IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.1375 of 1992 Date of decision:10.09.2010 National Insurance Company Limited ....Appellant versus Karam Singh and others ...Respondents CORAM: HON’BLE MR. JUSTICE K. KANNAN ---- Present: Mr. L.M.Suri, Senior Advocate, with Mr. Neeraj Khanna, Advocate, for the appellant. None for respondents 1 to 3. Mr. Harsh Aggarwal, Advocate, for respondent No.4 ---- 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 ? ---- K.Kannan, J. (Oral) 1. The Insurance Company for the insured's taxi is in appeal challenging liability on the ground that there was a restriction of a claim against the insurer since the policy had covered only upto the limit of liability under Section II-I (i) in respect of anyone accident under the terms of the Motor Vehicles Act of 1939. The learned counsel would contend that in terms of Section 95(2)(b), the policy of insurance was required to cover a liability incurred in respect of anyone accident upto the following limit namely:- “(a) .............. (b) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all.” FAO No.1375 of 1992 - 2 - 2. The policy produced before the Court shows the limit of liability is restricted to what is contained under the terms of the Act of 1939. If no extra premium had been paid, the liability to a third party shall be only as per what is required to be covered under the Act and the policy does not secure the payment of any extra premium for covering the risk to a third party. The learned counsel relies on a judgment of the Hon'ble Supreme Court in National Insurance Company Limited Versus Jugal Kishore and others-1988 ACJ 270 that dealt with a situation of the liability of an Insurance Company under the comprehensive policy and the extent of the insurance cover to a third party risk. The case was with reference to a bus which had been comprehensively insured and no extra premium had been charged for third party risk. The Hon'ble Supreme Court answered that the liability of Insurance Company to such third party risk was not unlimited and that it was liable to the extent of Rs.20,000/- as per the statutory liability at that time, in a situation prior to the amending Act of 56 of 1969. The liability of the appellant-Insurance Company shall therefore stand restricted to Rs.50,000/- out of the amount of Rs.1,80,000/- which was determined by the Tribunal. As regards the excess over the said amount, the insured had the benefit of the insurance cover with another Insurance Company Oriental Insurance Company. It had covered the risk between the period 12.09.1988 to 11.09.1989 . The accident had taken place on 19.05.1989. Oriental Insurance Company has not filed any document to show any restriction of liability. Unusual as it may seen, the owner had taken insurance with the appellant-Insurance Company as well as FAO No.1375 of 1992 - 3 - Oriental Insurance Company and the Tribunal had therefore apportioned the liability between the two Insurance Companies as 50:50. In the view that I have taken restricting the liability of the appellant-Insurance Company to be Rs.50,000/-, the remaining amount shall be borne by the Oriental Insurance Company. The award of the Tribunal is modified and the appeal is allowed to the above extent. (K.KANNAN) JUDGE 10.09.2010 sanjeev