# New India Assurance Company Ltd v. Smt. Murti Devi & Anr

- **Citation:** (2019) 2 ILRA 1121
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-08-13
- **Case number:** FAFO No. 851 of 1989
- **Bench:** Dr. Kaushal Jayendra Thaker
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/new-india-assurance-company-ltd-v-smt-murti-devi-anr-44567
- **Pages:** 8

## Headnote

A. Motor Vehicles Act, 1939 - Section 95
read with Section 92 (A) & Motor
Vehicles Act, 1988 - Section 147 of is
pari materia to Section 95.
Held: - Learned Tribunal has threadbare
discussed the difference in a contract of
minimum liability contract as well as of
statutory liability and in this case it is proved
that where liability is not limited by cogent
evidence from the policy itself that for 29
passengers, extra premium of Rs. 348/- was
charged. Third party insurance of Rs. 75/-
was also charged, and therefore, in light of
the decision of those days, the submission
that policy was for limited purpose and
liability was only Rs.15,000/- cannot be
accepted. (Para 5)
Appeal Fails (E-5)

## Text

2 All. New India Assurance Company Ltd. Vs Smt. Murti Devi & Anr.
1121
The
High
Court,
after
making
a
substantial enhancement in the award
amount, modified the interest component
at a reasonable rate of 7.5% p.a. and we
find no reason to allow the interest in this
matter at any rate higher than that
allowed by High Court."

21. In view of the above, the appeal
is partly allowed qua interest. The cross
objection is allowed. The amount be
deposited within 12 weeks from today
with interest at the rate of 7.5% from the
date of filing the of claim petition till the
amount is deposited.

22. Record and proceedings be sent
back to the Tribunal forthwith.
----------

(2019)10ILR A 1121

APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 13.08.2019

BEFORE

THE HON'BLE DR. KAUSHAL JAYENDRA
THAKER, J.

FAFO No. 851 of 1989

New India Assurance Company Ltd.
 ... Appellant
Versus
Smt. Murti Devi & Anr. ...Respondents

Counsel for the Appellant:
Sri Brijesh Chandra Naik

Counsel for the Respondents:
----

A. Motor Vehicles Act, 1939 - Section 95
read with Section 92 (A) & Motor
Vehicles Act, 1988 - Section 147 of is
pari materia to Section 95.
Held: - Learned Tribunal has threadbare
discussed the difference in a contract of
minimum liability contract as well as of
statutory liability and in this case it is proved
that where liability is not limited by cogent
evidence from the policy itself that for 29
passengers, extra premium of Rs. 348/- was
charged. Third party insurance of Rs. 75/-
was also charged, and therefore, in light of
the decision of those days, the submission
that policy was for limited purpose and
liability was only Rs.15,000/- cannot be
accepted. (Para 5)
Appeal Fails (E-5)
(Delivered by Hon'ble Dr. Kaushal
Jayendra Thaker, J.)

1. Heard Sri B. C. Naik, learned
counsel for the appellant.

2. By way of this appeal the
Insurance Company has felt aggrieved by
the judgment and decree dated 10th May,
1989 in Motor Accident Claim Petition
No. 92 of 1984 passed by Motor Accident
Claims
Tribunal/Additional
District
Judge, Allahabad granting a sum of
Rs.33,000/-.

3. Brief facts available from the record
are that on 02.07.1984 accident occurred
when the deceased was going on his bicycle at
that point of time a Truck came rashly and
negligently and dashed him and caused his
death. Accident is not in dispute, and
therefore, the claim petition was filed by the
claimant against the driver and owner as well
as Insurance Company of offending vehicle.
Tribunal after hearing the parties and after
taking into account the evidence on record
allowed the claim petition and awarded a sum
of Rs. 33,000/- in favor of the claimant.

4. The main plank of submission is
that under Section 95 (2) Motor Vehicles
Act, 1939, the liability of the Insurance
1122 INDIAN LAW REPORTS ALLAHABAD SERIES
Company was limited to Rs. 15,000/-
only and the Tribunal has misread the
cover-note and therefore, it is submitted
that Tribunal committed an error in
holding that as extra premium of Rs.
348/- was charged, the liability was
unlimited, and as separate charge for the
passengers was taken, therefore, it is
submitted that this finding is bad as no
extra
premium
was
charged
for
passengers and liability was only to Rs.
15,000/-.

5. The learned Tribunal has
threadbare discussed the difference in a
contract of minimum liability contract as
well as of statutory liability and in this
case it is proved that where liability is not
limited by cogent evidence from the
policy itself that for 29 passengers, extra
premium of Rs. 348/- was charged. Third
party insurance of Rs. 75/- was also
charged, and therefore, in light of the
decision of those days, the submission
that policy was for limited purpose and
liability was only Rs.15,000/- cannot be
accepted.

6. Section 95 reads with Section 92
(A) of Motor Vehicles Act, 1939 reads as
follows:-

"SECTION 95: Requirements of
policies and limits of liability

(1) In order to comply with the
requirements of this Chapter, a policy of
insurance may be a policy which,-

(a) is issued by a person who is
an
authorised
insurer391[or
by
a
cooperative society allowed under section
108 to transact the business of an insurer],
and

[(b) insures the person or classes
of persons specified in the policy to the
extent specified in sub-section (2)-

(i) against any liability which
may be incurred by him in respect of the
death of or bodily injury to any person or
damage to any property of a third party
caused by or arising out of the use of the
vehicle in a public place;

(ii) against the death of or
bodily injury to any passenger of a public
service vehicle caused by or arising out of
the use of the vehicle in a public place;]

Provided that a policy shall
not393[ * * * ] be required-

(i) to cover liability in respect of
the death, arising out of and in the course
of his employment, of the employees of a
person insured by the policy or in respect
of bodily injury sustained by such an
employee arising out of and in the course
of his employment Mother than a liability
arising
under
the
Workmen's
Compensation Act, 1923 (8 of 1923), in
respect of the death of, or bodily injury to,
any such employee-

(a) engaged in driving the
vehicle, or

(b) if it is a public service
vehicle, engaged as a conductor of the
vehicle or in examining tickets on the
vehicle, or

(c) if it is a goods vehicle, being
carried in the vehicle]; or

(ii) except where the vehicle is a
vehicle in which passengers are carried
for hire or reward or by reason of or in
pursuance of contract of. employment, to
cover liability in respect of the death of or
bodily injury to persons being carried in
or upon -or entering or mounting or
alighting from the vehicle at the time of
the occurrence of the event out of which a
claim arises, or

(iii) to cover any contractual
liability.

[Explanation.- For the removal
of doubts, it is hereby declared that the
2 All. New India Assurance Company Ltd. Vs Smt. Murti Devi & Anr.
1123
death of or bodily injury to any person, or
damage to any property of a third party
shall be deemed to have been caused by
or to have arisen out of the use of a
vehicle in a public place notwithstanding
that the person who is dead or injured or
the property which is damaged was not in
a public place at the time of the accident,
if the act or omission which led to the
accident occurred in a public place.]

(2) Subject to the proviso to
sub-section (1) a policy of insurance shall
cover any liability incurred in respect of
any one accident up to the following
limits, namely:-

[(a) where the vehicle is a goods
vehicle, a limit of396[one lakh and fifty
thousand rupees] in all, including the
liabilities, if any, arising under the
Workmen's Compensation Act, 1923-, in
respect of the death of, or bodily injury to,
employees (other than the driver), not
exceeding six in number, being carried in
the vehicle; ]

[(b) where the vehicle is a
vehicle in which passengers are carried
for hire or reward or by reason of or in
pursuance of a contract of employment,-

(i) in respect of persons other
than passengers carried for hire or reward,
a limit of fifty thousand rupees' in all;

[(ii) in respect of passengers, a
limit of fifteen thousand rupees for each
individual passenger;]

(c) save as provided in clause
(d), where the vehicle is a vehicle of any
other class, the amount of liability
incurred;

(d) irrespective of the class of
the vehicle, a limit of rupees [six
thousand] in all in respect of damage to
any property of a third party].

(4) A policy shall be of no effect
for the purposes of this Chapter unless
and until there is issued by the insurer in
favour of the person by whom the policy
is effected a certificate of insurance j[ * *
* ] in the precribed form and containing
the
prescribed
particulars
of
any
conditions subject to which the policy is
issued and of any other prescribed
matters; and different forms, particulars
and matters may be prescribed in different
cases.

[(4A) Where a cover note issued
by the insurer under the provisions of this
Chapter or the rules made thereunder is
not followed by a policy of insurance
within the prescribed time. the insurer
shall, within seven days of the expiry of
the period of the validity of the cover
note, notify the fact to the registering
authority in whose records the vehicle to
which the cover note relates has been
registered or to such other authority as the
State Government may prescribe.]

(5) Notwithstanding anything
elsewhere contained in any law, a person
issuing a policy of insurance under this
section shall be liable to indemnify the
person or classes of persons specified in
the policy in respect of any liability which
the policy purports to cover in the case of
that person or those classes of persons.

SECTION 92A: Liability to pay
compensation in certain cases on the
principle of no fault

(1)
Where
the
death
or
permanent disablement of any person has
resulted from an accident arising out of
the use of a motor vehicle or motor
vehicles, the owner of the vehicle shall,
or, as the case may be, the owners of the
vehicles shall, jointly and severally, be
liable to pay compensation in respect of
such death or disablement in accordance
with the provisions of this section.

(2)
The
amount
of
compensation which shall be payable
under subsection (1) in respect of the
1124 INDIAN LAW REPORTS ALLAHABAD SERIES
death of any person shall be a fixed sum
of fifteen thousand rupees and the amount
of compensation payable under that sub-
section in respect of the permanent
disablement of any person shall be a fixed
sum of seven thousand five hundred
rupees.

(3)
In
any
claim
for
compensation under sub-section (1), the
claimant shall not be required to plead
and establish that the death or permanent
disablement in respect of which the claim
has been made was due to any wrongful
act, neglect or default of the owner or
owners of the vehicle or vehicles
concerned or of any other person.

(4) A claim for compensation
under sub-section (1) shall not be defeated
by reason of any wrongful act, neglect or
default of the person in respect of whose
death or permanent disablement the claim
has been made nor shall the quantum of
compensation recoverable in respect of
such death or permanent disablement be
reduced on the basis of the share of such
person in the responsibility for such death
or permanent disablement."

7. Section 147 of Motor Vehicles
Act, 1988 which is pari materia to Section
95 reads as follows:-

"147 Requirements of policies
and limits of liability. --

(1) In order to comply with the
requirements of this Chapter, a policy of
insurance must be a policy which--

(a) is issued by a person who is
an authorised insurer; and

(b) insures the person or classes
of persons specified in the policy to the
extent specified in sub-section (2)--

(i) against any liability which
may be incurred by him in respect of the
death of or bodily 27 [injury to any
person, including owner of the goods or
his authorised representative carried in
the vehicle] or damage to any property of
a third party caused by or arising out of
the use of the vehicle in a public place;

(ii) against the death of or
bodily injury to any passenger of a public
service vehicle caused by or arising out of
the use of the vehicle in a public place:

Provided that a policy shall not
be required--

(i) to cover liability in respect of
the death, arising out of and in the course of
his employment, of the employee of a person
insured by the policy or in respect of bodily
injury sustained by such an employee arising
out of and in the course of his employment
other than a liability arising under the
Workmen's Compensation Act, 1923 (8 of
1923) in respect of the death of, or bodily
injury to, any such employee--

(a) engaged in driving the
vehicle, or

(b) if it is a public service
vehicle engaged as conductor of the
vehicle or in examining tickets on the
vehicle, or

(c) if it is a goods carriage,
being carried in the vehicle, or

(ii) to cover any contractual
liability.

Explanation. --For the removal
of doubts, it is hereby declared that the
death of or bodily injury to any person or
damage to any property of a third party
shall be deemed to have been caused by
or to have arisen out of, the use of a
vehicle in a public place notwithstanding
that the person who is dead or injured or
the property which is damaged was not in
a public place at the time of the accident,
if the act or omission which led to the
accident occurred in a public place.

(2) Subject to the proviso to
sub-section (1), a policy of insurance
2 All. New India Assurance Company Ltd. Vs Smt. Murti Devi & Anr.
1125
referred to in sub-section (1), shall cover
any liability incurred in respect of any
accident, up to the following limits,
namely:--

(a) save as provided in clause
(b), the amount of liability incurred;

(b) in respect of damage to any
property of a third party, a limit of rupees
six thousand:

Provided that any policy of
insurance issued with any limited liability
and in force, immediately before the
commencement of this Act, shall continue
to be effective for a period of four months
after such commencement or till the date
of expiry of such policy whichever is
earlier.

(3) A policy shall be of no effect
for the purposes of this Chapter unless
and until there is issued by the insurer in
favour of the person by whom the policy is
effected a certificate of insurance in the
prescribed form and containing the
prescribed particulars of any condition
subject to which the policy is issued and
of any other prescribed matters; and
different forms, particulars and matters
may be prescribed in different cases.

(4) Where a cover note issued
by the insurer under the provisions of this
Chapter or the rules made thereunder is
not followed by a policy of insurance
within the prescribed time, the insurer
shall, within seven days of the expiry of
the period of the validity of the cover
note, notify the fact to the registering
authority in whose records the vehicle to
which the cover note relates has been
registered or to such other authority as
the State Government may prescribe.

(5) Notwithstanding anything
contained in any law for the time being in
force, an insurer issuing a policy of
insurance under this section shall be
liable to indemnify the person or classes
of persons specified in the policy in
respect of any liability which the policy
purports to cover in the case of that
person or those classes of persons.

149. Duty of insurers to satisfy
judgments and awards against persons
insured in respect of third party risks.--

(1) If, after a certificate of
insurance has been issued under subsection (3) of section 147 in favour of the
person by whom a policy has been
effected, judgment or award in respect of
any such liability as is required to be
covered by a policy under clause (b) of
sub-section (l) of section 147 (being a
liability covered by the terms of the
policy) 1[or under the provisions of
section 163A] is obtained against any
person insured by the policy, then,
notwithstanding that the insurer may be
entitled to avoid or cancel or may have
avoided or cancelled the policy, the
insurer shall, subject to the provisions of
this section, pay to the person entitled to
the benefit of the decree any sum not
exceeding the sum assured payable
thereunder, as if he were the judgment
debtor, in respect of the liability, together
with any amount payable in respect of
costs and any sum payable in respect of
interest on that sum by virtue of any
enactment
relating
to
interest
on
judgments.

(2) No sum shall be payable by
an insurer under sub-section (1) in
respect of any judgment or award unless,
before
the
commencement
of
the
proceedings in which the judgment or
award is given the insurer had notice
through the Court or, as the case may be,
the Claims Tribunal of the bringing of the
proceedings, or in respect of such
judgment or award so long as execution is
stayed thereon pending an appeal; and an
insurer to whom notice of the bringing of
1126 INDIAN LAW REPORTS ALLAHABAD SERIES
any such proceedings is so given shall be
entitled to be made a party thereto and to
defend the action on any of the following
grounds, namely:--

(a) that there has been a breach
of a specified condition of the policy,
being one of the following conditions,
namely:--

(i) a condition excluding the use
of the vehicle--

(a) for hire or reward, where
the vehicle is on the date of the contract
of insurance a vehicle not covered by a
permit to ply for hire or reward, or

(b) for organised racing and
speed testing, or

(c) for a purpose not allowed by
the permit under which the vehicle is
used, where the vehicle is a transport
vehicle, or

(d)
without
side-car
being
attached where the vehicle is a motor
cycle; or

(ii)
a
condition
excluding
driving by a named person or persons or
by any person who is not duly licensed, or
by any person who has been disqualified
for holding or obtaining a driving licence
during the period of disqualification; or

(iii)
a
condition
excluding
liability for injury caused or contributed
to by conditions of war, civil war, riot or
civil commotion; or

(b) that the policy is void on the
ground that it was obtained by the non-
disclosure of a material fact or by a
representation of fact which was false in
some material particular.

(3) Where any such judgment as
is referred to in sub-section (1) is
obtained from a Court in a reciprocating
country and in the case of a foreign
judgment is, by virtue of the provisions of
section 13 of the Code of Civil Procedure,
1908 (5 of 1908) conclusive as to any
matter adjudicated upon by it, the insurer
(being an insurer registered under the
Insurance Act, 1938 (4 of 1938) and
whether or not he is registered under the
corresponding law of the reciprocating
country) shall be liable to the person
entitled to the benefit of the decree in the
manner and to the extent specified in subsection (1), as if the judgment were given
by a Court in India: Provided that no sum
shall be payable by the insurer in respect
of any such judgment unless, before the
commencement of the proceedings in
which the judgment is given, the insurer
had notice through the Court concerned
of the bringing of the proceedings and the
insurer to whom notice is so given is
entitled under the corresponding law of
the reciprocating country, to be made a
party to the proceedings and to defend the
action on grounds similar to those
specified in sub-section (2).

(4) Where a certificate of
insurance has been issued under subsection (3) of section 147 to the person by
whom a policy has been effected, so much
of the policy as purports to restrict the
insurance of the persons insured thereby
by reference to any condition other than
those in clause (b) of sub-section (2)
shall, as respects such liabilities as are
required to be covered by a policy under
clause (b) of sub-section (1) of section
147, be of no effect: Provided that any
sum paid by the insurer in or towards the
discharge of any liability of any person
which is covered by the policy by virtue
only
of
this
sub-section
shall
be
recoverable by the insurer from that
person.

(5) If the amount which an
insurer becomes liable under this section
to pay in respect of a liability incurred by
a person insured by a policy exceeds the
amount for which the insurer would apart
2 All. New India Assurance Company Ltd. Vs Smt. Murti Devi & Anr.
1127
from the provisions of this section be
liable under the policy in respect of that
liability, the insurer shall be entitled to
recover the excess from that person.

(6) In this section the expression
"material fact" and "material particular"
means, respectively a fact or particular of
such a nature as to influence the judgment
of a prudent insurer in determining
whether he will take the risk and, if so, at
what premium and on what conditions,
and the expression "liability covered by
the terms of the policy" means a liability
which is covered by the policy or which
would be so covered but for the fact that
the insurer is entitled to avoid or cancel
or has avoided or cancelled the policy.

(7) No insurer to whom the notice
referred to in sub-section (2) or sub-section
(3) has been given shall be entitled to avoid
his liability to any person entitled to the
benefit of any such judgment or award as is
referred to in sub-section (1) or in such
judgment as is referred to in sub-section (3)
otherwise than in the manner provided for in
sub-section (2) or in the corresponding law of
the reciprocating country, as the case may be.
Explanation.--For the purposes of this section,
"Claims Tribunal" means a Claims Tribunal
constituted under section 165 and "award"
means an award made by that Tribunal under
section 168."

8. Section 166 of Motor Vehicles
Act reads as under:-

"166.
Application
for
compensation.-- (1) An application for
compensation arising out of an accident
of the nature specified in sub-section (1)
of section 165 may be made--

(a) by the person who has
sustained the injury; or

(b)
by
the
owner
of
the
property; or

(c) where death has resulted
from the accident, by all or any of the
legal representatives of the deceased; or

(d) by any agent duly authorised
by the person injured or all or any of the
legal representatives of the deceased, as
the case may be:
Provided that where all the legal
representatives of the deceased have not
joined in any such application for
compensation, the application shall be
made on behalf of or for the benefit of all
the legal representatives of the deceased
and the legal representatives who have
not so joined, shall be impleaded as
respondents to the application.

(2) Every application under
sub-section (1) shall be made, at the
option of the claimant, either to the
Claims Tribunal having jurisdiction over
the area in which the accident occurred,
or to the Claims Tribunal within the local
limits of whose jurisdiction the claimant
resides or carries on business or within
the local limits of whose jurisdiction the
defendant resides, and shall be in such
form and contain such particulars as may
be prescribed:

Provided that where no claim
for compensation under section 140 is
made in such application, the application
shall contain a separate statement to that
effect immediately before the signature of
the applicant.

(3) [ * * * ]

(4) The Claims Tribunal shall
treat any report of accidents forwarded to
it under subsection (6) of section 158 as
an application for compensation under
this Act."

9. I am fortified in my view by the
judgment, and therefore, this appeal fails
and is dismissed. There is no question of
depositing further amount as while
1128 INDIAN LAW REPORTS ALLAHABAD SERIES
entertaining this appeal, the appellant was
directed to deposit the entire amount. The
interim relief shall stand vacated.
----------

(2019)10ILR A 1128

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 26.09.2019

BEFORE

THE HON'BLE MANOJ MISRA, J.
THE HON'BLE MRS. MANJU RANI
CHAUHAN, J.

Habeas Corpus Writ Petition No. 731 of 2019
&
Habeas Corpus Writ Petition Cases No.
732 of 2019 & 734 of 2019

Jai Pal ...Petitioner
Versus
Union of India & Ors. ...Respondents

Counsel for the Petitioner:
Sri Upendra Upadhyay

Counsel for the Respondents:
A.S.G.I., Sri S.K. Srivastava, Sri Deepak
Mishra (A.G.A.)

A. National Security Act, 1980 - Preventive
Detention - Grounds of detention do not
indicate that the mob was organized by the
petitioners or that there was anything done
by the petitioners - Solitary incident-
Satisfaction to be recorded on the basis of
cogent material that the detenu on being
released on bail is likely to indulge in
activity prejudicial to the maintenance of
public order- Absence of such materialPreventive detention of the petitioners is
not justified and is liable to be set aside.
 (Para 12 & 13)

The incident reflected a mob activity triggered by
a road accident in which a person had died. It is
not the case in the grounds of detention that the
petitioners had with a view to embarrass the
administration planned or organized the mob
action. The grounds though reflect petitioners'
participation in the mob but do not indicate that
the mob was organized by the petitioners or that
there was anything distinguishable done by the
petitioners in that mob action than what was
done by other participants.

There is no cogent material on the basis of
which, based on a solitary incident of the nature
cited in the grounds of detention, satisfaction
could be drawn that the petitioners on being
released on bail would indulge in activity that
would be prejudicial to the maintenance of public
order. As it is well settled that to preventively
detain a person, who is already in judicial
custody, satisfaction, amongst others, is also to
be recorded on the basis of cogent material that
the detenu on being released on bail is likely to
indulge in activity prejudicial to the maintenance
of public order, in absence of existence of such
material, the preventive detention of the
petitioners is not justified and is liable to be set
aside.

Consequently, all the three habeas corpus
petitions are allowed. The detention orders,
dated 16th April, 2019, passed by District
Magistrate, Etah against the aforesaid three
petitioners
are
hereby
quashed.
The
petitioners shall be set at liberty forthwith
unless wanted in any other case.

Habeas Corpus Petitions allowed (E-3)

Case law relied upon/discussed: -

1. Attorney General for India Vs Amratlal
Prajivandas & ors. reported in 1994 (5) SCC 54
2. Surya Prakash Sharma Vs St. of U.P. & ors.
1994 (Supp.) (3) SCC 195
3. Yogendra Murari Vs St. of U.P.& ors. (1988)
4 SCC 559
(Delivered by Hon'ble Manoj Misra, J. &
Hon'ble Mrs. Manju Rani Mishra, J.)

1. These three habeas corpus
petitions question detention orders, dated