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PETITIONER: M/S. ROAD TRANSPORT COMPANY

       Vs.

RESPONDENT: BHAN SINGH AND ANOTHER

DATE OF JUDGMENT:       22/07/1998

BENCH: G.T. NANAVATI, SYED SHAH MOHAMMED QUADRI

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T NANAVATI, J.      Leave granted.      All these  appeals arise  out of  the judgment  of  the Patna High  Court in  Civil Review Applications Nos. 4 to 10 of 1997  filed by  the appellant.  The appellant  wanted the High Court  to review  its judgment  passed in  the  appeals filed by  it against the common judgment and separate awards given  by   the  Additional   Claims   Tribunal   Hazaribagh (hereinafter referred  to as  the  Tribunal)  in  the  motor accident claims cases filed by the claimants-respondents.      On 12.10.73,  a passenger bus of the appellant met with an accident  because of  rash and  negligent driving  by its driver. 35  passengers travelling  in that  bus died. In all nine claim  cases were  filed before the Tribunal. Two cases were dismissed and in the remaining seven cases the Tribunal awarded different  sums of  moacy by way of compensation and ordered that in each case out of the total amount payable to the claimants  Rs.5,000/- shall  be paid  by  the  insurance company and the rest shall be paid by the appellant.      The  appellant  feeling  aggrieved  by  the  amount  of compensation and  the finding that the insurance company was liable to  pay only Rs.5,000/- per passenger and Rs.75,000/- in  all   preferred  appeals   before  the  High  Court  Two contentions were  raised  before  the  High  Court.  It  was contended that  the insurance  policy  was  a  comprehensive policy and,  therefore, the  insurance company  was  legally liable to  pay the whole amount of compensation and limiting its liability to Rs.5,000/- per passenger and Rs.75,000/- in all was contrary to the Motor Vehicles Act. 1939. The second contention  was  that  the  appellant  had  paid  additional premium of  Rs.300/- and,  therefore, limiting  liability of the  insurance   company  to  Rs.75,000/-  in  all  was  not justified. The  High Court  rejected both these contentions. Relying  upon   the  decision  of  this  Court  in  National Insurance Co.  Ltd. vs.  Jugal Kishore  (1988) 1 SCC 626 the High Court  held that even where the owner of a vehicle gets it comprehensively insured such insurance entitles the owner to claim  reimbursement of  the entire  amount  of  loss  or damage suffered  up to  the estimated  value of  the vehicle

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calculated according  to the rules and regulations framed in that behalf.  Comprehensive insurance  of  the  vehicle  and payment of  higher premium  on this  score, however,  do not mean that  the limit  of the  liability with regard to third party risk  or risk of any other nature becomes unlimited or higher than  the statutory liability fixed under sub-section (2) of  Section 95  of  the  Act.  It  also  held  that  the additional  premium  of  Rs.300/-  was  paid  as  it  was  a passenger bus  having capacity of carrying 50 passengers. It held  that   there  was  no  special  contract  between  the appellant-company  and   the  insurance   company  to  cover unlimited liability in respect of the passengers. In support of this  view it also relied upon the decision of this Court in New  Indian Assurance  company  Limited  vs.  Shanti  Bai (1995) 2  SCC 539. Taking this view the High Court dismissed all the appeals.      The appellant  thereafter filed review petitions before the  High Court  on the ground that the insurance policy was misread or  misinterpreted by the High Court as it failed to appreciate that  extra premium of Rs.300/- was paid over and above the  basic premium  of Rs.615/-  which covered the Act liability. The High Court did not agree with this contention raised by the appellant and dismissed the review petitions.      Only point  raised in these appeals is whether the High Court was right in holding that, under the insurance policy, the insurance  company was  liable to  indemnify the insured only  to   the  extent   of  Rs.5,000/-  per  passenger  and Rs.75,000/- in  all. It was submitted by the learned counsel that the  appellant had  paid additional premium of Rs.300/- and, therefore,  the extent  of liability  of the  insurance company was unlimited and should not have been restricted to Rs.5,000/- in  respect of  any one person and Rs.75,000/- in all. The  learned counsel for the insurance company disputed that any  additional premium  was paid  with a view to cover higher than  the ’Act  liability’. It  was contented  on its behalf that  the insurance  policy  was  comprehensive  with respect to  the  vehicle  only  and  additional  payment  of Rs.300/- was really made because the vehicle was a passenger bus having  registered capacity  to carry 50 passengers. The said additional  premium of Rs.300/- was not for the purpose of covering  unlimited or  higher liability  in  respect  of death of or bodily injury to any passenger.      As the  vehicle involved  in this  case was a passenger bus in  which passengers were carried for hire or reward the provisions  contained  in  Section  95(1)(b)(ii)  read  with Section 95(2)(b)(ii) became applicable. At the relevant time Section 95(2) was as under      "95(2) Subject  to the  proviso to  sub-section (i),  a policy of  insurance shall  cover any  liability incurred in respect of  any one  accident up  to the  following  limits, namely-      (a)....   .....   ....  ....      (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  fifty      passengers;      (2)   a   limit   of   seventy-five

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    thousand rupees  in all  where  the      vehicle is registered to carry more      than thirty but nor more than sixty      passengers;      (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 passenger where the      vehicle is  a motor  car, and  five      thousand rupees for each individual      passenger in any other case."      The renewed  policy for  the relevant  period was filed before the  Tribunal  by  the  appellant  and  also  by  the insurance company.  The relevant part of that policy read as under:      "In consideration of the payment of the Renewal Premium amount of  Rs.721.20. (Rupees  Seven hundred  twenty one and paise  twenty  only.)  as  per  details  below,  the  within mentioned policy  is hereby  renewed for a further period of 12 months  from 4.10.1973 to 3.10.1974 subject to the terms, conditions   warranties   as   per   Original   Policy   and endorsements thereon.                            SCHEDULE                     PARTICULRS OF MOTOR VEHICLE ------------------------------------------------------------ Regist- Make Type Cubic Year licen- Carry- Capa- insured’s ration    of body Capacity of Goods in Passenger  estimate Mark &                     Make Tons   excluding  of value Number                                 Driver     Including                                                   accesso-                                                   riesthere-                                                   on                                                   Rupees ------------------------------------------------------------ EBRW-8040 T.HV Bus    ..     1970         50      Rs.40,000 COMPREHENSIVE RISK  S. & RISK, FIFTY PASSENGERS’ RISK & L.L. TO PAID  DRIVER, CLEANER  & CONDUCTOR  UNDER W.C.  ACT  ONLY COVERED. ------------------------------------------------------------                                      STAGE CARRIAGE Premium : basic                         Rs.626.00 Less 10% N.V.R.                         Rs. 11.10                                         Rs.614.90 S. & R. risk                            Rs.100.00 50 passengers’ risk                     Rs.300.00 L.L. to drvr. clnr. condtr.             Rs. 15.00                                         Rs.1029.29 Less 30% N.C.B                          Rs. 308.70                                         Rs. 721.20. Dhanbad 8th Oct. 1973                            sd/-                                     BRANCH MANAGER"      Endorsement No.13  which also  formed  a  part  of  the policy was as under:      "Endorsement No.l3  attaching to  and forming  part  of Policy No. N DHV-27465      Legal Liability  to passengers  excluding liability  to Accidents for employees of the Insured arising out of and in the course of their employment.      In consideration  of an  additional premium of Rs.300/- and notwithstanding  anything to  the country  contained  in section. II I@ but subject otherwise to the terms exceptions

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conditions and  limitations of  this Policy the company will indemnify  the   insured  against   liability  at   law  for compensation (including  law cost 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 caused  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 in 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 appellant’s 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)(b)(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.      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   Workmen’s 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.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&K 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 rusk 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

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Rs.626/- though paid for comprehensive risk was not intended to cover  all the  stautroy liabilities  but it  was  really intended to  cover the entire loss or damage to the vehicle. As observed  by this  Court in  Jugal Kishore’s  case  "even though it  is 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  insure.   In  case,   however,  it  is  not comprehensively insured  a higher  premium than  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 up to the estimated  value of  the vehicle calculated according to the rules and regulations a framed in this behalf."      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 identify  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.      As we  do not  find any  substance in  any of  the  two contentions raised  on behalf of the appellant these appeals are  dismissed.   However,  in   view  of   the  facts   and circumstances of  the case  there shall  be no  order as  to costs.