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National Insurance Co. Ltd. Vs. Deepathumma and ors. - Court Judgment

LegalCrystal Citation
SubjectInsurance;Motor Vehicles
CourtMumbai High Court
Decided On
Judge
Reported inI(1987)ACC102; 1985MhLJ858
AppellantNational Insurance Co. Ltd.
RespondentDeepathumma and ors.
Excerpt:
.....has produced a passport, an air travel ticket of the deceased as well as a certificate showing that the deceased was a member of the muslim welfare society, dubai at exhibits 61, 62, 63 and 64. similarly, the evidence of asainar kutty (witness no. 5 for the applicants) clearly goes to show that the deceased kalanad kumbhamoo was serving in dubai and was sending about rs. no doubt, it does use terms like limits, but those limits and the total cover will have to be taken together for the purposes of giving effect and furthering the object of the enactment rather than deviate from it. the approach suggested would clearly rule out clause (2) entirely and in many cases save to insurance company what is in fact guaranteed. clause (4) itself opens with 'subject to the limits aforesaid' and..........accident and its limit under clause (2) is fixed to the maximum of rs. 75,000/-. having fixed that limit, clause (4) provides contingency as far as the working out on the pro rata basis the advantage within that limit. clause (4) itself opens with 'subject to the limits aforesaid' and that clearly shows that within the limits earlier provided the other limits are contingently provided so as to have workable guarantee. the term 'limit' does not thereby limit the entitlement itself. it provides a workable formula. in a given case, therefore, the limited amount of rs. 75,000/- which is the total cover which must be provided will have to be distributed by reason of clause (4) amongst those who are styled as individual passengers affected and each would then, if claimants be equal, be.....
Judgment:

B.A. Masodkar, J.

1. The first of the appeals is by an insurance company while the second is by the original owner and driver of the luxury bus.

2. Both these appeals question the adjudication and award made by the Member, Motor Accidents Claims Tribunal, Pune (hereinafter called 'the Tribunal'), directing payment of compensation in the sura of Rs. 1,00,000/- along with interest at 6 per cent per annum. It further directs the Insurance Company to bear the liability to the extent of Rs. 75,000/-.

3. The facts are narrow, in that Kalanad Kumbhamoo was killed in an accident on December 23, 1977 while he was travelling in a private luxury bus, bearing registration No. KLC 8028, which was driven by original opponent No. 1 and owned by original opponent No. 2, the appellants in the companion appeal. The luxury bus was insured with the appellant in the first of the appeals. The accident occurred in the early morning near village Kamthadi on the Bangalore-Pune National Highway and it was seen that the luxury bus had fallen in a culvert near the bridge from a height of about 40 feet. Number of passengers were injured and the deceased Kalanad Kumbhamoo eventually died in the Sasoon Hospital, where he was removed in an unconscious state.

4. As far as the question of the occurrence of accident is concerned, in the companion appeal, the appellants contend that evidence was not enough to hold that the accident took place as a result of negligent driving. Secondly, it is contended that the quantum of dependency accepted at Rs. 1,500/- could not have been so accepted by the Tribunal and that thus the award is erroneous. In the appeal filed by the Insurance Company, it is contended that there being only single individual who died in the accident, by reason of contract of insurance, the liability would be to the tune of Rs. 5,000/- and the Tribunal was in error in fixing that liability to the tune of Rs. 75,000/-, which was the total cover provided by accident policy.

5. We will first dispose of the submissions on merit made in the companion appeal. It is enough to observe that as far as the owner and the driver were concerned, none of them chose to put in any written statement with regard to the nature of the accident. The Tribunal was, thus, left with the facts found and noted in the panchanama and the evidence of Police Sub-Inspector Atmaram Borse, examined as witness No. 7 for the applicants. On the basis of that material, the Tribunal has come to the conclusion that a bus falling in this manner must have been driven in a negligent way. The spot panchanama (Exhibit 89) goes to show that the accident occurred on the Bangalore-Pune National Highway near village Karathadi by the side of a culvert near the bridge. The highway was about 30 feet in length and about 24 feet in width. At the place of the actual accident, it is 24 feet in width. There was a height of 45 feet below and the facts noticed by the panchas establish that the bus must have dashed the culvert and jumped over it and then fallen into a nalha. Luggage of the passengers was found scattered and blood-stains were seen. As this was the only evidence and the driver had not been put into the witness-box nor any other evidence was tendered, we think the Tribunal was entitled to draw inferences from the facts found which speak for themselves. It is not possible to accept the theory that some other truck had dashed the bus and thrown it off from the culvert. For such a theory, there is no basis. If two vehicles in speed were to collide in this manner, surely, even the other vehicle too would jump over the culvert, particularly when the width at the place of the accident is noticed as only 24 feet. The inferences drawn from the facts recorded and as established by the panchanama cannot be said, therefore, to be perverse or unreasonable. In fact, when drivers are not examined, who could have deposed to the true facts, even an adverse inference can fortify such a conclusion.

6. With regard to the quantum of dependency at Rs. 1,500/- per month, we were taken through the evidence of Mrs. Deofathamma alias Bibi Kalanad Kumbhamoo, the widow of the deceased Kalanad Kumbhamoo, examined as witness No. 2 for the applicants, who has stated that the family was being maintained by the deceased Kalanad Kumbhamoo who used to remit a sum of Rs. 1,500/- practically every month. She has asserted that sometimes a draft used to come or moneys ued to be received through some messenger. She has produced a passport, an air travel ticket of the deceased as well as a certificate showing that the deceased was a member of the Muslim Welfare Society, Dubai at Exhibits 61, 62, 63 and 64. Similarly, the evidence of Asainar Kutty (witness No. 4 for the applicants) and Abdul Rahim Abdulla (witness No. 5 for the applicants) clearly goes to show that the deceased Kalanad Kumbhamoo was serving in Dubai and was sending about Rs. 1,500/- per month to the family in India. If this be the fact and the age of the deceased Kalanad Kumbhamoo being 40 years, we do not think that the quantum of damages has been in any manner grossly disproportionate so as to interfere with the same. The appeal filed by the owner and the driver, thus, has no merit.

7. As to the appeal of the insurance company, a limited question with regard to the liability is raised. Mr. Murthy relied on the decisions reported in Noor Mohammad v. Phoola Rani 1984 ACJ 518 (Allahabad), K.R. Sivagami v. Mahaboob Nisa Bi 1981 ACJ 399 (Madras) and Madras Motor and Genl. Ins. Co. Ltd. v. V.P. Balakrishnan 1982 ACJ 460, for the proposition that the liability of the insurance company in such matters will be restricted to the sum of Rs. 5,000/- and would not be coextensive to the total cover provided in the sum of Rs. 75,000/-. He sought to distinguish the case of the Supreme Court in Motor Owner's Insurance Co. Ltd. v. J.K Modi 1981 ACJ 507 and the case of this court reported in Shivahari Rama Tiloji v. Kashi Vishnu Agarwadekar 1985 ACJ 494, submitting that the Supreme Court was dealing with the law which was unamended and applied to the facts of that case which was concerned with a third party insurance and the liability arising therefrom while in the submission of the learned Counsel the decision of a learned single Judge of this court taking contrary view requires reconsideration.

8. As against this, Mr. Rane relied not only on the decision of the Supreme Court and this court referred to above but also on the decision reported in the case of New India Assurance Co. v. Mahnood Ahmad 1984 ACJ 390 and also in the case of National Insurance Co. Ltd. v. Chhunnu Ram 1983 ACJ 577, taking a contrary view that the liability is co-extensive to the entire cover provided by the insurance company notwithstanding the change by introduction of amended provisions.

9. Before we go to the debated clause, we may clear the ground by pointing out that the Supreme Court decision, although not concerning the same provision, was considering the provisions of Section 95(2)(a) before amendment by Act of 1969, which uses the phrase 'any one accident'. The term 'any one accident' available in Section 95(2) of the Motor Vehicles Act 1939 (hereinafter called the Act') will have to be given that meaning which will further the fair considerations for which the insurance covers are provided. In that view, the court observed that a consideration of preponderating importance in a matter of such nature was not whether there was any one transaction which resulted in injuries to many but whether more than one person was injured, giving rise to more than one claim or cause of action even if the injuries were caused in the course of one single transaction. If more than one person is injured during the same transaction, each one of the persons has met with an accident. Having found so, the court ruled that by reason of the expression 'any one accident' each one of the persons injured will have to be separately treated to have been insured and the liability will have to be so worked out. The principal ratio of that judgment would still be available for the purpose of application while interpreting the provisions on which the debate has been raised. The debated provision is the part of Section 95 of the Act as amended and reads 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) ....

(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) ....

(ii) in respect of passengers,-

(1) ....

(2) a limit of seventy-five thousand rupees in all where the vehicle is registered to carry more than thirty but not more than sixty passengers;

(3) ....

(4) Subject to the limits aforesaid, ten thousand rupees for each individual passenger where the vehicle in a motor cab, and five thousand rupees for each individual passenger in any other case.

(Emphasis supplied)

Pursuant to these provisions, it is not in dispute that the policy provided as under:

In consideration of an additional premium of Rs. 234/- and notwithstanding anything to the contrary contained in Section II-1 (c) but subject otherwise to the terms, exceptions, conditions and limitations of this policy the company will indemnify the insured against liability at law for compensation (including law costs of any claimant) for death of or bodily injury to any person other than a person excluded under Section II-1(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.

(Emphasis supplied)

10. Mr. Murthy contended that although the total cover provided by the insurance policy in terms of law is in the sum of Rs. 75,000/-, the individual liability and the consequent indemnity is limited to Rs. 5,000/-. If, therefore, only one person had been killed in one cause or accident, then the liability of insurance company would be governed by the limit of Rs. 5,000/- and question of entire cover of Rs. 75,000/- being made payable would not arise.

11. We do not think so. Plain reading of the provisions quoted above are no doubt susceptible to such an interpretation, but we think that that interpretation which is equally reasonable and possible and furthers the object of law should be preferred than the one which does not. The object is to provide an indemnity to travelling passenger and secure compensation against damages arising out of accident. The terms 'one cause' or 'one accident' along with the total limit of the indemnity is meant to achieve this object. Herein, we hardly find any difference in principle to depart from the decision of the Supreme Court which considered the question of 'any one accident' and treated such a phrase available in Section 95(2)(a) of the Act with regard to a third party liability as giving rise to independent liability qua each person involved in an accident. The reasons given for construing that provision in favour of providing such an indemnity in accident matters are equally available while interpreting the provisions debated before us. Section 95 of the Act is a compulsive provision and it requires a policy of insurance to cover the liability when an accident occurs. No doubt, it does use terms like limits, but those limits and the total cover will have to be taken together for the purposes of giving effect and furthering the object of the enactment rather than deviate from it. Our approach should be to further the remedy rather than defeat it or limit it, so as to afford restitutive justice to those who are affected by accidents.

12. Sub-section (2) of Section 95 of the Act still even after amendment has reference to liability incurred in respect of any one accident and then goes on to provide the limits of such liability. The phrase 'any one accident' as interpreted would mean an accident qua a person. No difference exists even in the present phraseology. Qua the person the limit of guarantee against accident claim is very much available and is provided. Clauses (2) and (4) are two types of such limits operative on two different fields, first being the primary cover provided by Clause (2) while a limited cover to be worked out contingently as provided by Clause (4). The submission of Mr. Murthy is that it is only the latter that is applicable when single person is involved and not the former does not appeal to us, for by that the former is left out and never available. Law on the other hand keeps the first as foremost and latter as contingent. The approach suggested would clearly rule out Clause (2) entirely and in many cases save to insurance company what is in fact guaranteed. The result in a given case would be totally unworkable and unfair. In a case where there are more than twenty persons involved in an accident as passengers, reliance could be placed only on Clause (2) and not Clause (4) while when smaller number than 15 are involved, on Clause (4) and not on Clause (2). Such an effort departs from the concept of 'one accident' qua each of the person involved. To avoid such a position, we can and should read these clauses harmoniously. If we were to read them harmoniously without omitting either of them and keeping them in applicative form to cover all types of cases that may arise, the insurance liability has to be provided qua one accident and its limit under Clause (2) is fixed to the maximum of Rs. 75,000/-. Having fixed that limit, Clause (4) provides contingency as far as the working out on the pro rata basis the advantage within that limit. Clause (4) itself opens with 'subject to the limits aforesaid' and that clearly shows that within the limits earlier provided the other limits are contingently provided so as to have workable guarantee. The term 'limit' does not thereby limit the entitlement itself. It provides a workable formula. In a given case, therefore, the limited amount of Rs. 75,000/- which is the total cover which must be provided will have to be distributed by reason of Clause (4) amongst those who are styled as individual passengers affected and each would then, if claimants be equal, be entitled to a maximum of Rs. 5,000/- and nothing more out of the total amount. Ratio thus is fixed by Clause (4) for working out the entire available.

13. In all cases of vehicles to which the section applies, it is a mandate of law that the policy of insurance shall cover the liability in respect of any one accident upto the limits provided by that law. With regard to the vehicles registered to carry more than thirty passengers but not more than sixty passengers, the policy has to cover the liability to the tune of Rs. 75,030/-. Subject to that limit, each individual entitlement providing pro rata sharing by reason of Clause (4) to the extent of Rs. 5,000/- is enacted. We do not see how this reading of Clauses (2) and (4) together in any manner militates against the objects and purposes of the provisions or the text of Section 95 of the Act. On the other hand, such a reading, in our view, furthers those objects which are to provide insurance cover when vehicles are involved in accidents. It is the vehicle which is insured and the function of Clause (4) is merely to distribute the liability secured by the cover and not to restrict the cover itself.

14. By itself, the provisions of Section 95 of the Act is the follow-up of Section 94 of the Act. That provision is a mandate with regard to the necessity for insurance against a third party risk and Section 95 of the Act enacts Such requirements of policies of insurance so as to cover such risk and the limits of liability to be provided by the policy of such insurance. The term 'limit' is obviously used to fix the maximum liability so as to cover the risk. 'Limit' by itself suggests, as a term, a boundary, a restriction or a value of a given guarantee. In the context, thus, wherever the word 'limit' in available in Section 95 of the Act, it has dual juridical effect, in that it provides the maximum, and secondly, provides the value of the guarantee. Once this position is clear along with the purpose of the provisions, Sub-section (2) of Section 95 of the Act can only mean harmoniously as far as Clauses (2) and (4) of Sub-clause (b) are concerned. The limit is only in Clause (2) while Clause (4) takes in within that limit a workable limit. Clause (2) of Sub-clause (b) of Sub-section (2) of Section 95 of the Act is enumerative in character, laying down the value with regard to the policy of the vehicle registered to carry more than thirty passengers and so also is the position of Clauses (2) and (3) of Clause (b) of Sub-section (2) of Section 95 of the Act. Taken together, Clause (2) lays down the value of the insurance policy while clause (4) does not lay down such value or limit of that guarantee. In other words, Clauses (1), (2) and (3) deal with the value of the guarantee or indemnity assured by such insurance policy, while Clause (4) is intended to operate within the limit of that value. A bare reading of Clauses (2) and (4) in the context of the purposes of the provisions bring out this position. Once the value of the insurance policy is fixed by Clause (2), the operative provision requiring that value to be available has reference to the fact of liability incurred in respect of any one accident. These words are part of main Sub-section (2) and read along with Clauses (2) and (4) of Sub-section (2) of Section 95 of the Act leave no manner of doubt that once the liability arises in respect of any one incident, the value of guarantee or indemnity available is the one enacted by Clause (2) and not by Clause (4) of Sub-section (2) of Section 95 of the Act. Clause (4) is not providing for a new limit or value of the guarantee as such but it is intended to distribute the available guarantee by providing a formula in cases of multiple claims or claimants. Amongst such multiple claims, and while adjusting the same, a new limit or maximum is of Rs. 5,000/-. In other words, the insurance company would not be entitled to rely on Clause (4) so as to limit the very guarantee which is maximised under Clause (2) and not by Clause (4). Once such a guarantee is available, how each person will be compensated out of the realisable receipt and its distribution, cannot be left to the choice of the insuring party.

15. Both the clauses read together enact thus a rule of maximums and not of minimums operative in different fields. What is provided by Clause (2) is the maximum limit of ensured guarantee, while what is provided by Clause (4) is the working out of such guarantee which is always available. The term used by Clause (4) 'subject to the limits aforesaid' is intended not to limit the maximum of the guarantee available, but is a provision in the nature of a contingent one. The term 'subject to' signifies below the maximum or within it, depending upon condition or contingency. It would be reasonable to read Clause (4) thus as providing the maximum depending upon contingencies and circumstances available in each case, so as to work out such maximum. Such contingent provision enacted by Clause (4) is not intended surely to affect the earlier maximum, nor to reduce it, by reason of only one person being involved in an accident.

16. All this in unmistakable terms provide the total cover in the sum of Rs. 75,000/-, but as far as individual entitlement is concerned, that could be reduced and limited to Rs. 5,000/-, depending upon claims and not otherwise.

17. Policies of such type are contracts in indemnity and ordinarily such indemnity operates as a whole and is not in any manner divisible as such. It is to indemnify the claims arising out of accident as against the vehicle that the total provided is Rs. 75,000/- notwithstanding the actual number of persons, be 30 or even 60 as passengers, in an insured vehicle.

18. As indicated above if we were to hold that the liability is restricted by reason of the first clause, then in a given case the total indemnity will never be available although the contract is for a given indemnity. As we may illustrate if only one passenger were to travel, the liability will always then be restricted only' to Rs. 5,000/-, notwithstanding that the total cover intended to be provided by Section 95(2)(b)(ii)(2) of the Act is Rs. 75,000/-. Similarly, by reason of such arithmetical approach, the cover will be exhausted if there were fifteen passengers and every other passenger thereafter would be travelling without any cover or, at any rate, under a cover which is less than Rs. 5,000/-. We would prefer that construction which would keep the entire cover available provided by the beneficent scheme of law, notwithstanding the number of passengers, the individual limit of cover only operating when the distribution of the sum becomes necessary by reason of contingencies and not otherwise.

19. In other words, in respect of any number of claims arising out of any one accident or any one cause, the insurance indemnity is fixed by the maximum provided to the tune of Rs. 75,000/-. If that were not to exceed, it could be distributed if the claimants are more than one by reason of law and on pro rata basis. Various cases can arise for working out such pro rata basis and we need not go on illustrating examples. What should be the total cover of a given vehicle is expressed in no uncertain terms. In the present case, there being only one single person who claimed that cover, it was reasonable to hold that, the liability being to the tune of Rs. 1,00,000/-, that cover should be available notwithstanding the fact that the earlier clause subjected the individual indemnity to Rs. 5,000/-. For proper discharge of such indemnity agreements, it is hardly possible to conceive that partial discharge is being sought by reason of the earlier clause and the rest of indemnity is retained, although one unified cause or one accident has occurred. It is the whole accident or the total cause that is indemnified and the liability is co-extensive with one cause. As we have the evidence here, there being no other claimant, the Tribunal has taken a reasonable view of making that indemnity available as against the claim of a single dead person. We are not concerned with a case where there are other claimants who are similarly involved in such an accident.

20. The decisions of the Allahabad, Madras and Kerala High Courts, relied upon by Mr. Murthy for restricting the liability on the first clause by reason of Clause (4) of Section 95 (2) of the Act, do not persuade us for the reasons stated above to split the indemnity as against one and leave it unappropriated although the damage is large. We respectfully differ from the view taken in those judgments. Following the lines of the principles laid down by the Supreme Court in the case of Motor Owners' Insurance Co. Ltd. v. J.K. Modi (supra) the learned single Judge of this court too has differed from the view taken by the other High Courts and we think rightly.

21. After careful consideration of the provision in this regard and its objects and purposes, we think that the interpretation that furthers such an indemnity to its full extent rather than to its limited extent should be preferred.

22. Taking this view of the matter, we hold that the Tribunal was entitled to make available the entire indemnity, as there was no other claim seeking satisfaction of any claim for compensation, as is done under the facts of the present case. The appeal filed by the insurance company on this ground fails and is dismissed.

23. Both the appeals, therefore, to stand dismissed with costs in one set.


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