D CHANDRAPPA Vs. K SUNANDA

JUDGEMENT

(1.) Heard learned advocates representing the appellant, owner of the vehicle, the insurance company and the original claimant. The entire controversy in this appeal is limited to the question as to whether the insurance company can be saddled with the unlimited liability or in other words, whether the insurance company is required to pay the whole of the amount awarded as compensation or whether the liability is limited to Rs. 30,000/- as contended by them. In this case which pertains to a fatal accident the award was for Rs. 82,934/- with costs and interest at 9% per annum. The claimants had received Rs. 15,000/- as interim compensation and therefore the final award was for a sum of Rs.67,934/- along with costs and interest. The insurance company had contended that even though an additional premium had been paid and the passengers one of whom was the deceased were separately covered, that their liability was limited to Rs. 30,000/- because this is the cover that is extended for a premium of Rs. 30/-. This plea was upheld by the learned trial Judge despite the fact that the insurance policy clearly mentions that a liability vis-a-vis the passenger was unlimited. I need to record here that the Branch Manager of the Insurance Company has given evidence and he has sought to say that under the rules then prevalent, an additional cover per passenger can be taken out but that this is limited to Rs. 30,000/- per passenger where the premium is Rs. 30/-. He has stated that this is under the tariff rules of the company and he has also produced at Ex.R-2 the copy of the tariff rules which support him as far as this contention is concerned. Consequently, he contended that the reference to the unlimited liability in the insurance policy is a typographical error and that the court should accept the insurance company's contention that the cover per passenger was only Rs.30,000/- and not unlimited. This plea found favour with the learned trial Judge who limited the liability of the insurance company to Rs.30,000/-. The award has been challenged through the present appeal by the owner of the vehicle.

(2.) The appellant's learned advocate has advanced a strong plea that the learned trial Judge was totally in error in having absolved the insurance company from the full liability. According to him, the owner was conscious of the fact that the passengers required insurance cover which was why he paid an additional premium and pursuant to that, the document was issued to him which in unequivocal terms indicated that the liability of the insurance company was unlimited as far as the passengers were concerned. He contended that in these circumstances the insurance company cannot come forward with any explanations at the stage when a liability has arisen and seek to give a go by to the clear terms of the policy. In sum and substance, his argument proceeds on the footing that the policy represents the contract between the parties and that it fully binds the insurance company. He further contends that there is no limit to the liability of a insurer in these circumstances and to that extent it is his submission that even in the decision reported in 1992 ACJ 319, in the case of New India Assurance Co. Ltd., it was held that a Court would be fully justified in refusing to accept any explanations that may subsequently seek to limit the liability. In that case also, the same contention was taken up namely that the reference to the word 'unlimited' was a typographical error and the court rejected this defence.

(3.) Appellant's learned advocate also relies on an earlier decision of this court reported in ILR 1986 (2) Kant 2660, in the case of Oriental Fire and General Insurance Company v. Jagdish Babu. In that decision, the Court had held that nothing precluded the insurance company from undertaking a larger liability and since the columns in the policy were blank the court held them to signify that the liability was unlimited. Appellant's learned advocate submits that he is in a stronger footing in this case because according to him there is a clear representation that the liability was unlimited.