LexNATIONAL INSURANCE COMPANY LTD. versus BEHARI LAL AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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NATIONAL INSURANCE COMPANY LTD.
v.
BEHAR! LAL AND ORS.
AUGUST 28, 2000
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[SYED SHAH ,MOHAMMED QUADRI AND Y.K. SABHARWAL, JJ.)
Motor Vehicles Act 1988, (New Act) s.147(2) Proviso-Motor Vehicles
Act, 1939, (Old Act) s.95F(2)-Scope and import of phrase "with any limited
liability and in force" occurring in proviso-Bus insured with appellant
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meeting with accident resulting in death of one passenger-Policy valid from
October 28, 1988 to October 27, 1989-Policy continuing to be valid under
proviso to s.147(2) of New Act coming into force on July 1, 1989-Tribunal
allowing claim of legal heirs against owner and driver to the extent of Rs.
1,50,000 but limiting liability of appellant insurance company to Rs. 15,000
under Old Act-High Court allowing appeal by owner and driver and holding
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that liability of appellant was co-extensive with that of the owner and driver-
Held, liability of the appellant was governed by s.147(2)(a) of the New Act,
viz., the liability actually incurred, and not under s.95(2) of the Old Act; the
proviso to s.147(2) of the New Act did not limit the liability of appellant to
amount specified in policy issued under the Old Act.
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Interpretation of Statutes-Repeal-Effect of-Motor Vehicles Act 1988,
(New Act) s.217(1) repealing Motor Vehicles Act 1939, (Old Act)-s.217(2)(c)
of New Act providing that notwithstanding repeal, any document referring to
the Old Act shall be construed as r~ferring to the New Act-Held, proviso to
s.147(2) could not be read as proviso to s.217(2)(c) so as to limit the liability
of the insurance company to amount mentioned in s.95(2) of Old Act.
Under the proviso to sub-section (2) of s.147 of the Motor Vehicles
Act, 1988 ('New Act'), a policy of insurance issued under the Motor
Vehicles Act, 1939 ('Old Act') "with any limited liability and in force"
immediately before the commencement of the New Act (i.e. July 1, 1989)
shall continue to be effective for a period of four months after such com-
mencement or till the date of the expiry of such policy whichever is earlier.
S.217(2)(c) of the New Act provided that notwithstanding repeal, any
document referring to the Old Act or provisions thereof shall be construed
as referring to the New Act or corresponding provisions thereof.
The appellant issued a policy in favour of respondent No.l, owner of
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NATIONAL INSURANCE CO. v. BEHAR! LAL
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a bus, under the Old Act valid for one year from October 28, 1988 to
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October 27, 1989. The bus while being driven by respondent No. 2 met
with an accident which resulted in the death of one passenger whose heirs
filed a claim before the Motor Accident Claims Tribunal ('Tribunal').
The appellant contested the claim, inter a/ia, on the ground that its
liability under the terms of the policy issued under the Old Act and the
provisions of the New Act, was limited to only Rs. 15,000 per passenger
travelling in the bus. The Tribunal held that the claimants were entitled to
compensation of Rs. 1,50,000 from respondents 1 and 2 and that the
liability of the appellant was limited to Rs. 15,000.
The High Court allowed the appeal filed by respondents 1 and 2
holding that the liability of the appellant was co-extensive with that of
respondents 1 and 2 and thus modified the award of the Tribunal.
Dismissing the appeal, the Court
HELD : 1.1. The proviso to s.147(2) did not limit the liability of
insnram;e companies to payment of compensation to the extent specified in
the policy of insurance in terms of s.95(2) of the Old Act which was in force
before the commencement of the New Act or till the date of expiry of such
a policy, whichever was earlier. [706-E]
1.2. The proviso to s.147(2) could not be so interpreted as to subject
the insurance companies to flifferent maximum liabilities under statutory
policies in respect of accidents occurring during the same period. Having
fixed a date for enforcement of the New Act incorporating the requirement
of a statutory policy under s.147(1) thereof, the effect of the provision
could not have been whittled down during the period which may vary from
one day to four months depending upon when the existing policy expired
within the said period of four months. It merely indicated the span of
validity of existing policy. [705-D-E]
New India Assurance Company v. Satpal Singh, [2000] 1 SCC 237 and
Padma Srinivasan v. Premier Insurance Company Ltd., [1982] 1 SCC 613,
referred to.
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