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 IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos.4743-4744 OF 2001   

NEW INDIA ASSURANCE COMPANY LTD.                         Appellant (s)

                       VERSUS

RAMILA & ORS.                                            Respondent(s)

      O R D E R

These appeals are directed against the order passed by the Division Bench of the

Madhya Pradesh High Court whereby the learned  Division Bench of the High Court vide

order dated 4/1/2000 dismissed the appeals filed by the Insurance Company and allowed the

cross objections filed by the claimants and awarded full compensation to the claimants.

Necessary facts for the disposal of these appeals are that on 15th July, 1989 Vimal

Kumar was going on his scooter with Rameshchand as pillion rider.   When they reached

near village Tikdijogi, non-applicant/respondent came from opposite direction driving  bus

No.  M.B.N.-1188  belonging  to  non-applicant   No.2  

Kanhaiyalal and insured with appellant New India Assurance Co. in a rash and negligent

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manner dashed against scooter, as a result of which Vimal Kumar and Rameshchand died.

The LRs of Rameshchand claimed compensation of Rs.15,02,180/-, while LRS of deceased

Vimal Kumar sought compensation to the extent of Rs.7,61,000/- in claim case Nos. 83/89

and  101/89  respectively.   The  appellant  and  non-applicants/respondents   filed  common

written statements and resisted the claim.  The plea taken was that Vimal Kumar had no

valid driving licence.  He was driving scooter in a rash and negligent manner which caused

the accident.   No plea of  the  limited  liability  was taken in  the  written  statement  by the

insurance company.  The tribunal after appreciation of evidence granted compensation of

Rs.1,50,000/- to the LRS of deceased Rameshchand and Rs.3,75,000/- to the LRS of Vimal

Kumar and directed the Insurance Company as well as the driver and owner to pay the same

jointly and severally.  

Aggrieved against the order, the Insurance Company filed the appeals against the

award before the High Court.  The claimants also filed cross-objections for enhancement of

compensation amount.  It was submitted before the High Court on behalf of the Insurance

Company that the liability of the insurance company under Section 95 of the Act is limited to

Rs.50,000/-  in one accident.   It was contended that the tribunal has wrongly granted the

amount  of  compensation  against  the  two  claims  and more  than the  permissible  limit  of

Rs.50,000/-.  The High Court considered the matter and after reviewing of the matter,  it

found that this plea was not taken in the written statement.  It was also held that the entire

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policy was not filed and only first page of the policy was filed which too was blurred.    The

High Court further held that limit of Rs.50,000/- prescribed for damage to property and not

for  injury  or  death,  which  is  covered  under  Section  II-1(i).    Non-mentioning   of   any

amount  in    Section II-1(ii),  in view of  the facts  of  this case,  gives  impression that the

liability  of  the  appellant  with  respect  to  death  or  bodily  injury  was  unlimited,  and,

accordingly,  the  High  Court  upheld  the  order  of  the  tribunal,  dismissed  the  appeal  of

Insurance Company.  Thereafter, the High Court considered the cross-objections,   the total

amount worked out by the High Court   of compensation to LRS of Vimal Kumar Mehta to

sum  of  Rs.5,40,000/-  and  Rs.3000/-  for  5  members  for  loss  of  love  and  affection  and

consortium,  Rs.2000/- for funeral expenses,  the compensation worked out to Rs.5,57,000/-.

So far as Rameshchand is concerned, the amount was increased to Rs.1,67,600/-.

Against this order the present appeals have been filed.

Learned  counsel  for  the  appellant  submitted  that  the  amount  in  question  has

already been paid to the claimants, therefore, no useful purpose would be served in going

into the merits of the case.  Learned counsel, however, submits that in view of the decision of

this Court in  Oriental Insurance Co. Ltd.           Vs.  Cheruvakkara Nafeessu and others

[2001 ACJ 1], the appellant may be permitted to recover the amount of compensation from

owner, this Court has held:

“In the  facts  and circumstances  of  this  case  we find that despite holding the liability under the policy limited to the extent of

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Rs.50,000/-  the  Claims  Tribunal  and  the  High  Court  were  not unjustified in directing the appellant company to pay the whole of the awarded  amount  to  the  claimants  on  the  basis  of  the  contractual obligations contained in clauses relating to the liability of the third parties and avoidance clause.  However, the Claims Tribunal and the High Court were not justified in rejecting the right of the appellant company  to  recover  from  the  insured  the  excess  amount  paid  in execution and discharge of the award of the Tribunal.    The appeal is accordingly allowed holding that the appellant company is liable to pay the entire award amount to the claimants.  Upon making such payment  the  appellant  can  recover  the  excess  amount  from  the insured by executing this award against the insured to the extent of such excess as per Section 174 of the Motor Vehicles Act, 1988.  No costs.“

   Therefore, we dispose of these appeals and give liberty to the appellants to recover

the excess  amount paid by the insurance company   by executing this award against the

owner to the extent of such excess amount as per Section 174 of the Motor Vehicles Act,

consequently, the appeals are disposed of with the above observations.  

There will be no orders as to costs.  

......................J.   (A.K. MATHUR)

......................J.   (AFTAB ALAM)

New Delhi; February 13, 2008.