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United India Insurance Co. Ltd. vs M.R. Subramanian And Anr. on 19 October, 1994

Madras High Court
United India Insurance Co. Ltd. vs M.R. Subramanian And Anr. on 19 October, 1994
Equivalent citations: 1996 ACJ 1260
Author: M Srinivasan
Bench: M S Jagdeesan


JUDGMENT

M. Srinivasan, J.

1. When this appeal is taken up, a representation is made by learned Counsel for the respondent No. 1 who is the claimant, that the Managing Partner of the respondent No. 2 firm is no more. According to him, he died one year back and he does not know the exact date of his death. It is not the case of any of the parties that the firm got dissolved on the death of the Managing Partner. No steps have been taken by any of the parties to bring any other person on record as representing the firm.

2. The only contention raised by the appellant in the appeal is that the liability of the insurance company is limited to Rs. 5,000/- by the express terms in the policy which is marked as Exh. B-1. The relevant clause in the policy reads thus:

In consideration of an additional premium and notwithstanding anything to the contrary contained in Section II-I(c) but subject otherwise to the terms, exceptions, conditions and limitations of this policy the company will indemnify the insured against liability at law for compensation (including law costs of any claimant) for death of or bodily injury to any person other than a person excluded under section II-II(b) being carried in or upon or entering or mounting or alighting from the motor vehicle but such indemnity is limited to the sum of Rs. 5,000/- in respect of any one person and subject to the aforesaid limit in respect of any one person to Rs. 75,000/- in respect of any number of claims in connection with the motor vehicle arising out of one cause;

Provided always that in the event of an accident occurring whilst the motor vehicle is carrying more than the number of persons mentioned in the Schedule hereto as being the licensed carrying capacity of that vehicle in addition to the conductor, if any, then the insured shall repay to the company a rateable proportion of the total amount which would be payable by the company by reason of this endorsement, if not more than the said number of persons were carried in the motor vehicle;

Provided further that in computing the number of persons for the purpose of this endorsement any three children not exceeding 15 years of age will be reckoned as two persons and any children in arms not exceeding 3 years of age will be disregarded;

Provided also that the provisions of condition 3 of the policy are also applicable to a claim or series of claims under this endorsement;

Provided further that in the event of the policy being cancelled at the request of the insured no refund of premium paid in respect of this endorsement will be allowed;

Subject otherwise to the terms, exceptions, conditions and limitations of this policy.

3. A plea was taken by the insurance company in the counter-statement filed before the Tribunal in para 5 in the following terms:

Admittedly, the petitioner was a passenger travelling in the bus No. MSS 6099. Hence as per the terms and conditions of the insurance policy and the provisions of the Motor Vehicles Act, this respondent’s liability is limited to Rs. 5,000/- only. This respondent is not liable to pay more than Rs. 5,000/-to the petitioner, in case it is held that the petitioner is entitled to any compensation.

4. The owner of the vehicle, the respondent No. 1 before the Tribunal and the respondent No. 2 in this court, filed a memo before the Tribunal that he was adopting the counter filed by the insurance company. The notes paper of the Tribunal discloses that on 3.7.1982 the respondent No. 2 in the M.C.O.P., (insurance company) filed a counter and the respondent No. 1 (owner of the vehicle) adopted the same as its counter by filing a memo.

5. In these circumstances we have to proceed on the footing that there is no dispute with regard to the policy that is produced by the insurance company which is marked as Exh. B-1, or the terms thereof. The owner of the vehicle has not adduced any evidence with regard to any of the issues in the case. The Tribunal has found negligence on the part of the driver of the bus belonging to the respondent No. 1 before it and that finding is not challenged by any of the parties hereto. The appellant is raising a question only with regard to its liability in the compensation awarded. According to the appellant, it is liable to pay only Rs. 5,000/- as per policy.

6. The Tribunal has negatived the contention of the appellant taking the view that the total liability accepted by the insurance company in the case of claims by several passengers being Rs. 75,000/-it is bound to pay up to Rs. 75,000/-, with regard to every individual passenger who was victim of the accident. In that view, the Tribunal held that the claim that would be made by the claimant is Rs. 75,000/-, but awarded compensation of Rs. 49,000 and the insurance company is liable to pay the entire amount. The Tribunal has also placed reliance on the judgment of the Supreme Court in Motor Owners’ Ins. Co. Ltd. v. Jadavji Keshavji Modi 1981 ACJ 507 (SC) and the judgment of the Division Bench of Patna High Court in National Insurance Co. Ltd. v. Chhunnu Ram 1983 ACJ 577 (Patna). The Supreme Court dealt with the case which arose before the passing of Motor Vehicles (Amendment) Act 47 of 1982. But after the judgment was delivered in that case, Parliament passed the Amendment Act 47 of 1982, amending the provisions of Section 95(2)(b) of the Act. Interpreting the provisions of the Act after the said amendment, the Supreme Court held in M.K. Kunhimohammed v. P.A. Ahmedkutty 1987 ACJ 872 (SC), a case which arose out of an accident which occurred on 24.7.1978 that the maximum liability of the insurance company with regard to an individual passenger is Rs. 5,000/- in the case of death, even though the total liability with regard to one accident was very much more. The relevant passages in the judgment of the Supreme Court read thus:

Section 95(2)(b) as it existed before its amendment in 1982 dealt with the limits of liability of an insurer in the case of motor vehicles in which passengers were carried for hire or reward or by reason of or in pursuance of a contract of employment. Sub-clause (i) of Section 95(2)(b) provided that in respect of death of or injury to persons other than passengers carried for hire or reward a limit of Rs. 50,000/- in all was the limit of the liability of the insurer. Sub-clause (ii) dealt with the liability in respect of death of or injury to passengers. Under that Sub-clause there were two specific limits on the liability of the insurer in the case of motor vehicles carrying passengers. The first limit related to the aggregate liability of the insurer in any one accident. It was fixed at Rs. 50,000/- in all where the vehicle was registered to carry not more than thirty passengers, at Rs. 75,000/- in all where the vehicle was registered to carry more than thirty but not more than sixty passengers and at Rs. 1,00,000/- in all where the vehicle was registered to carry more than sixty passengers. The said Sub-clause proceeded to lay down the other limit in respect of each passenger by providing that subject to the limits aforesaid as regards the aggregate liability, the liability extends up to Rs. 10,000/- for each individual passenger where the vehicle was a motor cab and Rs. 5,000/- for each individual passenger in any other case. Neither of the two limits can be ignored. In the present case the vehicle in question being a bus carrying passengers for hire or reward registered to carry more than thirty but not more than sixty passengers the limit of the aggregate liability of the insurer in any one accident was Rs. 75,000/- and subject to the said limit the liability in respect of each individual passenger was Rs. 5,000/-. We find it difficult to hold that the limit prescribed in Section 95(2)(b)(ii)(4) was only the minimum liability prescribed by law. The amount mentioned in that provision provides the maximum amount payable by an insurer in respect of each passenger who has suffered on account of the accident. This appears to us to be a fair construction of Section 95(2) of the Act as it existed at the time when the accident took place. Our view receives support from at least two decisions of this court.

xxx xxx xxx

As the law stands today the insurer is liable to pay up to Rs. 15,000/- in respect of death of any passenger or any injury caused to him. In the Statement of Objects and Reasons attached to the Bill which ultimately became Act 47 of 1982 it was stated that the limit with respect to an insurer’s liability to a passenger involved in an accident in a public service vehicle was being fixed at Rs. 15,000/-. After the above amendment, which was intended to increase the liability of the insurer, instead of Rs. 10,000/- in the case of each individual passenger where the vehicle was a motor cab and Rs. 5,000/- for each individual passenger in other cases which were the limits in force immediately prior to the said amendment the liability in respect of an individual passenger is now raised to Rs. 15,000/-. This clearly demonstrates that Parliament never intended that the aggregate liability of the insurer mentioned in Sub-clauses (1),(2) and (3) of Section 95(2)(b)(ii) of the Act would be the liability of the insurer even when one passenger had died or suffered injury on account of an accident. Such liability was always further limited by Sub-clause (4) of Section 95(2)(b)(ii) of the Act.

xxx xxx xxx

Having regard to the statute as it stood prior to the amendments by Act 47 of 1982 we hold that the insurer was liable to pay up to Rs. 10,000/- for each individual passenger where the vehicle involved was a motor cab and up to Rs. 5,000/- for each individual passenger in any other case. The judgment of the Kerala High Court against which this petition is filed has followed the above construction. We do not find any ground to interfere with it. This petition is, therefore, dismissed.

7. In view of the said judgment of the Supreme Court there can be no doubt whatever, that the liability of the appellant in this case with regard to the claimant is only Rs. 5,000/- and nothing more than that. Consequently, the view taken by the Tribunal that the insurance company is liable to pay the entire compensation of Rs. 49,000/- is erroneous and it is set aside. While the award of Rs. 49,000/- as compensation by the Tribunal is retained, as against the owner of the vehicle, who is the respondent No. 2 herein the same is set aside in so far as the appellant is concerned and there will be an award against the appellant only for a sum of Rs. 5,000/- out of the total compensation of Rs. 49,000/-. In other words, the total compensation payable to the claimant is Rs. 49,000/- out of which the appellant is liable to pay Rs. 5,000/- only and the remaining amount shall be paid by the owner of the vehicle (respondent No. 2 herein).

8. The claimant has filed a memorandum of cross-objections in this court claiming higher compensation. In the original O.P., he prayed for an award of Rs. 75,000/- and the Tribunal awarded only Rs. 49,000/-. For the remaining amount the claimant has preferred the memorandum of cross-objections.

9. A preliminary objection is taken by the appellant as against the maintainability of the memorandum of cross-objections. He points out that the appeal is confined to the liability of the insurance company and in that appeal the claimant cannot make a claim for enhancement, which is really directed against the owner of the vehicle who is a co-respondent in the appeal. Such a question has been considered by the Division Bench of this court in United India Insurance Co. Ltd. v. Rajammal and it was held that such a memorandum of cross-objections is not maintainable and dismissed the same on this ground. We have gone through the judgment of the Division Bench and we are entirely in agreement with the reasoning contained in the judgment. The same is the view taken in Panna Lal v. State of Bombay . Following the said judgment of the Division Bench we hold that the memorandum of cross-objections is not maintainable. Hence, the memorandum of cross-objections is dismissed.

10. It is represented by learned Counsel for the appellant that the entire compensation amount was deposited by the appellant in the Tribunal and that a sum of Rs. 5,000/- has already been withdrawn by the claimant pursuant to the direction of this court. The balance remaining in court deposit can be withdrawn by the appellant. The appellant is permitted to withdraw the balance amount from the court deposit.

11. In the result, the civil miscellaneous appeal is allowed to the extent indicated above and the liability of the appellant is reduced to Rs. 5,000/-. While the award against the respondent No. 2 herein is maintained, the memorandum of cross-objections is dismissed. There will be no order as to costs in the appeal as well as in the memorandum of cross-objections.

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