassed by the insurance company i.e., the appellant that its liability in view of Section 147(2)(b) of the MV Act is only Rs.6,000/-, the Tribunal did not appreciate the contention properly in the considered view of this Court. However, when a contention was canvassed by the insurance company i.e., the appellant that its liability in view of Section 147(2)(b) of the MV Act is only Rs.6,000/-, the Tribunal did not appreciate the contention properly in the considered view of this Court. As rightly contended by the learned counsel for the appellant the vehicle of the petitioner was supposed to be insured with insurance company. There was no pleading at all from the part of the petitioner as to whether his vehicle was insured with any insurance company so as to get compensation under the head of damage to own vehicle. Thus, if the vehicle of the petitioner was insured with the insurance company, there would have been an occasion for the petitioner to claim compensation towards the damages to the own vehicle. Pleadings were silent in this regard. It was the bounden duty of the petitioner to plead necessary things in this regard in the considered view of this Court. - 19) Having regard to the overall facts and circumstances and looking into the terms and conditions in Ex.B.1 policy which is in tune with Section 147(2)(b) of the MV Act, this Court is of the considered view that the Tribunal without answering the contention of the insurance company in proper perspective was inclined to award a sum of Rs.50,000/- towards compensation. There were no findings from the Tribunal as to how Section 147(2)(b) of the MV Act can be circumvented. In my considered view, in view of Ex.B.1 policy and Section 147(2)(b) of the MV Act, the petitioner has no right to claim compensation to the damages of his own vehicle being a third party for more than Rs.6,000/- against appellant. ……… 21) Having regard to the overall facts and circumstances, the petitioner is not entitled to claim more than Rs.6,000/- as against the insurance company as he was no other than the third party whose property was damaged in view of restriction under Section 147(2)(b) of the MV Act. Even the petitioner on facts was not entitled to claim more than Rs.6,000/- and he failed to prove the damages which he claimed by examining the Surveyor, etc. The case of the petitioner was not at all clear with true facts as regards as to whether he insured his vehicle with the insurance company so as to get compensation towards damages to own vehicle.” - 15. The case of the petitioner was not at all clear with true facts as regards as to whether he insured his vehicle with the insurance company so as to get compensation towards damages to own vehicle.” - 15. The aforesaid case cited, more or less, is similar to the facts of the present case. Even therein, the car in which the claimants were proceeding was hit by a lorry from behind causing damage to the vehicle. Alleging rash and negligent act of driver of the lorry, claim was laid against the insurer of the offending vehicle, wherein an amount of Rs.50,000/- came to be awarded towards damages payable by insurer therein. In the said context, while interpreting Section 147(2)(b) of the Act, it was held that the claim was clearly beyond the limit as prescribed under the Statute and also the policy. Therefore, the order of the Tribunal to the extent of awarding compensation qua the insurer was modified. 16. Learned counsel for the respondent/claimant has placed reliance on a judgment of the Apex Court in the case of New India Assurance Company Ltd. Vs. C. M. Jaya and others , [ (2002) 2 SCC 278 ] to contend that the insurer had liability to indemnify against the damage suffered on account of use of motor vehicle and has drawn attention of this Court to paragraph Nos.7 & 16, which read thus: - “7. The relevant clauses of the policy are reproduced in paragraph 6 of the said judgment. Clause 1(a) under Section II relating to liability of third party reads:- "1. The relevant clauses of the policy are reproduced in paragraph 6 of the said judgment. Clause 1(a) under Section II relating to liability of third party reads:- "1. The Company will indemnify the insured in the event of accident caused by or arising out of the use of the motor car against all sums including claimant's cost and expenses which the insured shall become legally liable to pay in respect of (a) death of or bodily injury to any person but except so far as is necessary to meet the requirements of Section 95 of the Motor Vehicles Act, 1939, the Company shall not be liable where such death or injury arises out of and in the course of the employment of such person by the insured." Looking to this clause the Court in paragraph 8 has held: - "Thus under Section II(1)(a) of the policy the insurer has agreed to indemnify the insured against all sums which the insured shall become legally liable to pay in respect of death of or bodily injury to "any person". The expression "any person" would undoubtedly include an occupant of the car who is gratuitously traveling in the car. The remaining part of clause (a) relates to cases of death or injury arising out of and in the course of employment of such person by the insured. In such cases the liability of the insurer is only to the extent necessary to meet the requirements of Section 95 of the Act. Insofar as gratuitous passengers are concerned there is no limitation in the policy as such. Hence under the terms of the policy, the insurer is liable to satisfy the award passed in favour of the claimant. We are unable to agree with the view expressed by the High Court in this case as the terms of the policy are unambiguous." - Distinguishing the judgment in Pushpabai Purshottam Udeshi and others vs. Ranjit Ginning & pressing Co. We are unable to agree with the view expressed by the High Court in this case as the terms of the policy are unambiguous." - Distinguishing the judgment in Pushpabai Purshottam Udeshi and others vs. Ranjit Ginning & pressing Co. (P) Ltd. and another [ (1977) 2 SCC 745 ], the Court observed that the said judgment was based upon the relevant clause in the insurance policy, which restricted the legal liability of the insurer to the statutory requirements under Section 95 of the Act and so that decision had no application to the case as the terms of the policy stated in paragraph 6 of the judgment were wide enough to cover a gratuitous occupant of the vehicle. The Court also referred to the case of Jugal Kishore (supra) in which it is held that though it is not permissible to use a vehicle unless it is covered at least under "act only" policy, it is not obligatory for the owner to get a comprehensive policy but it is open to the insurer to take a policy covering a higher risk. ………. 16. It is not in dispute from the admitted copy of the insurance policy produced before the Court that the liability of the appellant is limited to Rs.50,000/- in regard to the claim in question. The relevant clause in the policy relating to limits of liability reads:- Limits of Liability: Limit of the amount of the Company's liability under Section II-1(i) in respect of any one accident. - Rs. 50,000/- Limit of the amount of the Company's liability under Section II-1(ii) in respect of any claim or series of claims arising out of one event - Rs. 50,000/- It is also not the case that any additional or higher premium was paid to cover unlimited or higher liability than the statutory liability fixed as found in the term of the policy extracted above. In the light of the law stated above, it necessarily follows that the liability of the appellant is limited to Rs.50,000/-, as was rightly held by the Tribunal. The High Court committed an error in taking the contrary view that the liability of the appellant was unlimited merely on the ground that the insured had taken a comprehensive policy. In the light of the law stated above, it necessarily follows that the liability of the appellant is limited to Rs.50,000/-, as was rightly held by the Tribunal. The High Court committed an error in taking the contrary view that the liability of the appellant was unlimited merely on the ground that the insured had taken a comprehensive policy. In Shanti Bai's case, this Court has clearly expressed the opinion that a comprehensive policy issued on the basis of the estimated value of the vehicle does not automatically result in covering the liability with regard to third party risk for an amount higher than the statutory limit in the absence of specific agreement and payment of separate premium to cover third party risk for an amount higher than the statutory limit. This position is accepted in Amrit Lal Sood's case as well though no reference is made to this case. As already stated above, in Amrit Lal Sood's case, the Court found an express term in the policy for covering wider risk and to meet the higher liability unlike in the case of Shanti Bai. Therefore, the High Court was not right in holding that the liability of the appellant insurance-company was unlimited merely on the ground that the vehicle in question, i.e., the truck, was covered by a comprehensive insurance policy.” - 17. The aforesaid judgment of the Apex Court, in the opinion of this Court, may not come to much help of the claimant. It dealt with Section 95 of the Act, 1988, which prescribed limitation on the liability. Here, this Court is concerned with the scope of Section 147 of the Act, 1988, and in particular, the liability of insurer on damage caused to the vehicle for third party claim. The judgment referred above has no application to the facts of the present case. - 18. Dealing with limits of liability as emphasized under Section 147(2) of the Act, 1988, the Full Bench of High Court of Karnataka in New India Assurance Company Ltd., Bijapur Vs. Yallava and another , [ILR 2020 KAR 2239] held as follows: “14. Sub-section (2) of Section 147 is subject to the proviso contained in sub-section (1) thereof. - 18. Dealing with limits of liability as emphasized under Section 147(2) of the Act, 1988, the Full Bench of High Court of Karnataka in New India Assurance Company Ltd., Bijapur Vs. Yallava and another , [ILR 2020 KAR 2239] held as follows: “14. Sub-section (2) of Section 147 is subject to the proviso contained in sub-section (1) thereof. It speaks about the limits of liability, namely, (a) save as provided in clause (b) of Section 147(2), the amount of liability incurred i.e., the actual liability; and (b) in respect of damage to any property of a third party, the limit is of rupees six thousand only. The proviso which is of no relevance now states that if any policy of insurance issued with any limited liability was in force, immediately before the commencement of the Act, the same shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever was earlier. In other words, sub- section (2) of Section 147 states that a policy, subject to proviso to sub- section (1) (which covers compulsory coverage or statutory cover), would cover the amount of liability incurred in respect of any death or bodily injury to any person or victim of an accident who is a third party. But, insofar as the damage to third party is concerned, the upper limit provided is Rs.6,000/- only. But it is permissible for an insurer to provide coverage of a wider liability i.e., apart from the actual liability incurred in respect of the death or bodily injury of a third party victim of an accident as stipulated in section 147(1) such as covering the risk of the passengers of a private car who are not considered as third parties or the driver of a private car who is not an employee or even the risk of the owner of a vehicle under a personal accident cover. Similarly, there could be a liability beyond Rs.6,000/- also incurred by an insurer so as to indemnify the entire damage to the property of a third party. Thus, if the policy assumes a wider liability by a specific contract, then the same would not be limited by the cap of Rs.6000/- stated in Section 147(2)(b) of the Act. It would fall under a contractual liability and not a statutory one.” - 19. Thus, if the policy assumes a wider liability by a specific contract, then the same would not be limited by the cap of Rs.6000/- stated in Section 147(2)(b) of the Act. It would fall under a contractual liability and not a statutory one.” - 19. Section 147(2)(b) of the Act, 1988, clearly envisaged that the liability cannot be fixed for an amount more than Rs.6,000/- in respect of damage to any property of a third party. In the present case, the insurer against whom the claim is laid qua the claimant clearly is indisputable to be a third party. When there is a clear statutory limitation on the liability, the insurer cannot be mulcted with any liability over and above the same. Therefore, the issue in relation to liability is, accordingly, answered in favour of the appellant. 20. Coming to the aspect of the quantum that has to be determined by the Tribunal, though learned counsel for the appellant tried to contend that the amount fixed, in particular based on a report of Surveyor under Ex.A4, is excessive, in the absence of any other contra evidence let in by insurer when the Tribunal has evaluated both oral and documentary evidence, in particular that of P.W.2 – Body Shop Manager of Varun Motors and P.W.3 – Licensed Surveyor, in assessing the quantum of loss and damage, this Court does not find any reason to differ with such finding of fact. - 21. The Tribunal only to the extent of adding of Rs.80,000/-, which was realized on account of sale of the vehicle, in computing the total quantum of compensation, in opinion of this Court, committed error inasmuch as once claimant realized certain value after disposal of the damaged vehicle even to be a salvage value, the total assessed damages would have to be necessarily factored into itself the amount so realized, whereas in the present case, rather than excluding the said amount, the same has been added up, which is clearly erroneous. The claimant, therefore, is not entitled to Rs.80,000/-, the amount which he has already realized. The total amount of compensation thus awarded has to be excluded by Rs.80,000/-, meaning thereby, the claimant would be entitled to compensation of Rs.5,15,355/-. Further, the said amount has to be paid by respondent Nos.1 & 2, except for a sum of Rs.6,000/- to be payable by the appellant herein. 22. The total amount of compensation thus awarded has to be excluded by Rs.80,000/-, meaning thereby, the claimant would be entitled to compensation of Rs.5,15,355/-. Further, the said amount has to be paid by respondent Nos.1 & 2, except for a sum of Rs.6,000/- to be payable by the appellant herein. 22. In the result, the present Appeal stands allowed in part modifying the total amount of compensation payable as Rs.5,15,355/-, of which, the appellant shall be liable for only Rs.6,000/- with interest as awarded and the remaining amount shall be payable by respondent Nos.2 & 3 herein / respondent Nos.1 & 2 before the Tribunal along with applicable interest. - 23. It is stated that the appellant herein had already deposited 1/4 th of the compensation awarded before the Tribunal, therefore, it is granted liberty to make application for withdrawal of the same, except the amount which it is held to be liable in terms of this order and the claimant is permitted to withdraw the same. There shall be no order as to costs. As a sequel, interlocutory applications pending consideration, if any, shall stand closed.