SHARMA, J. - (1.) ALL these appeals raise common question of law as to whether Insurance Companies, the appellants herein, are liable only to the extent of statutory liability fixed under the Motor Vehicles Act, 1939 (for short the Act of 1939) or their liability is unlimited.
(2.) IT is contended by the learned counsel for the appellants that in the Schedule of premium under the Heading "liability to public risk", it was indicated to be Rs. 240/ -. The stand in essence, therefore, is that when any extra premium is not paid for any enhanced liability, the statutorily liability fixed for Rs. 50,000/- or Rs. 1,50,000/- was maximum that could have been awarded, and nothing beyond it. Reliance is placed on National Insurance Co. Ltd. vs. Keshav Bahadur & Ors. [jt 2004 (2) SC 282] = (RLW 2004 (1) SC 149), New India Assurance Co. Ltd. vs. C. M. Jaya & Ors. [2002 (2) SCC 278] = (RLW 2002 (2) SC 193), National Insurance Co. Ltd. vs. Nathilal & Ors. [1999 (1) SCC 552], New India Assurance Co. Ltd. vs. N. M. Annakutty & Ors. [1997 (2) ACJ 1121], United India Insurance Co. Ltd. vs. Daddi Suryakanthanam & Ors. , [1999 (1) TAC 763 (AP)] and Oriental Insurance Co. Ltd. vs. Sreenivasan, [1999 (2) TAC 113 (Ker.)]. Per contra, learned counsel for the respondents took us to the India Motor Tariffs, Schedule of Premiums applicable w. e. f. 1. 6. 1985, according to which the Covers available are as under:- " I. Own Damage Cover - Loss of damage by accidental external means or malicious acts, fire external explosion; lightning, self-ignition, burglary, housebreaking or theft, riot and strike, flood inundation and earthquake (fire and damage ). II. Liability to the public risks or third party cover - Indemnity to the insured against liability for claims by the public in respect of accidental personal injury or damage to property caused by or arising out of the use of the insured vehicle. I. III. "act Only" liability cover - Indemnity to the insured against legal liability as under the Motor Vehicles Act, 1939, for claims by the public in respect of accidental personal injury or damage to property caused by or arising out of the use of he insured vehicle. Subject to the General Exceptions of the policy. " Page 15 relates to the Goods Carrying Vehicles, which reads as under:- " Class "a- (2)" Goods Carrying Vehicles - General Carriage:- Licensed Carrying Capacity of the Vehicle Own Damage Liability to the Public Risks Act only Liability Not exceeding 1016 Kgs. (1 Ton) Rs. 340 + 1. 05% on I. E. V. Rs. 120 Rs. 100 Not exceeding 3048 Kgs. (3 Tons) Rs. 550 + 1. 10% on I. E. V. Rs. 240 Rs. 200 Not exceeding 5080 Kgs. (5 Tons) Rs. 850 + 1. 10% Rs. 240 Rs. 200 Exceeding 5080 Kgs. (5 Tons) Rs. 850 + Rs. 200 for each 1016 Kgs. (1 Ton or part thereof) + 1. 10% on I. E. V. Rs. 240 Rs. 20 N. B. : 1. Section 1 of all Comprehensive Policies must be subject to a compulsory excess of:- i) in respect of 3 Wheeled Vehicles with Licensed Carrying Capacity not exceeding 508 Kgs. Rs. 200/- ii) in respect of all other Vehicles Rs. 500/- 2. See Note to Endorsement No. 26 Special Exclusion (Commercial Vehicles Policies only) on Sheet 177 of the Tariff. 3. In respect of Vehicles fitted with Fibre Glass Tank, an additional rate of 2% on the I. E. V. Of the Fibre Glass Tank only should be charged. 4. Minimum values for the computation of premium in respect of vehicles will be as follows irrespective of any lower value proposed for insurance. Licensed Carrying Capacity Three Wheeled Vehicle with carrying capacity not exceeding 508 Kgs. (1/2 Ton) - Rs. 5,000/- Not exceeding 1016 Kgs. (3 Tons) - Rs. 15,000/- Not exceeding 3048 Kgs. (5 Tons) - Rs. 20,000/- Not exceeding 5080 Kgs. (5 Tons) - Rs. 30,000/- Exceeding 5080 Kgs. (5 Tons) - Rs. 40,000. /- 5. The following discounts may be allowed from the premium: (a) 0. 10% on I. E. V. If Earthquake etc. perils are excluded (b) 0. 15% on I. E. V. If Flood etc. perils are excluded (c) 0. 15% on I. E. V. If Riot, Strike etc. perils are excluded. " Page 17 relates to the Passenger Carrying Vehicles (Excluding Passenger Risks) which indicates thus:- " Class "b- (1)" Passenger Carrying Vehicles (Excluding Passenger Risks) (a) Buses/ (including Tourist Buses) (b) Hotel/school Omnibuses (c) Airline Buses. Subject to endorsement No. 26 and compulsory Excess of Rs. 500/- except in the case of Liability to the Public Risk. Maximum Passenger Capacity Licensed Carrying Own Damage Liability to the Public Risks Act only Liability Not exceeding 18 Seats Rs. 280 + 1. 10% on I. E. V. Rs. 240 Rs. 200 " 35 Seats Rs. 360 + 1. 10% on I. E. V. Rs. 240 Rs. 200 " 60 Seats Rs. 440 + 1. 10% on I. E. V. Rs. 240 Rs. 200 Exceeding 60 Seats Rs. 545 + 1. 80% on I. E. V. Rs. 240 Rs. 200 N. B. : 1. Minimum values for premium computation will be as follows irrespective of any lower values declared for Insurance. Maximum Licensed Passenger Carrying Capacity: Not exceeding 18 Seats - Rs. 15,000/- " 36 " - Rs. 25,000/- " 60 " - Rs. 40,000/- Exceeding 60 " - Rs. 50,000/- N. B. : The following discounts may be allowed : (a) 0. 10% on I. E. V. If Earthquake etc. perils are excluded (b) 0. 15% on I. E. V. If Flood etc. perils are excluded (c) 0. 15% on I. E. V. If Riot, Strike etc. perils are excluded. Class B (2) : Passenger Carrying Vehicle (Taxis) (a) Taxis or Private Car Type Vehicles for Hire or Reward, (b) Private Type Taxis let out on Private Hire direct by owner with or without meters and driven by the owner or an employee of the owner. (c) Private Car Type vehicles let out on Private Hire and driven by the Hirer or any driver with his permission (d) Private Car Type vehicles owned by Hotels and hired by them to their Guests. " Learned counsel for the respondents placed reliance on National Insurance Company Ltd. vs. Laxmi & Ors. (2005 ACJ 211) and canvassed that if insurance company has charged additional premium, its liability towards third party risk is unlimited.
(3.) IN National INsurance Company Ltd. vs. Laxmi (supra), the Tribunal awarded sum of Rs. 1,04,000/- as compensation to the claimants and the insurance company was held liable to indemnify the owner of the vehicle for the entire sum under the policy. The insurance company appealed before the High Court for limiting its liability to Rs. 50,000/-, the statutory liability fixed under 1939 Act. After the High Court dismissed the appeal, the matter was taken to Supreme Court from where the matter was remanded to the Tribunal with the direction to hold an inquiry as regards the liability of the insurance company. After framing additional issue and considering the material the Tribunal found that premium for the `act only policy' was Rs. 200/- and the premium charged from the vehicle owner was Rs. 240/- which was captioned `liability to public risk Act only' which under the insurance jargon considered as `third party risk policy' by charging higher than the `act only policy' and on that premise, it came to the conclusion that the insurance company has charged additional premium for public risk and its liability towards `third party risk' was unlimited and the insurance company was liable for the entire claim. The award of the Tribunal was assailed in appeal before the Single Bench of the High Court which was dismissed. The Division Bench considered the terms of policy and held as under:- " Therefore, in our opinion, under policy the appellant specifically undertook unlimited liability to indemnify the insured towards the Third-party by not excluding the liability if the insured in respect of claims arising out of death or bodily injury caused to the third party. Therefore the Motor Accident Claims Tribunal and learned Single Judge were right in their conclusion. " In Keshav Bahadur's case (supra), the Apex Court indicated thus:- " In case of insurer-appellant not taking any higher liability by accepting higher premium, the liability is neither unlimited nor higher than the statutory liability fixed under section 95 (2) of the Act. Even if a vehicle is the subject matter of comprehensive insurance and a higher premium is paid on that score, limits of the liability with regard to third party risk does not become unlimited or higher beyond the statutory liability fixed. For this purpose, a specific agreement has to be arrived at between the insured and the insurer and separate premium has to be paid in respect of additional amount of liability undertaken by the insurer in that regard. " The principle, that is settled is that merely charging of higher premium or even taking a comprehensive policy does not necessarily cover the third party risk to the unlimited extent unless terms of the policy so provide for. ;