NATIONAL INSURANCE COMPANY LIMITED Vs. KALAI SELVI

JUDGEMENT

(1.) THE appellant is the insurance company. THE only question raised by the appellant refers to the limit of the liability of the insurance company. THE compensation awarded by the Tribunal is Rs. 1, 85, 000. According to the insurance company, the liability of the company is restricted to Rs. 1, 50, 000. It produced the certificate of insurance (exhibit B-4) for the vehicle in question for the relevant period. THE Tribunal on a construction of the clause in exhibit B-4 rejected the contention of the appellant and passed an award against the appellant and the owner of the vehicle for the entire amount jointly and severally. THE relevant provision in exhibit B-4 reads thus :"I/we hereby certify that the policy to which this certificate relates as well as this certificate of insurance are issued in accordance with the provisions of Chapter VII-A and VIII of the Motor Vehicles Act, 1939." According to learned counsel for the appellant, when the insurance is effected in accordance with the provisions of Chapter VII-A and Chapter VIII of the Motor Vehicles Act, 1939, it means that the limits prescribed in the Act are automatically applicable. It is also submitted by her that no additional premium has been paid for the increase in the liability to third parties. It is seen from exhibit B-4 that a sum of Rs. 16 has been paid as additional premium for limited liability to be paid to driver and/ or cleaner as per END IMT. 16.RW-2 is the official of the appellant-company. He has spoken to the fact that the maximum liability for the appellant under the policy is only Rs. 1, 50, 000 and no additional premium has been paid for the purpose of increasing the liability to third parties. In cross-examination it has been elicited from him that the additional sum of Rs. 16 is only for the purpose of the limited liability to driver and/or cleaner. According to him, there are three kinds of policies. (1) Act policy, (2) comprehensive policy, and (3) public risk or third party policy. It is stated by him that the policy in this case is a third party policy and not an Act policy. It is suggested to him that the liability is not expressly restricted to Rs. 1, 50, 000. A question was put to him that according to the Indian Motor Tariff it is sufficient if a sum of Rs. 200 is paid as premium for Act policies. He has denied knowledge of the same. In answer to another suggestion whehter according to the Indian Motor Tariff if only a sum of Rs. 40 is paid the liability of the insurance company with reference to third parties is unlimited, he has denied that suggestion.Section 95(2)(a) of the Motor Vehicles Act, 1939, prescribes the requirements for a policy of insurance.

(2.) THE clause reads as follows :"95. (2) Subject to the proviso to sub-section (1), a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits, namely (a) where the vehicle is a goods vehicle, a limit of one lakh and fifty thousand rupees in all, including the liabilities, if any, arising under the Workmen's Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, employees (other than the driver), not exceeding six in number, being carried in the vehicle." THEre is no dispute that in this case the vehicle is a goods vehicle. Thus the section requires that the limit for the policy should be at least Rs. 1, 50, 000. According to learned counsel, when the certificate of insurance states that the policy is in accordance with the provisions of the Act it means that the liability is restricted to Rs. 1, 50, 000. She prayed for a direction to the owner of the vehicle to produce the original policy which is with the owner.

(3.) THE Tribunal is also in error in thinking that the liability is unlimited in the case of third parties overlooking the specific clause contained in the certificate of insurance, exhibit B-4, that the insurance will have effect, in accordance with the Act. THE position is now made clear further by the original policy itself which has been produced before us and marked as exhibit B-5.In the circumstances, the award passed by the Tribunal as against the appellant with reference to the entire amount awarded is erroneous.