1. This is an appeal by the owner of a passenger bus No. ASN 1681 questioning the legality of the apportionment of the compensation awarded by the Member, Motor Accident Claims Tribunal, Nowgong, for short 'the Tribunal' in M. A. C. Case No. 13 of 1974.
2. The appellant, owner of the vehicle claims that at all relevant time the bus was insured with the New Great Insurance Company of India Ltd., which on merger is styled as 'The Oriental Fire and General Insurance Company', Respondent No, 2. It is indubitable that the policy of insurance was a policy which covered against any liability up to Rs. 50,000 which might be incurred by the owner in respect of the death or bodily injury to any person caused by or arising out of the use of the vehicle in a public place.
3. The appellant's vehicle driven at high speed caused a run-down accident resulting in instantaneous death of a poor labourer, Munindra Baroi. His wife respondent No. 1, for her and on behalf of her four minor children preferred a claim for compensation before the Tribunal. Opposite parties were duly notified. They appeared and submitted their say in the form of written statements, issues were framed, evidence recorded and by a reasoned judgment the learned Tribunal arrived at the conclusion that the respondent No. 1--Smt. Milan Baroi and the four minors entitled to compensation of Rs. 35,000. He determined all the issues in favour of the claimant. The operative part of the award reads as under:--
'As per discussion above, an award of Rs. 35,000 is awarded to the claimant out of which Rs. 10,000 shall have to be paid by the owner of the vehicle Phatic Bora and the balance of Rs. 25,000 shall have to be paid by O. P, No. 2, the Insurance Company.....'
4. The owner of the bus being aggrieved by the under-scored portion of the award has preferred the appeal and questioned the validity of the apportionment. Mr. Jitendra Nath Sarma learned counsel for the appellant submits that under the terms of the policy of Insurance, the Insurer was liable to pay a sum of Rs. 50,000 in respect of any such accident. In the absence of any special reasons the learned Tribunal acted illegally in adopting a method contrary to the terms of the policy of insurance, when the Insurer (respondent No. 2) was obliged to indemnify the entire liability of the owner. In view of the stipulation in the policy of Insurance, the insurer was bound to indemnify any liability up to Rs. 50,000 in respect of the death of Munindra arising out of the use of the vehicle. The entire liability is on the Insurer (respondent No. 2). The second limb of argument is that in view of the provisions contained in Sections 95 (1) (b) (i) and 95 (2) (b) (i) of the Motor Vehicles Act, 1939, hereinafter referred as 'the Act', it is the liability of the Insurer to pay up the entire claim awarded. To bear up the argument the learned counsel relies on Rameswar Hazarika v. Promode Kanta Barua, Assam LR (1972) Assam & Naga 42 (48) (DB).
5. The policy of Insurance has been produced before us by the learned counsel for the appellant, we have perused the same. It has been inspected by Mr. S. S. Sharma, learned counsel for the respondent-insurer who admits it to be the policy. The learned counsel for the respondent submits that the insurer has no copy with it. On a bare perusal of 'the policy' we find that the bus in question was insured with respondent No. 2. The period of insurance covered the period commencing from 20-10-73 to 19-10-74. The accident happened on 9-6-74. We also find that the Insurer is liable to indemnify the owner to the extent of Rs. 50,000 in respect of the death or bodily injury to any person caused by or arising out of the use of the vehicle. Therefore, we have no hesitation in coming to the conclusion that respondent No. 2-the Insurer has had the contractual liability to indemnify the owner, against any liability arising out of any accident within the period of insurance in respect of the death of any persons caused by or arising out of the use of the vehicle, up to Rs. 50,000. In this view of the matter it is the Insurer who is liable to indemnify the entire claim. The purpose of insurance will be frustrated if the owner is called upon to pay compensation notwithstanding the policy of insurance. Any other direction would amount to alteration of the terms of the 'contract of insurance' without any sanction of law and/or to create a new contract not agreed upon by the parties. In the result we hold that the Insurer (respondent No. 2) is liable to pay the entire compensation amounting to Rs. 35,000 payable to the claimant-respondent No. 1. The owner of the bus has no liability whatsoever to make the payment.
Be that as it may, we find that the principles governing the obligations as set out above have been incorporated in Section 95 (1) (b) (i) read with Section 95 (2) (b) (i) of the Motor Vehicles Act, 1939. Sections 95 (1) (b) (i) and 95 (2) (b) (i) read as follows :--
'95. Requirements of policies and limits of liability-
(a) In order to comply with the require
ments of this Chapter, a policy of insurance must be a policy which--
* * *
(b) insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2)-
(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place:
* * *
95 (2). Subject to the proviso to Subsection (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-
(i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all.'
6. It will be seen that there is a statutory obligation of an owner to insure a vehicle against third party risk. Sectioin 95 (1) requires that the policy must cover person or classes of persons to the extent specified in Section 95 (2) against any liability which may be incurred by the insured in respect of 'the death or bodily injury to any person caused by or arising out of the use of the vehicle in a public place'. Under Section 95 (2) of 'the Act' the limit of liability in respect of a third party is Rs. 50,000 in all, in any one accident. The accident happened in a public place. The death was caused or arose out of the use of the vehicle. The vehicle was insured with respondent No. 2. The policy of insurance clearly shows that the Insurer was to indemnify the liability of the owner up to Rs. 50,000 in such circumstances. Therefore, we have no hesitation to hold that respondent No. 2 is bound to pay the compensation of Rs. 35,000 awarded and the appellant has no liability to pay any part thereof. In Rameswar Hazarika (Assam LR (1972) Assam & Naga 42) (supra) it has been held that it is the liability of the Insurer to pay such compensation within the limits of the statutory liabilities fixed under Sections 95 and 96 of 'the Act' It has been held that where a passenger vehicle causes accident resulting in the death of a pedestrian, the Liability to pay the compensation is of the Insurer and not upon the insured, as enjoined in Section 95 of 'the Act'. We respectfully agree with the view expressed and hold that in the present case the entire amount of Rs. 35,000 as awarded by the learned Member. Motor Accident Claims Tribunal, Nowgong shall be paid by respondent No. 2 (M/s. Oriental Fire and General Insurance Company). We hold thai the owner-appellant has no liability to pay the amount. Accordingly, we modify the award and direct that the entire amount of Rs. 35,000 shall be paid by respondent No. 2-the Insurer to the claimant-appellant.
7. Mr. B. M. Goswami, learned counsel for the claimant submits that only Rs. 25,000 has been deposited by the Insurer into the Tribunal. We direct respondent No. 2 to deposit the balance amount of Rs. 10,000 within two months from today, into the Tribunal, and the appellant shall be entitled to withdraw the amount. Appellant-claimant shall be entitled to take necessary steps to recover the amount in question if it is not deposited within two months. The amount of Rs. 25,000 shall remain so deposited in Bank as ordered by the learned Tribunal. The minors shall be entitled to withdraw proportionate amounts on attaining majority. However, in the meantime the respondent No. 1, mother of the minors may take necessary steps to collect the interest accrued and utilise it for education and welfare of the minors. On default to deposit the amount within two months respondent No. 2 shall be liable to pay interest at the rate of 12% per annum.
8. In the result the appeal is allowed to the extent indicated above. In the facts and circumstances, we make no order as to costs.
N.I. Singh, J.