New India Assurance Company Limited vs Hem Raj and others

K. Kannan, J.—The appeal is on the Issue of liability for the Insurance Company which contends that since the deceased was travelling in a rickshaw and was a third party to a passenger bus, in terms of Section 95(2)(i), the liability for a person other than a passenger carried for hire or reward shall be Rs.50,000/- only. The Tribunal had awarded Rs.96,000/-and had directed the entire amount to be recovered against the Insurance Company.

I have no doubt in my mind that the reading of the Section by the Tribunal, was erroneous as regards the liability for a person other than a passenger. The learned counsel for the claimant Would contend that the sub-section must be read is such a way that the restriction of liability Must be understood to apply only for persons, who are driver or conductor and for a third party it is always unlimited liability. The learned counsel refers me to the decision of this Court is Rajesh Kumar and another v. Gurnam Kaur and others, (2007)146 P.L.R. 238 to contend that the limited liability for an Insurance Company qua third party cannot be inferred by the provisions of Section 95(2)(1)(c). I respectfully differ with the view expressed in the said judgment. The objects and reasons for enacting Section 147 of Motor Vehicles Act, 1988 itself spells out through clause 147 that it was enacted for meeting ''the requirements of the policies and the limit of liability in respect of passengers and persons other than passengers in relation to passenger vehicles and goods carriages,'' which was meant to remedy only the mischief of restriction of liability to even a claim of third party contained in the previous Act viz. MV Act, 1939. The award is, therefore, modified and the liability of the Insurance Company is restricted to Rs.50,000/- with interest. The learned counsel for the claimant would contend that the entire amount has been withdrawn from the Insurance Company as awarded by the Tribunal. In such an eventuality the right of recovery shall obtain from the insurer against the insured only and not against the claimant.

The appeal is allowed.