Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5
PETITIONER:
M/S. ROAD TRANSPORT COMPANY
Vs.
RESPONDENT:
BHAN SINGH AND ANOTHER
DATE OF JUDGMENT: 22/07/1998
BENCH:
G.T. NANAVATI, SYED SHAH MOHAMMED QUADRI
ACT:
HEADNOTE:
JUDGMENT:
J U D G M E N T
NANAVATI, J.
Leave granted.
All these appeals arise out of the judgment of the
Patna High Court in Civil Review Applications Nos. 4 to 10
of 1997 filed by the appellant. The appellant wanted the
High Court to review its judgment passed in the appeals
filed by it against the common judgment and separate awards
given by the Additional Claims Tribunal Hazaribagh
(hereinafter referred to as the Tribunal) in the motor
accident claims cases filed by the claimants-respondents.
On 12.10.73, a passenger bus of the appellant met with
an accident because of rash and negligent driving by its
driver. 35 passengers travelling in that bus died. In all
nine claim cases were filed before the Tribunal. Two cases
were dismissed and in the remaining seven cases the Tribunal
awarded different sums of moacy by way of compensation and
ordered that in each case out of the total amount payable to
the claimants Rs.5,000/- shall be paid by the insurance
company and the rest shall be paid by the appellant.
The appellant feeling aggrieved by the amount of
compensation and the finding that the insurance company was
liable to pay only Rs.5,000/- per passenger and Rs.75,000/-
in all preferred appeals before the High Court Two
contentions were raised before the High Court. It was
contended that the insurance policy was a comprehensive
policy and, therefore, the insurance company was legally
liable to pay the whole amount of compensation and limiting
its liability to Rs.5,000/- per passenger and Rs.75,000/- in
all was contrary to the Motor Vehicles Act. 1939. The second
contention was that the appellant had paid additional
premium of Rs.300/- and, therefore, limiting liability of
the insurance company to Rs.75,000/- in all was not
justified. The High Court rejected both these contentions.
Relying upon the decision of this Court in National
Insurance Co. Ltd. vs. Jugal Kishore (1988) 1 SCC 626 the
High Court held that even where the owner of a vehicle gets
it comprehensively insured 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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5
calculated according to the rules and regulations framed in
that 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 or risk of any other nature becomes unlimited or
higher than the statutory liability fixed under sub-section
(2) of Section 95 of the Act. It also held that the
additional premium of Rs.300/- was paid as it was a
passenger bus having capacity of carrying 50 passengers. It
held that there was no special contract between the
appellant-company and the insurance company to cover
unlimited liability in respect of the passengers. In support
of this view it also relied upon the decision of this Court
in New Indian Assurance company Limited vs. Shanti Bai
(1995) 2 SCC 539. Taking this view the High Court dismissed
all the appeals.
The appellant thereafter filed review petitions before
the High Court on the ground that the insurance policy was
misread or misinterpreted by the High Court as it failed to
appreciate that extra premium of Rs.300/- was paid over and
above the basic premium of Rs.615/- which covered the Act
liability. The High Court did not agree with this contention
raised by the appellant and dismissed the review petitions.
Only point raised in these appeals is whether the High
Court was right in holding that, under the insurance policy,
the insurance company was liable to indemnify the insured
only to the extent of Rs.5,000/- per passenger and
Rs.75,000/- in all. It was submitted by the learned counsel
that the appellant had paid additional premium of Rs.300/-
and, therefore, the extent of liability of the insurance
company was unlimited and should not have been restricted to
Rs.5,000/- in respect of any one person and Rs.75,000/- in
all. The learned counsel for the insurance company disputed
that any additional premium was paid with a view to cover
higher than the ’Act liability’. It was contented on its
behalf that the insurance policy was comprehensive with
respect to the vehicle only and additional payment of
Rs.300/- was really made because the vehicle was a passenger
bus having registered capacity to carry 50 passengers. The
said additional premium of Rs.300/- was not for the purpose
of covering unlimited or higher liability in respect of
death of or bodily injury to any passenger.
As the vehicle involved in this case was a passenger
bus in which passengers were carried for hire or reward the
provisions contained in Section 95(1)(b)(ii) read with
Section 95(2)(b)(ii) became applicable. At the relevant time
Section 95(2) was as under
"95(2) Subject to the proviso to sub-section (i), 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,-
(i) in respect of persons other
than passengers carried for hire or
reward, a limit of fifty thousand
rupees in all;
(ii) in respect of passengers, (1)
a limit of fifty thousand rupees in
all where the vehicle is registered
to carry not more than fifty
passengers;
(2) a limit of seventy-five
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5
thousand rupees in all where the
vehicle is registered to carry more
than thirty but nor more than sixty
passengers;
(3) a limit of one lakh rupees in
all where the vehicle is registered
to carry more than sixty
passengers; and
(4) subject to the limits
aforesaid, ten thousand rupees for
each individual passenger where the
vehicle is a motor car, and five
thousand rupees for each individual
passenger in any other case."
The renewed policy for the relevant period was filed
before the Tribunal by the appellant and also by the
insurance company. The relevant part of that policy read as
under:
"In consideration of the payment of the Renewal Premium
amount of Rs.721.20. (Rupees Seven hundred twenty one and
paise twenty only.) as per details below, the within
mentioned policy is hereby renewed for a further period of
12 months from 4.10.1973 to 3.10.1974 subject to the terms,
conditions warranties as per Original Policy and
endorsements thereon.
SCHEDULE
PARTICULRS OF MOTOR VEHICLE
------------------------------------------------------------
Regist- Make Type Cubic Year licen- Carry- Capa- insured’s
ration of body Capacity of Goods in Passenger estimate
Mark & Make Tons excluding of value
Number Driver Including
accesso-
riesthere-
on
Rupees
------------------------------------------------------------
EBRW-8040 T.HV Bus .. 1970 50 Rs.40,000
COMPREHENSIVE RISK S. & RISK, FIFTY PASSENGERS’ RISK & L.L.
TO PAID DRIVER, CLEANER & CONDUCTOR UNDER W.C. ACT ONLY
COVERED.
------------------------------------------------------------
STAGE CARRIAGE
Premium : basic Rs.626.00
Less 10% N.V.R. Rs. 11.10
Rs.614.90
S. & R. risk Rs.100.00
50 passengers’ risk Rs.300.00
L.L. to drvr. clnr. condtr. Rs. 15.00
Rs.1029.29
Less 30% N.C.B Rs. 308.70
Rs. 721.20.
Dhanbad
8th Oct. 1973 sd/-
BRANCH MANAGER"
Endorsement No.13 which also formed a part of the
policy was as under:
"Endorsement No.l3 attaching to and forming part of
Policy No. N DHV-27465
Legal Liability to passengers excluding liability to
Accidents for employees of the Insured arising out of and in
the course of their employment.
In consideration of an additional premium of Rs.300/-
and notwithstanding anything to the country contained in
section. II I@ but subject otherwise to the terms exceptions
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5
conditions and limitations of this Policy the company will
indemnify the insured against liability at law for
compensation (including law cost of any claimant) for death
of or bodily injury to any person other than a person
excluded under section II-I(b) being carried in or upon or
entering or mounting or alighting from the Motor Vehicle but
such indemnity is limited to the sum of Rs.5,000/- in
respect of any one person and subject to the aforesaid limit
in respect of any one person to Rs.75,000/- in respect of
any number of claims in connection with the Motor Vehicle
arising out of one cause."
Section 95(1)(b)(i) provides for compulsory insurance
against any liability which may be incurred by the insured
in respect of the death of or bodily injury to any person.
Section 95(1)(b)(ii) provides for compulsory insurance
against the death or bodily injury to any passenger of a
public service vehicle caused by or arising out of the use
of the vehicle in a public place. Section 95(1)(b)(ii) being
a specific provision made in respect of passengers of a
public service vehicle, obviously that provision becomes
applicable and not the general provision contained in
Section 95(1)(b)(i), when the insured incurs liability in
respect of the passengers travelling in his public service
vehicle. Before the Tribunal and the High Court also the
appellant had claimed the protection of Section
95(1)(b)(ii). Therefore, Mr. Ranjit Kumar, learned counsel
for the appellant, cannot now be permitted to bring the
appellant’s case under Section 95(1(b)(i) on the ground that
it is wide enough to include a passenger as the word used
therein is any person’. Even otherwise also this contention
has no substance. Therefore, the liability of the insurance
company will have to be determined in terms of Section
95(2)(b)(ii). It is not in dispute that at the relevant time
Section 95(2)(b)(ii) limited the liability of the insurance
company to Rs.5,000/- each passenger and Rs.75,000/- in all,
where the vehicle was registered to carry more than 30 but
not more than 60 passengers.
The next submission was that the appellant had paid
additional premium of Rs.300/- to cover liability higher
than the limited liability fixed by Section 95(2). It was
submitted by Mr. Ranjit Kumar that the policy being a
comprehensive policy it covered all the statutory
liabilities and the additional premium of Rs.300/- was paid
for covering liability higher than the statutory liability
in respect of passengers. The insurance policy, relevant
part of which has been set out above, shows that it covered
the following risks: (1) comprehensive risk, (2) S&R risk,
(3) passenger risk and (4) legal liability in respect of
paid driver, cleaner and conductor under Workmen’s
compensation Act. For the comprehensive risk the appellant
had paid Rs.626/- as basic premium. Ordinarily the insurance
policy does not cover strike and riot risk and, therefore,
to cover that risk also the insured had paid additional
premium of Rs.100/-. To cover 50 passengers’ risk the
insured had paid Rs.721.20 as additional premium. If the
comprehensive risk covered all other risks as contended by
the appellant then the policy would not have mentioned
separately the S&K risk and passenger risk. Not only that
they have been separately mentioned but separate amounts
were paid by way of premium for covering those risks. Thus
the basic premium of Rs.626 paid for the comprehensive rusk
was obviously in respect of the bus and not in respect of
other risks as contended by the learned counsel for the
respondent insurance company. A fair reading of the
insurance policy discloses that the basic premium of
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5
Rs.626/- though paid for comprehensive risk was not intended
to cover all the stautroy liabilities but it was really
intended to cover the entire loss or damage to the vehicle.
As observed by this Court in Jugal Kishore’s case "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 insure. In case, however, it is not
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 up to
the estimated value of the vehicle calculated according to
the rules and regulations a framed in this behalf."
The insurance company had charged a premium of Rs.300/-
towards passengers’ risk. It works out at Rs.6/- per
passenger. As per the Indian Motor Tariff applicable on the
date of accident by charging a premium of Rs.6/- per
passenger the liability of the company per passenger was
Rs.5,000/- only. The Indian Motor Tariff which regulates a
premium and liability of insurance company is framed by the
Tariff Advisory Committee, a statutory body set up under the
Insurance Act. The additional Premium of Rs.300/- was thus
paid to cover the statutory liability for 50 passengers as
the vehicle insured was a passenger bus having registered
capacity of carrying 50 passengers. Endorsement No.13 which
was attached to and formed part of the policy and which we
have set out above also makes it clear that it was in
consideration of an additional premium of Rs.300/- that the
insurance company had undertaken to identify the insured
against his liability in respect of passengers to the extent
of Rs.5,000/- for each passenger and Rs.75,000/- in all. It
is, therefore, not possible to accept the contention raised
on behalf of the appellant that the additional premium of
Rs.300/- was paid for covering higher than the statutory
liability. There was no special contract to cover unlimited
liability in respect of the passengers.
As we do not find any substance in any of the two
contentions raised on behalf of the appellant these appeals
are dismissed. However, in view of the facts and
circumstances of the case there shall be no order as to
costs.