ORIENTAL INSURANCE CO LTD Vs. SAJI

JUDGEMENT

(1.) This appeal has been filed by the insurer of an offending vehicle involved in a motor accident which took place on 21.5.1987. The claimant who is the first respondent in this appeal filed a petition seeking compensation of Rs. 1,07,000/- for the injuries sustained by him in the above accident. The offending vehicle was owned by the second respondent. In the course of the inquiry the appellant insurer contended that their liability was limited to Rs. 50,000/-. In support of the contention Ext.B1 policy dated 19.9.1986 was produced before the Tribunal. However, the Tribunal passed an award for Rs. 59,738/- with interest which was directed to be indemnified by the appellant.

(2.) There is no dispute in this appeal either with regard to the quantum of the compensation awarded or with regard to the negligence of the driver of the offending vehicle. The only dispute before us relates to the extent of liability of the appellant for the compensation awarded.

(3.) Counsel appearing for the appellant contended that in view of the provisions contained in S.95(2)(b)(i) of the Motor Vehicles Act, 1939 (for short 'the Act'). Appellant is liable to indemnify only to the extent of Rs. 50,000/-. The above section is contained in Chap.8 of the Act which deals with the insurance of motor vehicles against third party risks. S.94 mandates that no person shall use the motor vehicle in a public place unless there is a policy of insurance complying with the requirements provided in the Chapter. Sub-s. (2) of S.95 contains such requirements of policies and sub-s. (2) contains limits of liabilities arising out of insurance. Clause (b) of sub-s. (2) of S.95 of the Act is as follows: