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New India Assurance Company Ltd. vs Krishna Devi And Ors. on 1 February, 1998

Delhi High Court
New India Assurance Company Ltd. vs Krishna Devi And Ors. on 1 February, 1998
Equivalent citations: 1 (1998) ACC 352
Author: U Mehra
Bench: U Mehra


JUDGMENT

Usha Mehra, J.

1. In this appeal two main questions have been raised, namely, (1) whether the liability of the Insurance Company is limited to the extent of Rs. 50,000/- under the Motor Vehicles Act (in short the Act) ? (2) whether the cross-objections filed by the claimants seeking enhancement of compensation not tenable because appeal has been filed by the Insurance Company ?

2. In order to appreciate these questions we may have quick glance to the relevant facts of this case. Deceased Shri Siri Pal aged about 37 years was standing in front of a tea shop behind Lawrence Road factory area on 10th August, 1982 at about 7.45 a.m., when a truck bearing No. DEL-6075 driven rashly and negligently came and struck him and his cycle. The deceased was crushed under the front wheels of the truck. At the time of this accident he was employed as a peon in P&T Department. He was drawing a salary of Rs. 650/- per month. Beside his salary the deceased was also doing part-time business wherefrom he was earning Rs. 800/-per month. Thus his total monthly income was Rs. 1,450/- per month. His legal heirs consisting of his wife and three minor children filed a petition under the Act claiming compensation to the tune of Rs. three lakhs. His parents were imp leaded as respondents 4 and 5. Written statement was filed by this appellant in which the privity of contract was denied. A plea of limited liability was also taken in the written statement but neither the insurance policy was produced nor the Insurance Company led any evidence. By the, impugned award the Motor Accident Claims Tribunal (in short the Tribunal) awarded as sum of Rs. 76,800/- in favour of the claimants beside awarding interest @ 12% from the date of petition till realisation. The awarded amount was to be shared by the claimants and respondents 4 and 5. The Tribunal fixed the liability of the Insurance Company (present appellant) and of owner and driver joint and several.

3. In order to appreciate the controversy raised with regard to limited liability the relevant provisions of Section 95(2)(a) of the Act may be perused which are reproduced as under-

Section 95(2)(a): 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 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.

4. Mr. Sanjeev Sachdeva appearing for the claimants contended that if we read the above provision in its proper perspective then it is difficult to subscribe to the version that the provision of Clause (a) of Sub-section (2) applies to third party. According to him provision of Sub-section (2)(a) talks about a goods vehicle and employees being carried in it. Admittedly in the present case accident took place with a goods vehicle, i.e. a truck. Clause (a) of Sub-section (2) was substituted thereby restricting the liability arising out of the Workmen’s Compensation Act to six employees carried in a goods vehicle. This is in contrast to the amendment in provisions of Sub-section (1) of Section 95 which makes it compulsory that a policy of insurance must also cover liability arising under the Workmen’s Compensation Act, 1923 because there may be cases which are not covered by Workmen Compensation Act, 1923 and it is, therefore, justifiable to protect the employees by providing a right against the insurer. Clause (a) of Sub-section (2) of Section 95 of the Act covers the employees to a limited extent as provided under the clause who are carried in a goods vehicle but certainly it does not apply to a third person crushed on the road. In case of third party the question of limited liability would not arise. Limited liability under Clause (a) is in respect of employees carried in the vehicle. If any injury is caused to them the liability is limited as mentioned in Clause (a) but not if such a vehicle kills a person on the road. In that case the liability is unlimited. Clause (a) of Sub-section 2 provides that whatever the number of persons employed and whatever the number who have suffered death or bodily injury, the liability in respect of them will not extend beyond six persons. But that does not mean that if a goods vehicle kills a third person the Insurance Company would not be liable for the whole amount awarded. By amending Clause (a) the Legislature intended to restrict the liability arising out of the Workmen’s Compensation Act to six employees carried in a goods vehicle. This clause limits the liability incurred in respect of any one accident with reference to the class of persons carried in the goods vehicle. Thus this Sub-section (2)(a) cannot be invoked to restrict the liability to a death caused to a third party like the claimants in this case. Deceased was not one of the classes of persons referred to in Clause (a) of Sub-section (2) of Section 95 of the Act.

5. Mr. G.K. Sharma, Counsel for the appellant on the other hand contended that Clause (a) of Sub-section (2) does not only talks about the employees carried in the goods vehicle but also of the third party. This sub-section begins with the qualifying words “subject to the proviso to Sub-section (1)”. These words are there only to emphasise that certain risks are exempted from compulsory insurance and that there exceptions thereto which have to be covered by the policy. The enacting part and the proviso have to be read as a whole. The amount mentioned in Clause (a) is thus for the total liability incurred in respect of any one accident and not just the liability incurred in respect of the classes of persons mentioned in the clause. The words “in all” and including the liability in these additional words indicate that the amount specified is the overall limit. Clause (a), therefore, prescribes limit in respect of compulsory insurable risk including third party risk. It does not confine only to the classes of persons who are excepted from the proviso to Sub-section (1). Since it was a case of limited liability and the factum of act liability having been mentioned in the written statement, the Tribunal erred in fastening the complete liability of the award on the appellant.

6. At the outset it must be mentioned that Mr. G.K. Sharma fairly conceded that the appellant in this appeal cannot challenge the quantum of compensation awarded by the Tribunal.

7. On the question of limited liability I have heard Counsels for the parties and after perusing the provisions of the Act, the interpretation which Mr. Sanjeev Sachdeva wants this Courts to give to Clause (a) of Sub-section (2) cannot be appreciated. The effect of Sub-section (2) of Section 95 to the provisos to Sub-section (1) of the Section is to require that these all have to be read together and harmonised. Effect must be given to every part of the section. The plain reading of Sub-section 2(a) makes it clear that it is not restricted to class of persons carried in the vehicle. The compulsory insurance policy that is the “Act policy” contains the bare minimum requirements of cover if the vehicle is legally usable in a public place. We have to see the liability incurred by the insurer under a policy complying with the minimum requirements of the Act. To establish that it was “Act policy” complying with the minimum requirement to the Act the owner of the vehicle or for that matter this appellant was to produce the policy. But policy was not produced nor exhibited. Therefore, no presumption could be drawn that it was an “Act policy” nor presumption could be drawn that the policy in question was Act policy limited to the terms of the Act. No witness was examined to prove that this was a case of Act liability or the liability of the Insurance Company was limited to Rs. 50,000/- only. Therefore, reliance by Mr. Sharma on the decision of Supreme Court in the case of British Indian General Insurance Co. Ltd. v. Maya Banerjee and Ors. 1986 ACJ page 946 : I (1987) ACC 175 (SC), is of no help to him. Similarly the decision of Orissa High Court in the case of The Branch Manager, National Insurance Co. Ltd. v. Kahas Beherani and Ors., , is of no help. The Courts in the above cases were dealing with the provisions of Section 90(2)(b) of the Act. Mr. G.K. Sharma fairly conceded that the provisions of Sub-section 2(b) are not applicable to the facts of this case. Moreover, on facts these cases are distinguishable. Reliance by Mr. Sharma on the decision of Patna High Court in the case of New India Assurance Co. Ltd. v. Jamuna Devi and Ors. 1997 ACJ page 446, is also of no help to him. In that case the defense set up by the Insurance Company was not controverted by the owner and when the Award was made by the Tribunal the owner moved an application for modification of the same. On his application the Tribunal modified the award. It was in this background the observations were made by the Court that the owner could not be allowed to come forward after the judgment and award were pronounced. But that is not the case in hand. This appellant led no evidence to prove limited liability. As observed above the insurance cover was not produced nor. proved, therefore, the Tribunal was justified in concluding that liability was unlimited and compensation was payable jointly and severally by this appellant alongwith owner and driver. To support this conclusion reference can be made to the decision of this Court in the case of Nirmal Singh and Anr. v. C.M. Jaya and Ors. , wherein it has been observed that where neither the original policy nor the carbon copy of the same was produced on record either by owner or the Insurance Company then adverse inference should be drawn against the Insurance Company and its liability has to be held as unlimited. To the same effect are the observations of this Court in the case of Bullan and Anr. v. Jasmer Kaur and Ors. . In that case also the provisions of Section 95(2)(a) of the Act were in question. In the written statement the Insurance Company took the plea of limited liability but did not lead any evidence in support of that plea nor produced the policy. This Court repelling the contention of limited liability held that in the absence of policy liability cannot be held to be limited. Similarly, in this case in the absence of policy having been produced, I am afraid the argument of the appellant cannot be accepted. In the facts of this case the Tribunal rightly concluded that the liability of the appellant was not limited I see no reason to interfere with same.

8. Now turning to the question whether the cross-objections are maintainable or not, Mr. Sharma urged that when the appeal is preferred by the Insurance Company, the respondent cannot file cross-objections. The reason for this contention is that first liability of insurer has to be fixed which in this case has not been fixed. To support his contentions Mr. Sharma placed reliance on the decision of Orissa High Court in the case of Divisional Manager, National Insurance Co. Ltd. v. Kalilata Malik and Ors. , where it has been held that the claimant cannot be granted opportunity to file cross-objection for enhancement of compensation in an appeal by the Insurance Company. As against this our own High Court in the case of Nirmal Singh (supra) has taken the view that cross-objections by the claimant are maintainable against the co-respondents as well as against the Insurance Company. Reason for arriving at this conclusion was that the Court may pass a decree against several defendants. One of them alone may choose to prefer an appeal. He shall have to implead non-appearing defendants as respondents, they being necessary parties for adjudication of the appeal. If non-appealing defendants permit one to prefer an appeal, because they stand to gain in the event of the appeal being allowed, they by their conduct have allowed the appealing one to represent their common interest. They must accept his representative character in the result of the appeal. Unless this approach is to be adopted, the co-defendants having suffered a common decree would be able to set at naught statutory right of the respondent to file cross-objections by permitting one of them to file an appeal and then contending that the effect of allowing cross-objection would result in adversely affecting the liability of non-appealing defendants/respondents. For this reason argument of Mr. Sharma cannot be accepted. Supreme Court in the case of Panna Lal v. State of Bombay , reiterated that “Order 41, Rule 22 of CPC permits, as a general rule, a respondent to prefer an objection directed only against the appellant and it is only in exceptional cases, such as, where the relief sought against the appellant in such an objection is intermixed with the relief granted to the other respondents, so that the relief against the appellant cannot be granted without the question being re-opened between the objecting respondent and other respondents, that an objection under Order 41, Rule 22 can be directed against the other respondents is correct.” After analysing various provisions of the Act and decisions this Court in the case of Nirmal Singh (supra) concluded that:

Ordinarily, there is no dispute about the proposition that the provision of Order 41, Rule 22 permits a respondent to prefer an objection directed only against the appellant. But in exceptional cases relief can be granted against the respondent as well where the objection is intermixed with the relief granted in the matter and to do complete justice between the parties. The law is clearly stated in the cases cited above wherein it has been held that the provision of Order 41, Rule 22 only confers restrictive rights on the respondents to prefer objections to the decree without filing a separate appeal and such objections should, as a general rule, be primarily against the appellant but in exceptional cases it may incidentally be also directed against the other respondents. Furthermore, the provisions of Order 41, Rule 33 will come to the rescue of the cross-objectors and they can be granted relief as the object of Rule 33 is manifestly to enable the Court to do complete justice between the parties to the Appeal.

9. In the present case, the cross-objections were filed by the claimants seeking enhancement of compensation. Though these objections may not as such be covered under Order 41, Rule 22 of CPC but at the same time provisions of Order 41, Rule 33, CPC, will come to the rescue of the objectors. In order to do the complete justice cross-objections are maintainable against co-respondents who suffered a common decree alongwith the appellant cannot be allowed to set at naught the statutory right of the claimants to seek enhancement against them as well as through them against the present appellant.

10. In view of my above discussion it is held that cross-objections filed by claimants are maintainable against co-respondents i.e. owner and driver of the truck as well as against this appellant. However, since notice of cross-objections had not been served on co-respondents nor in fact they appeared in this case hence it is ordered that notice be issued on these cross-objections to co-respondents as well as to the appellant returnable on 18th March, 1998. Notice is ordered to be issued in order to avoid any technical objection later on.

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