LexNEW ASIATIC INSURANCE CO. LTD versus PESSUMAL DHANAMAL ASWANI AND ORS.
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' • 78.0.R. SUPREME COURT REPORTS 867 NEW ASIATIC INSURANCE CO. LTD. v. PESSUMAL DHANAMAL ASWAN! AND ORS. fK. SUBBA RAO, K. C. DAS GUPTA AND RAGHUBAR DAYAL, JJ.J Motor Vehicles Act-(4 of 1939), ss. 93 to 96-Scope of. A had insured his car with the appellant under a comprehen- sive policy. A permitted B, (who had insured his own car with another company) to drive his car and while B was driving the car it met with an accident. As a result of the accident C died and D sustained serious injuries. Both C and D were in the car. The heirs of C and D filed suits for damages. Notices under s. 96(2) of the Motor Vehicles Act, 1939 were issued to the appellant who there~on took out a Chamber Summons contending that the notice was bad in law. Alternatively it was contended that the appellant be permitted to defend the suit in the name of the defendant. The Court held that the notices were bad. The plaintiffs filed Letters Patent appeals with success and the Chamber Summons were dismissed and the trial Judge was directed to hear the alternative prayer. Against this Order the present appeal was filed with special leave. The contention of the appellant was that in view of para- graph 4 of B's own policy issued by the other company which indemnified B against any liability incurred by him whilst personally driving a private car not belonging to him or hired by him under a Hire-Purchase agreement, B was not included among persons indemnified in para. 3 of A's policy which the appellant had issued on account of proviso (a) to the said para. The respondent contended that this proviso is not a limitation on the class of persons ·indemnified under para. 3 that class being the drivers driving A's car insured under the policy but merely amounted to a condition affecting the liability of the company vis a vis the driver who was en- titled to be indemnified under any other policy. Held: (i) From a consideration of ss. 93, 94, 95 and 96 of the Motor Vehicles Act it follows that if under the terms of the policy B can be said to be the person insured under Para 3 of the policy, the company would be liable to satisfy the decree if any passed against B. (ii) The appellant by agreeing with the person who effects the policy, to insure him against liability to third parties, takes upon itself the entire liability of the person effecting the in- surance. It os open to the insurer not to extend the indemnity to the insured to other persons but if it extends it to other per- sons, it cannot restrict it vis o, vis the right of the third party entitled to damages to recover them from the insured, a right which is not d;~ted. A proviso meant to e!Xempt certain persons from the general classification will have to be related to considerations affecting it and is not to be related to such classified person's right to indemnity from any other insurer. (iii) The cl. (4) of s. II of B's policy with the other company does not make that policy to be a policy within the meaning of LIP(D)lSCI-28(a) 1964 April 24 1964 I 868 SUPREME COURT REPORTS [1964) s. 94 of the Act in relation to A's car by whose user B incurred N ... A.rialic liabilities sought to be established in the two suits. Such a policy 1 ........... Co. Lld. and any indemnity under it cannot be used for sul>-classifying p.....:Z" Dhattamal drivers specified in the policy issued to A by the appellant. A..,...miand Ollters (iv) The High Court was correct in holding that the ap- pellant had insured B. in view of para. 3 of s. II of that policy and that it comes within the expression in&urer in s. '96 of the Act.. CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 1043-1044 of 1963. Appeals by special leave from the judg- ment and decree dated April 8, 1963 of the Bombay High Court in Appeals Nos. 10 and 11 of 1962. S. T. Desai, V. N. Thakar, 1. B. Dadachanji, 0. C. Mathur and Ravinder Narain, for the appellant (in both the appeals). G. S. Pathak, 0. P. Malhotra and I. N. Shroff, for respon- dent No. 1 (in both the appeals). V. J. Merchant, for respondents Nos. 2 and 4 to 7 (in C.A. No. 1043/ 1963). April 24, 1964. The Judgment of the Court was delivered by JlaflobarDayal,J. R.AGHUBAR DAYAL, J.-These appeals, by special leave. arise in the following circumstances: S. N. Asnani owned Chevrolet Car bearing registered No. AA 4431. He insured it with !lie New Asiatic Insurance Co. Ltd., hereinafter referred to as the company,
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