# Oriental Insurance Company Ltd v. Rajendra Kumar Jain and Ors

- **Citation:** (2013) 2 ILRA 593
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2013-05-07
- **Case number:** First Appeal From Order No. 151 of 1987
- **Bench:** Rajes Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/oriental-insurance-company-ltd-v-rajendra-kumar-jain-and-ors-42593
- **Pages:** 4

## Headnote

Motor Vehicle Act 1939- Section 95
(2)(b)(ii)- Liability of Insurance companyvehicle attached with U.P.S.R.T.C met an
accident-caused
death
of
certain
passengers-tribunal awarded27000/- with
interest-appeal
on
ground
insurance
company having limited liability of Rs.
5000/-on each-can not be fastened with
594 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
liability of comprehensive insurance-heldappellant
liable
to
pay
Rs.
5000/-
remaining amount payable by vehicle
owner.

Held: Para-6
I find substance in the argument of
learned counsel for the appellant. The
policy is annexed as annexure-1 to the
affidavit, which reveals that in respect of
the third party risk only statutory premium
has been paid and no extra premium has
been paid for unlimited liability. The
column of unlimited liability is vacant,
therefore, the appellant was liable for a
sum of Rs.5,000/- for each passenger
under Section 95 (2)(b)(ii) of the Act.

Case Law discussed:
(1995) 2 SCC 539; 2002 (3) TAC 434(SC);
(1988) 1 S.C.C.; (1995) 2 S.C.C. 539; 2002 (3)
T.A.C. 434 (S.C.)

## Text

2 All] Oriental Insurance Company Ltd. Vs. Rajendra Kumar Jain and Ors.
593

11. In view of the law as discussed
above, non framing of issues on the point
regarding compliance of Section 16 (a)
and Section 16 (c) of Specific Relief Act,
the judgment becomes perverse in the
eyes of law and, as such, the issue to the
effect that whether the plaintiff has
always been ready and is ready and
willing to perform his part of contract
must
be
framed.
Consequent
upon
framing of this issue the parties shall have
to be given a right to lead evidence on
that issue. Regarding compliance of
Section 16 (a) of Specific Relief Act,
detailed findings have to be made under
issue no.5 in which learned Trial Court
has to consider as to whether the ends of
justice would successfully meet if the
plaintiff is compensated by refunding the
amount of earnest money paid by him
along with interest, if any. No further
issue is required to be made on this point
as the Court has to deal with this aspect
under issue no.5.

12. Since the matter is very old as
the suit was filed on 29.11.1975, I am
reluctant to remand the case but I can't
help as after framing of issues the parties
shall be given right to lead evidence on
that score alone which cannot be done at
the ends of this Court as it would snatch
away the right of appeal, I am bound to
remand back the case.

13. On the basis of discussions as
made above, the impugned judgment and
decree is set aside, appeal is allowed and
the case is remanded back for fresh trial
after framing issue no.6 within the
requirement of Section 16 (c) of Specific
Relief
Act.
Since
the
pecuniary
jurisdiction of the Civil Judge (Junior
Division)
and
Civil
Judge
(Senior
Division) has been enhanced the file is
remitted back to learned District Judge,
Pratapgrah who is requested to entrust the
case having pecuniary jurisdiction to try
the suits up to valuation of Rs.10,000/-.
The said Court shall immediately frame
issue no.6 and shall afford the parties
opportunity to lead evidence on that score
alone and shall proceed on with the case
on day to day basis as far as possible and
shall try to dispose of the suit within two
months from the framing of additional
issue.

14. Parties shall bear their own
costs. The Registry of this Court shall
immediately send back the Lower Court
Record
to
learned
District
Judge,
Pratapgarh through Special Messenger
within one week from today.
---------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 07.05.2013

BEFORE
THE HON'BLE RAJES KUMAR, J.

First Appeal From Order No. 151 of 1987

Oriental Insurance Company Ltd.

 ...Appellant
Versus
Rajendra Kumar and Ors. ...Respondents

Counsel for the Petitioner:
Sri A.B. Saran, Sri Arun Kumar Shukla

Counsel for the Respondents:
Sri R.K. Jain

Motor Vehicle Act 1939- Section 95
(2)(b)(ii)- Liability of Insurance companyvehicle attached with U.P.S.R.T.C met an
accident-caused
death
of
certain
passengers-tribunal awarded27000/- with
interest-appeal
on
ground
insurance
company having limited liability of Rs.
5000/-on each-can not be fastened with
594 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
liability of comprehensive insurance-heldappellant
liable
to
pay
Rs.
5000/-
remaining amount payable by vehicle
owner.

Held: Para-6
I find substance in the argument of
learned counsel for the appellant. The
policy is annexed as annexure-1 to the
affidavit, which reveals that in respect of
the third party risk only statutory premium
has been paid and no extra premium has
been paid for unlimited liability. The
column of unlimited liability is vacant,
therefore, the appellant was liable for a
sum of Rs.5,000/- for each passenger
under Section 95 (2)(b)(ii) of the Act.

Case Law discussed:
(1995) 2 SCC 539; 2002 (3) TAC 434(SC);
(1988) 1 S.C.C.; (1995) 2 S.C.C. 539; 2002 (3)
T.A.C. 434 (S.C.)
(Delivered by Hon'ble Rajes Kumar, J.)

1. Notices have been sent to the
respondent no.6 by registered post. The
office reported that neither undelivered
cover nor acknowledgment has been
received back after service. Thus, there is
sufficient service on the respondent no.6.

2. Heard Sri A.K.Shukla, learned
counsel for the appellant. No one appears
on behalf of the respondents. 3

3. The appellant is insurer of bus
bearing
registration
no.URU-1566,
involved in an accident and was attached
with U.P.S.R.T.C. In the accident certain
persons sitting in the bus have died and
some persons suffered injuries. Tribunal
has
awarded
the
compensation
at
Rs.27,000/- and directed the appellant to
pay the compensation along with interest.
Present is the case of death.

4. Learned counsel for the appellant
submitted that the accident took place on
27.02.1982 and on the date of the
accident, under Section 95 (2) (b) (ii) of
Motor Vehicles Act, 1939 (hereinafter
referred to as the "Act") as it existed in
respect of each individual passenger there
was limited liability of Rs.5,000/- only on
the insurance company. He submitted that
though the insurance was comprehensive
and statutory in respect of the third party
risk, no extra premium has been paid in
respect of the third party for unlimited
liability and, therefore, under Section 95
(2)( (b) (ii) of the Act the insurance
company is liable to pay only Rs.5,000/-
and the balance amount is payable by the
owner of the vehicle.

5. In support of the contention, he
relied upon the decision of the Apex
Court in the case of New India
Assurance Co. Ltd. Vs. Shanti Bai
(Smt.) and others, reported in (1995) 2
SCC, 539 and the Constitution Bench
decision of the Apex Court in the case of
New India Assurance Co. Ltd. Vs.
C.M.Jaya and others, reported in 2002
(3) TAC, 434 (SC).

6. I find substance in the argument
of learned counsel for the appellant. The
policy is annexed as annexure-1 to the
affidavit, which reveals that in respect of
the third party risk only statutory
premium has been paid and no extra
premium has been paid for unlimited
liability. The column of unlimited liability
is vacant, therefore, the appellant was
liable for a sum of Rs.5,000/- for each
passenger under Section 95 (2)(b)(ii) of
the Act.

7 The Apex Court in the case of
National Insurance Company Limited
Vs. Jugal Kishore and others, reported in
(1988) 1 S.C.C. has held that comprehensive
policy only entitles the owner to claim
2 All] Oriental Insurance Company Ltd. Vs. Rajendra Kumar Jain and Ors.
595
reimbursement of the entire amount of loss
or damage suffered upto the estimated value
of of the vehicle. It does not mean that the
limit of liability with regard to third party
risk becomes unlimited or higher than the
statutory liability. For this purpose, a
specific agreement is necessary.

8. In the case of New India
Assurance Co. Ltd. Vs. Shanti Bai and
others, reported in (1995) 2 S.C.C. 539,
the Apex Court while dealing with
Section 95 (2) of the Act has held as
follows :

"These provisions were interpreted
by this Court in the case of National
Insurance Co. Ltd. v. Jugal Kishore. This
Court observed that even though it is not
permissible to use a vehicle unless it is
covered at least under an "Act only"
policy, it is not obligatory for the owner
of a vehicle to get it comprehensively
insured. In case, however, it is got
comprehensively
insured,
a
higher
premium is payable depending on the
estimated value of the vehicle. Such
insurance entitles the owner to claim
reimbursement of the entire amount of
loss or damage suffered upto the
estimated value of the vehicle calculated
according to the Rules and Regulations
framed in this behalf. It has further
observed as under :

"Comprehensive insurance of the
vehicle and payment of higher premium
on this score, however, does not mean
that the limit of the liability with regard to
third party risk becomes unlimited or
higher than the statutory liability fixed
under sub-section (2) of Section 95 of the
Act. For this purpose a specific agreement
has to be arrived at between the owner
and the Insurance Company and separate
premium has to be paid on the amount of
liability undertaken by the Insurance
Company in this behalf."

In the present case, therefore, a
comprehensive policy which has been
issued on the basis of the estimated value
of the vehicle of Rs.2,50,000/- does not
automatically result in covering the
liability with regard to third policy risk
for an amount higher than the statutory
amount."

9. The Apex Court has further held
that "mere fact that the insurance policy is
comprehensive policy, will not help the
respondents in any matter."

10. The Constitution Bench of the
Apex Court in the case of New India
Assurance Co. Ltd. Vs. C.M. Jaya and
others, reported in 2002 (3) T.A.C. 434
(S.C.) has held as follows :

"Thus, a careful reading of these
decisions clearly shows that the liability
of the insurer is limited, as indicated in
Section 95 of the Act, but it is open to the
insured to make payment of additional
higher premium and get higher risk
covered in respect of third party also. But
in the absence of any such clause in the
insurance policy, the liability of the
insurer cannot be unlimited in respect of
third party and it is limited only to the
statutory liability. This view has been
consistently taken in the other decisions
of this Court.

In the light of what is stated above, we
do not find any conflict on the question
raised in the order of reference between the
decisions of two Benches of three learned
Judges in Shanti Bai and Amrit Lal Sood
aforementioned and, on the other hand,
596 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
there is consistency on the point that in case
of an insurance policy not taking any higher
liability by accepting a higher premium, the
liability of the Insurance Company is
neither unlimited nor higher than the
statutory liability fixed under Section 95 (2)
of the Act. In Amrit Lal Sood's case, the
decision in Shanti Bai is not noticed.
However, both these decisions refer to the
case of Jugal Kishore and no contrary view
is expressed.

In the premise, we hold that the view
expressed by the Bench of three learned
Judges in the case of Shanti Bai is correct
and answer the question set up in the
order of reference in the beginning is as
under :

"In the case of Insurance Company not
taking any higher liability by accepting a
higher
premium
for
payment
of
compensation to a third party, the insurer
would be liable to the extent limited under
Section 95 (2) of the Act and would not be
liable to pay the entire amount."

11. In the result, the appeal is
allowed. The order of Tribunal is
modified to the extent that the appellant is
liable to pay only Rs.5,000/- and the
balance amount is payable by the owner
of the vehicle. However, the appellant is
directed to pay the entire amount of
compensation and recover the balance
amount from the owner of the vehicle.
---------
APPELLATE JURISDICTION
CIVIL SIDE
DATED:LUCKNOW 13.05.2013

BEFORE
THE HON'BLE UMA NATH SINGH, J.
THE HON'BLE MAHENDRA DAYAL, J.

Special Appeal (D) No. 264 Of 2013
with 275/07; 583/07; 182/07; 722/07;
601/11

State of U.P. & Ors.

 ...Petitioner
Versus
Prem Chandra and Ors.8577(S/S) 2010

 ...Respondents

Counsel for the Petitioner:
C.S.C.

Counsel for the Respondents:
Sri A.M. Tripathi

U.P. Civil Services Regulation-Regulation
370-
Pensionary
benifit-respondents
working on daily wages basis-given status
of work charge employee in 1984 and 89stood
regularised
on
01.04.99
and
24.07.99-retired on 31.01.2009-admittedly
worked continuously 21 yrs as work
charge employee and 10 years as regular
employee-Single
Judge
following
the
Judgment of Mohd. Mustfa given parity-in
which similar provision of Regularization
3.17 of Punjab Civil Services Rules was
quashed by Full Bench in Kesar Chand
case-upheld by Apex Court-provisions of
Regulation 370 has to be read down with
judgment
of
Apex
Court
in
Punjab
Electricity Board-appeal dismissed.

Held: Para-6
On due consideration of rival submissions,
we dismiss the special appeal for reasons
that the learned Single Judge has granted
parity with a similarly situated employee
as referred to herein above, namely Mohd.
Mustafa; and that in a similar case a Full
Bench of the Punjab and Haryana High
Court has quashed the provision which
was upheld by the Hon'ble Apex Court in
appeal: the judgment of the Full Bench has
merged into the judgment of the Hon'ble
the Apex Court reported in AIR SCW 1670
(Punjab Electricity Board and another v.
Narata Singh and another). Thus the
provisions of regulation 370 of the U.P.
Civil Service Regulation have to be read
down in line with judgment of Hon'ble the
Apex Court in the absence of challenge to