Case: M/s. Road Transport Company Vs. Bhan Singh

contained in section. II.I(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-I(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. 5,000/- in respect of any one person and subject to the aforesaid limit in respect of any one person to Rs. 75,000 in respect of any number of claims in connection with the Motor Vehicle arising out of one cause." Section 95(1)(b)(i) provides for compulsory insurance against any liability which may be incurred by the insured in respect of the death of or bodily injury to any person. Section 95(1)(b)(ii) provides for compulsory insurance against the death or bodily injury to any passenger of a public service vehicle cause by or arising out of the use of the vehicle in a public place. Section 95(1)(b)(ii) being a specific provision made in respect of passengers of a public service vehicle, obviously that provision becomes applicable and not the general provision contained in Section 95(1)(b)(i), when the insured incurs liability in respect of the passengers travelling into his public service vehicle. Before the Tribunal and the High Court also the appellant had claimed the protection of Section 95(1)(b)(ii). Therefore, Mr. Ranjit Kumar, learned counsel for the appellant, cannot now be permitted to bring the appellants case under Section 95(1)(b)(i) on the ground that it is wide enough to include a passenger as the word used therein is `any person. Even otherwise also this contention has no substance. Therefore, the liability of the insurance company will have to be determined in terms of Section 95(2)(ii). It is not in dispute that at the relevant time Section 95(2)(b)(ii) limited the liability of the insurance company to Rs. 5,000/- each passenger and Rs. 75,000/- in all, where the vehicle was registered to carry more than 30 but not more than 60 passengers. 6. The next submission was that the appellant had paid additional premium of Rs. 300/- to cover liability higher than the limited liability fixed by Section 95(2). It was submitted by Mr. Ranjit Kumar that the policy being a comprehensive policy it covered all the statutory liabilities and the additional premium of Rs. 300/- was paid for covering liability higher than the statutory liability in respect of passengers. The insurance policy, relevant part of which has been set out above, shows that it covered the following risks : (1) comprehensive risk, (2) S&R risk, (3) passenger risk, and (4) legal liability in respect of paid driver, cleaner and conductor under Workmens Compensation Act. For the comprehensive risk the appellant had paid Rs. 626/- as basic premium. Ordinarily the insurance policy does not cover strike and riot risk and, therefore, to cover that risk also the insured had paid additional premium of Rs. 100/-. To cover 50 passengers risk the insured had paid Rs. 300/- as premium and for covering the risk in respect of driver etc. he had paid Rs. 721.20 as additional premium. If the comprehensive risk covered all other risks as contended by the appellant then the policy would not have mentioned separately the S&R risk and passenger risk. Not only that they have been separately mentioned but separate amounts were paid by way of premium for covering those risks. Thus the basic premium of Rs. 626 paid for the comprehensive risk was obviously in respect of the bus and not in respect of other risks as contended by the learned counsel for the respondent insurance company. A fair reading of the insurance policy discloses that the basic premium of Rs. 626/- though paid for comprehensive risk was not intended to cover all the statutory liabilities but it was really intended to cover the entire loss or damage to the vehicle. As observed by this Court in Jugal Kishores case "even though it not permissible to use a vehicle unless it is covered at least under an `Act only policy it is not obligatory for the owner of a vehicle to get it comprehensively insured. In case, however, it is not comprehensively insured a higher premium that for an `Act only policy is payable depending on the estimated value of the vehicle. Such insurance entitles the owner to claim reimbursement of the entire amount of loss or damage suffered upto the estimated value of the vehicle calculated according to the rules and regulations framed in this behalf."7. The insurance company had charged a premium of Rs. 300/- towards passengers risk. It works out at Rs. 6/- per passenger. As per the Indian Motor Tariff applicable on the date of accident by charging a premium of Rs. 6/- per passenger the liability of the company per passenger was Rs. 5,000/- only. The Indian Motor Tariff which regulates a premium and liability of insurance company is framed by the Tariff Advisory Committee, a statutory body set up under the Insurance Act. The additional premium of Rs. 300/- was thus paid to cover the statutory liability for 50 passengers as the vehicle insured was a passenger bus having registered capacity of carrying 50 passengers. Endorsement No. 13 which was attached to and formed part of the policy and which we have set out above also makes it clear that it was in consideration of an additional premium of Rs. 300/- that the insurance company had undertaken to idemnify the insured against his liability in respect of passengers to the extent of Rs. 5,000/- for each passenger and Rs. 75,000/- in all. It is, therefore, not possible to accept the contention raised on behalf of the appellant that the additional premium of Rs. 300/- was paid for covering higher than the statutory liability. There was no special contract to cover unlimited liability in respect of the passengers. 8.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]Thus the basic premium of Rs. 626 paid for the comprehensive risk was obviously in respect of the bus and not in respect of other risks as contended by the learned counsel for the respondent insurance company. A fair reading of the insurance policy discloses that the basic premium of Rs. 626/- though paid for comprehensive risk was not intended to cover all the statutory liabilities but it was really intended to cover the entire loss or damage to the vehicle. As observed by this Court in Jugal Kishores case "even though it not permissible to use a vehicle unless it is covered at least under an `Act only policy it is not obligatory for the owner of a vehicle to get it comprehensively insured. In case, however, it is not comprehensively insured a higher premium that for an `Act only policy is payable depending on the estimated value of the vehicle. Such insurance entitles the owner to claim reimbursement of the entire amount of loss or damage suffered upto the estimated value of the vehicle calculated according to the rules and regulations framed in this behalf."7. The insurance company had charged a premium of Rs. 300/- towards passengers risk. It works out at Rs. 6/- per passenger. As per the Indian Motor Tariff applicable on the date of accident by charging a premium of Rs. 6/- per passenger the liability of the company per passenger was Rs. 5,000/- only. The Indian Motor Tariff which regulates a premium and liability of insurance company is framed by the Tariff Advisory Committee, a statutory body set up under the Insurance Act. The additional premium of Rs. 300/- was thus paid to cover the statutory liability for 50 passengers as the vehicle insured was a passenger bus having registered capacity of carrying 50 passengers. Endorsement No. 13 which was attached to and formed part of the policy and which we have set out above also makes it clear that it was in consideration of an additional premium of Rs. 300/- that the insurance company had undertaken to idemnify the insured against his liability in respect of passengers to the extent of Rs. 5,000/- for each passenger and Rs. 75,000/- in all. It is, therefore, not possible to accept the contention raised on behalf of the appellant that the additional premium of Rs. 300/- was paid for covering higher than the statutory liability. There was no special contract to cover unlimited liability in respect of the passengers.