FAO No. 410 of 1988 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No. 410 of 1988 Date of Decision: May 7, 2010 The New India Assurance Co. Ltd. .....Appellant Versus Smt. Chameli Devi and others .....Respondents CORAM: HON'BLE THE CHIEF JUSTICE HON’BLE MR. JUSTICE JASBIR SINGH HON’BLE MR. JUSTICE HEMANT GUPTA 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? Present: Shri L.M. Suri, Senior Advocate, with Shri Neeraj Khanna, Advocate, for the appellant. Shri Pritam Saini, Advocate, for the respondents. HEMANT GUPTA, J. This order shall dispose of bunch of appeals placed before this Bench on a Reference made by the Division Bench of this Court on 23.5.1988 as to whether the liability of the Insurance Company is limited to Rs.15,000/- per passenger or unlimited under the provisions of Section 95(2)(b) of the Motor Vehicles Act, 1939 (for short `the Act’). FAO No. 410 of 1988 [2] The said order passed by the Division Bench reads as under:- “The main case taken up on urgent motion. It is contended by Mr. Suri that the words “such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939”, occurring in the insurance policy intend to cover the provisions of Section 95(2) of the Motor Vehicles Act, 1939 and since sub-clause (b) thereof would apply to the instant case, the liability of the insurance company was upto Rs.15,000/- for each individual passenger. Reliance has been placed on a Division Bench judgment of this Court in Pt. Ram Parkash and others v. Smt. Kanta Suri and another, 1987(2) FIR 169, where this provision came to be specifically interpreted and a decision of the Rajasthan High Court in Chand Kanwar v. Manaram, 1986 ACJ 269 was distinguished. The term in the insurance policy being comprehensive enough would come to meet the requirements of any other provision of the Motor Vehicles Act as well. It is noticeable that Chapter VIII of the said Act covering insurance of Motor Vehicles against thirty party risk has in it not only Section 95 but Section 110-B as well and under Section 110-B the power of the claims tribunal to award compensation is not curtailed in any manner. We are prima facie of the view that the aforequoted entry in the insurance policy is wide enough to bring within its ambit such liability as may be required to be met under Section 110-B of the Act. Admitted F.B.” The present reference arises as a Division Bench of this Court in Pt. Ram Parkash’s case (supra) has taken a view that the Insurance Company has limited liability in respect of the passenger of a motor vehicle. The correctness of the said judgment was doubted by the Division Bench of this Court in the order mentioned above, primarily on the basis of the decision of the Rajasthan High Court in Chand Kanwar’s case (supra), that since the policy issued by the FAO No. 410 of 1988 [3] Insurance Company is comprehensive, it is to meet the requirement of any other provisions of the Motor Vehicles Act as well. Therefore, the Insurance Company is liability to indemnify the insured of the entire liability. Before we examine the respective contentions of the parties, the brief facts from FAO No. 410 of 1988 out of which the said Reference has arisen, need be stated. A private bus bearing registration No. RSO 2850 owned by one Shashi Kant Gupta met with an accident on 19.4.1986 at about 7.00 a.m. in the area of village Gadhauli, Police Station Chhappar, District Yamuna Nagar (Haryana). Many passengers died while other received multiple injuries. As many as 28 claim applications were preferred to claim compensation either by the legal heirs on account of death of the passengers or by the injured in respect of the injuries received in the said motor vehicular accident. The owner of the bus denied that there was any negligence of the driver in causing the accident, whereas the Insurance Company, the present appellant, raised a plea that its liability is limited to the extent of Rs.15,000/- per passenger. The learned Tribunal found that the accident had taken place due to negligence of the bus driver. It also found that the liability of the Insurance Company is not limited as there is difference between the Insurance Policy produced by the owner of the vehicle and that by the Insurance Company and there is no limit mentioned against the heading `limits of liability’. Even in the Endorsement IMT- 13, the columns have been left blank. Thus, the Tribunal found that the Insurance Company is liability to indemnify the owner of the entire liability. FAO No. 410 of 1988 [4] A Constitution Bench of the Hon’ble Supreme Court in New India Assurance Co. Ltd. v. C.M. Jaya and others, (2002)2 Supreme Court Cases 278, has considered the provisions of Section 95(2) of the Act and held that though the liability of the insurer is limited as indicated in Section 95 of the Act, but it is open to the insured to make the payment of the additional higher premium and get higher risk covered in respect of third party also. In the absence of any such clause in the Insurance Policy, the liability of the insurer cannot be unlimited in respect of third party and it is limited only to the statutory liability. The said proposition is not disputed by any of the learned counsel for the parties. But what is contended on behalf of the learned counsel for the appellant is that by payment of premium of Rs.12 per passenger i.e. Rs.648/- in respect of 54 passengers, the Insurance Company has agreed to indemnify the insured to the statutory liability alone. It is contended that Rs.12 per passenger is the premium recognized for the limited statutory liability of the Insurance Company. Such premium is prescribed under the India Motor Tariff, framed by the Tariff Advisory Committee constituted in exercise of the provisions of Part-II (B) of the Insurance Act, 1938. Such terms of the policy were recognized by the Hon’ble Supreme Court in New India Assurance Co. Ltd. v. Shanti Bai, (1995)2 SCC 539. It is argued that for unlimited liability in terms of Exhibit P.6, the insurer was to pay a premium of Rs.50/- per passenger, but since premium of Rs.12/- alone has been paid, it is a case of statutory liability restricted to Rs.15,000/- per passenger. In the aforesaid case, the Court held to the following effect:- “6. The insurance policy taken out by the owner of the said bus i.e. respondent No.4 herein, and which was FAO No. 410 of 1988 [5] in force at the relevant time, was a comprehensive policy. This policy has been produced before us. It shows that the insured estimated value of the vehicle is Rs.2,50,000/-. In the Schedule of Premium, there is an additional payment of Rs.600/- in respect of 50 passengers. The cliam against this amount states : “for LL to passengers as per Ednt. No. I.M.T. 12”. The appellant-company has contended that it has charged premium at the rate of Rs.12/- per passenger in respect of 50 passengers to cover its limited liability under Section 50 of the Motor Vehicles Act, 1939 which was then in force. xx xx xx 8. It was contended before the High Court that a separate premium has been paid for the passengers. This shows that there was a special contract to cover unlimited liability in respect of passengers between the appellant-company and respondent No. 4. The Tribunal as well as the High Court seem to have proceeded on the basis that the appellant-company had charged an extra premium of 0.50 paise per passenger to cover the risk of unlimited liability towards passengers. This seems to be an error. The premium of Rs.600/- has been paid in respect of 50 passengers. The policy clearly shows this. It is not 0.50 paise per passenger. It is pointed out by the appellant-company with reference to its tariff in respect of “Legal Liability for accidents of Passengers” that if the limit of liability for any one passenger is fifteen thousand rupees, the rate of annual premium per passenger is Rs.12/-. If the limit is twenty thousand rupees, the rate of premium per passengers is Rs.23/- per annum and so on. In respect of un-limited liability, the premium payable per passenger is Rs.50/-. 9. In the present case, the premium which has been paid is at the rate of Rs.12/- per passenger and is clearly referable to the statutory liability of fifteen thousand rupees per passenger under Section 95(2)(b) (ii) of the Motor Vehicles Act, 1939. In the present case, there is no special contract between the appellant- company and respondent No.4 to cover unlimited liability in respect of an accident to a passenger. In the absence of such an express agreement, the policy covers FAO No. 410 of 1988 [6] only the statutory liability. The mere fact that the insurance policy is a comprehensive policy will not help the respondent in any manner.” On the other hand, learned counsel for the claimant has argued that Insurance Policy produced by the Insurance Company Exhibit R.5 is materially different from the policy produced by the insured Exhibit R.4. Exhibit R.5 is not a carbon copy of the policy produced from the records of the Insurance Policy, but is said to be attested from original. It is not accompanied by the complete terms of the policy, but has endorsements appended including IMT-13(A) in which blanks have been filled up. The said policy is subject to Endorsement Nos. 23, 21, 16, 26, 57 and 13, with the following schedule of premium:- B.P I.E.V. Rs. 440-00 Rs.1050-00 SRCC, Flood & EQ Rs. 600-00 Rs.2090-00 Less 25% Flood & EQ Rs. 375-00 Rs.1715-00 54 passenger @ 12 Rs. 648-00 T.P. Rs. 240-00 U.L. to T.P. Driver & Cleaner Less 10% SD Rs. 75-00 Rs. 16-00 Rs. 2694-00 Rs. 269-00 Rs. 2425-00 ---------------- On the other hand, the policy produced by the owner is Exhibit R.4. It may be noticed that the schedule of premium as mentioned in Exhibit R.4 is filled up by hand without any indication that the premium charged is in respect of which entry of the printed proforma. Though the amount charged is same, but the schedule is in different format. The schedule of premium along with the limits of FAO No. 410 of 1988 [7] liability and other conditions, mentioned in the policy, Exhibit R.4, reads as under :- “ Limits of Liability (a) Limits of the amount of the Company’s liability under Section II-1 (i) in respect of any one accident: Such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939. (b) Limits of the amount of the Company’s liability under Section II-1 (ii) in respect of any one claim of series of claim arising out of one event: Rs.50,000. Schedule of Premium A. Own Damage Basic As per END IMT 23 add: 3% on extra electrical or electronic fitting as per END IMT 71 Add for % on I.E.V. Less…….% Discount for excess of Rs…… (Max. Rs……..) as per END. IMT. 1 Add for Riot & Strike 0.25% of total I.E.V. as per END I.M.T. 21 Add….. Add…… Less % No Claim Bonus Rs. 440 Rs.1050 Rs. 600 ----------- Rs.2039 Rs. 375 ---------- Rs.1715 ----------- B: Liability to Public Risk Add: LL to Passenger 54 passengers As per END IMT 13 Limit per passenger Rs…. (Maximum Rs…..as per M.V. Act, 1939) Add. For L.L. to paid driver and/or cleaner as per END IMT. 16 Add for increased TE.P. Limits Section 11 1(i) Unlimited Section 11 1(ii) Rs….. Add for …… Comprehensive Premium ( A + B) Less: 10% S. discount (if due) Rs. 648 Rs. 240 Rs. 75 Rs. 16 ---------- Rs. 979 Rs. 1715 ---------- Rs.2694 Rs. 269 Net Premium Due (Rounded Off) Rs.2425 Note : The words and figures in italics are in Hand in the policy Ex R-4 “ SECTION II –LIABILITY TOWARDS THIRD PARTIES FAO No. 410 of 1988 [8] 1. Subject to the Limits of Liability the Company will indemnify the insured against all sums including claimants cost 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. PROVIDED ALWAYS that:- (a) xx xx xx (b) Except so far as necessary to meet the requirements of Section 2A and Section95 of the Motor Vehicles Act, 1939, the Company shall not be liable in respect of death of or bodily injury to any person in the employment of the Insured arising out of and in the course of such employment. (c) Except so far as is necessary to meet the requirements of Section 95 of the Motor Vehicles Act, 1939, in relation to liability under the Workmen’s Compensation Act, 1923, the Company shall not be liable in respect of death of or bodily injury to any person (other than a passenger carried by reason of or in pursuance of a contract of employment) being carried in or upon or entering or mounting or alighting from the Motor Vehicle at the time of the occurrence of the event out of which any claim arises. (d) The Company shall not be liable in respect of damage to property belonging to or held in trust by or in the custody or control of the insured or a Member of the Insured’s household or being covered by the Motor Vehicle.” The said policy is subject to Endorsement Nos. 21, 16, 23 and 17 only. Still further none of the blanks in endorsement IMT-13 of Policy Exhibit R.4 is filled up. The schedule does not reflect that which amount is towards which liability. IMT 13-A is on a separate sheet of paper with policy Exhibit R.5. Endorsement IMT-13 in Exhibits R.4 and R.5 reads as under:- FAO No. 410 of 1988 [9] (Exhibit R.4) (Exhibit R.5) IMT 13. Legal Liability to Passengers excluding Liability for accidents to employees of the Insured arising out of and in the course of their employment. In consideration of an additional premium as mentioned in the schedule 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. as mentioned in the schedule in respect of any one person and subject to the aforesaid limit in respect of any one person to Rs. as mentioned in the schedule in respect of any number of claims in connection with the Motor Vehicle arising out of one cause. xx xx xx Endorsement No. I.M.T. 13(A) attaching to and forming part of Policy No. 4417303679. Legal Liability to Passengers excluding Liability for accidents to employees of the Insured arising out of and in the course of their employment. In consideration of an additional premium of Rs.12/- per passengers 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.15,000/- in respect of any one person and subject to the aforesaid limit in respect of any one person to Rs.15,000/- in respect of any number of claims in connection with the Motor Vehicle arising out of one cause. xx xx xx FAO No. 410 of 1988 [10] The Policy, Exhibit R.4, has been produced in evidence by RW1-Shashi Kant Gupta, owner of the vehicle, who has inter-alia, deposed that he got the bus insured comprehensively with the Insurance Company with unlimited liability. The entire cross- examination conducted upon the said witness by the counsel for the Insurance Company reads as under:- “It is incorrect to suggest that I have brought the incomplete policy. I do not know if the company had charged Rs.12/- as premium per passenger. It is incorrect to suggest that insurance policy is regarding third party.” The Insurance Policy Exhibit R.5 has been tendered into evidence by the counsel for the Insurance Company on 12.11.1987 when he made the following statement:- “I tender in evidence attested copy of Insurance Policy Ex. R.5 Legal liability for Accident to passengers Ex. R.6 and close my evidence on behalf of respondent No.2.” A Full Bench of this Court in United India Insurance Company Ltd. Ludhiana v. Kamala Rani and others, 1997(3) PLR 302, has held that the certified copy of the Insurance Policy produced by the Insurance Company, is admissible in evidence without any formal proof of it. It was held to the following effect:- “33. Every policy issued is required to be registered in the records. Every insurance company shall maintain the record and under the General Insurance Business (Nationalisation) Act, 1972, the Central Govt. has got the power to issue directions and the Central Government also have got the power to control over the business of the Corporation and other officers of the Companies are declared to be public servants within Section 2(21) of the Indian Penal Code. xx xx xx FAO No. 410 of 1988 [11] 35. Thus a reading of the provisions of the Motor Vehicles Act, 1939 and the rules framed thereunder and the provisions of Insurance Act, 1938, provisions of General Insurance Business (Nationalisation) Act, 1972 and the provisions of General Insurance (Emergency) Act, 1971 makes it abundantly clear that every motor vehicle owner has to take out an insurance policy before using the motor vehicle in a public place. Thus issuance of an insurance policy covering the risk for using the motor vehicle in a public place is a statutory duty cast on the insurance companies. As already observed, the business of general insurance including motor vehicle insurance was nationalized in the year 1972 and the Government has taken over the business of general insurance including the motor vehicle insurance. Therefore, the insurance companies which are owned by the Government are discharging a statutory and public duty as envisaged under the various enactments referred to above. Thus issuance of a policy issued by a company wholly owned by the Government is, therefore, an act of official body and of public officers as the policies are issued under the statutory provisions contained in the enactments referred to above. xx xx xx 37. ….It can safely be held that policies of insurance or certificate of insurance and cover notes issued by the companies in performance of their statutory duties can be classified as public documents within the meaning of Section 74 of the Evidence Act. When certificate of insurance/policy issued by the insurance company is a public document, the same can be proved by production of a certified copy under Section 77 of the Indian Evidence Act. We are, therefore, of the opinion that a certified copy of insurance policy produced by the insurance Company which issued it is admissible in evidence without any formal proof of it. If the insured i.e. the owner of the vehicle disputes the correctness of the said certified copy, it is for him to produce the original which will be in his custody only. We are, therefore, of the opinion that certified copy of insurance policy is admissible in evidence under Section 74 read with Section 77 of the Indian Evidence Act without any formal proof.” FAO No. 410 of 1988 [12] We may add that Section 2(5) of the Insurance Act, 1938 defines the word `certified’, whereas Section 2(9) defines `insurer’. The said provisions read as under:- “2. Definition- In this Act, unless there is anything repugnant in the subject or context,- xx xx xx (5) “certified” in relation to any copy or translation of a document required to be furnished by or on behalf of an insurer or a provident society as defined in Part III means certified by a principal officer or such insurer or provident society to be a true copy or a correct translation, as the case may be; xx xx xx (9) “insurer” means- (a) any individual or unincorporated body of individuals or body corporate incorporated under the law of any country other than India carrying on insurance business (not being a person specified in sub-clause (c) of this clause) which – (i) carries on that business in India, or (ii) has his or its principal place of business or is domiciled in India, or (iii) with the object of obtaining insurance business, employs a representative, or maintains a place of business, in India;” The Insurance Company has issued the Insurance Policy in terms of the Insurance Act, 1938. Therefore, if a policy is certified by a principal officer to be true copy, the same would be admissible in evidence. Exhibit R.4 is the carbon copy of the Insurance Policy. The authenticity of the said policy has not been disputed by the learned counsel for the Insurance Company in the cross-examination conducted on 14.10.1987 except to say that it incomplete. It is not suggested that it is not carbon copy of the original. Therefore, the said policy is deemed to be proved on record. Policy Exhibit R.5 contains a FAO No. 410 of 1988 [13] schedule of premium typed with endorsement “attested from original” without any signatures. It is signed by the duly constituted attorney at the place meant for signatures at the time of issuance of the policy. Even if it is taken to be an irregular form of attestation, still the policy being at variance with the carbon copy of the policy produced by the insured, we find that no reliance can be placed upon such policy produced by the Insurance Company. We also find that the policy, Exhibit R.5, does not contain terms and conditions as are appended with the policy, Exhibit R.4. Policy produced as Exhibit R.5, is subject to endorsement IMT-13, whereas policy Exhibit R.4 is not subject to such condition. Therefore, the policy, Exhibit R.4, produced in evidence by the insured is the relevant policy governing the terms of the insurance between the parties. Exhibit R.6 are the printed pages 25 and 26 with the heading `additional premium’ in respect of third party indemnity limits. The said extracts are said to be part of the India Motor Tariff, framed by the Tariff Advisory Committee constituted under Section 64-U of the Insurance Act, 1938. Such Tariff Advisory Committee is a body corporate having perpetual succession and a common seal. The decisions of the Advisory Committee are final in terms of sub section (4) of Section 64-UC of the Act. Neither the statement of the counsel, who tendered Exhibit R.6, nor the document Exhibit R.6, shows that it is part of India Motor Tariff, the certified copy of which can be said to be admissible per-se. As per such document, Rs.12/- is the premium for limited liability of Rs.15,000/- for one passenger, Rs.23/- for the liability of Rs. 23,000/- and Rs.30/- for the liability of Rs.30,000/- per passenger whereas on payment of Rs.50/- the liability is unlimited. FAO No. 410 of