PANWAR, J. - (1.) THIS appeal is directed against the judgment and award dated 23. 02. 1996 passed by the learned Motor Accident Claims Tribunal, Sojat (camp Jaitaran) (in short, referred to hereinafter as `the Tribunal') in Case No. 318/92 (old case No. 69/87) whereby the Tribunal has awarded compensation of Rs. 1,15,000/- in favour of the claimant- respondents and against the appellant insurance company as well as respondents Bhera Ram and Shambhu Singh, driver and owner of the offending vehicle respectively. The Tribunal ordered the liability to pay compensation to be joint and several. Briefly stated, facts to the extent they are relevant and necessary for the decision of this appeal are that on 7. 1. 1987 an accident occurred at about 8. 30 P. M. at Bassi in which one passenger Janwata Ram trevelling in Bus No. RJQ 9424 was to alight at Bassi and, therefore, the bus driver Bhera Ram slowed down the speed of the bus at Bassi. However, before Janwata Ram could actually alight at the bus-stand the driver of the bus accelerated the speed and as a result thereof janwata Ram fell down and was crushed under the rear wheel of the bus. He sustained severe injuries and was taken to hospital where he succumbed to the injuries. His legal representatives brought up the claim case which was decided by the Tribunal as noted above. Admittedly, the offending vehicle (bus No. RJQ 9424) was insured with the appellant insurer at the relevant time. The appellant insurance company has preferred this appeal on the sole ground that its liability is limited to Rs. 15,000/- per passenger which is clear from the premium paid by the owner of the insured vehicle.
(2.) AS against the submission of the appellant insurance company, learned counsel for the respondents has contended that the claimant-respondents are entitled to receive the entire compensation from the insurance company once it is established that the offending vehicle was insured under a valid certificate at the relevant time with the insurer. He argued that the insurer's right to recover the excess amount from the insured would not detract form the claimants' right to receive the entire amount of compensation form the company. As noticed above, the sole question rivets around the controversy whether the appellant is liable beyond the limit for which premium was charged per passenger under Sec. 95 (2) (b) (ii) of the Motor Vehicles Act, 1939. It is not disputed that premium as to third party risk coverage was charged at the rate of Rs. 12/- per passenger. Ex. A/1 the schedule to the policy was exhibited and proved. The vehicle involved in the accident was carrying passengers for hire and, therefore, the liability of the appellant has to be fixed in terms of the premium charged per passenger in view of the express provisions of Sec. 95 (2) (b) (ii) of the Act of 1939. It has been contended by the learned counsel for the claimant-respondents that even if the liability of the appellant Insurance Company is limited to the extent provided under the provisions of Sec. 95 (2) (b) (ii) of the Act of 1939 the claimants are nonetheless entitled to receive the entire amount of compensation from the insurance company. In support of his contention, the learned counsel has drawn my attention to the clause `avoidance of Certain Terms and Right of Recovery' contained in the policy. The said clause reads as under:- " Nothing in this Policy or any Endorsement hereon shall affect the right of any person indemnified by this Policy or any other person to recover an amount under or by virtue of the provisions of the Motor Vehicle Act, 1939, Section 96. But the insured shall repay to the company all sums paid by the Company which the Company would not have been liable to pay but for the said provisions. " When specific premium is charged and paid limiting the liability to indemnify the passenger risk then the insurer cannot be asked to undertake the entire liability. I am fortified in this view by the decision of the Hon'ble Supreme Court in New India Assurance Company Ltd. vs. Shanti Bai & Others (1 ). Indeed, the question was referred to the Constitution Bench of the Hon'ble Supreme Court in New India Assurance Co. Ltd. vs. C. M. Jaya & Others (2), wherein the view expressed by the three-Judges Bench in New India Assurance Company Ltd. vs. ,. Shanti Bai & Others (supra) was held t be correct and the reference was answered accordingly. It held that in case of insurance company not taking any higher liability by accepting a higher premium for payment of compensation to a third party, the insurer would be liable to the extent limited under Section 95 (2) of the Act and would not be liable to pay the entire amount. However, the insurance policy is governed by various terms and conditions which are, of course, effective only between he insured and the insurer in which third parties' right to being indemnified need be protected and, therefore, dealing with similar situation the Hon'ble Supreme Court in New Asiatic Insurance Company Ltd. vs. Pessumal Dhanmal Aswani (3), expressly held that such conditions have to be ignored when considering the liability of the company to the third parties. The `avoidance Clause' to the policy and the conspicuous `important Notice' endorsed on the schedule appended to the policy clearly mention that nothing in the policy or any endorsement thereon shall affect the right or any person indemnified by the policy or any other person to recover an amount under or by virtue of the provisions of the Act. It also provides that the insured will reply to the company all sums paid by it which the company would not have been liable to pay but for the provisions of the Act. The `important Notice' mentions that any payment made by the company by reason of wider terms appearing in the certificate in order to comply with the Act is recoverable from the insured and refers to the avoidance clause. In Oriental Insurance Co. Ltd. vs. Cheruvakkara Nafeessu & Others (4), a similar question came up for consideration before the Hon'ble Supreme Court. In that case, the limit of liability of the Insurance Company in respect of any one accident or series of claims arising out of the event was s. 50,000/- only but the clause of the policy provides "nothing in this policy or the endorsement hereon shall affect the right of any person indemnified by this policy or any other person to recover an amount under or by virtue of the provisions of the Motor Vehicles Act, 1939, Section 96. "
(3.) IN that case, the Hon'ble Supreme Court held that the liability under the policy was limited to the extent of Rs. 50,000/ -. However, it was further held that the Claims Tribunal and the High Court were not unjustified in directing the appellant Company to pay whole of the awarded amount to the claimants on the basis of contractual obligation contained in clauses related to the liability of third party and avoidance clause. It was also held that the appellant Company is liable to pay the entire amount awarded and upon making such payment, the INsurance Company can recover the excess amount from the insured. Thus it may be that the liability of the insurer company may be limited to an extent but for that reason that right to be indemnified by the insurance company to the extent of the entire liability where third party risk coverage is in force will not be affected and the insurance company shall be entitled only to recover such excess amount as it has paid beyond the limit of its liability from the insured. In the instant case, it is undisputed that premium as to passenger risk indemnity was charged and paid at the rate of Rs. 12/- per passenger which is for liability of the company to the extent of rs. 15,000/ -. In view of the above discussion, this appeal is allowed. The judgment and award impugned is modified in that the liability of the appellant insurance company is held to be limited to the extent of Rs. 15,000/- and interest thereon. The appellant insurance company is, however, directed to pay the entire amount of compensation alongwith interest to the respondent-claimants within a period of three months from today but shall be entitled to recover the excess amount from the owner of the insured vehicle paid beyond its liability. There shall, however, be no order as to costs. . ;