RAMAN ASTHANA Vs. MAHILA SIYABAI

JUDGEMENT

(1.) THIS appeal is filed by the owner of the vehicle challenging the portion of the award passed by the Claims Tribunal whereby the insurance company is exonerated from indemnifying the owner of the vehicle. Sughar Singh died in a motor accident on 20.5.1985 involving Bus No. MPW 8306 which was driven from Narwar towards Dabra. Sughar Singh died on the spot. Owner Suman Asthana was impleaded as party and after his death, his brother appellant Raman Asthana is substituted in his place.

(2.) COUNSEL for the appellant submitted that the Claims Tribunal has committed an error in holding that the vehicle was not insured. He invited attention of the Court to the policy Ex. P-2. Effective date of commencement of the insurance is 5.12.1984 for the period upto 4.12.1985. Counsel for the appellant submitted that during the subsistence of the insurance policy, vehicle was insured on the date of accident i.e. on 20.5.1985. Counsel for the appellant further submitted that the Claims Tribunal has wrongly interpreted the provisions of 64-VB of the Insurance Act, 1938. Counsel for the respondent insurance company submitted that actually premium was received by the company on 23.5.1985, therefore, insurance company is not liable. This question has been considered by the apex Court in the case of Oriental Insurance Co. Ltd. v. Inderjit Kaurand others [1998 (I) MPWN 164 = AIR 1998 SC 588]. In this case, it is held that Chapter 11 of the Motor Vehicles Act, 1988 provides for the insurance of motor vehicle against third party risk and while interpreting section 64-VB of the Insurance Act, 1938, it is held that the insurance company, being an authorised insurer, issued a policy of insurance to cover the bus without receiving the premium therefor. By reason of the provisions of sections 147 (5) and 149 (1) of the Motor Vehicles Act, the insurance company became liable to indemnify third parties in respect of the liability which that policy covered and to satisfy awards of compensation in respect thereof, notwithstanding its entitlement to avoid or cancel the policy for the reason that the cheque in payment of the premium thereon had not been honoured.

(3.) THUS , in this case, no additional or higher premium was paid to cover the unlimited or higher liability than the statutory liability. Therefore, we hold that the liability of the insurance company is limited to Rs. 50,000/- (Rs. fifty thousand only). Remaining amount shall be paid by the appellant before the Claims Tribunal within two months. Amount already deposited by the insurance company shall be adjusted towards the liability of the insurance company. There is no challenge to the quantum of compensation, therefore, we refrain from modifying the order as regards quantum of compensation. Appeal succeeds in part as indicated above. There shall be no order as to costs.