SUPREME COURT OF INDIA

Before:- K. Venkataswami and A.P. Misra, JJ.

Civil Appeal No. 659 of 1988. D/d. 10.9.1998.

New India Assurance Co. Ltd. - Appellant

Versus

Krishanpal Singh and others - Respondents

Motor Vehicles Act, 1939, Sections 95(2)(b)(ii)(3) and (4) Limit of insurer's liability - An accident to the motor vehicle which was insured covering, inter alia, the risk for capacity up to 65 passengers - Policy was "Act Policy" - Relevant provision to be looked into is Section 95(2)(b)(ii)(3) read with (4) - Insurer's liability is limited to Rs. 5000 in respect of each passenger subject to the limit fixed in Section 95(2)(b)(ii)(3) - View taken by the High Court without noticing Section 95(2)(b)(ii)(4) of the Act, cannot be sustained and set aside - The award of the Tribunal, making the Insurance Company liable only up to a sum of Rs. 5000 restored.

[Paras 6 and 7]

Cases Referred :-

Motor Owners Insurance Co. Ltd. v. Jadavji Keshavji Modi, (1981) 4 SCC 660 .

ORDER

K. Venkataswami, J. - This appeal by special leave is directed against the order dated 23-9-1987 of the Madhya Pradesh High Court, Jabalpur Bench, in MA No. 119 of 1985.

2. The short question that arises for consideration is whether the High Court was right in reversing the award of the Motor Accident Claims Tribunal, which restricted the liability of the appellant Insurance Company to the extent of Rs. 5000 with interest.

3. The facts are that one Ramesh Singh, who was a passenger in a bus belonging to the first respondent, died in the accident on 22-4-1979 as a result of a fall from the bus. The legal representatives of the deceased passenger preferred a claim petition, claiming compensation of Rs. 1,60,000. The Tribunal, on the evidence produced before it, had determined the compensation payable to the legal representatives in a sum of Rs. 44,000 together with interest. The Tribunal further held that the liability of the Insurance Company shall be limited only to the extent of Rs. 5000 as the policy taken by the owner of the vehicle was "Act Policy" under Section 95(2)(b) of the Motor Vehicles Act, 1939. The balance of the award amount was directed to be paid by the owner of the vehicle.

4. The owner of the vehicle, aggrieved by the award of the Tribunal restricting the liability of the Insurance Company to a sum of Rs 5000, preferred an appeal to the High Court.

5. The High Court in the judgment under appeal has held that the liability of the Insurance Company was to the extent of Rs 50,000 as per Section 95(2)(b)(i) of the Act and the total award being only Rs 44,000, which is less than Rs. 50,000 the entire amount must be paid by the Insurance Company. This view of the High Court is under challenge in this appeal. The relevant provisions as on 22-4-1979 are set out below:

"95. (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) * * *

(b) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment,

(i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all;

(ii) in respect of passengers,

(1) a limit of fifty thousand rupees in all where the vehicle is registered to carry not more than thirty passengers;

(2) a limit of seventy-five thousand rupees in all where the vehicle is registered to carry more than thirty but not more than sixty passengers;

(3) a limit of one lakh rupees in all where the vehicle is registered to carry more than sixty passengers; and

(4) subject to the limits aforesaid, ten thousand rupees for each individual passenger where the vehicle is a motor cab and five thousand rupees for each individual passenger in any other case;"

6. The High Court, while making the Insurance Company liable to pay the entire amount of Rs. 44,000, noticed only Section 95(2)(b)(i) which will not apply to the passenger in a bus and failed to take note of Sections 95(2)(b)(ii)(3) and (4) of the Act. Further the High Court went wrong in understanding the ratio laid down in Motor Owners Insurance Co. Ltd. v. Jadavji Keshavji Modi, (1981) 4 SCC 660 . In that case this Court was concerned with the scope of Section 95(2)(a) of the Act. This Court while recognising the limit prescribed in Section 95(2)(a) interpreted the same as being the limit for "any one accident" which means that each of the affected persons had an accident. That case has no bearing on the facts of the case on hand.

7. In this case we are concerned with an accident to the motor vehicle which was insured covering, inter alia, the risk for capacity up to 65 passengers. The policy was "Act Policy" is common ground. That being the position, the relevant provision at the time to be looked into is Section 95(2)(b)(ii)(3) read with (4). A plain reading of the said provisions extracted above will present no difficulty in holding that the insurers liability is limited to Rs. 5000 in respect of each passenger subject to the limit fixed in Section 95(2)(b)(ii)(3). Accordingly, the view taken by the High Court without noticing Section 95(2)(b)(ii)(4) of the Act, cannot be sustained and it is, therefore, set aside. The award of the Tribunal, making the Insurance Company liable only up to a sum of Rs. 5000, is restored.

8. The appeal is allowed accordingly with no order as to costs.

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