Full Judgment Text
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PETITIONER:
NATIONAL INSURANCE CO. LTD., NEW DELHI
Vs.
RESPONDENT:
JUGAL KISHORE & OTHERS
DATE OF JUDGMENT09/02/1988
BENCH:
OJHA, N.D. (J)
BENCH:
OJHA, N.D. (J)
VENKATARAMIAH, E.S. (J)
CITATION:
1988 AIR 719 1988 SCC (1) 626
JT 1988 (1) 265 1988 SCALE (1)268
CITATOR INFO :
D 1989 SC1074 (13)
ACT:
Motor Vehicles Act, 1939-Sections 95(2)(b) and 96-Motor
accidents-Comprehensive claim-Insurance company filing copy
of Insurance policy-Necessity of-Third party risk-
Comprehensive insurance of Vehicle and payment of higher
premium liability not in excess of statutory liability.
Practice and Procedure-Motor Accidents Compensation
case-Filing of insurance policy copy-Necessity for.
HEADNOTE:
%
Respondent No. 1, Jugal Kishore, while driving a three
wheeler scooter, met with an accident with bus No. DLP-3699,
driven by Rai Singh, respondent No. 2, owned by M/s. Delhi
Janata Co-operative Transport Policy Limited, respondent No.
3, and insured with the appellant. The Motor Accident Claims
Tribunal, Delhi awarded compensation in the sum of Rs.10,000
to respondent No.1. On appeal, the High Court enhanced the
Compensation to Rs.1,00,000.
This Court, while granting special leave required the
appellant to deposit the amount of compensation awarded by
the High Court and permitted the respondent to withdraw the
same, making it clear that it shall not be refunded by him
in the event of reversal of the decision of the High Court.
The appellant contends that in view of the statutory
provision contained in this behalf in clause (b) of sub-
section (2) of section 95 of the Act, as it stood on the
date of accident, no award in excess of the statutory
liability of Rs.20,000 could have been made against the
appellant.
The respondent, on the other hand, contends (1)
Notwithstanding the provision contained in this behalf in
clause (b) aforesaid, it was open to the insurer to take a
policy covering a higher risk than contemplated by clause
(b) and consequently the said clause had to be read subject
to the terms of the policy. In this connection, the
respondent relies on the words "Commercial Vehicle
comprehensive" printed on the policy,
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and on the circumstance that the premium paid was higher
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than the premium of an "Act only" policy, and urges that the
liability of the appellant was unlimited.
(2) In view of sub-section (6) of section 96 of the Act
no Insurer to whom the notice referred to in sub-section (2)
thereof has been given, is entitled "to avoid his liability"
to any person entitled to the benefit of any such judgment
as is referred to in sub-section (1) thereof otherwise than
in the manner provided for in sub-section (2). On this basis
it is urged that the appellant was not entitled to assert
that its liability was confined to Rs.20,000 only inasmuch
as this is not one of the defences specified in sub-section
(2) of section 96 of the Act.
Allowing the appeal, this Court,
^
HELD: (1) It is not obligatory for the owner of a
vehicle to get it comprehensively insured for which a higher
premium than for an "act only" policy is payable. Such
comprehensive insurance entitles the owner to claim
reimbursement of the entire amount of loss or damage
suffered up to the estimated value of the vehicle insured.
Comprehensive insurance of the vehicle and payment of higher
premium on this score, as was done in the instant case do
not mean that the limit of the liability with regard to
third party risk becomes unlimited or higher than the
statutory liability fixed under sub-section (2) of section
95 of the Act. For this purpose a specific agreement has to
be arrived at between the owner and the insurance company
and additional premium paid. [915C-E]
(2) A perusal of the policy indicates that the
liability undertaken with regard to the death or bodily
injury to any person caused by or arising out of the use of
the vehicle has been confined to "such amount as is
necessary to meet the requirements of the Motor Vehicle Act,
1939", which was at the relevant time Rs.20,000 only. An
award against the appellant could not, therefore, have been
made in excess of the said statutory liability. [916F-G]
(3) It is apparent from the words "to avoid his
liability" used in sub-section (6) of section 96 that the
restrictions placed with regard to defences available to the
insurer specified in sub-section (2) of section 96 are
applicable to a case where the insurer wants to avoid his
liability. In the instant case the appellant is not seeking
to avoid its liability but wants a determination of the
extent of its liability in accordance with the statutory
provisions contained in this behalf in clause (b) of sub-
section (2) of section 95 of the Act. [917E-F]
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(4) This Court has consistently emphasized that it is
the duty of the party which is in possession of a document
which would be helpful in doing justice in the cause to
produce the said document and such party should not be
permitted to take shelter behind the abstract doctrine of
burden of proof. This duty is greater in the case of
instrumentalities of the State, such as the appellant, who
are under an obligation to act fairly. The obligation on the
part of the State or its instrumentalities to act fairly can
never be over-emphasized. [918C-D]
(5) The attitude often adopted by the Insurance
Companies, as was adopted in this case, is not to file a
copy of the policy before the Tribunal and before the High
Court in appeal. The claimants for compensation are
invariably not possessed of either the policy or a copy
thereof. In all cases where the Insurance Company concerned
wishes to take a defence in a claim petition that its
liability is not in excess of the statutory liability it
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should file a copy of the insurance policy alongwith its
defence. [917G-H; 918B-C]
Pushpabai Purshottam Udeshi v. Ranjit Ginning and
Pressing Co., [1977] A.C.J. 343 and British India General
Insurance Co. v. Captain Itbar Singh, AIR 1959 Supreme Court
1331, referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3677 of
1984.
From the Judgment and Order dated 17.5.1982 of the
Delhi High Court in F.A. No. 30 of 1975.
P.P. Malhotra and N.K. Sharma for the Appellant.
O.P. Goyal, Ms. Sunita Vasudeva and R.C. Verma for the
Respondents.
The Judgment of the Court was delivered by
OJHA, J. This appeal by special leave has been filed by
the National Insurance Company Ltd., New Delhi, against a
judgment of the Delhi High Court in an appeal under Section
110-D of the Motor Vehicles Act, 1939 (hereinafter referred
to as the ’Act’).
Necessary facts may be stated herein in a nutshell.
Shri Jugal Kishore, Respondent No. 1 was, on 15th June,
1969, driving a threewheeler scooter when he met with an
accident with bus No. DLP-
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3699, driven by Shri Rai Singh, Respondent No. 2 and owned
by M/s. Delhi Janata Co-operative Transport Society Limited,
Respondent No. 3, He sustained injuries consequent upon
which he made a claim for compensation before the Motor
Accident Claims Tribunal, Delhi against Respondent Nos. 2
and 3 and the appellant which was the insurer of the bus
aforesaid. The claim of Respondent No. 1 was contested by
the appellant and also by Respondent No. 3 but proceeded ex
parte against Respondent No. 2. The Tribunal awarded
compensation in the sum of Rs.10.000 recoverable jointly and
severally from the appellant and Respondent No. 3. Aggrieved
by the award of the Tribunal Respondent No. 1 preferred an
appeal before the High Court of Delhi and asserted that the
amount of compensation awarded by the Tribunal was
inadequate. His appeal was allowed by the High Court and the
award was modified. The High Court awarded a sum of Rs.
1,00,000 as compensation to Respondent No. 1 with interest
at 9 per cent per annum from the date of institution of the
claim till realisation with costs against the driver as well
as the owner of the bus as also against the appellant,
Insurance Company.
Before granting special leave this Court required the
appellant to deposit Rs. 1,00,000 namely the amount of
compensation awarded by the High Court and permitted
Respondent No. 1 to withdraw the same. Special leave was
granted on 14th September, 1984 by the following order of
this Court.
"Under the orders of this Court the appellant has
deposited Rs. One lac, which is the amount of
compensation awarded to the claimants. The
claimants have withdrawn the amount without
furnishing security.
Special leave granted on condition that in
the event of reversal of the decision of the High
Court, the said amount shall not be refunded by
the claimants. Stay of further execution of the
award confirmed."
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It has been urged by the learned counsel for the
appellant that in view of the statutory provision contained
in this behalf in clause (b) of sub-section (2) of Section
95 of the Act as it stood on the date of accident namely
15th June, 1969 which happens to be prior to 2nd March,
1970, the date of commencement of Amending Act 56 of 1969,
no award in excess of Rs.20,000 could have been made against
the appellant. Before dealing with the submission we may
point out that the policy under which the bus aforesaid was
insured had not been
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filed either before the Tribunal or before the High Court. A
photostat copy of the policy has, however, been filed in
this Court and learned counsel for the respondents did not
have objection in the same being admitted in evidence.
Clause (b) of sub-section (2) of Section 95 of the Act as it
stood at the relevant time reads as under:
"95. (1) ..............
(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) ...................
(b) Where the vehicle is a vehicle in which
passengers are carried for hire or reward or
by reason of or in pursuance of a contract of
employment, in respect of persons other than
passengers carried for hire or reward, a
limit of twenty thousand rupees; and in
respect of passengers a limit of twenty
thousand rupees in all, and four thousand
rupees in respect of an individual passenger,
if the vehicle is registered to carry not
more than six passengers excluding the driver
or two thousand rupees in respect of an
individual passenger, if the vehicle is
registered to carry more than six passengers
excluding the driver;
(c) ..................
On the plain language of the aforesaid clause (b) which
applies to the instant case it is apparent that the
liability of the appellant could not be in excess of
Rs.20,000. Learned counsel for the respondents, however,
urged that notwithstanding the provision contained in this
behalf in clause (b) aforesaid it was open to the insurer to
take a policy covering a higher risk than contemplated by
the aforesaid clause (b) and consequently the said clause
had to be read subject to the terms of the policy which was
taken in the instant case. We find substance in this
submission in view of the decision of this Court in
Pushpabai Purshottam Udeshi and others v. M/s Ranjit Ginning
and Pressing Co. and another, [1977] A.C.J. 343 where it was
held that the insurer can always take policies covering
risks which are not covered by the re-
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quirements of Section 95 of the Act.
We have accordingly perused the photostat copy of the
policy to ascertain whether risk for any amount higher than
the amount of Rs.20,000 contemplated by clause (b) aforesaid
was covered. Our attention was invited by learned counsel
for the respondents to the circumstance that at the right
hand corner on the top of page 1 of the policy the words
"COMMERCIAL VEHICLE COMPREHENSIVE" were printed. On this
basis and on the basis that the premium paid was higher than
the premium of an "act only" policy it was urged by the
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learned counsel for the respondents that the liability of
the appellant was unlimited and not confined to Rs.20,000
only. We find it difficult to accept this submission. Even
though it is not permissible to use a vehicle unless it is
covered at least under an "act only" policy it is not
obligatory for the owner of a vehicle to get it
comprehensively insured. In case, however, it is got
comprehensively insured a higher premium than for an "act
only" policy is payable depending on the estimated value of
the vehicle. Such insurance entitles the owner to claim
reimbursement of the entire amount of loss or damage
suffered up to the estimated value of the vehicle calculated
according to the rules and regulations framed in this
behalf. Comprehensive insurance of the vehicle and payment
of higher premium on this score, however, do not mean that
the limit of the liability with regard to third party risk
becomes unlimited or higher than the statutory liability
fixed under sub-section (2) of Section 95 of the Act. For
this purpose a specific agreement has to be arrived at
between the owner and the insurance company and separate
premium has to be paid on the amount of liability undertaken
by the insurance company in this behalf. Likewise, if risk
of any other nature for instance, with regard to the driver
or passengers etc. in excess of statutory liability, if any,
is sought to be covered it has to be clearly specified in
the policy and separate premium paid therefor. This is the
requirement of the tariff regulations framed for the
purpose. Coming to the photostat copy of the policy in the
instant case it would be seen that Section II thereof deals
with liability to third parties. Sub-section (1) minus the
proviso thereto reads as hereunder:
"1. Subject to the Limits of Liability the Company
will indemnify the insured against all sums
including claimant’s cost and expenses which the
insured shall become legally liable to pay in
respect of
(i) death or bodily injury to any person caused
by or
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arising out of the use (including the loading
and/or unloading) of the Motor Vehicle.
(ii) damage to property caused by the use
(including the loading and/or unloading) of
the Motor Vehicle)".
The Schedule to the policy indicates the limits of
liability and the amount of premium paid. The limits of
liability are indicated as hereinbelow:
"Limits of Liability:
Limit of the amount of the Company’s Such amount as is necessary
liability under Section II-1(1) in to meet the requirements of
respect of any one accidentthe Motor Vehicle Act, 1939
Limit of the amount of the Company’s
liability under Section II-1(11) in
respect of any one claim or series of
claims arising out of one event Rs.20,000/-
The premium paid on the other hand is shown as below:
"Premium Rs.415.00
Add 1/2% on I.E.V. Rs.200.00
Add for 53 Pass, 9 of Rs.2.50 Rs.132.50
Add for Driver & Conductor Rs.10.00
---------
757.50"
---------
A perusal of the policy, therefore, indicates that the
liability undertaken with regard to the death or bodily
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injury to any person caused by or arising out of the use
(including the loading and or un loading) of the motor
vehicle falling under Section II(1)(i) has been confined to
"such amount as is necessary to meet the requirements of the
Motor Vehicle Act, 1939." This liability, as is apparent
from clause (b) of sub-section (2) of Section 95 of the Act,
was at the relevant time Rs.20,000 only. The details of the
premium also indicate that no additional premium with regard
to a case falling under Section II(1)(i) was paid by the
owner of the vehicle to the insurance company. It is only
the vehicle which was comprehensively insured, the insured’s
estimate of value including accessories (I.E.V.) thereof
having been shown as Rs.40,000. In this view of the matter
the submission made by learned
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counsel for the respondents that the appellant had in the
instant case undertaken an unlimited liability does not
obviously have any substance. The liability under the policy
in the instant case was the same as the statutory liability
contemplated by clause (b) of sub-section (2) of Section 95
of the Act namely Rs.20,000. An award against the appellant
could not, therefore, have been made in excess of the said
statutory liability.
Learned counsel for the appellant then urged relying on
the decision of this Court in British India General
Insurance Co. Ltd. v. Captain Itbar Singh and Others, AIR
1959 Supreme Court 1331 that in view of the sub-section (6)
of Section 96 of the Act no insurer to whom the notice
referred to in sub-section (2) thereof has been given, is
entitled "to avoid his liability" to any person entitled to
the benefit of any such judgment as is referred to in sub-
section (1) thereof otherwise than in the manner provided
for in sub-section (2). On this basis it was urged that the
appellant was not entitled to assert that its liability was
confined to Rs.20,000 only inasmuch as this is not one of
the defences specified in sub-section (2) of Section 96 of
the Act. We find it difficult to agree with this submission
either. Firstly, in paragraph 12 of the report of this very
case it has been held that sub-section (2) of Section 96 in
fact deals with defences other than those based on the
conditions of a policy. Secondly, from the words "to avoid
his liability" used in sub-section (6) of Section 96 it is
apparent that the restrictions placed with regard to
defences available to the insurer specified in sub-section
(2) of Section 96 are applicable to a case where the insurer
wants to avoid his liability. In the instant case the
appellant is not seeking to avoid its liability but wants a
determination of the extent of its liability which is to be
determined, in the absence of any contract to the contrary,
in accordance with the statutory provisions contained in
this bahalf in clause (b) of sub-section (2) of Section 95
of the Act. In the instant case since as seen above the
appellant did not undertake in the policy any liability in
excess of the statutory liability the award against it could
be only in accordance with the said statutory liability.
Before parting with the case, we consider it necessary
to refer to the attitude often adopted by the Insurance
Companies, as was adopted even in this case, of not filing a
copy of the policy before the Tribunal and even before the
High Court in appeal. In this connection what is of
significance is that the claimants for compensation under
the Act are invariably not possessed of either the policy or
a copy thereof. This Court has consistently emphasised that
it is the duty of the party
918
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which is in possession of a document which would be helpful
in doing justice in the cause to produce the said document
and such party should not be permitted to take shelter
behind the abstract doctrine of burden of proof. This duty
is greater in the case of instrumentalities of the State
such as the appellant who are under an obligation to act
fairly. In many cases even the owner of the vehicle for
reasons known to him does not choose to produce the policy
or a copy thereof. We accordingly wish to emphasise that in
all such cases where the Insurance Company concerned wishes
to take a defence in a claim petition that its liability is
not in excess of the statutory liability it should file a
copy of the insurance policy along with its defence. Even in
the instant case had it been done so at the appropriate
stage necessity of approaching this Court in Civil Appeal
would in all probability have been avoided. Filing a copy of
the policy, therefore, not only cuts short avoidable
litigation but also helps the Court in doing justice between
the parties. The obligation on the part of the State or its
instrumentalities to act fairly can never be over-
emphasised.
In the result, this appeal succeeds and is allowed to
this extent that the liability of the appellant is fixed at
Rs.20,000 together with interest as allowed by the High
Court. In view of the order of this Court dated 14th
September, 1984 quoted above, however, it is held that even
if the total liability of the appellant falls short of
Rs.1,00,000, it shall not be entitled to any refund out of
the sum of Rs.1,00,000 which was deposited by it and
withdrawn by the claimant-respondent in pursuance of the
said order. The decree of the High Court as against the
driver and the owner of the vehicle namely Respondents 2 and
3 is, however, maintained and all sums in excess of
Rs.1,00,000 which has already been withdrawn by the
claimant-respondent as aforesaid shall be recoverable by him
from Respondents 2 and 3 only. There shall be no order as to
costs.
R.S.S. Appeal allowed.
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