- (1.) VIDE judgment dated 16.4.2004, the Hon'ble Division Bench had remanded these appeals back to the Single Bench to decide a particular legal issue. Since these appeals raise the same legal issue, they are being decided by this common judgment.
(2.) THE legal issue which arises for consideration, what is the extent of liability of the Insurance Company, vis a vis, a concerned party, when the accident had occurred prior to come into force of the Motor Vehicle Act, 1988 ('the Act of 1988', for short). THE said issue was framed by the learned Tribunal as issue No.3. However, while deciding the said issue, the learned Tribunal was of the opinion that the extent of liability of the Insurance Company is an unlimited one. It is this aspect which has been challenged by the Insurance Company in the appeals filed by them. However, the learned Single Judge, vide judgment dated 26.04.1997, had dismissed the appeals. THErefore, the Insurance Company had filed special appeals before the learned Division Bench. As mentioned above vide judgment dated 16.04.2004, the learned Division Bench has not only remanded the case back, but has also directed the Single Bench to decide the legal issue mentioned above. Hence, these appeals before this Court. Vide order dated 11.11.2010, this Court had directed the Registry to show the name of Ms. Gyatri Rathore as the learned counsel for the respondents in the cause list. On 07.12.2010, despite the fact that her name was shown in the cause list, the learned counsel for the respondents did not appear before the Court. Therefore, this Court was pleased to adjourn the case for two weeks. However, this Court made it clear that in case the learned counsel for the respondent does not appear on the next date, this Court shall have no option, but to decide the case on merit. Even today nobody has appeared on behalf of the respondents. Therefore, in light of the order dated 7.12.2010, this Court has no other option, but to proceed ex-parte against the respondents. Mr. Virendra Agarwal, the learned counsel for the appellants, has contended that the issue with regard to the liability of the Insurance Company is well settled. For, according to the decision of the Hon'ble Supreme Court in the case of Padma Sriniwasan Vs. Premier Insurance Company [1982 ACJ 191], the material date is the date of the accrual of the cause of auction when the liability arises i.e. the date of the accident. Therefore, the Court has to see what was the extent of liability of the Insurance Company on the date of the accident. According to the learned counsel, the accident had occurred on 21.5.1989, whereas the Act of 1988 did not come into force till 1.7.1989 i.e. it came into force two months after the date of the accident. Hence, the liability of the Insurance Company would be governed by the law which was in force on the date of the accident, namely the Motor Vehicle Act, 1939 ('the Act of 1939', for short). Secondly, according to Section 95(2)(a) of the Act of 1939, the liability is limited only to Rs.1,50,000/-. Therefore, according to the learned counsel, the learned Tribunal was unjustified in claiming that the liability was an unlimited one. In order to buttress this contention that the liability is limited one, the learned counsel has relied upon the case of New India Assurance Co. Ltd. Vs. C.M. Jaya & Ors. [2002 (2) SCC 278]. Thirdly, according to the insurance policy (Ex-A/1), the column provided for increasing the limit with regard to third party was left blank. Thereby meaning that no additional premium was paid to the insurer for enlarging the risk for third party. Thus, the document also proves the fact that the liability is a limited one. However, this document has also been ignored by the learned Tribunal. Heard the learned counsel for the appellants. A bare perusal of the impugned award clearly reveals that in light of Section 147 of the Act of 1988, the learned Tribunal had held that the extent of liability of the Insurance Company has to be an unlimited one. However, the learned Tribunal has failed to consider the fact that the liability of an Insurance Company has to be determined with regard to the date of the accident. Admittedly, on the date of the accident, the Act 1988 had not come into force. In fact, on the date of the accident, the Act of 1939 was in force. Therefore, the extent of the liability of the Insurance Company would have to be decided, necessarily, on the basis of the Act of 1939. Therefore, the reliance placed on Section 147 of the Act of 1988 by the Tribunal is highly misplaced. The Tribunal was required to consider the law as it existed on the date of the accident. According to Section 95(2) of the Act of 1939, the liability of the Insurance Company is limited to the extent of Rs.1,50,000/-. Therefore, the learned Tribunal could not have legally concluded that the liability of the Insurance Company is an unlimited one. In the case of C.M. Jaya & Ors. (Supra), the Constitution Bench of the Hon'ble Supreme Court has clearly held that unless the Insurance Company takes a higher premium for increasing its liability, the liability of the Insurance Company would be limited as laid down under Section 95(2) of the Act of 1939. Merely because a comprehensive policy has been taken would not make the liability of the Insurance Company an unlimited one. In the present case, the insurance policy clearly reveals that no extra premium was charged by the Insurance Company. Thus, in light of the principle settled in the case of C.M. Jaya & Ors. (Supra), obviously the liability of the Insurance Company would be a limited one. Thus, this Court has no hesitation in holding that the Insurance Company is liable to pay the compensation only to the tune of Rs.1,50,000/-. However, while remanding these appeals back to the Single Bench, vide Judgment dated 16.4.2004, the learned Division Bench had made it emphatically clear that in case this Court were to come to the conclusion that the liability of the Insurance company is a limited one, even then the extra amount paid by the Insurance Company to the claimants cannot be realised from them. According to the learned Division Bench the Insurance Company would be entitled to recover the extra amount from the owner of the offending vehicle.
(3.) THEREFORE, the Insurance Company is entitled to recover the amount of 38000/- (Rs.1,88,000-Rs.1,50,000) in the case No.173/1997, the amount of 63000/- (Rs.2,13,000-Rs.1,50,000) in the case No.171/1997, the amount of Rs.2,81,000/- (Rs.4,31,000-Rs.1,50,000) in the case No.174/1997 along with an interest @ 6% per annum from the owners of the offending vehicle. With these observations, these appeals are, hereby, allowed.;