NEW INDIA ASSURANCE CO. LTD Vs. N. RAMAKRISHNAN

JUDGEMENT

(1.) THE appellant is the insurer of a bus KLZ 1427 owned by the third respondent. The vehicle was Involved in an accident which took place at 7.30 A.M. on January 13, 1979 when the first respondent got injured, being hit by the bus. The first respondent thereupon filed application for compensation under S.110A of the Motor Vehicles Act, 1939 (the Act) before the Motor Accidents Claims Tribunal, Kozhikode. The appellant, who was the third respondent, did not admit that the accident was caused by the rash and negligent driving of the driver, the second resplendent; nor did they admit the other particulars regarding the age, or the injuries sustained by the first respondent. They also contended that the compensation claimed was excessive and without any rational basis. They then went on to state as follows in Para.7 of the counter statement.

(2.) AT the trial, the appellant produced the office copy of the insurance policy and It was marked as Ext. R2. The original of the policy was not produced, but it was produced in this court by the third respondent herein the owner of the bus, along with C. M P. No. 6717 of 1992. The limit of the insurer's liability was specified as under in the policy of insurance: S.2 referred to is S.2 of the Commercial Vehicles Clause attached to the policy, sub clause (i) of which related to death or bodily injury to any person caused by or arising out of the use of the motor vehicle, and sub clause (ii) related to damage to property caused by the use of the motor vehicle. Based on these terms in the policy appellant pleaded that their liability was limited to an amount of Rs.50,000/-.

(3.) THE appellant is aggrieved by the award in so far as it makes them liable for the entirety of the claim, without limiting it to the amount of Rs. 50,000/- as contended by them. That is the subject matter of the appeal and the question we have to decide is whether on the facts, and on the law applicable to the case, the liability of the appellant company is limited to Rs. 50,000/-. Counsel for the appellant submits that the appellant's liability relating to claims under S.2I(i) has been limited by the policy itself to such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939. It is pointed out that the requirements of the Act have to be discerned in the provisions of S.95 (2)(b), and thereunder, the liability of the insurer in such cases is limited to Rs. 50,000/-. The appellant has undertaken to indemnify (the insured only to this extent and no more, and therefore the Tribunal has erred in making the appellant liable for the entirety of the amount awarded.