Case: Sharda Prasad Singh Vs. Maharashtra State Road Transport Corporation &amp; Others

The claim in suit for the damage to the property is only Rs, 23,000/- which is much below the risk covered under the insurance policy. However, it was contended by Shri Kudrolli, the learned Counsel for defendant No. 3 the Insurance Company that in view of the provisions of section 96(2) read with section 95(2)(d) of the Motor Vehicles Act, the liability of the Insurance Company is restricted to Rs. 2,000/- only. If this statutory liability is added to the liability to the death or injury namely Rs, 46,200/- then the total liability of the Insurance Company will come to Rs. 48,200/- only. If an amount of Rs. 1,476-49 ps. paid to the injured Sawant is added to it, still the liability will not exceed Rs. 50,000/- and, therefore, the trial Court was wholly right in restricting the liability of the Insurance Company to Rs. 50,000/- only. It is also contended by Shri Khudrolli that the plaintiff had filed the present suit before the Civil Court and not before the Motor Accidents Claims Tribunal. In this view of the matter, the liability of the Insurance Company for the damages to the property of the third party cannot exceed the statutory limit i.e. Rs. 2,000/-. It is not possible for us to accept this contention of Shri Kudrolli. As already observed after the amendment and introduction of section 110A(1)(aa) the owner of the property can also file an application for compensation under section 110(1) of the Act. Admittedly the plaintiff-Corporation was the third party and in that capacity it was claiming compensation for damages to its own property. Such a claim could have been lodged under section 110(1) of the Act. If this is so then the proviso to section 110(1) will apply to such a claim also. Under the proviso to section 110(1) of the Act, the Corporation has exercised its option to prefer the claim before the Civil Court. Therefore, in substance it is a claim covered by the Motor Vehicles Act, though the forum chosen is the Civil Court. From the bare reading of section 110, it is quite clear that if the Motor Accidents Claims Tribunal are not constituted by the Government under Section 110 of the Act, the persons concerned can institute their claim before the Civil Court. In that case it cannot be said that though right exists there is no forum available. Therefore, nothing depends upon the forum chosen. The claim for compensation made towards the damage to the property arose out of the accident to the staff car belonging to the Corporation. Admittedly so far as the third party property is concerned under the Insurance Policy, the risk covered is up to Rs. 50,000/-. Section 96(2) read with section 95(2)(d) only prescribes statutory compensation. It does not follow from that, that it is not open to an insurer to cover the third party property risk in excess of Rs. 2,000/-. There is no bar or embargo for covering the higher risk under the Policy of Insurance. As observed by the Supreme Court in A.I.R. 1977 S.C. 1735, (Pushpabai v. M/s Ranjit Ginning and Pressing Co. (P) Ltd. and another)2, the insurer is always at liberty to take policies covering risks which are not covered by compulsory insurance. Thus the Act Liability is the minimum liability, but there is nothing in the Act, which can prohibit the Insurance Company from expanding limits of its liability by a contract of Insurance. It is well known that whenever higher risk is covered the Insurance Company gets higher or additional premium. Section 96 compels the insurer to satisfy the judgments against the person insured in respect of third party. It places an obligation on the insurer to pay the amount awarded against the owner of the vehicle, subject to certain conditions. The first condition is that there should be a judgment or decree against a person insured. The second condition is that the judgment must be in respect of liability covered by the policy. If these conditions are satisfied, then the Insurance Company is bound to pay the amount decreed. In our view, this position is made amply clear by sub-section (5) of section 95 itself which lays down that , notwithstanding anything elsewhere contained in any law, a person issuing a policy of insurance under the said section, shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons. If the argument advanced by Shri Kudrolli is accepted then the very basis of contract of indemnity will lose its efficacy.10. We are fortified in this view by the Division Bench decision of Gujarat High Court in (United India Fire and General Insurance Co. Ltd. Ahmedabad v. Minaxiben Harischandra Joshi and others)3, A.I.R. 1979, Gujarat, 108, and in (Bomanji Rustomji Ginwala v. Ibrahim Vall Master and others)4, A.I.R. 1982, Gujarat, 112. The Gujarat High Court in United India Fire and General Insurance Co. Ltd. v. Minaxiben Harishchandra Joshi has held that it is always open to Company to insure for a higher amount. If the Company insures a vehicle for a higher amount, it always does so for the benefit of the insured. Therefore, if an insurer is held liable to pay the claimants more than the statutory limit prescribed by section 95, the Company is liable to make good the additional liability within the overall limit of its contractual liability. Similar view is taken by Punjab and Haryana High Court in (Hans Raj and another v. Sukhdev Singh and another)5, 1982 Accident Claims Journal 435 and by Andhra Pradesh High Court in (Srisallam Devastonam v. Bhavani Premilamma)6, A.I.R. 1983 A.P. 297. 11. In this view of the matter, in the present case the defendant No. 3 Insurance Company is liable to pay the whole of the decretal amount which comes to Rs. 72,176-49 ps. together with interest and the costs.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]6. With the assistance of the learned Counsel, appearing for both the sides, we have gone through the entire evidence onin substance the driver of the tanker has taken a different stand, one before the Criminal Court and another before the Civil Court. If his evidence is read and considered with the evidence of the panch witness and the recitals in the panchanama, then it is quite obvious that the witness is not telling the truth. It is no doubt true that there is word against word so far as the actual collision is concerned. However, the version given by Shri Sawant is not only consistent but is also supported by the evidence of panch witness and recitals in the panchanama. In view of this, we are wholly satisfied that the learned Judge of the trial Court was right in accepting the testimony of Shri Sawant and rejecting the evidence of Shri Jose. Since we generally agree with the appreciation of the evidence as well as the finding recorded by the learned Judge of the trial Court in that behalf, it is not necessary to reproduce the whole evidence or the reasons in support of the said finding over again. In our view, the learned Judge of the trial Court was wholly right in holding that the collision took place because of the negligence of the tanker driver and the driver of the car Shri Muley was is no way responsible for the collision. Once this finding is recorded then the argument advanced by Shri Patel that this was a case of contributory negligence cannot be accepted.7. So far as the proof of the claim is concerned Shri Sawant has stated in his deposition about the amount received by him towards the sick leave. P.W. 2 Vijaykumar has state din his evidence that the M.S.R.T.C. has paid Rs. 23,000/to Sanghi Motors Bombay Limited, towards the repair charges. He also has produced on record the bills received from the Sanghi Motors. He has also proved the claim towards idle charges. P.W. 4 Anant Dharap has proved the payment made to the dependants of deceased Shri Shirodhkar. He has given the details of payment including the cheque numbers, etc. He has stated in his deposition that this amount was paid under the provisions of Workmens Compensation Act. The evidence of these witnesses is not seriously challenged in theIn these circumstances, we have no hesitation incoming to the conclusion that thehas proved the claim made in the suit and, therefore, the decree passed by the trial Court in that behalf is whollyis not possible for us to accept this contention of Shri Patel,. We are dealing with a case wherein the plaintiff has filed a suit also for the recovery of the amount paid by it to the dependants of deceased Shri Shirodkar and Shri Muley under the provisions of Workmens Compensation Act. It is also claiming an amount of Rs. 23,000/towards damages to its own property i.e. to the staff car. Therefore, the suit filed by the plaintiff is a composite one. Under section 13 of the Workmens Compensation Act, thewas entitled to recover the amount paid by it to the dependants of deceased Shri Shirodhkar and Shri Muley. It is not disputed that thecould not have made such a claim under section 110(1) of the Motor Vehicles Act. However, in view of the amended provisions of sectioni.e. for more than Rs. 2,000/the plaintiff had an option either to institute the claim before the Motor Accidents Claims Tribunal or to refer it to the Civil Court for adjudication. Once the option is exercised and the claim it referred to the Civil Court then under the said proviso, the Motor Accidents Claims Tribunal has no jurisdiction to entertain any question relating to such claim. The provisions of section110F of theAct will, therefore, not apply to such a claim. We are dealing with a case where the major part of the claim is obviously beyond the jurisdiction of the Motor Accidents Claims Tribunal. While making a claim, which is not within the jurisdiction of the Motor Accidents Claims Tribunal, the plaintiff has also made a claim towards the damages of its own property, which could have been instituted under section 110(1) read with sectionof the Act. However, to that part of the claim, the proviso to section 110(1) squarely applies. It was a claim for compensation in respect of the damage to property exceeding Rs.Therefore, the plaintiff had an option either to institute the said claim before the Motor Accidents Claims Tribunal or to approach the Civil Court for adjudication. The words "refer the claim to the Civil Court," as used in the proviso of section 110(1) cannot be read torn from its context. No reference by the Motor Accidents Claims Tribunal to the Civil Court as such is contemplated by any of the provisions of the Motor Vehicles Act. Therefore, the word refer only means to submit for determination or to file a claim. Under the proviso the plaintiff had an option either to lodge or file a claim before the Motor Accidents Claims Tribunal or before the Civil Court. The plaintiff has chosen to institute the claim before the Civil Court for adjudication and in our opinion rightly. The claim made by the plaintiff in the suit covers the claim for recovery of the amount paid by it to the dependants of the deceased under the provisions of the Workmens Compensation Act. This claim was wholly outside the provisions of section 110(1) of the Act. For proving its claim towards the damage to the property or for the amount paid under the Workmens Compensation Act, the plaintiff was obliged to prove that the accident took place due to the rash and negligent driving of the tanker driver. This issue is common to both the claims, namely the claim made for the recovery of the amount paid under the provisions of Workmens Compensation Act as well as the claim towards the damage to the property. Therefore, plaintiff rightly exercised the option to institute whole of the claim before the Civil Court for adjudication. Since the present case is covered by proviso to section 110(1) of the Act, the suit is not barred by section 110 F of the Act and the trial Court had jurisdiction to entertain and decide the suit.However, we find much substance in the contention raised by Shri Patel that the learned Judge of the trial Court committed an error in restricting the liability of the defendant No. 3, the Insurance Company to Rs. 50,000/only. The amount claimed in the suit towards the compensation paid to the dependants of the two deceased was Rs. 46,200/which was obviously below Rs.Even otherwise, in view of the decision of the Supreme Court in (Motor Owners Company Ltd. v. Jadavji Keshavji Modi and others)1, A.I.R. 1981 Supreme Court, 2059, the limit of compensation of Rs, 50,000/will extend to each of the deceased. It is an admitted position that under the contract of insurance so far as the risk to the third party property is concerned, the same was covered upto Rs.The claim in suit for the damage to the property is only Rs, 23,000/which is much below the risk covered under the insuranceis not possible for us to accept this contention of Shri Kudrolli. As already observed after the amendment and introduction of section 110A(1)(aa) the owner of the property can also file an application for compensation under section 110(1) of the Act. Admittedly thewas the third party and in that capacity it was claiming compensation for damages to its own property. Such a claim could have been lodged under section 110(1) of the Act. If this is so then the proviso to section 110(1) will apply to such a claim also. Under the proviso to section 110(1) of the Act, the Corporation has exercised its option to prefer the claim before the Civil Court. Therefore, in substance it is a claim covered by the Motor Vehicles Act, though the forum chosen is the Civil Court. From the bare reading of section 110, it is quite clear that if the Motor Accidents Claims Tribunal are not constituted by the Government under Section 110 of the Act, the persons concerned can institute their claim before the Civil Court. In that case it cannot be said that though right exists there is no forum available. Therefore, nothing depends upon the forum chosen. The claim for compensation made towards the damage to the property arose out of the accident to the staff car belonging to the Corporation. Admittedly so far as the third party property is concerned under the Insurance Policy, the risk covered is up to Rs.Section 96(2) read with section 95(2)(d) only prescribes statutory compensation. It does not follow from that, that it is not open to an insurer to cover the third party property risk in excess of Rs.There is no bar or embargo for covering the higher risk under the Policy ofthe Act Liability is the minimum liability, but there is nothing in the Act, which can prohibit the Insurance Company from expanding limits of its liability by a contract of Insurance. It is well known that whenever higher risk is covered the Insurance Company gets higher or additional premium. Section 96 compels the insurer to satisfy the judgments against the person insured in respect of third party. It places an obligation on the insurer to pay the amount awarded against the owner of the vehicle, subject to certain conditions. The first condition is that there should be a judgment or decree against a person insured. The second condition is that the judgment must be in respect of liability covered by the policy. If these conditions are satisfied, then the Insurance Company is bound to pay the amount decreed. In our view, this position is made amply clear by(5) of section 95 itself which lays down that , notwithstanding anything elsewhere contained in any law, a person issuing a policy of insurance under the said section, shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons. If the argument advanced by Shri Kudrolli is accepted then the very basis of contract of indemnity will lose its efficacy.10. We are fortified in this view by the Division Bench decision of Gujarat High Court in (United India Fire and General Insurance Co. Ltd. Ahmedabad v. Minaxiben Harischandra Joshi and others)3, A.I.R. 1979, Gujarat, 108, and in (Bomanji Rustomji Ginwala v. Ibrahim Vall Master and others)4, A.I.R. 1982, Gujarat, 112. The Gujarat High Court in United India Fire and General Insurance Co. Ltd. v. Minaxiben Harishchandra Joshi has held that it is always open to Company to insure for a higher amount. If the Company insures a vehicle for a higher amount, it always does so for the benefit of the insured. Therefore, if an insurer is held liable to pay the claimants more than the statutory limit prescribed by section 95, the Company is liable to make good the additional liability within the overall limit of its contractual liability. Similar view is taken by Punjab and Haryana High Court in (Hans Raj and another v. Sukhdev Singh and another)5, 1982 Accident Claims Journal 435 and by Andhra Pradesh High Court in (Srisallam Devastonam v. Bhavani Premilamma)6, A.I.R. 1983 A.P. 297.In this view of the matter, in the present case the defendant No. 3 Insurance Company is liable to pay the whole of the decretal amount which comes to Rs.ps. together with interest and the costs.