NEW INDIA ASSURANCE COMPANY LIMITED Vs. NATHIBEN CHATRABHUJ SMT

JUDGEMENT

(1.) The following question is referred to the Full Bench by the Division Bench consisting of N. H. Bhatt and S. L. Talati JJ. as the said Division Bench was of the view that it was necessary to resolve the conflict arising out of the two inconsistent Division Bench decisions one in State Road Transport v. Malubai reported in 21 G.L.R. 400 deci- ded by B. K. Mehta and S. B. Majmudar JJ. and another in Vanaji v. Shivabhai Kashibhai reported in AIR 1980 Gujarat 154 = 1979(2)-XX(2) G.L.R. 342 decided by M. K. Shah and D. H. Shukla JJ. :

(2.) In order to appreciate the controversy in its proper perspective it requires to be mentioned that the occasion to make the reference arose in the course of proceedings in which the Insurance Company which had insured a public carrier (Leyland Goods Truck) disclaimed its liability to satisfy the awards made in three different but connected motor accident claim cases on the ground that the vehicle in question was on the date of the contract of insurance a vehicle not covered by a permit to carry passengers for hire or reward and that it was at the time of the accident stated to have been actually used to carry three passengers for hire or reward and that therefore the Insurance Company was not liable to satisfy the awards made in favour of one of such passengers who was injured and the dependents of the other two of such passengers who met with their death in the course of the accident.

(3.) It would be convenient to refer to the relevant statutory provi- sions at the outset. Chapter VIII of the Motor Vehicles Act 1939 (hereinafter be referred to as the Act) which consists of secs. 93 to 111 makes detailed provisions with regard to the insurance of motor vehicles against third party risks. Sec. 94 in so far as it is relevant for the present purposes provides that no person shall use except as a passenger or cause or allow any other person to use a motor vehicle in a public place unless there is in force in relation to the use of the vehicle by that person or that other person as the case may be a policy of insurance complying with the requirements of the said Chapter. Sec. 95 deals with the requirements of policies and limits of liability. In 80 far as it is relevant for the present purposes the said section reads as under: