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PETITIONER: M.K. KUNHIMOHAMMED

       Vs.

RESPONDENT: P.A. AHMEDKUTTY & ORS.

DATE OF JUDGMENT01/09/1987

BENCH: VENKATARAMIAH, E.S. (J) BENCH: VENKATARAMIAH, E.S. (J) SINGH, K.N. (J)

CITATION:  1987 AIR 2158            1987 SCR  (3)1149  1987 SCC  (4) 284        JT 1987 (3)   465  1987 SCALE  (2)442

ACT:     Motor  Vehicles Act, 1939: Section 95(2)--Death of  pas- senger  in accident--Limits of liability of  insurer--Amend- ment  of Act regarding distinction between  public  vehicles and  other  motor vehicles etc., enhancement  of  limits  of compensation insurance of motor vehicles against third party risks and expansion of definition of ’legal  representative’ with regard to claims--Suggestions made.

HEADNOTE:     The  petitioner  was the owner of a bus being run  as  a stage  carriage. On 24.7.78 while carrying  passengers  this bus met with an accident, as a result of which one passenger died.  The  Motor  Accident Claims Tribunal  held  that  the accident took place due to the negligence on the part of the driver  and awarded compensation of Rs.56,800 to  the  legal representatives  of the deceased. It further held  that  the liability  of  the insurer to indemnify the  petitioner  was limited  to Rs.5,000 as the policy specifically limited  the insurer’s  liability  to  what  had  been  provided  by   s. 95(2)(b)(ii)(2) and (4) of Motor Vehicles Act, 1939.     The appeal filed by the Petitioner was dismissed by  the High Court.     In the Special Leave Petition before this Court, it  was contended  on behalf of the petitioner that the insurer  was liable to indemnify the petitioner upto a limit of Rs.75,000 under s. 95(2)(b)(ii)(2) of the Motor Vehicles Act, 1939 and that the further limit mentioned in s. 95(2)(b) (ii)(4)  was inapplicable to the case of the petitioner. Dismissing the Special Leave Petition, this Court,     HELD:  1. Having regard to the Motor Vehicles Act,  1939 as  it stood prior to the amendments by Act 47 of 1982.  the insurer was liable to pay upto Rs.10,000 for each individual passenger  where  the vehicle involved was a motor  cab  and upto  Rs.5,000  for each individual passenger in  any  other case. [1161F] 2.1  Section 95(2)(b) as it existed before its amendment  in 1982 1150 dealt with the limits of the liability of an insurer in  the case of motor vehicles in which passengers were carried  for

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hire or reward or by reason of or in pursuance of a contract of employment. [1155H; 1156A]     Sub-clause  (i)  of section 95(2)(b)  provided  that  in respect of death of or injury to persons other than  passen- gers carried for hire or reward, a limit of Rs.50,000 in all was the limit of the liability of the insurer. [1156A]     Under sub-clause (ii) 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  aggre- gate  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 other limit was in respect  of  each passenger, which provided that subject to the limits  afore- said  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. [1156B-D]     2.2  The  limit prescribed  in  section  95(2)(b)(ii)(4) cannot  be said to be 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 an accident.  This is  a  fair construction of section 95(2) of the Act  as  it existed at the time when the accident took place. [1156E]     2.3 After the 1982 amendment the liability of the insur- er  in respect of each individual passenger is Rs.15,000  as against  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, prior  to  the  said amendment.  This shows 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)  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). [1159F-G]     2.4 In the instant case, the vehicle in question being a bus  carrying  passengers for hire or reward  registered  to carry more than thirty     1151 but not more than sixty passengers, the limit of the  aggre- gate  liability  of  the insurer in  any  one  accident  was Rs.75,000  and  subject to the said limit the  liability  in respect of each passenger was Rs.5,000. [1156D]     2.5 As the law stands today the insurer is liable to pay upto  Rs.15,000 in respect of death of any passenger or  any injury  caused to him. 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, limit  of Rs.15,000 fixed in the case of each passenger appears to  be still meagre. [1159E; 1160E]     3.  The  following  suggestions in  respect  of  certain provisions of the Motor Vehicles Act are made for considera- tion of the Central Government:-     (i)  The limits of compensation in respect of  death  or permanent disablement payable in the event of there being no proof of fault have become unrealistic in view of inflation- ary pressures and consequent loss of purchasing power of the rupee. These limits should, therefore, be raised adequately.

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[1162B-C]     (ii)  There is no justification for continuing the  dis- tinction between public service vehicles and other  vehicles and also between passengers and third parties with regard to the liability of the insurer to pay compensation. Even among the  public service vehicles a distinction is  made  between vehicles used as goods carriages and those used for carrying passengers. It may be considered whether it is necessary  to continue  these distinctions and also whether the limits  of liability  of  the insurer should not be  altered  suitably. [1162D-E]     (iii)  The society and the State which  are  responsible for  a  large  number of motor vehicles being  put  on  road should  carry  also  the responsibility  of  protecting  the interests of innocent victims of hit and run motor accidents which are increasing in number. The amounts of Rs.5,000  and Rs.1,000  provided  as compensation in respect of  death  or grievous  hurt respectively appear to be highly  inadequate. It  may  be considered whether these figures should  not  be increased in an appropriate manner. [1162F-G]     (iv) The expression "legal representative" has not  been defined  in the Act and it has led to serious doubts in  the course of judicial proceedings. It may be considered whether it would not be advisable to define the said expression  for purposes of making claims before Claims 1152 Tribunals  where  death has resulted from  a  motor  vehicle accident  in the same way in which the English Law has  been amended. [1163A-C]     Motor Owners Insurance Co. Ltd. v. Jadavji Keshavji Modi JUDGMENT: Northern India Transport Insurance Co., [1971] Supp. SCR 20; Manjusri Raha & Ors. etc. v.B.L. Gupta & Ors. etc., [1977] 2 SCR 944; P.B. Kader & Ors. v. Thatchamma and Ors., AIR  1970 Kerala 241; K.R. Sivagami, Proprietor, Rajendran Tourist  v. Mahaboob  Nisa Bi and others, [1981] ACJ 399;  Madras  Motor and General Insurance Co. Ltd. by its successor: The  United Fire  and General Insurance Co. Ltd. and others  v.V.P.  Ba- lakrishnan  and others, [1982] ACJ 460; New India  Assurance Co. Ltd. v. Mahmood Ahmad and others, [1984] ACJ 390; Shiva- hari Rama Tiloli and another v. Kashi Vishnu Agarwadekar and others,  [1985]  ACJ  494; National Insurance  Co.  Ltd.  v. Shanim  Ahmad and others, [1985] ACJ 749; Tara Pada  Roy  v. Dwijendra Nath Sen and others, [1986] ACJ 299; Noor Mohammad and  another  v.  Phoola Rani and others,  [1984]  ACJ  518; Raghib Nasim and another v. Naseem Ahmad and others,  [1986] ACJ 405 and Gujarat State Road Transport Corporation,  Ahme- dabad  v.  Ramanbhai Prabhatbhai and Another, [1987]  3  SCC 234, referred to.

&     CIVIL  APPELLATE  JURISDICTION: Special  Leave  Petition (Civil) No. 7534 of 1987.     From  the  Judgment and Order dated 4.11.  1986  of  the Kerala High Court in M.F.A. No. 64 of 1982. E.M.S. Anam for the Petitioner. The Order of the Court was delivered by     VENKATARAMIAH, J. The petitioner was the owner of a  bus bearing  No. KLD- 9327 which was being run as a  stage  car- riage. On 24.7.1978 while the said bus was carrying  passen- gers it met with an accident and Saheeda, who was one of the passengers  in  the bus, died as a consequence of  the  said accident.  The accident took place, according to  the  Motor

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Accidents Claims Tribunal, due to the negligence on the part of  the driver of the vehicle who had been employed  by  the petitioner. The Tribunal found that the compensation payable by  the petitioner to the legal representatives  of  Saheeda was  Rs.56,800. It, however, held that the liability of  the insurer to indemnify the petitioner was limited to  Rs.5,000 as the policy specifically limited the insurer’s 1153 liability   to   what   had   been   provided   by   section 95(2)(b)(ii)(2) and (4) of Motor Vehicles Act, 1939 (herein- after referred to as the Act’). Aggrieved by the decision of the Tribunal the petitioner filed an appeal before the  High Court  of Kerala. The said appeal was dismissed. This  peti- tion  is  filed under Article 136 of  the  Constitution  for special  leave  to appeal against the judgment of  the  High Court.     The  contention of the petitioner before this  Court  is that the insurer was liable to indemnify the petitioner upto a  limit of Rs.75,000 under section 95(2)(b)(ii)(2)  of  the Act  and  that  the  further  limit  mentioned  in   section 95(2)(b)(ii)(4)  of the Act was inapplicable to the case  of the  petitioner. The relevant part of section 95 of the  Act during the relevant time read as follows:               "95(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--                         (a)  where  the vehicle is  a  goods               vehicle,  a limit of fifty thousand rupees  in               all, including the liabilities, if any,  aris-               ing under the Workmen’s Compensation Act, 1923               (8  of 1923), in respect of the death  of,  or               bodily  injury to, employees (other  than  the               driver),  not exceeding six in  number,  being               carried in the vehicle;                         (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 ,--                         (i) in respect of persons other than               passengers carried for hire or reward, a limit               of fifty thousand rupees in all;               (ii) in respect of passengers,--                          (1)  a  limit  of  fifty   thousand               rupees in all where the vehicle is  registered               to carry not more than thirty passengers;                          (2)  a limit of seventy-five  thou-               sand rupees in all where the vehicle is regis-               tered  to carry more than thirty but not  more               than sixty passengers;               1154                        (3) a limit of one lakh rupees in all               where the vehicle is registered to carry  more               than sixty passengers; and                        (4) subject to the limits  aforesaid,               ten  thousand rupees for each individual  pas-               senger  where the vehicle is a motor cab,  and               five  thousand  rupees  for  each   individual               passenger in any other case;                        (c)  save as provided in clause  (d),               where  the vehicle is a vehicle of  any  other               class, the amount of liability incurred;                        (d) irrespective of the class of  the               vehicle, a limit of rupees two thousand in all               in  respect  of damage to any  property  of  a

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             third party.     Section  95 of the Act sets out the requirements of  the policies  of insurance which must be taken by the owners  of motor  vehicles and the limits of liabilities thereunder.  A policy  of insurance should subject to the proviso  to  sub- section  (1)  of section 95 of the Act cover  any  liability incurred  in  respect of any one accident  upto  the  limits specified  in  sub-section  (2) of section 95  of  the  Act. Clause  (a) of section 95(2) of the Act during the  relevant time provided that where the vehicle was a goods vehicle the policy  should  cover the liability upto  Rs.50,000  in  all including  the liabilities, if any, arising under the  Work- men’s  Compensation  Act,  1923 in respect of  death  of  or bodily  injury  to the workmen (other than the  driver)  not exceeding  six in number being carried in the vehicle.  This clause came up for consideration before this Court in  Motor Owners  Insurance Co. Ltd. v. Jadavji Keshavji Modi &  Ors., [1982]  1 SCR 560. In that case this Court held that  clause (a) of section 95(2) of the Act qualified the extent of  the insurer’s liability by the use of the unambiguous expression "in all" and since that expression was specially  introduced by  an  amendment,  it must be allowed its  full  play.  The legislature  must be presumed to have intended what  it  had plainly said. But clause (a) did not stand alone and was not the  only  provision to be considered  for  determining  the outside  limit of the insurer’s liability. It was  necessary to give effect to the words ’any one accident’ which  formed part in the opening part of sub-section (2) of section 95 of the  Act. The Court, therefore, held that if more  than  one person was injured during the course of the same transaction each  one of the persons must be deemed to have met with  an accident. Accordingly, 1155 the Court held that each of the persons who was entitled  to claim  compensation under clause (a) of sub-section  (2)  of section  95  of  the  Act was entitled to  claim  a  sum  of Rs.50,000 which was the limit prescribed by the said  clause on the date on which the accident, referred to in that case, occurred. The Court, however, distinguished the decision  of this  Court  in Sheikhupura Transport Co. Ltd.  v.  Northern India Transport Insurance Co., [1971] Supp. SCR 20 which was a case in which clause (b) of sub-section (2) of section  95 of  the  Act had arisen for consideration. In doing  so  the Court observed thus:                         "The  judgment  of the  Punjab  High               Court  was brought in appeal to this Court  in               Sheikhupura  Transport  Co. Ltd.  v.  Northern               India Transport Co. For reasons aforesaid, the               judgment  in that case is not an authority  on               the  interpretation of clause (a)  of  section               95(2).  After setting out the relevant  provi-               sions  of section 95(2) at pages 24 and 25  of               the Report, Hegde J. speaking for himself  and               Jaganmohan Reddy, J. concluded:                        ’In  the present case we are  dealing               with a vehicle in which more than six  passen-               gers  were  allowed to be carried.  Hence  the               maximum liability imposed under section  95(2)               on  the  insurer  is  Rs.2,000  per  passenger               though   the  total  liability  may  go   upto               Rs.20,000.’                         Towards the end of the judgment,  it               was  observed that reading the provision  con-               tained in sections 95 and 96 together ’   ....               it  is clear that the statutory  liability  of

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             the  insurer  to indemnify the insured  is  as               prescribed  in s. 95(2). Hence the High  Court               was right in its conclusion that the liability               of  the insurer in the present case  only  ex-               tends  upto  Rs.2,000  each, in  the  case  of               Bachan  Singh and Narinder Nath.’ In  view  of               the  limit on the insurer’s liability  in  re-               spect  of each passenger, the argument on  the               construction  of the words ’any one  accident’               had  no  relevance and was  therefore  neither               made  nor considered by the  Court.  Different               considerations may arise under clause (b),  as               amended  by  Act  56 of 1969, but  we  do  not               propose  to  make  any  observations  on  that               aspect  of the matter, since it does  not  di-               rectly arise before us."     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 1156 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  passen- gers.  Under that sub-clause there were two specific  limits on  the liability of the insurer in the case of motor  vehi- cles  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  regis- tered 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 the accident.  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 Court.     In  Sheikhupura  Transport Co. Ltd.  v.  Northern  India Transport  Insurance Co. (supra) the motor vehicle  involved was  a passenger bus. On account of an accident  which  took place on account of the negligence of the driver of the said vehicle two persons died on the spot. Their legal  represen- tatives  claimed  compensation before  the  Motor  Accidents Claims Tribunal. The Tribunal found that the legal represen-

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tatives  of each of the two persons who had died on  account of the accident, were entitled to compensation of Rs. 18,000 and  directed  that  the entire sum should be  paid  by  the insurance company. On appeal by the legal representatives as well as by the insurance company the High Court enhanced the compensation payable to the legal 1157 representatives  of  each  of the two  deceased  persons  to Rs.36,000  and  also  allowed the appeal  of  the  insurance company and limited its liability to the tune of Rs.2,000 in respect  of each of the two deceased persons  in  accordance with section 95(2)(b) of the Act as it stood at the relevant time which provided that where the vehicle was a vehicle  in which  passengers  were  carried for hire or  reward  or  by reason  of  or in pursuance of a contract of  employment  in respect of persons other than passengers carried for hire or reward, a limit of Rs.20,000 and in respect of passengers  a limit  of  Rs.20,000 in all and Rs.2,000 in  respect  of  an individual passenger if the vehicle was registered to  carry more  than six persons excluding the driver. The  Court  ob- served  that since in the said case the vehicle was  one  in which  more than six persons were allowed to be carried  the maximum liability imposed under section 95(2) of the Act  on the  insurer  was Rs.2,000 per passenger  though  the  total liability  might  go upto Rs.20,000 in a  given  case  where large  number  of  persons had suffered on  account  of  the accident. Accordingly the Court affirmed the judgment of the High  Court insofar as the question of the liability of  the insurer was concerned.     Clause (b) of section 95(2) of the Act again came up for consideration before this Court in Manjusri Raha & Ors. etc. v.  B.L.  Gupta & Ors. etc. [1977] 2 SCR 944. In  that  case also  the motor vehicle which was involved in  the  accident was  a  bus carrying passengers on a route in the  State  of Madhya Pradesh. The Court followed the decision in the  case of  Sheikhupura Transport Co. Ltd. v. Northern India  Trans- port Insurance Co., (supra) and limited the liability of the insurer to Rs.2,000 as provided by the Act at that time. The Court  found itself in complete agreement with the  observa- tions made by the Kerala High Court in P.B. Kader & Ors.  v. Thatchamma  and Ors., AIR 1970 Kerala 241, and approved  the following observations made by the Kerala High Court:                        "It is sad that an Indian life should               be  so  devalued by an Indian law as  to  cost               only  Rs.2,000, apart from the fact  that  the               value of the Indian rupee has been eroded  and               Indian  life has become dealer since the  time               the statute was enacted, and the consciousness               of  the comforts and amenities of life in  the               Indian  community  has arisen, it  would  have               been  quite appropriate to revise this  fossil               figure of Rs.2,000 per individual, involved in               an  accident,  to make it more  realistic  and               humane, but that is a matter for the  legisla-               ture; and the observation that I have made  is               calculated  to  remind  the  law-makers   that               humanism is the basis of law and justice."               1158     The  Court  also suggested on its own  that  instead  of limiting  the  liability  of the insurance  companies  to  a specified  sum of rupees as representing the value of  human life, the amount should be left to be determined by a  Court in the special circumstances of each case, even in the  case where passenger vehicles were responsible for the  incident. Fazal  Ali, J. who delivered the judgment in the above  case

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further observed at pages 950-95 1 thus:               "While our Legislature has made laws to  cover               every possible situation, yet it is well  nigh               impossible to make provisions for all kinds of               situations. Nevertheless where the social need               of the hour requires that precious human lives               lost  in  motor accidents leaving a  trail  of               economic disaster in the shape of their unpro-               vided for families call for special  attention               of the law makers to meet this social need  by               providing for heavy and adequate  compensation               particularly  through insurance companies.  It               is true that while our law makers are the best               judges of the requirements of the society, yet               it is indeed surprising that such an important               aspect  of the matter has missed their  atten-               tion. Our country can iII-afford the loss of a               precious life when we are building a  progres-               sive  society  and if any  person  engaged  in               industry, office, business or any other  occu-               pation dies, a void is created which is  bound               to result in a serious set back to the  indus-               try  or occupation concerned. Apart from  that               the  death of a worker creates a serious  eco-               nomic  problem for the family which he  leaves               behind. In these circumstances it is only just               and  fair that the Legislature should  make  a               suitable  provision  so  as  to  pay  adequate               compensation  by properly evaluating the  pre-               cious  life of a citizen in its true  perspec-               tive rather than devaluing human lives on  the               basis  of an artificial mathematical  formula.               It is common knowledge that where a  passenger               travelling by a plane dies in an accident,  he               gets  a  compensation of Rs.1,00,000  or  like               large  sums, and yet when death comes  to  him               not through a plane but through a motor  vehi-               cle  he is entitled only to Rs.2,000. Does  it               indicate that the life of a passenger  travel-               ling  by  plane becomes more  precious  merely               because he has chosen a particular  conveyance               and  the  value of his  life  is  considerably               reduced  if he happens to choose a  conveyance               of  a lesser value like a motor vehicle?  Such               an invidious distinction is absolutely  shock-               ing  to any judicial or social conscience  and               yet  s.  95(2)(d) of the  Motor  Vehicles  Act               seems to suggest such a distinction. We               1159               hope  and trust that our law-makers will  give               serious attention to this aspect of the matter               and remove this serious lacuna in s.  95(2)(d)               of the Motor Vehicles Act."     These  observations  were quoted with approval  by  this Court  in the course of its judgment in Motor Owners  Insur- ance  Co. Ltd. v. Jadavji Keshavji Modi & Ors., (supra)  and while  doing so the Court observed that the  above  observa- tions  were still languishing in the cold. storage of  pious wishes.  Immediately after the decision in the Motor  Owners Insurance  Co. Ltd. v. Jadavji Keshavji Modi & Ors.  (supra) Parliament took steps to amend sub-clause (ii) of clause (b) of  section  95(2) of the Act by Act 47 of 1982.  After  the said amendment subclause (ii) of clause (b) of section 95(2) of the Act reads thus:               "95(2)(b).  Where the vehicle is a vehicle  in

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             which  passengers  are  carried  for  hire  or               reward  of 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. ........................................................"     As  the  law stands today the insurer is liable  to  pay upto  Rs.15,000 in respect of death of any passenger or  any injury  caused to him. In the Statement of Objects and  Rea- sons attached to the Bill which ultimately became Act 47  of 1982 it was stated that the limit with respect to an  insur- er’s  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  demon- strates  that Parliament never intended that  the  aggregate liability  of the insurer mentioned in subclauses  (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  the 11th  of  May,  1987 for the purpose  of  consolidating  and amending  the  law  in regard to the motor  vehicles  it  is proposed by 1160 section  147 to retain the provision regarding the limit  of the  insurer’s  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  vehicles 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 insurer’s  liability keeping in view the need for  providing for adequate compensation as a measure of social security.     We  should  at this stage state that the High  Court  of

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Madras  in K.R. Sivagami, Proprietor, Rajendran  Tourist  v. Mahaboob  Nisa Bi and Others, [1981] ACJ 339 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  con- tained   in  sub-clauses  (1),  (2)  and  (3)   of   section 95(2)(b)(ii) which provided that 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  that subject  to  the  limits aforesaid Rs.10,000 for each individual passenger where  the vehicle was a motor cab and Rs.5,000 1161 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: The  United Fire  and  General  Insurance Co. Ltd. and  others  v.  V.P. Balakrishnan and others., [1982] ACJ 460.     The  High Court of Allahabad in New India Assurance  Co. Ltd.  v. Mahmood Ahmad and others, [1984] ACJ 390  the  High Court  of  Bombay in Shivahari Rama Tiloji  and  another  v. Kashi Vishnu Agarwadekar and others, [1985] ACJ 494 and  the High Court of Patna in National Insurance Co. Ltd. v. Shanim Ahmad  and  others, [1985] ACJ 749 and in Tara Pada  Roy  v. Dwijendra  Nath  Sen and others, [1986] ACJ 299  have  over- looked 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 and another v. Phoola  Rani  and  others, [1984]  ACJ 5 18 and in Raghib Nasim and another  v.  Naseem Ahmed and others, [1986] ACJ 405 two Division Benches of the Allahabad  High Court have construed the provision in  ques- tion  as  we  have done in this case. The  decision  of  the Single Judge of the Allahabad High Court in New India Assur- ance  Co. Ltd. v. Mahmood Ahmad and others, (supra) is  dis- sented  from in the later decision of the Division Bench  of the  Allahabad  High Court in Raghib Nasim  and  another  v. Naseem Ahmad and others, (supra).     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 upto Rs.5,000 for  each individual passenger in any other case. The  judg- ment 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. This petition  is,  there- fore, dismissed.     In  the end we propose to make a few suggestions to  the Central  Government  in  respect of  certain  provisions  in Chapters X, XI and XII of the Motor Vehicles Bill No. 56  of 1987  now  pending  before Parliament which  relate  to  the liability without fault in certain cases, insurance of motor vehicles  against  third party risks and  Claims  Tribunals. Sections  140, 147, 161 and 166 in the Motor  Vehicles  Bill No. 56 of 1987 correspond to sections 92A, 95, 109A and 110A of  the present Act. The Bill does not propose to  introduce any change in sections 1162 140,  147,  161  and 166 of the Bill from what  the  law  is

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today.  They are almost identical with the  existing  provi- sions.  In  section  140 of the Bill  which  corresponds  to section 92A of the Act the liability to pay compensation  in the case of death of any person or in the case of  permanent disablement of any person is proposed to be retained at  Rs. 15,000  and Rs.7,500 respectively in the same way  in  which the  law  stands today. Having regard  to  the  inflationary pressures and the consequent loss of purchasing power of the rupee we feel that the amount of Rs.15,000 and the amount of Rs.7,500  in  the  above provisions appear  to  have  become unrealistic.  We,  therefore,  suggest that  the  limits  of compensation in respect of death and in respect of permanent disablement, payable in the event of there being no proof of fault,  should  be  raised adequately to  meet  the  current situation. Section 147 in the Bill corresponds to section 95 of  the present Act, Here again the Government may  consider whether it is necessary to continue the distinction  between public  service vehicles and other motor vehicles in  regard to the liability of the insurer to pay compensation. We also do not find any justification for continuing the distinction between the liability of the insurer to pay compensation  to passengers and the liability of the insurer to pay compensa- tion to other third parties under the said provisions.  Even among  the public service vehicles a distinction is made  in the said provisions between vehicles used as goods carriages and  vehicles used for the purpose of  carrying  passengers. The  Central Government may consider whether the  limits  of liability of the insurer now incorporated in section 147  of the Bill should not be altered suitably. Section 161 in  the Bill  corresponds to section 109A of the present  Act  which makes special provisions as to compensation payable in cases of hit and run motor accidents. This provision provides  for payment  of Rs.5,000 in respect of death of any  person  re- sulting  from a hit and run motor accident and for the  pay- ment  of Rs.1,000 in respect of grievous injury to a  person from a hit and run motor accident. It is a matter of  common knowledge that hit and run motor accidents are increasing in number. The society and the State which are responsible  for such large number of motor vehicles being put on road should carry also the responsibility of protecting the interests of the  innocent victims of hit and run motor accidents. A  sum of  Rs.5,000 and a sum of Rs.1,000 provided as  compensation in respect of death or grievous hurt respectively appear  to be  highly inadequate. The Government may  consider  whether these  figures  should not be increased  in  an  appropriate manner.  Lastly  we come to section 166 of  the  Bill  which corresponds  to section 110A of the present Act.  This  con- tains  the provisions relating to application for  compensa- tion  to  be  filed before Claims Tribunals.  It  is  stated therein  that where death has resulted from the accident  an application for compensation may be 1163 made  by  all  or any of the legal  representatives  of  the deceased. The expression ’legal representative’ has not been defined  in the Act and it has led to serious doubts in  the course of judicial proceedings. Attention of the  Government is drawn to the decision of this Court in Gujarat State Road Transport  Corporation, Ahmedabad v.  Ramanbhai  Prabhatbhai and Another, [1987] 3 SCC 234 and the reference made in  the said decision to the Report of the English Royal  Commission on Civil Liberty and Compensation for Personal Injury  under the Chairmanship of Lord Pearson. The Government may consid- er  whether it would not be advisable to define the  expres- sion  ’legal representative’ for purposes of  making  claims before Claims Tribunal where death had resulted from a motor

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vehicle  accident in the same way in which the  English  Law has been amended. Since the Bill is on the anvil of  Parlia- ment  we  feel  that this is the appropriate  time  for  the Central Government to reconsider the above issues. A copy of this Order may be sent to the Secretary to the Government of India, Ministry of Transport, for information. N.P.V.                                              Petition dismissed. 1164