Case: National Insurance Company Ltd Vs. Nathilal

2. Respondents 1 and 2 filed a Claim Petition under Sectionof the Motor Vehicles Act, 1939 claiming damages in sum of Rs. 6,50,000/for the death of their son, Akhilesh Kumar, aged about 22 years. The deceased Akhilesh Kumar was travelling in a Jeep bearing No.along with three other adults and two children from Jaipur to Sawai Madhopur when the accident took place on 4th/5th May, 1998 at about 1.15 a.m. Before the Motor Accident Claims Tribunal (for short `Tribunal) the appellant took a stand that its liability was restricted to sum of Rs. 15,000/under the policy. The said stand of the appellant was not accepted by the Tribunal and by its Award dated 27.2.93 it held that the liability of the appellant was unlimited and awarded a compensation in a sum of Rs. 2,44,000/with interest at the rate of 12% per annum.3. Aggrieved by the Award of the Tribunal, in particular, the finding that the Insurance Companys liability was unlimited, theCompany preferred an appeal to the Rajasthan High Court.4. The High Court affirmed the view taken by the Tribunal and the present appeal against the order of the High Court has been filed by special leave.

Court's reasoning:
In the light of the above ratio laid down by this Court and in view of the fact that no extra premium was paid towards unlimited liability as is clear from the Policy produced before the Tribunal, the judgment and order of the Tribunal affirmed by the High Court cannot be sustained and are, accordingly, set aside. The liability of the Insurance Company is limited to Rs.The Award of the Tribunal will accordingly stand modified insofar as the liability of theCompany is concerned.7. This Court by an order dated 24.10.94, while granting interim stay, directed theCompany to deposit the entire Award money in the Tribunal. It further permitted the claimant to withdraw a sum of Rs. 50,000/out of such deposit. The balance amount was directed to be invested in a Long Term Deposit in a scheduled bank. TheCompany is permitted to withdraw the amount in deposit with accrued interest in view of its success in this appeal. The amount paid to the claimant, pursuant to the order of this Court, shall not be recovered from the claimant but the appellant can recover that amount from the owner of the vehicle.