NATIONAL INSURANCE COMPANY LIMITED Vs. KESHAV BAHADUR

JUDGEMENT

(1.) Leave granted.

(2.) National Insurance Company Limited (hereinafter referred to as the insurer) questions legality of the judgment of a Division Bench of the Jharkhand High Court holding that the insurer has to pay the compensation of Rs. 72,000/- awarded to the legal representatives of one Hasta Bahadur (hereinafter referred to as the deceased) who lost his life in a vehicular accident on 5-6-1987. The deceased was working as a Chowkidar of Hydel Project, Sikidri. A claim petition was filed by his sons under Section 110-A of the Motor Vehicles Act, 1939 (in short the Act). The Motor Vehicle Accidents Tribunal (hereinafter referred to as the Tribunal) awarded compensation of Rs. 72,000/- along with interest @ 12% per annum. The amount was directed to be paid within 60 days. It was further directed that in case of failure to pay within 60 days, the rate of interest would be 18%. The insurer questioned the legality of the direction that the whole amount of compensation was to be paid by the insurer; and the direction regarding default rate of interest. According to it, the liability was limited to Rs. 50,000/- in terms of Section 95(2)(b)(i) of the Act; and there was no legal basis for the default rate. Though these points were specifically urged before the Tribunal, no definite finding was recorded. Similar was the situation so far as the High Court is concerned. Though it dealt with the question of interest and reduced the rate from 12%, as awarded by the Tribunal, to 9% per annum, no finding was recorded regarding legality of default rate.

(3.) Learned counsel for the appellant-insurer submitted that the liability statutorily fixed in respect of third party risk was at the relevant point of time Rs. 50,000/-. With reference to copy of the policy of insurance, which was produced before the Tribunal and the High Court it is pointed out that a sum of Rs. 240/- was paid as the third party insurance premium. The limits of liability were also indicated in the following terms :