M.K. KUNHIMOHAMMED versus P.A. AHMEDKUITY & ORS.

Citation: [1987] 3 S.C.R. 1149 · Decided: 01-09-1987 · Supreme Court of India · Bench: E.S. VENKATARAMIAH · Disposal: Dismissed
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Judgment (excerpt)

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"' 
,..\. 
M.K. KUNHIMOHAMMED 
A 
v. 
P.A. AHMEDKUITY & ORS. 
SEPTEMBER !, 1987 
y 
[E.S. VENKATARAMIAH AND K.N. SINGH, JJ.] 
B 
)._ 
Motor Vehicles Act, 1939: Section 95(2)-Death of passenger in 
accident-Limits of liability of insurer-Amendment of Act regarding 
distinction between public vehicles and other motor whicles etc., 
enhancement of limits of compensation insurance of motor vehicles 
against third party risks and expansion of definition of 'legal represen- c 
1-
tative' with regard to claims-Suggestions made. 
The petitioner was the owner of a bus being run as a stage car-
riage. On 24. 7. 78 while .carrying passengers this bus met with an acci-
dent, as a result of which one passenger died. The Motor Accident 
"" 
Claims Tribunal held that the accident took place due to the negligence D 
on the part of the driver and awarded compensation of Rs.56,800 to the 
legal representatives of the deceased. It further held that the liability of 
the insurer to indemnify the petitioner was limited to Rs.5,000 as the 
policy specifically ltmited the insurer's liability to what had been pro-
vided bys. 95(2)(b)(ii)(2) and (4) of Motor Vehicles Act, 1939. 
, 
E 
The appeal filed by the Petitioner was dismissed by the High 
Court. 
'( 
In the Special Leave Petition before this Court, it was contended 
on behalf of the petitioner that the insurer was liable to indemnify the 
petitioner upto a limit of Rs. 75,000 under s. 95(2)(b)(ii)(2) of the Motor F 
Vehicles Act, 1939 and that the further limit mentioned in s. 95(2)(b) 
(ii)(4) was inapplicable to the case of the petitioner. 
Dismissing the Special Leave Petition, this Court, 
Y 
HELD: 1. Having regard to the Motor Vehicles Act, 1939 as it G 
stood prior to the amendments by Act 47 of 1982, the insurer was liable 
to pay upto Rs.10,000 for each individual passenger where the vehicle 
involved was a motor cab and upto Rs.5,000 ·for each individual passen-
ger in any other case. [1161F] 
2.1 Section 95(2)(b) as it existed before its amendment in 1982 
H 
1149 
1150 
SUPREME COURT REPORTS 
[1987] 3 S.C.R. 
A 
dealt with the limits of the liability of an insurer in the case of motor 
vehicles in which passengers were carried for hire or reward or by 
reason of or in pursuance of a contract of employment. [1155H; 1156A] 
Sub-clause (i) of section 95(2)(b) provided that in respect of death 
of or injury to persons other thai) passengers carried for hire or re-
B ward, a limit of Rs.50,000 in all was !he limit of the liability of the 
insurer. [1156A] 
Under sub-clause (ii) there were two specific limits on the liability 
of the insurer in the case of motor vehicles carrying passengers. The 
first limit related to the aggregate liability of the insurer in any one 
accident. It was fixed at Rs.50,000 in all where the vehicle was 
C registered to carry not more than,thirty passengers, at Rs. 75_,000 in all 
where the vehicle was registered to carry more than thirty but not more 
than sixty passengers and at Rs. f,00,000 in all where the vehicle was 
registered to carry more than si~y passengers. The other limit was in 
respect of each passenger, which provided that subject to the limits 
D aforesaid as regards the aggrega\e liability, the liability extended up to 
Rs.10,000 for each individual passenger where the vehicle was a motor 
cab and Rs.5,000 for each individual passenger in any other case. 
Neither of the two limits can he ignored. [1156B-D] 
2.2 The limit prescribed ip section 95(2)(b)(ii)(4) cannot be said 
E to be only the minimum liability prescribed by law. The amount 
mentioned in that provision provides the maximum amount payable by 
an insurer in respect of each pa~senger who has suffered on account of 
an accident. This is a fair construction of section 95(2) of the Act as it 
existed at the time when the accident took place. [1156E] 
F 
2.3 After the 1982 amendment the liability of the insurer in 
respect of each individual pass~nger is Rs.15,000 as against Rs.10,000 
in the case of each individual passenger where the vehicle was a motor 
cab and Rs.5,000 for each individual passenger in other cases, prior to 
the said amendment. This shows that Parliament never intended that 
the aggregate liability of the insurer mentioned in sub-clauses (1), (2) 
G 
and (3) of section 95(2)(b )(ii) would be the liability of the insurer even 
when one passenger had died or suffered injury on account of an acci-
dent. Such liability was always further limited by sub·dause
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