ORIENTAL INSURANCE COMPANY LIMITED Vs. SHANTI DEVI

JUDGEMENT

(1.) This appeal under clause 10 of Letters Patent is directed against the judgment and award dated 5.5.1998 passed in M.A. No. 130 of 1995 (R), whereby and whereunder the learned single Judge refused to set aside the judgment and award passed by the learned 5th Additional Judicial Commissioner-cumMotor Accidents Claims Tribunal, Ranchi in Compensation Case No. 170 of 1989.

(2.) The facts of the case lie in a narrow compass. Learned Claims Tribunal awarded a sum of Rs. 1,20,000 as compensation amount to be paid by the insurer of the vehicle involved in the accident. The insurance company has taken a plea that as per section 95 (2) of Motor Vehicles Act, 1939, the liability of the insurance company in the ordinary cases was fixed at Rs. 50,000 only. It was further pointed out that the accident has taken place on 15.10.1989, but proviso to sub-section (2) of section 147 of new Act 1988 provides that if the accident takes place within 4 months of the coming into force of the new Act, liability of the insurance company will be limited. It is further submitted that the accident has actually taken place within 4 months from the date of commencement of the new Act and, therefore, the principle of limited liability of the insurance company should have been considered by the court but it was not so done.

(3.) Mr. A. Allam, the learned counsel appearing for the appellant, submitted that whether this plea of limited liability was taken in the trial court or not is immaterial because insurance policy was produced in the learned trial court. From perusal of the insurance policy, it will appear that no extra premium for unlimited liability was paid and, therefore, according to section 95 of the Act, the liability of the insurance company will be limited to the extent of Rs. 50,000. In this connection, the learned counsel placed reliance on New India Assurance Co. Ltd. v. CM. Jaya, 2002 ACJ 271 (SC), wherein it was held that if insurance company is not taking any higher premium for payment of compensation to third party, in such a situation insurance company will not be liable to pay the entire amount and the liability of insurance company will be limited to Rs. 50,000 in terms of insurance policy. The learned counsel further submitted that in view of this caselaw, in any circumstances, since death has occurred within four months from the date of coming into force of new Act 1988, the liability of the insurance company will be limited to Rs. 50,000 only.