JUDGMENT
S.K. Mahajan, J.
1. Admit.
2. Since common questions of law and facts are involved in both these appeals they are disposed of by this common Order.
3. The insurance company has filed these appeals challenging the award of the Motor Accident Claims Tribunal whereby the liability of the insurance company had been held to be unlimited it has been directed to pay the entire compensation assessed by the Tribunal to the legal heirs of the persons who died in a road accident alleged to have been caused by the rash and negligent driving of the bus by respondent no.7. A few facts relevant for deciding these appeals are :-
4. In an accident which had taken place on December 11, 1981 two of the passengers namely, Shri A.K. Datta and Shri Rajesh Pal had died due to the injuries sustained by them in the said accident. The claimants filed an application before the Motor Accident Claims Tribunal claiming compensation for the death of the said two persons by impleading not only the driver and owner of the bus but also the insurance company with which the vehicle was insured. In its written statement the insurance company had taken the plea that the liability of the insurance company was not more than Rs.5000/- per passenger and Rs.75,000/- per accident. On these pleas being taken one of the issues framed by the Tribunal was as to what was the maximum liability of the insurance company. After holding that the accident was caused due to the rash and negligent driving of the bus, the Tribunal held that the claimants were entitled to compensation for the death of the aforesaid persons who had died in the said accident. Dealing with the question as to what was the liability of the insurance company the Tribunal held that since the vehicle was comprehensively insured the liability of the insurance company cannot be limited to Rs.5000/- per passenger and in its opinion the liability of the insurance company was unlimited to each of the passengers traveling in the bus. The Tribunal, therefore, directed the entire compensation to be paid by the insurance company.
5. As already mentioned above aggrieved by this award the insurance company has filed the present appeal.
6. The contention of Mr. V. P. Chaudhary, learned senior counsel appearing for the appellant is that since the insurance company had charged premium @ Rs.6/- per passenger for 53 passengers, which was the carrying capacity of the bus, the liability of the insurance company could not be more than what was described in Motor Vehicles Act. It is submitted that as per the tariff to make the liability of the insurance company unlimited a sum of Rs.15/- per passenger was required to be paid as premium to the insurance company. It is submitted that as premium of Rs.6/- per passenger has been paid by the insured, the liability of the insurance company for any one passenger cannot exceed Rs.5000/- or Rs.75,000/- for any one accident. Mr. Chaudhary has relied upon the judgment of the Supreme Court in New India Assurance Company Ltd. versus Shanti Bai, 1995 ACJ 470. He has also relied upon the Division Bench judgment of this Court in the case of National Insurance Company Ltd. versus Kamla Devi reported in 1997 (1) AD (Delhi) 368 to contend that the issue of a comprehensive policy could not mean that the liability of the insurance company even in respect of passengers traveling in the bus was unlimited. It is submitted that comprehensive policy only means that the damage to the bus would be comprehensive and not the liability towards the passengers. He has also relied upon the judgment of the Supreme Court reported as New India Assurance Company versus C.N. Jaya, 2002 ACJ 271 to contend that where the commercial vehicle was comprehensively insured but no additional higher premium was paid to cover higher liability or the statutory liability of the third party, the liability of the insurance company qua the third party could not be said to be unlimited.
7. Mr. Khetrapal, learned counsel for the respondent has however relied upon the judgment of the Rajasthan High Court in the case of Smt. Chand Kaur versus Manna Ram and others to contend that where the commercial vehicle is comprehensively insured the same would mean that whatever amount is to be paid by the insured, the insurer in pursuance of such comprehensive policy must take upon itself the liability and responsibility to indemnify the insured. It is, therefore, submitted that as the insurance company had issued a comprehensive policy it is the liability of the company to satisfy the award and to pay whatever amount the insured is liable to pay under the award.
8. I have heard learned counsel for the parties and also gone through the judgments cited by them at the Bar. No doubt in the judgment of the Rajasthan High Court reported as Smt.Chand Kaur Vs. Manna Ram (supra) it is held that once a comprehensive policy is issued by the insurance company it is its duty to indemnify the insured of whatever amount it is liable to pay under the award to the victims of the road accident, however, in my opinion, the law laid down in the aforesaid judgment is no longer a good law and the judgment would be deemed to have been impliedly overruled by the judgments of the Supreme Court in the case of New India Assurance Co. Ltd. Vs. Shanti Bai (supra) and New India Assurance Co. Ltd. Vs. C.N. Jaya (supra) . In Shanti Bai’s case the Court was concerned with almost a similar question as to whether the insurance company which has charged premium at the rate prescribed in the insurance tariff is liable to pay more than what is mentioned in the said tariff. In the aforesaid case the insurance company had charged a premium of Rs.12/- per passenger for 50 passengers covering their limited liability. The Supreme Court was of the view that since as per the tariff by charging a premium of Rs.12/- the insurance company had taken over the minimum liability payable under the Motor Vehicles Act, it could not be held to be liable to pay compensation at the rate of more than what was prescribed in the Act. Referring to Section 95 of the Motor Vehicles Act and as to whether the insurance company was liable to pay in view of its having issued a comprehensive policy, the Court observed that a comprehensive insurance of the vehicle and payment of higher premium on that score did not mean that limit of the liability with regard to the third party risk becomes unlimited or higher than the statutory liability fixed under Sub-section (2) of Section 95 of the Motor Vehicle Act. According to the Supreme Court for that 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 that behalf. The Court was of the view that since the premium paid by the insured was @ Rs.12/- per passenger the same was clearly referable to the statutory liability of Rs.15,000/- per passenger under Section 95(2)(b) of the Motor Vehicle Act.
9. In C.N. Jaya’s case also the Supreme Court relying upon its earlier observations in the case of National Insurance Company versus Jugal Kishore 1988 ACJ 270 has held that though it is not permissible to use a vehicle unless it is insured at least under an Act/Policy, it is not obligatory for the owner of the vehicle to get it comprehensively insured. In case, however, it is got comprehensively insured a higher premium is payable depending upon the estimated value of the vehicle and such insurance entitles the owner to claim reimbursement of entire amount of loss or damage suffered up to the estimated value of the vehicle calculated according to the rules and regulations framed in that behalf, however, the same would not cover the unlimited liability for the passengers and its liability would continue to be limited in terms of Section 95(2)(b) of the Motor Vehicles Act.
10. In Oriental Fire and General Insurance Company Ltd. versus Shakuntala Garg and others a Division Bench of this Court had taken the view that the insurance company even in the case of limited liability was required to pay the entire compensation to the victims of the road accident, however, if advised it could file proceedings against the owner and the driver for recovery of the excess amount, if any, paid by it. This judgment of the Division Bench of this Court, however, was reversed by the Supreme Court in Civil Appeal no.104/03 decided on January 19, 2003. The Supreme Court relying upon its earlier judgment in the case of C.N. Jaya (supra) held that the liability of the insurance company was limited and it could not, therefore, be directed to pay the entire amount of compensation.
11. A copy of the tariff prevailing in the year 1981-82 has been produced in Court. According to the tariff, the legal liability of the insurance company to the passengers in case of an accident has been specified. According to the tariff in case a sum of Rs.6/- is charged as premium per passenger, the liability of the insurance will be limited to Rs.5,000/- for any one passenger and Rs.75,000/- for any one accident. The liability of the insurance company goes on increasing with the payment of increased premium per passenger. As per the tariff for unlimited indemnity the insured was required to pay a premium of Rs.15/- per seat. As per exh. RW-3/1B which is the schedule to the policy of insurance, the insurance company had charged a total sum of Rs.318/- for legal liability to the passengers. The licensed capacity of the bus was 53 passengers plus the driver and conductor. It is thus seen that for covering the legal liability of these 53 passengers a premium of Rs.318/- has been charged meaning thereby that the insurance company has charged a premium of Rs.6/- per passenger and as per the tariff prevalent at the time of issue of the policy the insurance company has limited its liability to Rs.5000/- per passenger. As per Section 95(2)(b) to comply with the requirements of this Chapter a policy of insurance must be a policy which insures the persons or class of persons specified in the policy to the extent specified in that Section. Under this Section the policy of insurance must cover the minimum liability mentioned therein. The minimum liability as in 1981 was Rs.5000/- per passenger. The Schedule to the insurance policy specifically says that the insurance company has insured the vehicle covering the liability of the passengers to the extent what has been prescribed in the statute. The statutory liability, therefore, not only in accordance with tariff but also in accordance with the Motor Vehicles Act being limited to Rs.5000/- in my opinion the Tribunal could not direct the Insurance Company to pay the entire compensation only on the ground that the company had issued a comprehensive policy.
12. For the foregoing reasons I allow these appeals and direct that the liability of the insurance company under the award will be limited only to Rs.5000/- per passenger along with interest, if any, as may have been directed by the Tribunal to be paid under the award. Since the liability of the insurance company and the owner and driver of the bus was held to be joint and several and there was a stay of excution of the award in so far as the insurance company was concerned, I hold that claimants would be entitled to execute the award for the balance amount against the owner and driver of the vehicle and the execution will not be dismissed only on the ground that the same is barred by limitation. The Appeals stand disposed of with no order as to costs.