(1.) THIS reference to the Full Bench arises out of a proceeding before the Motor accidents Claims tribunal, Madras, for compensation in respect of an accident involving the death of one Krishnaswami. It is the case of the claimants for compensation, that when the said Krishnaswami was driving his car along Mount road, the lorry belonging to the second respondent, driven in a rash and negligent manner by her driver Munuswami, dashed against his car, as a result of which krishnaswami died. While the Claims Tribunal dismissed the application for compensation, the Division Bench (Kailasam and Venkataraman, JJ.) have taken the view that a compensation of Rs. 40,000 would be payable to the claimants. On behalf of the Insurance company with whom the lorry had been insured, it was contended before the learned Judges that under Section 95 (2) (a) of the Motor vehicles Act, Act IV of 1939 the liability of the Insurance Company must be limited to a sum of Rs. 20,000, the vehicle involved being a goods vehicle. The learned judges are inclined to accept this contention and have referred the matter to the full Bench, in view of the Division Bench decision of this court in Gopalakrishna v. Sankaranarayana, where the learned Judges (Srinivasan and sadasivam, JJ.) have held that the liability of an Insurance Company in respect of injury to a third party is not subject to the limit of Rs. 20,000 under s. , 95 (2) (a) of the Act. Examining the relevant provisions of the Motor Vehicles Act at length and setting out reasons for their view contrary to that taken in the following question has been referred to the Full Bench-"where an Insurance Company insures the owner of a goods vehicle under S. 95 of the Motor Vehicles Act, 1939 against the liability which the owner may incur in respect of the death of a person (third party)caused by the use of the vehicle in a public place, the policy being simply one conforming to the requirements of the Act (and not beyond them) is the liability of the insurance company limited to Rs. 20,000 (Rs. twenty thousand) under section 95 (2) (a) of the Act?" during the hearing of the matter before us, a doubt was raised whether the insurance policy in question in the case, is what is commonly termed as "act policy" that is, a policy conforming to the minimum requirements of the comprehensive policy which inter alia does not limit the extent of the liability covered. The insurance policy itself has not been exhibited in the case, and, as the question referred proceeds on the assumption that the policy in question is one limited to he terms of the Act, we examine the matter on that basis. There can be no doubt that it is perfectly open to the owner of a vehicle to take out an insurance policy which goes beyond the terms of the Act and covers more risk than what is required to be covered by the Act. The provisions for compulsory insurance against third party risks from the user of the motor vehicle in a public place are placed under Ch. VII of the Motor Vehicles Act, 1939. By these provisions by compelling owners, users or drivers of motor vehicles to protect themselves against financial risks arising out of accidents which they may incur, the ability of third parties to get damages is not made wholly dependent on the financial condition of the owner, user or driver of the vehicle. Section 94 emphasises the necessity for insurance against third party risk by prohibiting in mandatory terms the use of a motor vehicle by any person in a public place, unless there is in force in relation to the use of the vehicle by that person or other person as the case may be a policy of insurance complying with the requirements of Ch. VIII. There are certain exceptions in Section 94; but a reference to them is unnecessary in the context of the question now under consideration. Section 125 which provides penalties for contravention of the provisions of Section 94, states that whoever drives a motor vehicle or causes or allows a motor vehicle to be driven in contravention of the provisions of Section 94 shall be punishable with imprisonment which may extend to three months, or with fine which may extend to one thousand rupees, or with both. In interpreting the provisions of the Chapter, we have to bear in mind both the apparent object of the enactment and the penal consequence following the failure to make out an insurance policy in terms of the Chapter.
(2.) S. 95, sub-secs. (1) and (2) lay down the requirements to be complied with by an insurance policy taken in accordance with Chapter VIII for the use of a particular vehicle. The policy has to be issued by an authorised insurer and it must specify the person of classes of persons who are insured against liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place in India or in a reciprocating territory. The policy must insure to the extent of the liability specified in sub-section (2 ). Sub-section (4) of Section 95 requires the issue by the Insurance Company of a certificate of insurance in the prescribed form in favour of the person for whom the policy is effected. Sub-section (5) of Section 95 makes the insurer liable to indemnify the person or classes of person specified in the policy in respect of any liability which the policy purports to cover, notwithstanding anything elsewhere contained in any law. Section 96 makes it the duty of the insurer to satisfy judgments against persons insured in respect of third party risks as if he were the judgment-debtor. The provision as to insuring a person or classes or persons found in Section 95 means that the insurance policy gives to the person or classes of persons insured the right to enforce against the insurer the undertaking which the policy gives in respect of the liability incurred by the assured. Sub-section (2) of Section 95 is the section that really calls for interpretation now. For taking it up as it is necessary we shall set out the relevant parts of Section 95 having a bearing on the question:-
"section 95 (1 ). In order to comply with the requirements of this chapter, a policy of insurance must be a policy which- (a) is issued by a person who is an authorised insurer. . . . . (b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) against any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place in India or in reciprocating territory; Provided that a policy shall not be required- (i) to cover liability in respect of the death arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the workmen's Compensation Act, 1923, in respect of the death of, or bodily injury to, any such employee (a) engaged in driving the vehicle, or (b) if it is a public service vehicle, engaged as conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods vehicles, being carried in the vehicle, or (ii) except 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, to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises, or (iii) to cover any contractual liability. (2) Subject to the proviso to sub-section (1) a policy for insurance shall cover any liability incurred in respect of any one accident upto the following limits namely- (a) Where the vehicle is a goods vehicle a limit of twenty thousand rupees in all, including the liabilities, if any, arising under the Workmen's compensation Act, 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 jayalakshmi and Ors. vs. The Ruby General Insurance Co. , Madras and Anr. (03. 02. 1970. . . Page 6 of 13 yalakshmi and Ors. vs. The Ruby General Insurance Co. , Madras and Anr. (03. 02. 1970. . . Page 6 of 13 passengers are 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 twenty thousand rupees; and in respect of passengers, a limit of twenty thousand rupees in all, and four thousand rupees in respect of an individual passenger, if the vehicle is registered to carry not more than six passengers excluding the driver or two thousand rupees in respect of an individual passenger, if the vehicle is registered to carry more than six passengers excluding the driver. (c) Where the vehicle is a vehicle of any other class the amount of the liability incurred; (4 ). . . . . (4-A ). . . . . (5 ). . . . . "
(3.) THE meaning of the several expressions found in the section. "goods vehicle", "public service vehicle" and "passengers carried for hire or reward" may be gathered from the definitions in Section 2 and other provisions of he Act. "goods vehicle" is defined to mean any motor vehicle constructed or adapted for use for the carriage of goods, or any motor vehicle not so constructed or adapted, when used for the carriage of goods, solely or in addition to passenger. The body of subsection (2) of Section 95, clauses (a), (b) and (c) limits the liability incurred in respect of any one accident with reference to the vehicle insured. When it is a goods vehicle, the policy of insurance need cover, for compliance with chapter viii, a liability to a limit of Rs. 20,000 in all, including a liability, if any arising under the Workmen's Compensation Act, 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. In the case of vehicles carrying passengers for hire or reward or by reason of or in pursuance of a contract of employment under subsection (2), clause (b), there is an over-all limit of Rs. 20,000 in the case of persons other than passengers who are being carried for hire or reward and Rs. 20,000 in the case of passengers. Here, if the vehicle is registered for carrying passengers not more than six, the maximum liability in respect of an individual passenger is Rs. 4000 and in any other case Rs. 2000. Clause (c) of Section 2 provides that where the vehicle is a vehicle of any other class, the amount payable as compensation will be the amount of liability incurred. The learned Advocate-General appearing for the claimants lays emphasis on the words "subject to the proviso to sub-sec (1)" at the beginning of S. 95 (2) and submits that the limits of liability specified in sub section (2) can in the context be only with reference to the classes of persons excepted from the proviso the Section 95 (1 ).;