NEW INDIA ASSURANCE COMPANY LTD Vs. HANUMAKKA

JUDGEMENT

(1.) the Motor Vehicles Act, 1988 ('the Act' for short) by the New India Assurance Company Limited, the following question of law arises for consideration. Whether Section 147(2) of the Act which provides for continuance of the liability of an insurance company as it existed prior to the coming into force of the Act for tour months does not apply to the liability of the Insurance Company to answer the No Fault Liability of the owner of the vehicle under Section 140 of the Act and therefore the no fault liability of the insurance company on and after 1-7-1989 in case of death is Rs. 25,000/- ?

(2.) Brief facts of the case are these:- A claimpetition under Section 166 of the Act was presented before the Motor Accidents Claims Tribunal, Tumkur, claiming compensation for the death of Ramaiah, husband of the 1st respondent in a motor accident which occurred on 17-7-1987. In the claim petition, a compensation of Rs. 25,000/- was also claimed under Section 140 of the Act. The Tribunal having found that the vehicle in question was involved in the accident, proceeded to award compensation on the ground of no fault at Rs. 25,000/- as fixed under Section 140 of the Act and fixed the said liability on the Insurance Company. Aggrieved by the said order, the appellant has presented this appeal.

(3.) Under the Motor Vehicles Act, 1939, as it originally stood, compensation for injury or death caused by a motor accident was payable on proof of negligence on the part of the driver of the vehicle concerned. Subsequently Chapter VII-A was introduced into the Act for the first time creating No Fault Liability. According to Section 92-A of the Act in respect of death, a compensation of Rs.15,000/- was made payable without going into the question of fault. In other words, the said amount of compensation was payable irrespective of the question of negligence. The question under what circumstances the compensation fixed under Section 92-A was payable by the insurer and the Insurance Company came up for consideration be for the Full Bench of this Court in United India Insurance Co. v Immam Aminasab Nadaf, 1LR 1990 Kar. 16. The Full Bench held the No Fault Liability under Section 92-A of the 1939 Act was independent of the liability to pay compensation in a claim petition under Section 110-A of the Act on the basis of fault. It was further held that a sum of Rs.15,000/- as fixed under Section 92-A was payable in the case of death, by the owner, the moment it is proved that the vehicle was involved in the accident. Further, it was held that though the liability under Section 92-A of the Act is fixed only on the owner of the vehicle and there was no reference to Insurance Company, in view of Section 93(b-a) of the Act the Insurance Company was liable to pay the compensation awarded under Section 92-A of the Act, subject to the condition that the risk was covered by the Insurance Policy.