Full Judgment Text
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PETITIONER:
M.K. KUNHIMOHAMMED
Vs.
RESPONDENT:
P.A. AHMEDKUTTY & ORS.
DATE OF JUDGMENT01/09/1987
BENCH:
VENKATARAMIAH, E.S. (J)
BENCH:
VENKATARAMIAH, E.S. (J)
SINGH, K.N. (J)
CITATION:
1987 AIR 2158 1987 SCR (3)1149
1987 SCC (4) 284 JT 1987 (3) 465
1987 SCALE (2)442
ACT:
Motor Vehicles Act, 1939: Section 95(2)--Death of pas-
senger in accident--Limits of liability of insurer--Amend-
ment of Act regarding distinction between public vehicles
and other motor vehicles etc., enhancement of limits of
compensation insurance of motor vehicles against third party
risks and expansion of definition of ’legal representative’
with regard to claims--Suggestions made.
HEADNOTE:
The petitioner was the owner of a bus being run as a
stage carriage. On 24.7.78 while carrying passengers this
bus met with an accident, as a result of which one passenger
died. The Motor Accident Claims Tribunal held that the
accident took place due to the negligence on the part of the
driver and awarded compensation of Rs.56,800 to the legal
representatives of the deceased. It further held that the
liability of the insurer to indemnify the petitioner was
limited to Rs.5,000 as the policy specifically limited the
insurer’s liability to what had been provided by s.
95(2)(b)(ii)(2) and (4) of Motor Vehicles Act, 1939.
The appeal filed by the Petitioner was dismissed by the
High Court.
In the Special Leave Petition before this Court, it was
contended on behalf of the petitioner that the insurer was
liable to indemnify the petitioner upto a limit of Rs.75,000
under s. 95(2)(b)(ii)(2) of the Motor Vehicles Act, 1939 and
that the further limit mentioned in s. 95(2)(b) (ii)(4) was
inapplicable to the case of the petitioner.
Dismissing the Special Leave Petition, this Court,
HELD: 1. Having regard to the Motor Vehicles Act, 1939
as it stood prior to the amendments by Act 47 of 1982. the
insurer was liable to pay upto Rs.10,000 for each individual
passenger where the vehicle involved was a motor cab and
upto Rs.5,000 for each individual passenger in any other
case. [1161F]
2.1 Section 95(2)(b) as it existed before its amendment in
1982
1150
dealt with the limits of the liability of an insurer in the
case of motor vehicles in which passengers were carried for
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hire or reward or by reason of or in pursuance of a contract
of employment. [1155H; 1156A]
Sub-clause (i) of section 95(2)(b) provided that in
respect of death of or injury to persons other than passen-
gers carried for hire or reward, a limit of Rs.50,000 in all
was the limit of the liability of the insurer. [1156A]
Under sub-clause (ii) there were two specific limits on
the liability of the insurer in the case of motor vehicles
carrying passengers. The first limit related to the aggre-
gate liability of the insurer in any one accident. It was
fixed at Rs.50,000 in all where the vehicle was registered
to carry not more than thirty passengers, at Rs.75,000 in
all where the vehicle was registered to carry more than
thirty but not more than sixty passengers and at Rs.1,00,000
in all where the vehicle was registered to carry more than
sixty passengers. The other limit was in respect of each
passenger, which provided that subject to the limits afore-
said as regards the aggregate liability, the liability
extended up to Rs.10,000 for each individual passenger where
the vehicle was a motor cab and Rs.5,000 for each individual
passenger in any other case. Neither of the two limits can
be ignored. [1156B-D]
2.2 The limit prescribed in section 95(2)(b)(ii)(4)
cannot be said to be only the minimum liability prescribed
by law. The amount mentioned in that provision provides the
maximum amount payable by an insurer in respect of each
passenger who has suffered on account of an accident. This
is a fair construction of section 95(2) of the Act as it
existed at the time when the accident took place. [1156E]
2.3 After the 1982 amendment the liability of the insur-
er in respect of each individual passenger is Rs.15,000 as
against Rs.10,000 in the case of each individual passenger
where the vehicle was a motor cab and Rs.5,000 for each
individual passenger in other cases, prior to the said
amendment. This shows that Parliament never intended that
the aggregate liability of the insurer mentioned in sub-
clauses (1), (2) and (3) of section 95(2)(b)(ii) would be
the liability of the insurer even when one passenger had
died or suffered injury on account of an accident. Such
liability was always further limited by sub-clause (4) of
section 95(2)(b)(ii). [1159F-G]
2.4 In the instant case, the vehicle in question being a
bus carrying passengers for hire or reward registered to
carry more than thirty
1151
but not more than sixty passengers, the limit of the aggre-
gate liability of the insurer in any one accident was
Rs.75,000 and subject to the said limit the liability in
respect of each passenger was Rs.5,000. [1156D]
2.5 As the law stands today the insurer is liable to pay
upto Rs.15,000 in respect of death of any passenger or any
injury caused to him. Having regard to the large number of
motor vehicle accidents which are taking place on roads and
also to the fact that a large number of public service
vehicles carrying passengers are involved in them, limit of
Rs.15,000 fixed in the case of each passenger appears to be
still meagre. [1159E; 1160E]
3. The following suggestions in respect of certain
provisions of the Motor Vehicles Act are made for considera-
tion of the Central Government:-
(i) The limits of compensation in respect of death or
permanent disablement payable in the event of there being no
proof of fault have become unrealistic in view of inflation-
ary pressures and consequent loss of purchasing power of the
rupee. These limits should, therefore, be raised adequately.
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[1162B-C]
(ii) There is no justification for continuing the dis-
tinction between public service vehicles and other vehicles
and also between passengers and third parties with regard to
the liability of the insurer to pay compensation. Even among
the public service vehicles a distinction is made between
vehicles used as goods carriages and those used for carrying
passengers. It may be considered whether it is necessary to
continue these distinctions and also whether the limits of
liability of the insurer should not be altered suitably.
[1162D-E]
(iii) The society and the State which are responsible
for a large number of motor vehicles being put on road
should carry also the responsibility of protecting the
interests of innocent victims of hit and run motor accidents
which are increasing in number. The amounts of Rs.5,000 and
Rs.1,000 provided as compensation in respect of death or
grievous hurt respectively appear to be highly inadequate.
It may be considered whether these figures should not be
increased in an appropriate manner. [1162F-G]
(iv) The expression "legal representative" has not been
defined in the Act and it has led to serious doubts in the
course of judicial proceedings. It may be considered whether
it would not be advisable to define the said expression for
purposes of making claims before Claims
1152
Tribunals where death has resulted from a motor vehicle
accident in the same way in which the English Law has been
amended. [1163A-C]
Motor Owners Insurance Co. Ltd. v. Jadavji Keshavji Modi
JUDGMENT:
Northern India Transport Insurance Co., [1971] Supp. SCR 20;
Manjusri Raha & Ors. etc. v.B.L. Gupta & Ors. etc., [1977] 2
SCR 944; P.B. Kader & Ors. v. Thatchamma and Ors., AIR 1970
Kerala 241; K.R. Sivagami, Proprietor, Rajendran Tourist v.
Mahaboob Nisa Bi and others, [1981] ACJ 399; Madras Motor
and General Insurance Co. Ltd. by its successor: The United
Fire and General Insurance Co. Ltd. and others v.V.P. Ba-
lakrishnan and others, [1982] ACJ 460; New India Assurance
Co. Ltd. v. Mahmood Ahmad and others, [1984] ACJ 390; Shiva-
hari Rama Tiloli and another v. Kashi Vishnu Agarwadekar and
others, [1985] ACJ 494; National Insurance Co. Ltd. v.
Shanim Ahmad and others, [1985] ACJ 749; Tara Pada Roy v.
Dwijendra Nath Sen and others, [1986] ACJ 299; Noor Mohammad
and another v. Phoola Rani and others, [1984] ACJ 518;
Raghib Nasim and another v. Naseem Ahmad and others, [1986]
ACJ 405 and Gujarat State Road Transport Corporation, Ahme-
dabad v. Ramanbhai Prabhatbhai and Another, [1987] 3 SCC
234, referred to.
&
CIVIL APPELLATE JURISDICTION: Special Leave Petition
(Civil) No. 7534 of 1987.
From the Judgment and Order dated 4.11. 1986 of the
Kerala High Court in M.F.A. No. 64 of 1982.
E.M.S. Anam for the Petitioner.
The Order of the Court was delivered by
VENKATARAMIAH, J. The petitioner was the owner of a bus
bearing No. KLD- 9327 which was being run as a stage car-
riage. On 24.7.1978 while the said bus was carrying passen-
gers it met with an accident and Saheeda, who was one of the
passengers in the bus, died as a consequence of the said
accident. The accident took place, according to the Motor
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Accidents Claims Tribunal, due to the negligence on the part
of the driver of the vehicle who had been employed by the
petitioner. The Tribunal found that the compensation payable
by the petitioner to the legal representatives of Saheeda
was Rs.56,800. It, however, held that the liability of the
insurer to indemnify the petitioner was limited to Rs.5,000
as the policy specifically limited the insurer’s
1153
liability to what had been provided by section
95(2)(b)(ii)(2) and (4) of Motor Vehicles Act, 1939 (herein-
after referred to as the Act’). Aggrieved by the decision of
the Tribunal the petitioner filed an appeal before the High
Court of Kerala. The said appeal was dismissed. This peti-
tion is filed under Article 136 of the Constitution for
special leave to appeal against the judgment of the High
Court.
The contention of the petitioner before this Court is
that the insurer was liable to indemnify the petitioner upto
a limit of Rs.75,000 under section 95(2)(b)(ii)(2) of the
Act and that the further limit mentioned in section
95(2)(b)(ii)(4) of the Act was inapplicable to the case of
the petitioner. The relevant part of section 95 of the Act
during the relevant time read 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 fifty thousand rupees in
all, including the liabilities, if any, aris-
ing 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;
(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 thirty passengers;
(2) a limit of seventy-five thou-
sand rupees in all where the vehicle is regis-
tered to carry more than thirty but not more
than sixty passengers;
1154
(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 pas-
senger where the vehicle is a motor cab, and
five thousand rupees for each individual
passenger in any other case;
(c) save as provided in clause (d),
where the vehicle is a vehicle of any other
class, the amount of liability incurred;
(d) irrespective of the class of the
vehicle, a limit of rupees two thousand in all
in respect of damage to any property of a
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third party.
Section 95 of the Act sets out the requirements of the
policies of insurance which must be taken by the owners of
motor vehicles and the limits of liabilities thereunder. A
policy of insurance should subject to the proviso to sub-
section (1) of section 95 of the Act cover any liability
incurred in respect of any one accident upto the limits
specified in sub-section (2) of section 95 of the Act.
Clause (a) of section 95(2) of the Act during the relevant
time provided that where the vehicle was a goods vehicle the
policy should cover the liability upto Rs.50,000 in all
including the liabilities, if any, arising under the Work-
men’s Compensation Act, 1923 in respect of death of or
bodily injury to the workmen (other than the driver) not
exceeding six in number being carried in the vehicle. This
clause came up for consideration before this Court in Motor
Owners Insurance Co. Ltd. v. Jadavji Keshavji Modi & Ors.,
[1982] 1 SCR 560. In that case this Court held that clause
(a) of section 95(2) of the Act qualified the extent of the
insurer’s liability by the use of the unambiguous expression
"in all" and since that expression was specially introduced
by an amendment, it must be allowed its full play. The
legislature must be presumed to have intended what it had
plainly said. But clause (a) did not stand alone and was not
the only provision to be considered for determining the
outside limit of the insurer’s liability. It was necessary
to give effect to the words ’any one accident’ which formed
part in the opening part of sub-section (2) of section 95 of
the Act. The Court, therefore, held that if more than one
person was injured during the course of the same transaction
each one of the persons must be deemed to have met with an
accident. Accordingly,
1155
the Court held that each of the persons who was entitled to
claim compensation under clause (a) of sub-section (2) of
section 95 of the Act was entitled to claim a sum of
Rs.50,000 which was the limit prescribed by the said clause
on the date on which the accident, referred to in that case,
occurred. The Court, however, distinguished the decision of
this Court in Sheikhupura Transport Co. Ltd. v. Northern
India Transport Insurance Co., [1971] Supp. SCR 20 which was
a case in which clause (b) of sub-section (2) of section 95
of the Act had arisen for consideration. In doing so the
Court observed thus:
"The judgment of the Punjab High
Court was brought in appeal to this Court in
Sheikhupura Transport Co. Ltd. v. Northern
India Transport Co. For reasons aforesaid, the
judgment in that case is not an authority on
the interpretation of clause (a) of section
95(2). After setting out the relevant provi-
sions of section 95(2) at pages 24 and 25 of
the Report, Hegde J. speaking for himself and
Jaganmohan Reddy, J. concluded:
’In the present case we are dealing
with a vehicle in which more than six passen-
gers were allowed to be carried. Hence the
maximum liability imposed under section 95(2)
on the insurer is Rs.2,000 per passenger
though the total liability may go upto
Rs.20,000.’
Towards the end of the judgment, it
was observed that reading the provision con-
tained in sections 95 and 96 together ’ ....
it is clear that the statutory liability of
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the insurer to indemnify the insured is as
prescribed in s. 95(2). Hence the High Court
was right in its conclusion that the liability
of the insurer in the present case only ex-
tends upto Rs.2,000 each, in the case of
Bachan Singh and Narinder Nath.’ In view of
the limit on the insurer’s liability in re-
spect of each passenger, the argument on the
construction of the words ’any one accident’
had no relevance and was therefore neither
made nor considered by the Court. Different
considerations may arise under clause (b), as
amended by Act 56 of 1969, but we do not
propose to make any observations on that
aspect of the matter, since it does not di-
rectly arise before us."
Section 95(2)(b) as it existed before its amendment in
1982 dealt with the limits of the liability of an insurer in
the case of motor vehicles
1156
in which passengers were carried for hire or reward or by
reason of or in pursuance of a contract of employment. Sub-
clause (i) of section 95(2)(b) provided that in respect of
death of or injury to persons other than passengers carried
for hire or reward a limit of Rs.50,000 in all was the limit
of the liability of the insurer. Sub-clause (ii) dealt with
the liability in respect of death of or injury to passen-
gers. Under that sub-clause there were two specific limits
on the liability of the insurer in the case of motor vehi-
cles carrying passengers. The first limit related to the
aggregate liability of the insurer in any one accident. It
was fixed at Rs.50,000 in all where the vehicle was regis-
tered to carry not more than thirty passengers, at Rs.75,000
in all where the vehicle was registered to carry more than
thirty but not more than sixty passengers and at Rs.
1,00,000 in all where the vehicle was registered to carry
more than sixty passengers. The said sub-clause proceeded to
lay down the other limit in respect of each passenger by
providing that subject to the limits aforesaid as regards
the aggregate liability, the liability extended up to Rs.
10,000 for each individual passenger where the vehicle was a
motor cab and Rs.5,000 for each individual passenger in any
other case. Neither of the two limits can be ignored. In the
present case the vehicle in question being a bus carrying
passengers for hire or reward registered to carry more than
thirty but not more than sixty passengers the limit of the
aggregate liability of the insurer in any one accident was
Rs.75,000 and subject to the said limit the liability in
respect of each individual passenger was Rs.5,000. We find
it difficult to hold that the limit prescribed in section
95(2)(b)(ii)(4) was only the minimum liability prescribed by
law. The amount mentioned in that provision provides the
maximum amount payable by an insurer in respect of each
passenger who has suffered on account of the accident. This
appears to us to be a fair construction of section 95(2) of
the Act as it existed at the time when the accident took
place. Our view receives support from at least two decisions
of this Court.
In Sheikhupura Transport Co. Ltd. v. Northern India
Transport Insurance Co. (supra) the motor vehicle involved
was a passenger bus. On account of an accident which took
place on account of the negligence of the driver of the said
vehicle two persons died on the spot. Their legal represen-
tatives claimed compensation before the Motor Accidents
Claims Tribunal. The Tribunal found that the legal represen-
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tatives of each of the two persons who had died on account
of the accident, were entitled to compensation of Rs. 18,000
and directed that the entire sum should be paid by the
insurance company. On appeal by the legal representatives as
well as by the insurance company the High Court enhanced the
compensation payable to the legal
1157
representatives of each of the two deceased persons to
Rs.36,000 and also allowed the appeal of the insurance
company and limited its liability to the tune of Rs.2,000 in
respect of each of the two deceased persons in accordance
with section 95(2)(b) of the Act as it stood at the relevant
time which provided that where the vehicle was a vehicle in
which passengers were 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 Rs.20,000 and in respect of passengers a
limit of Rs.20,000 in all and Rs.2,000 in respect of an
individual passenger if the vehicle was registered to carry
more than six persons excluding the driver. The Court ob-
served that since in the said case the vehicle was one in
which more than six persons were allowed to be carried the
maximum liability imposed under section 95(2) of the Act on
the insurer was Rs.2,000 per passenger though the total
liability might go upto Rs.20,000 in a given case where
large number of persons had suffered on account of the
accident. Accordingly the Court affirmed the judgment of the
High Court insofar as the question of the liability of the
insurer was concerned.
Clause (b) of section 95(2) of the Act again came up for
consideration before this Court in Manjusri Raha & Ors. etc.
v. B.L. Gupta & Ors. etc. [1977] 2 SCR 944. In that case
also the motor vehicle which was involved in the accident
was a bus carrying passengers on a route in the State of
Madhya Pradesh. The Court followed the decision in the case
of Sheikhupura Transport Co. Ltd. v. Northern India Trans-
port Insurance Co., (supra) and limited the liability of the
insurer to Rs.2,000 as provided by the Act at that time. The
Court found itself in complete agreement with the observa-
tions made by the Kerala High Court in P.B. Kader & Ors. v.
Thatchamma and Ors., AIR 1970 Kerala 241, and approved the
following observations made by the Kerala High Court:
"It is sad that an Indian life should
be so devalued by an Indian law as to cost
only Rs.2,000, apart from the fact that the
value of the Indian rupee has been eroded and
Indian life has become dealer since the time
the statute was enacted, and the consciousness
of the comforts and amenities of life in the
Indian community has arisen, it would have
been quite appropriate to revise this fossil
figure of Rs.2,000 per individual, involved in
an accident, to make it more realistic and
humane, but that is a matter for the legisla-
ture; and the observation that I have made is
calculated to remind the law-makers that
humanism is the basis of law and justice."
1158
The Court also suggested on its own that instead of
limiting the liability of the insurance companies to a
specified sum of rupees as representing the value of human
life, the amount should be left to be determined by a Court
in the special circumstances of each case, even in the case
where passenger vehicles were responsible for the incident.
Fazal Ali, J. who delivered the judgment in the above case
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further observed at pages 950-95 1 thus:
"While our Legislature has made laws to cover
every possible situation, yet it is well nigh
impossible to make provisions for all kinds of
situations. Nevertheless where the social need
of the hour requires that precious human lives
lost in motor accidents leaving a trail of
economic disaster in the shape of their unpro-
vided for families call for special attention
of the law makers to meet this social need by
providing for heavy and adequate compensation
particularly through insurance companies. It
is true that while our law makers are the best
judges of the requirements of the society, yet
it is indeed surprising that such an important
aspect of the matter has missed their atten-
tion. Our country can iII-afford the loss of a
precious life when we are building a progres-
sive society and if any person engaged in
industry, office, business or any other occu-
pation dies, a void is created which is bound
to result in a serious set back to the indus-
try or occupation concerned. Apart from that
the death of a worker creates a serious eco-
nomic problem for the family which he leaves
behind. In these circumstances it is only just
and fair that the Legislature should make a
suitable provision so as to pay adequate
compensation by properly evaluating the pre-
cious life of a citizen in its true perspec-
tive rather than devaluing human lives on the
basis of an artificial mathematical formula.
It is common knowledge that where a passenger
travelling by a plane dies in an accident, he
gets a compensation of Rs.1,00,000 or like
large sums, and yet when death comes to him
not through a plane but through a motor vehi-
cle he is entitled only to Rs.2,000. Does it
indicate that the life of a passenger travel-
ling by plane becomes more precious merely
because he has chosen a particular conveyance
and the value of his life is considerably
reduced if he happens to choose a conveyance
of a lesser value like a motor vehicle? Such
an invidious distinction is absolutely shock-
ing to any judicial or social conscience and
yet s. 95(2)(d) of the Motor Vehicles Act
seems to suggest such a distinction. We
1159
hope and trust that our law-makers will give
serious attention to this aspect of the matter
and remove this serious lacuna in s. 95(2)(d)
of the Motor Vehicles Act."
These observations were quoted with approval by this
Court in the course of its judgment in Motor Owners Insur-
ance Co. Ltd. v. Jadavji Keshavji Modi & Ors., (supra) and
while doing so the Court observed that the above observa-
tions were still languishing in the cold. storage of pious
wishes. Immediately after the decision in the Motor Owners
Insurance Co. Ltd. v. Jadavji Keshavji Modi & Ors. (supra)
Parliament took steps to amend sub-clause (ii) of clause (b)
of section 95(2) of the Act by Act 47 of 1982. After the
said amendment subclause (ii) of clause (b) of section 95(2)
of the Act reads thus:
"95(2)(b). Where the vehicle is a vehicle in
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which passengers are carried for hire or
reward of by reason of or in pursuance of a
contract of employment--
...........................................................
(ii) in respect of passengers, a
limit of fifteen thousand rupees for each
individual passenger.
........................................................"
As the law stands today the insurer is liable to pay
upto Rs.15,000 in respect of death of any passenger or any
injury caused to him. In the Statement of Objects and Rea-
sons attached to the Bill which ultimately became Act 47 of
1982 it was stated that the limit with respect to an insur-
er’s liability to a passenger involved in an accident in a
public service vehicle was being fixed at Rs.15,000. After
the above amendment, which was intended to increase the
liability of the insurer, instead of Rs.10,000 in the case
of each individual passenger where the vehicle was a motor
cab and Rs.5,000 for each individual passenger in other
cases which were the limits in force immediately prior to
the said amendment the liability in respect of an individual
passenger is now raised to Rs.15,000. This clearly demon-
strates that Parliament never intended that the aggregate
liability of the insurer mentioned in subclauses (1), (2)
and (3) of section 95(2)(b)(ii) of the Act would be the
liability of the insurer even when one passenger had died or
suffered injury on account of an accident. Such liability
was always further limited by sub-clause (4) of section
95(2)(b)(ii) of the Act. Even in the latest Bill, i.e., Bill
No. 56 of 1987 which was introduced in the Lok Sabha on the
11th of May, 1987 for the purpose of consolidating and
amending the law in regard to the motor vehicles it is
proposed by
1160
section 147 to retain the provision regarding the limit of
the insurer’s liability in respect of vehicles in which
passengers are carried for hire or reward or by reason of or
in pursuance of a contract of employment as it was provided
by Act 47 of 1982. Section 147(2)(b)(ii) of the Bill reads
thus:
"147(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:-
...........................................................
(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;--
............................................................
(ii) in respect of passengers, a
limit of fifteen thousand, rupees for each
individual passenger,
............................................................
Having regard to the large number of motor vehicles
accidents which are taking place on roads and also to the
fact that a large number of public service vehicles carrying
passengers are involved in them, we are of the view that the
limit of Rs.15,000 fixed in the case of each passenger
appears to be still meagre and we hope that Parliament while
enacting the Bill into law would take steps to increase the
insurer’s liability keeping in view the need for providing
for adequate compensation as a measure of social security.
We should at this stage state that the High Court of
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Madras in K.R. Sivagami, Proprietor, Rajendran Tourist v.
Mahaboob Nisa Bi and Others, [1981] ACJ 339 has taken the
same view as regards the effect of section 95(2)(b)(ii) of
the Act as it stood before its amendment in 1982. It has
observed that the said provision specifically provided for
two limitations on the liability of the insurer in respect
of an accident in which a vehicle carrying passengers was
involved, the first limitation being the limitation con-
tained in sub-clauses (1), (2) and (3) of section
95(2)(b)(ii) which provided that for the aggregate liability
of the insurer in an accident and the second limitation
being the one contained in sub-clause (4) of section
95(2)(b)(ii) which provided that subject to the limits
aforesaid Rs.10,000 for each individual passenger where the
vehicle was a motor cab and Rs.5,000
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for each individual passenger in any other case. Khalid, J.,
as he then was, of the Kerala High Court has also accepted
the same construction of section 95(2)(b) in Madras Motor
and General Insurance Co. Ltd. by its successor: The United
Fire and General Insurance Co. Ltd. and others v. V.P.
Balakrishnan and others., [1982] ACJ 460.
The High Court of Allahabad in New India Assurance Co.
Ltd. v. Mahmood Ahmad and others, [1984] ACJ 390 the High
Court of Bombay in Shivahari Rama Tiloji and another v.
Kashi Vishnu Agarwadekar and others, [1985] ACJ 494 and the
High Court of Patna in National Insurance Co. Ltd. v. Shanim
Ahmad and others, [1985] ACJ 749 and in Tara Pada Roy v.
Dwijendra Nath Sen and others, [1986] ACJ 299 have over-
looked the cumulative effect of sub-clauses (1), (2) and (3)
and of sub-clause (4) of section 95(2)(b)(ii) of the Act.
They have failed to give effect to section 95(2)(b)(ii)(4)
of the Act. We are of the view that these decisions do not
lay down the correct view. We may, however, state here that
in Noor Mohammad and another v. Phoola Rani and others,
[1984] ACJ 5 18 and in Raghib Nasim and another v. Naseem
Ahmed and others, [1986] ACJ 405 two Division Benches of the
Allahabad High Court have construed the provision in ques-
tion as we have done in this case. The decision of the
Single Judge of the Allahabad High Court in New India Assur-
ance Co. Ltd. v. Mahmood Ahmad and others, (supra) is dis-
sented from in the later decision of the Division Bench of
the Allahabad High Court in Raghib Nasim and another v.
Naseem Ahmad and others, (supra).
Having regard to the statute as it stood prior to the
amendments by Act 47 of 1982 we hold that the insurer was
liable to pay upto Rs.10,000 for each individual passenger
where the vehicle involved was a motor cab and upto Rs.5,000
for each individual passenger in any other case. The judg-
ment of the Kerala High Court against which this petition is
filed has followed the above construction. We do not find
any ground to interfere with it. This petition is, there-
fore, dismissed.
In the end we propose to make a few suggestions to the
Central Government in respect of certain provisions in
Chapters X, XI and XII of the Motor Vehicles Bill No. 56 of
1987 now pending before Parliament which relate to the
liability without fault in certain cases, insurance of motor
vehicles against third party risks and Claims Tribunals.
Sections 140, 147, 161 and 166 in the Motor Vehicles Bill
No. 56 of 1987 correspond to sections 92A, 95, 109A and 110A
of the present Act. The Bill does not propose to introduce
any change in sections
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140, 147, 161 and 166 of the Bill from what the law is
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today. They are almost identical with the existing provi-
sions. In section 140 of the Bill which corresponds to
section 92A of the Act the liability to pay compensation in
the case of death of any person or in the case of permanent
disablement of any person is proposed to be retained at Rs.
15,000 and Rs.7,500 respectively in the same way in which
the law stands today. Having regard to the inflationary
pressures and the consequent loss of purchasing power of the
rupee we feel that the amount of Rs.15,000 and the amount of
Rs.7,500 in the above provisions appear to have become
unrealistic. We, therefore, suggest that the limits of
compensation in respect of death and in respect of permanent
disablement, payable in the event of there being no proof of
fault, should be raised adequately to meet the current
situation. Section 147 in the Bill corresponds to section 95
of the present Act, Here again the Government may consider
whether it is necessary to continue the distinction between
public service vehicles and other motor vehicles in regard
to the liability of the insurer to pay compensation. We also
do not find any justification for continuing the distinction
between the liability of the insurer to pay compensation to
passengers and the liability of the insurer to pay compensa-
tion to other third parties under the said provisions. Even
among the public service vehicles a distinction is made in
the said provisions between vehicles used as goods carriages
and vehicles used for the purpose of carrying passengers.
The Central Government may consider whether the limits of
liability of the insurer now incorporated in section 147 of
the Bill should not be altered suitably. Section 161 in the
Bill corresponds to section 109A of the present Act which
makes special provisions as to compensation payable in cases
of hit and run motor accidents. This provision provides for
payment of Rs.5,000 in respect of death of any person re-
sulting from a hit and run motor accident and for the pay-
ment of Rs.1,000 in respect of grievous injury to a person
from a hit and run motor accident. It is a matter of common
knowledge that hit and run motor accidents are increasing in
number. The society and the State which are responsible for
such large number of motor vehicles being put on road should
carry also the responsibility of protecting the interests of
the innocent victims of hit and run motor accidents. A sum
of Rs.5,000 and a sum of Rs.1,000 provided as compensation
in respect of death or grievous hurt respectively appear to
be highly inadequate. The Government may consider whether
these figures should not be increased in an appropriate
manner. Lastly we come to section 166 of the Bill which
corresponds to section 110A of the present Act. This con-
tains the provisions relating to application for compensa-
tion to be filed before Claims Tribunals. It is stated
therein that where death has resulted from the accident an
application for compensation may be
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made by all or any of the legal representatives of the
deceased. The expression ’legal representative’ has not been
defined in the Act and it has led to serious doubts in the
course of judicial proceedings. Attention of the Government
is drawn to the decision of this Court in Gujarat State Road
Transport Corporation, Ahmedabad v. Ramanbhai Prabhatbhai
and Another, [1987] 3 SCC 234 and the reference made in the
said decision to the Report of the English Royal Commission
on Civil Liberty and Compensation for Personal Injury under
the Chairmanship of Lord Pearson. The Government may consid-
er whether it would not be advisable to define the expres-
sion ’legal representative’ for purposes of making claims
before Claims Tribunal where death had resulted from a motor
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vehicle accident in the same way in which the English Law
has been amended. Since the Bill is on the anvil of Parlia-
ment we feel that this is the appropriate time for the
Central Government to reconsider the above issues. A copy of
this Order may be sent to the Secretary to the Government of
India, Ministry of Transport, for information.
N.P.V. Petition
dismissed.
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