1. In this appeal filed by the claimant under S. 110-D of the Motor Vehicles Act, 1939, a short question regarding award of proper compensation for accidental damage caused to the car of the appellant arises for consideration of this Court.
2. The claimant filed M. A. C. Petition No. 12 of 1976 before the MACT at Broach. In the said claim petition, he contended that motor car bearing No. G. T. I. 5440 was owned by him. On l8th Oct., 1975, at 7 p.m., his son Farokh Romanji Ginwala was driving the said motor car and was going from Mohmedpura side towards the railway station i.e. from west to east in Broach city. When his car was at a distance of 50 feet from a place popularly known as Panchfanas, a tractor with a troweller trailer bearing No. GJN 8557 with a cultivator about 721 feet long attached at the back of the tractor was going from east to west. The claimant alleged that the tractor was driven with dazzling light and the cultivator attached at the back of the tractor was not in a fixed state but was moving to and fro along with the motion of the tractor and when the car driven by his son passed by the side of the tractor, the pointed hook of the cultivator attached to the tractor dashed with the right side mudguard of the car and pierced through and through the right door of the car near the driver's seat on right side and in the process, extensive damage was caused to the car. The case of the claimant is that no light was fixed on the cultivator and the cultivator was not in a fixed state but was moving to and fro with the movement of the tractor and was kept in such a projected position that it was never possible for the driver of the vehicle coming from the opposite direction either to notice the cultivator or the to and fro movement of the cultivator. Further contention of the claimant is that the tractor ought not to have been driven on the asphalt road with the cultivator, attached to it in such a condition and that it was on account of the negligent act of driving of the tractor coupled with the further negligent act of keeping the cultivator in such a condition projecting on both the sides, that the hook of the cultivator pierced the mudguard of the car and this type of rash and negligent driving of the tractor-cultivator was responsible for the extensive damage caused to the car. The car had to be kept unused for, 3-4 months during which period extensive repairs to the car were carried out at the cost of Rs. 7,130/-. In the meanwhile, the claimant had to go without car, and that caused considerable inconvenience and loss to him. He had to take on hire other vehicles for his business and other, purposes. On that account, further amount of Rs. 2,869/was claimed by the claimant. Thus, in all, Rs. 9,999/- were claimed from the present respondents who were the driver of the of fending tractor, insurance company which had insured the said tractor against third party risk, the owner of the tractor and the Gujarat State Land Development Bank Limited with which the tractor was placed under an agreement of hire-purchase. As the claim petition has been totally rejected by the Tribunal the claimant has approached this Court for award of damages on account of accidental damage caused to his car.
__________________________________________________________________________________*Only portions approved for reporting by High Court are reported here _________________________________________________________________________________**Against decision Of D. S. Majmudar. Esq., Motor Accidents Claims Tribunal, Bharuch in M. A. C . Petn. No 12 of 1976.__________________________________________________________________________________
3 to 25. xx xx xx xx
26. Insurer's liability:- That takes me to the last question involved in this appeal and that pertains to the liability of the insurance company, original opponent No. 2, present respondent No. 2 to satisfy the claim awarded to the claimant. Mr. B. K. Amin, learned Advocate for respondent No. 2 put forward two contentions which according to him, were good enough to enable the insurance company to escape its liability to meet the claim of the claimant. The first contention of Mr. Amin was that the insurance company was exonerated for the simple reason that the driver of the tractor which was insured with the insurance company had committed breaches of statutory rules under the Motor Vehicles Act while driving the insured vehicle. So far as the aforesaid contention was concerned, he heavily relied on the claimant's own conteations before the Tribunal as well as before this Court in that behalf. While considering' the question of negligence of the respective drivers of the vehicles, I have already discussed in details regarding non-observance of the statutory rules by the driver of the tractor at the relevant time. It has been clearly found from the record of this cas6 that the tractor driver by committing complete breach of the relevant statutory rules, had driven the tractor in a rash and negligent manner at the relevant time. Even though R. 264 (2) of the Rules enjoined upon him to drive the tractor as far as possible on the sidestrip of the metalled road, the driver observed the said rule in breach and drove it in the middle of the tar road. He had also committed violation of R. 266 regarding projection of roads, especially R. 266 (3). But the further question remains as to whether the insurance company can seek any assistance from the aforesaid established breaches of stautory rules as committed by the driver of the insured vehicle in order to escape its liability to answer the claim of third parties like the present claimant. It is now well settled that mere breach of statutory rules on the part of the driver of the insured vehicle would not automatically enable the insurance company to escape its liability to answer the claim of third parties as enjoined by the provisions of Rr. 95 and 96 of the Rules. It is also Well settled that under S. 96 (2) of the Act,, the insurance company has got limited defences. The insurance company can resist the claim of third party claimant if it can show that there has been breach of specific Conditions of policy being one, of the conditions expressly mentioned in S. 96 (2) (b) 0) to (iii). Mr. Amin for the insurance company fairly stated that breaches of statutory rules which the driver of the offending tractor committed do not fall within any of the specified conditions as mentioned in Section 96 (2) (b) (i) to (iii). In the case of British India Gen. Ins. Co. v. Captain Itbar Singh, reported in AIR 1959 SC 1331, the legal position is well settled by the Supreme Court as under (at pp. 1333, 1334):-
'Apart from the statute an insurer has no right to be made a party to the action by the injured person against the insured causing the injury. Sub-section (2) of S. 96 however gives him the right to be made a party to the suit and to defend it. The right therefore is created by statute and its content necessarily depends on the provisions of the statute. Sub-section (2) clearly provides that an insurer made a defendant to the action is not entitled to take any defence which is not specified in it. When the grounds of defence have been specified, they cannot be added to. The only manner of avoiding liability provided for in sub-section (2) is through the defences therein mentioned. Therefore, when sub-section (6) talks of avoiding liability in the manner provided in sub-section (2), it necessarily refers to these defences.'
In view of the aforesaid legal position, the first contention of Mr. Amin on behalf of the insurance company cannot hold water and has got to be repelled. The mere fact that while driving the tractor, the driver of the insured vehicle committed breaches of the statutory rules, cannot give a valid defence to the insurance company to escape its liability qua third parties, as admittedly none of the breaches of the statutory rules is covered by the conditions expressly mentioned in S. 96 (2), of the Motor Vehicles Act.
27. That takes me to the second contention of Mr. Amin on behalf of the insurance company. He submitted that as per Section 95 (2) (d) limit of Rs. 2,000/. was statutorily provided for by the legislature in respect of the liability of the insurance company for damage to any property of a third party. Mr. Amin's contention, therefore, in the alternative, was that in any case, the insurance company would be liable to answer the claim of the claimant to the tune of Rs. 2,000/- only. This contention of Mr. Amin does not stand closer scrutiny. Mr. Amin is right when he contended that as per the statutory provisions of the Act, minimum coverage of insurer's liability so far as damage to property of a third party is concerned, is to the tune of Rs. 21000/-. But this is 'Act liability'. It is well settled that by its contract with the insured, the insurance company can cover a wider risk because 'Act liability' is the minimum liability which cannot be got over, by the insurance company. But there is nothing in the Act which can restrict the insurance company from expanding limits of its liability by a contract with the insured. In the case of Gujarat Mineral Development Corporation Ltd. V. Varjubhai Lallubhai Bhil, (1979) 20 Guj LR 123 :(AIR 1979 Guj 26), a Division Bench of this Court consisting of P. D. Desai and M. K. Shah, JJ. Considered this very question. P. D. Desai, J. observed in that connection as under (at p. 36 of AIR): -
'When in any particular policy the insurer undertakes a wider coverage than the minimum act liability, it is that liability which he has undertaken to satisfy under the contract of policy, which is now crystallised in the statutory indemnity both in S. 95 (5) and in the duty to satisfy the judgment for that liability under S. 96 (1). Therefore, even in respect of the liability arising out of such wider coverage, it would be open to the third party to proceed against the insurance cornpany u/s. 96 (1) for the satisfaction of the award.''
The same view is taken by another Division Bench consisting of S. H. Sheth and M. K. Shah, JJ. in the case of United India Fire and Gen. Ins. Co. v. Minaxiben, (1979) 20 Guj LR 158: (AIR 1979 Guj 108 at p. 109), wherein S. H. Sheth, J. speaking for the Division Bench observed:
'If the insurance company insures a vehicle for a higher amount than the limit prescribed by the statute, it always does so for the benefit of the insured. Therefore, if an insured is held liable to pay to the claimants more than the statutory limit prescribed by S. 95 of the Motor Vehicles Act, the insurance company is liable to make good the additional liability within the overall limit of its contractual liability. Merely because the insurance company voluntarily entered into a contract of insurance for a higher amount than the statutory Emit prescribed for such an insurance, it cannot claim with impunity that even though the insurance was for a higher amount, its liability was limited only to what the statute prescribed for the vehicle in question.'
28. In view of the aforesaid legal position, the terms of the insurance policy will have to be scrutinised. At Ext. 100 is found the insurance policy in question and Ext. 97 is a copy thereof. In the said policy, the limits of liability of the insurance company have been provided for. Mr. Amin pointed out to me that in that column, limit of the amount of insurance company's liability under S. 2 (1) (i) is mentioned at Rs. 50,000/-while limit of liability under S. 2 (1) (ii) is found to be kept blank. The insurance policy Ext. 100 has to be read subject to the attached clause C. V. Clause C. V. forming part of the policy shows S. 2 as bearing the heading 'Liability to third parties'. Section 2 (i) of Clause C. V. so far as relevant for our purpose reads as under: -
'1. Subject to the limits of liability the company will indemnify the insured against all sums including claimant's costs and expenses which the insured shall become legally liable to pay in respect of -
(i) death of or bodily injury to any person caused by or arising out of the use (including the loading and/or unloading) of the motor vehicle.
(ii) damage to property caused by the use (including the loading and/or unloading) of the motor vehicle.
The limit of liability as prescribed by policy, Ex t. 100, when read with aforesaid S. 11 (1) (i) and (ii) of Clause C. V. clearly shows that the company's liability for meeting the claims of third parties on account of death
Or bodily injuries, is limited to Rs. 50,000/-, but so far as its liability to answer the claim of third parties for damage to property caused by the use of the motor vehicle is concerned, the column opposite to the said
Limit clause is kept empty.
29. Mr. Amin's contention was that a clear inference, which arises therefrom, is that the company wanted to limit its liability regarding the claims. arising out of the damage to third party's property, to act liability only. It is not possible to raise the said inference as Mr. Amin wanted me to do. The very fact that the company has expressly limited its liability for meeting the claims of the third parties in case of personal injuries, to Rs. 50,000/-and the further fact that it has not so restricted its liability so far as claims arising out of damage to property of third parties would clearly lead to the conclusion that so far as latter type of claims are concerned, the company's liability was intended to be kept unlimited. It is trite to say that if the company wanted to limit its liability in respect of claims arising out of the damage to Property of third parties to act liability only, the company would have expressly stated so in the blank column opposite to printed particulars regarding the nature of damage to property as found in the Policy. Maybe it was an error, on the part of the insurance company or it may be that by some inadvertent mistake, the concerned officers of the company while issuing the policy, forgot to mention the limit of the company's liability regarding claims arising out of damage to property of third parties, because of use of the motor vehicle. But if there is any such error or omission, the benefit thereof could go to the insured and the claimant rather than to the insurance company. It must thank itself for the negligence of its concerned clerks and/or officers who issued the policy in question to the insured. However, it is impossible to presume from the blank column of company's liability that the company wanted to insert an endorsement restricting its liability to act liability so far as its limit of liability under section II (i) (ii) was concerned. It would be a wild conjecture not based on any evidence. The company must thank itself for not being precise or accurate. The fact remains that as the recitals in the policy stand, there is an upper limit of Rs. 50,000/- so far, as limit of company's liability under Section 11 (1) (i) of clause C. V. is concerned while there is no upper limit of the company's liability so far as claims arising under Section 11 (1) (ii) of clause C. V. are concerned, meaning thereby on the terms of the policy, the company has not chosen to restrict its liability to meet the claims of third parties regarding damage caused to their properties on account of the use of the insured motor, vehicle . Mr. Amin submitted that in the column mentioning details of premium, it is not shown that any additional premium was charged by the insurance company regarding any wider coverage, which it wanted to provide for the insured vehicle against claims for damages arising out of accidental damage caused to properties of third parties, by use of the insured vehicle. If specific item was clearly mentioned in the premium column, it could have been easy to decipher as to what type of extra coverage was sought to be contemplated by the insurance company by charging additional premium. But merely because no such specification is mentioned in the premium column it cannot necessarily be presumed that the company did not want to cover any liability in addition to the act liability so far as the claim falling under Section 11 (1) (ii) of clause C. V. was concerned. The very fact that no limit of company's liability pertaining to such a claim was expressly provided for in the terms of the policy itself leads to the necessary inference that the company did not want to restrict its liability for such a claim. In this view of the matter, the second contention of Mr. Amin has got to be repelled. It must be held that the company by an express term of the insurance policy had effected a wider and unlimited coverage regarding claims of third parties pertaining to damage caused to their properties by use of the insured vehicle. It must, therefore, be held that the insurance company will remain fully liable to satisfy the entire claim of the claimant in the present case.
30. xx xx xx xx xx
31. Appeal allowed.