Jameskutty Jacob vs United India Insurance Co. Ltd. & Ors

This Appeal is against the Judgment dated 17th October, 1997.

Briefly stated the facts are as follows:

On 5th February, 1986 an accident took place in which a young boy

was seriously injured. A claim was filed against the Appellant, who

was shown as the owner of the vehicle, and the Insurance Company.

The Motor Accident Claims Tribunal awarded a sum of Rs. 2,00,000/-

with interest thereon. In so awarding it did not accept the contention

of the Appellant that the Appellant was not owner of the vehicle

inasmuch as he had sold the vehicle in 1983. The Motor Accident

Claims Tribunal also did not accept the contention that the liability of

the Insurance Company was limited to Rs. 50,000/-. It held both the

Appellant and the Insurance Company jointly and severally liable.

The Insurance Company filed an Appeal. It claimed that the

Policy was an 'Act only' policy on which no extra premium had been

paid for making the liability unlimited. It was submitted that as the

policy was an 'Act only' policy the liability of the Insurance Company

was limited to Rs. 50,000/- only under Section 95 (2)(b)(i) of the

Motor Vehicles Act, 1939. The High Court accepted this contention

and limited the liability of the Insurance Company to a sum of Rs.

50,000/-.

After this Appeal was filed this Court directed the Insurance

Company to produce the complete policy as also any other document

to show that the vehicle insured was a taxi and not a private car. The

Insurance Company had produced the policy. We, however, do not

find, from the Policy or from any other document produced on record,

that the vehicle was a taxi. Undoubtedly the policy is an 'Act only'

policy, however, even in respect of an 'Act only' policy the Insurance

Company would be liable for the statutory amount as payable under

Section 95 of the Motor Vehicles Act, 1939. The relevant portion of

Section 95 reads as follows:

95. Requirements of policies and limits of liability.-

(1) xxx xxx xxx

xxx xxx xxx

(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

one lakh and fifty thousand rupees in all,

including the liabilities, if any, arising 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, a limit of

fifteen thousand rupees for each

individual passenger;

(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 six thousand in all in respect of

damage to any property of a third party.

(3) xxx xxx xxx

(4) xxx xxx xxx

(4-A) xxx xxx xxx

(5) xxx xxx xxx"

Accordingly, it is to be seen that if the vehicle was a vehicle in

which passengers are carried for hire or reward then the liability would

be limited to Rs. 50,000/- under Section 95(2)(b)(i). However, if the

vehicle does not carry passengers for hire or reward, then under

Section 95(2)(c) the liability of the Insurance Company would be the

amount of liability incurred.

In this case, nobody has appeared on behalf of the Insurance

Company in spite of the fact that they were served. We are informed

by counsel for the Appellant that there is no evidence on record to

show that the vehicle was a taxi. We, therefore, fail to understand on

what basis the High Court has restricted the liability of the Insurance

Company to Rs. 50,000/-. In view of the fact that it has not been

shown to us that the vehicle was a taxi, the case would be covered by

Section 95 (2)(c) and the liability of the Insurance Company would be

the amount of liability incurred, even though it is an 'Act only' Policy.

Under the circumstances, the impugned Judgment of the High

Court is set aside and that of the Motor Accident Claims Tribunal is

reinstated.

The Appeal stands disposed of accordingly. There will be no

order as to costs.