Case: M. K. Kunhimohammed Vs. P. A. Ahmedkutty and Others

limit of fifteen thousand rupees for each individual passenger... " 8. As the law stands today, the insurer is liable to pay up to Rs. 15, 000 in respect of death of any passenger or any injury caused to him. In the Statement of Objects and Reasons attached to the Bill which ultimately became Act 47 of 1982, it was stated that the limit with respect to an insurers liability to a passenger involved in an accident in a public service vehicle was being fixed at Rs. 15, 000. After the above amendment which was intended to increase the liability of the insurer, instead of Rs. 10, 000 in the case of each individual passenger where the vehicle was a motor cab and Rs. 5, 000 for each individual passenger in other cases which were the limits in force immediately prior to the said amendment, the liability in respect of an individual passenger is now raised to Rs. 15, 000. This clearly demonstrates that Parliament never intended that the aggregate liability of the insurer mentioned in sub-clauses (1), (2) and (3) of section 95(2)(b)(ii) of the Act would be the liability of the insurer even when one passenger had died or suffered injury on account of an accident. Such liability was always further limited by sub-clause (4) of section 95(2)(b)(ii) of the Act. Even in the latest Bill, i.e., Bill No. 56 of 1987, which was introduced in the Lok Sabha on May 11, 1987, for the purpose of consolidating and amending the law in regard to motor vehicles, it is proposed by section 147 to retain the provision regarding the limit of the insurers liability in respect of vehicles in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment as it was provided by Act 47 of 1982. Section 147(2)(b)(ii) of the Bill reads thus : " 147. (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:--... (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, --... (ii) in respect of passengers, a limit of fifteen thousand rupees for each individual passenger, ...." Having regard to the large number of motor vehicle accidents which are taking place on roads and also to the fact that a large number of public service vehicles carrying passengers are involved in them, we are of the view that the limit of Rs. 15, 000 fixed in the case of each passenger appears to be still meagre and we hope that Parliament while enacting the Bill into law would take steps to increase the insurers liability keeping in view the need for providing for adequate compensation as a measure of social security. 9. We should at this stage state that that the High Court of Madras in K. R. Sivagami, Proprietor, Rajendran Tourist v. Mahaboob Nisa Bi [1981] ACJ 399, has taken the same view as regards the effect of section 95(2)(b)(ii) of the Act as it stood before its amendment in 1982. It has observed that the said provision specifically provided for two limitations on the liability of the insurer in respect of an accident in which a vehicle carrying passengers was involved, the first limitation being the limitation contained in sub-clauses (1), (2) and (3) of section 95(2)(b)(ii) which provided for the aggregate liability of the insurer in an accident and the second limitation being the one contained in sub-clause (4) of section 95(2)(b)(ii) which provided, subject to the limits aforesaid, a limit of Rs. 10, 000 for each individual passenger where the vehicle was a motor cab and of Rs. 5, 000 for each individual passenger in any other case. Khalid J., as he then was, of the Kerala High Court has also accepted the same construction of section 95(2)(b) in Madras Motor and General Insurance Co. Ltd. by its successor : United India Fire and General Insurance Co. Ltd. v. V. P. Balakrishnan [1982] ACJ 460 (Ker).The High Court of Allahabad in New India Assurance Co. Ltd. v. Mahmood Ahmad, [1986] 59 Comp Cas 291, the High Court of Bombay in Shivahari Rama Tiloji v. Kashi Vishnu Agarwadekar [1986] 60 Comp Cas 682 and the High Court of Patna in National Insurance Co. Ltd. v. Shanim Ahmad [1987] 62 Comp Cas 811 (/Pat) and in Tara Pada Roy v. Dwijendra Nath Sen [1986] ACJ 299 (/Pat) have overlooked the cumulative effect of sub-clauses (1), (2) and (3) and of sub-clause (4) of section 95(2)(b)(ii) of the Act. They have failed to give effect to section 95(2)(b)(ii)(4) of the Act. We are of the view that these decisions do not lay down the correct view. We may, however, state here that in Noor Mohammad v. Phoola Rani [1986] 59 Comp Cas 306 (All/) and in Raghib Nasim v. Naseem Ahmad [1986] ACJ 405 (All/), two Division Benches of the Allahabad High Court have construed the provision in question as we have done in this case. The decision of the single judge of the Allahabad High Court in New India Assurance Co. Ltd. v. Mahmood Ahmad [1986] 59 Comp Cas 291 (All/) was dissented from in the later decision of the Division Bench of the Allahabad High Court in Raghib Nasim v. Naseem Ahmad [1986] ACJ 405. 10. Having regard to the statute as it stood prior to the amendments by Act 47 of 1982, we hold that the insurer was liable to pay upto Rs. 10, 000 for each individual passenger where the vehicle involved was a motor cab and up to Rs. 5, 000 for each individual passenger in any other case. The judgment of the Kerala High Court against which this petition is filed has followed the above construction. We do not find any ground to interfere with it.

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

Explanation:
0[ds]Section 95(2)(b) as it existed before its amendment in 1982 dealt with the limits of the liability of an insurer in the case of motor vehicles in which passengers were carried for hire or reward or by reason of or in pursuance of a contract of employment. Sub-clause (i) of section 95(2)(b) provided that in respect of death of or injury to persons other than passengers carried for hire or reward, a limit of Rs. 50, 000 in all was the limit of the liability of the insurer. Sub-clause (ii) dealt with the liability in respect of, death of or injury to, passengers. Under that sub-clause, there were two specific limits on the liability of the insurer in the case of motor vehicles carrying passengers. The first limit related to the aggregate liability of the insurer in any one accident. It was fixed at Rs. 50, 000 in all where the vehicle was registered to carry not more than thirty passengers, at Rs. 75, 000 in all where the vehicle was registered to carry more than thirty but not more than sixty passengers and at Rs. 1, 00, 000 in all where the vehicle was registered to carry more than sixty passengers. The said sub-clause proceeded to lay down the other limit in respect of each passenger by providing that subject to the limits aforesaid as regards the aggregate liability, the liability extended up to Rs. 10, 000 for each individual passenger where the vehicle was a motor cab and Rs. 5, 000 for each individual passenger in any other case. Neither of the two limits can be ignored. In the present case, the vehicle in question being a bus carrying passengers for hire or reward registered to carry more than thirty but not more than sixty passengers, the limit of the aggregate liability of the insurer in any one accident was Rs. 75, 000 and subject to the said limit, the liability in respect of each individual passenger was Rs. 5, 000. We find it difficult to hold that the limit prescribed in section 95(2)(b)(ii)(4) was only the minimum liability prescribed by law. The amount mentioned in that provision provides the maximum amount payable by an insurer in respect of each passenger who has suffered on account of theaccident. This appears to us to be a fair construction of section 95(2) of the Act as it existed at the time when the accident took place. Our view receives support from at least two decisions of this courtAs the law stands today, the insurer is liable to pay up to Rs. 15, 000 in respect of death of any passenger or any injury caused to him. In the Statement of Objects and Reasons attached to the Bill which ultimately became Act 47 of 1982, it was stated that the limit with respect to an insurers liability to a passenger involved in an accident in a public service vehicle was being fixed at Rs. 15, 000. After the above amendment which was intended to increase the liability of the insurer, instead of Rs. 10, 000 in the case of each individual passenger where the vehicle was a motor cab and Rs. 5, 000 for each individual passenger in other cases which were the limits in force immediately prior to the said amendment, the liability in respect of an individual passenger is now raised to Rs. 15, 000. This clearly demonstrates that Parliament never intended that the aggregate liability of the insurer mentioned in sub-clauses (1), (2) and (3) of section 95(2)(b)(ii) of the Act would be the liability of the insurer even when one passenger had died or suffered injury on account of an accident. Such liability was always further limited by sub-clause (4) of section 95(2)(b)(ii) of the Act. Even in the latest Bill, i.e., Bill No. 56 of 1987, which was introduced in the Lok Sabha on May 11, 1987, for the purpose of consolidating and amending the law in regard to motor vehicles, it is proposed by section 147 to retain the provision regarding the limit of the insurers liability in respect of vehicles in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment as it was provided by Act 47 of 1982Having regard to the large number of motor vehicle accidents which are taking place on roads and also to the fact that a large number of public service vehicles carrying passengers are involved in them, we are of the view that the limit of Rs. 15, 000 fixed in the case of each passenger appears to be still meagre and we hope that Parliament while enacting the Bill into law would take steps to increase the insurers liability keeping in view the need for providing for adequate compensation as a measure of social securityHaving regard to the statute as it stood prior to the amendments by Act 47 of 1982, we hold that the insurer was liable to pay upto Rs. 10, 000 for each individual passenger where the vehicle involved was a motor cab and up to Rs. 5, 000 for each individual passenger in any other case. The judgment of the Kerala High Court against which this petition is filed has followed the above construction. We do not find any ground to interfere with it.