1. These three appeals are directed against an Award made on 30.3.1983 by the Motor Accident Claims Tribunal, Panaji, and give rise to a common question of law. Hence, they will be jointly disposed of by this judgement.

2. A tragic accident took place on 25.2.1973, at about 7.30 p.m, at assagao. The bus GDT 2017, belonging to the first appellant and driven at the material time by the second appellant, went off the road, overturned and fell on one of its sides. The said vehicle had earlier left Siolim to proceed to Casissua, Chapora, carrying a number of people for a dinner party. As a result of this accident. Manchar Tamonkar, Shankar Sonu Verneker and Vishnu Soma Agarwadekar sustained serious injuries that ultimately caused their death. Applications for compensation under the relevant provision of the Motor Vehicles Act were filed. Such applications were resisted by the appellants and by the seventh respondent, the Insurance Company. The latter's case was that in any event, its liability was limited to Rs. 5000/- only per passenger by virtue of the provisions of Section 95(2)(b)(ii)(4) of the Motor Vehicles Act (hereinafter referred to as ‘the Act’).

3. The learned Presiding Officer of the Motor Accident Claims Tribunal recorded a finding that the accident was due to the rash and negligent driving of the bus by the second appellant and, considering the relevant factors, awarded compensations of Rs. 15,000/-, Rs. 12,000/- and Rs. 20,000/- to the heirs of the said Manohar, Shankar and Vishnu, respectively. He further held that the liability of the Insurance Company, the seventh respondent herein, would be limited to Rs. 5,000/- plus interest at the rate of 6% p.a in each compensation awarded. It is against this part of the Award that these appeals are directed.

4. Mr. Ramdas Kolwalkar, learned counsel appearing for the appellants, submitted that the learned Presiding Officer of the Motor Accidents Claims Tribunal has erred, inasmuch as he has limited the liability of the Insurance Company to Rs. 5000/- only in each compensation awarded by him. He contended, relying on the authority of the Supreme Court in Motor Owners' Insurance Co. Ltd. v. Jadavji Keshavji Modi . 1981 4 SCC 660 of the Allahabad High Court in New India assurance Co., Allahabad v. Mahmood Ahmad . AIR 1984 All. 183., and Om Prakash v. Smt. Rukmini Devi . AIR 1982 All 389., and of the Patna High Court in National Insurance Co. Ltd. v. Chhunnu Ram . AIR 1984 Patna 1., that the provision of sub-clause (4) has to be read in the context of Section 95, particularly of Sub-section (2). The expression ‘any one accident’ occurring threrein is to be construed from the subjective angle of the injured person and not from the angle of the vehicle involved in the accident. He urged that the only limit of the liability of the insurer is the one prescribed in sub-section (ii), Clause (b), sub-clause (4) fixing only a minimum liability per passenger. He further contended that, therefore, if the compensation awarded to the totality of passengers did not exceed the aforesaid limit of compensation, sub-clause (4) would not operate. However, if such compensation exceeds the outer limit, then, the excess will be the liability of the owner of the vehicle.

5. Mr. Ferdino Rebello, however, joined issue and contended that the ruling of the Supreme Court in Modi's case is of no assistance to the appellants since the observations made are in connection with the provision of Section 95(2)(a) and not of Clause (b). He then urged that the wording of sub-clause (4) is exceedingly clear and it is patent that the legislature placed a ceiling on the compensation to be awarded to a passenger of a motor cab or of any other motor vehicle. To construe the said provision of law in the manner suggested by the learned counsel for the appellants would amount, according to Mr. Rebello, to cause violence to the language of sub-clause (4) and to force a meaning incompatible with its language. He placed reliance in support of this submision in the decision of the Kerala High Court in the case of Madras Motor and General Insurance Co. Ltd. v. V.P Bataknshnan . 1982 ACJ 460., and further contended that the decision of the Supreme Court in Sheikhupura Transport Co. Ltd. v. Northern India Transport Insurance Co.† . 1971 1 SCC 785 has not been disapproved by the Supreme Court in Modi's case and, therefore, still stands.

6. Thus, the question that falls for my consideration is whether the liability incurred by an insurer in respect of any one accident, where the vechicle involved is one in which passengers are carried for hire or reward or by reason of or in pursuance of a contract, is limited to Rs. 5000/- for each individual passenger under the provision of Section 95(2)(b)(4) of the Act. I will now, therefore, address myself to the said question.

7. Section 95, as it stood at the time of the accident, reads in the part which is relevant for our case as under:

“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 or by a co-operative 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)—

………………………………………………………………………………………………………………

(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)…………………………………………………………………………………………………………………

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

(i)……………………………………………………………………………………………………………..

(ii) in respect of passengers,—

(1)………………………………………………………………………………………………………

(2)……………………………………………………………………………………………………….

(3)………………………………………………………………………………………………………

(4) subject to the limits aforesaid, ten thousand rupees for each individual passenger where the vehicle is a motor-cab, and five thousand rupees for each individual passenger in any other case.”

8. It cannot be disputed, in view of the above quoted provisions of the law, that an insurance policy will cover only a liability incurred in respect of any one accident upto the prescribed limits. It is also apparent that such limits are of two kinds. One as regards the main and overall liability and the other, the one prescribed in sub-section (4). This second limit of liability is, in my opinion, clearly subordinate to the first as the expression ‘subject to the limits aforesiad’ indicate. The effect of this subordination of the limit postulated in sub-section (4) to the overall limit, in my view, is only that the liability of the insurer will not go, in any event, beyond the said overall limit. Thus, the subordinate limit prescribed in sub-clause (4) comes into operation only where there are more than one passengers injured or having died in the accident. In fact, it seems that the said limit was prescribed to facilitate the apportionment of compensation among the various victims of an accident upto the overall limit of the liability of the insurer. It further appears in the circumstances, and considering the compulsoriness of the insurance in order to assure, at least upto that limit, payment of compensation to the victim of a motor vehicle accident, that the said subordinate limit is to fix a minimum limit of liability which must be covered by the insurer.

9. I draw support for this view from the observations of the Supreme Court in Modi's case, though such observations were made while considering the provision of Section 95(2)(a) of the Act. In fact, the Court after examining and analysing the matter in detail, observed that the expression ‘any one accident’ occurring in Section 95(2) is susceptible of two equally reasonable meanings or interpretations and therefore, since such expression gives cause to ambiguity in the language used by the legislature in the opening part of Section 95(2), the doubt arising out of the correlation of that language with the words ‘in all’ which occur in Clause (a) ought to be resolved by having regard to the underlying legislative purpose of the provisions contained in Chapter VIII of the Act which deals with third party risks. The Supreme Court then held that the expression ‘any one accident’ occurring in Section 95(2) and subsequent liability upto Rs. 50000/- ‘in all’ in section 95(2)(a) means an accident from the angle of each individual person who is injured or dies in an accident and not from the angle of the vehicle and, hence, the expression ‘in all’ concerns each such individual separately. Section 95(2) governs both clauses (a) and (b) and thus, I see no sound reason as to why the observations and the ruling of the Supreme Court, though made while considering clause (a), will not apply to clause (b) also. I may point out that sub-clause (4) is not clear. It limits, on one hand, the overall liability of the insurer and on the other, prescribes another limit of liability for each individual passenger. There is as such, ambiguity in its language. In fact, if for instance, there is only one insured passenger, will the liability of the insurer be limited to Rs. 5000/- only, or will this liability come up to the overall limit? In my view, the answer to this question is to be found in the legislative policy itself. Insurance of motor vehicles was made compulsory manifestly for the purpose of assuring the victim of a motor vehicle accident the payment of a compensation, at least upto the limit of the liability of the insurer. If this is the purpose of the compulsoriness of the insurance, it becomes apparent and clear that the ambiguity in the language of Clause (4) has to be resolved in a manner which is favourable to the victim of an accident. Thus, though the Supreme Court did not consider the case under Section 95(2)(b) and kept the matter open by observing that different considerations may arise under Clause (b), in my opinion, the ratio of the Modi's case is fully attracted to Clause (b) and, therefore, applies to the case before me.

10. I am fortified in the view I have taken by the decisions of the Allahabad and Patna High Courts in the cases relied upon by Mr. Kolwalkar. In fact, in Mahmood Ahmad's case, the learned single Judge of the Allahabad High Court, after quoting extensively the observations in Modi's case, observed that, though that was the dictum of the Supreme Court while interpreting section 95(2)(a) of the act, the same interpretation can be applied to clause (b) also. He thus held that subject to the limit specified under sub-clauses (1), (2) and (3) of Section 95(2)(b) of the Act, the liability of the insurance company to reimburse was at least to be Rs. 5000/- per each individual, and further that although the minimum extent of liability of the insurance company to indemnify the owner of the vehicle in respect of the compensation incurred by him due to loss of life or injury to each individual passenger in a motor accident would at least be Rs. 5000/- yet its total liability would be subject to the minimum limits prescribed. Any liability in excess thereof, if incurred by the owner, will have to be borne by the owner of the vehicle himself unless the terms of the contract of insurance provide otherwise.

11. Similarly, in Chhunnu Ram's case, a Division Bench of the Patna High Court held that, in view of the decision of the Supreme Court in Modi's case, a Court may perhaps in a given case award the maximum compensation even to only one passenger who might be a victim of the accident in the type of the bus he was travelling against the Insurance Company.

12. The view that the ratio of Modi's case applies also to clause (b) was also taken in Om Prakash v. Rukmini Devi. In the said case, a Division Bench of the Allahabad High Court, also relying on the ruling of the Supreme Court in Modi's case, held that in a case falling under Section 95(2)(b) of the Act, the compensation has to be awarded by looking at it from the angle of the injured person and not from the angle of the accident.

13. It is no doubt true that in Sheikhupura Transport's case, the Supreme Court, while dealing with a case falling under Section 95(2)(b) has observed that the limit of insurer prescribed under Section 95(2)(b) of the Act can be enhanced by any contract to the contrary, and therefore, held that, considering all the relevant provisions of the Act, it was clear that the statutory liability of the insurer to indemnify the insured is as prescribed in Section 95(2)(b) of the Act. In Modi's case, the Supreme Court made a specific reference to its earlier decision in Sheikhupura Transport's case and after quoting from the said decision, observed that in view of the limit on the insurer's liability in respect of each passenger, the argument on the construction of the words ‘any one accident’ have no relevance in the Sheikhupura Transport's case and it was, therefore, neither made or considered by the Court, and further, that different considerations may arise under clause (b) as amended by act 56 of 1969. It was however also observed that the Court did not propose to decide the said question, and therefore, it is clear that it was left open by the Supreme Court. As I already observed, I find no sound reason as to why the observations made by the Supreme Court in Modi's case should not apply to a case falling under Section 95(2)(b) of the Act. Section 95(2) of the Act governs both clauses (a) and (b) and therefore, the expression ‘any one accident’ occurring therein has, in my opinion, to be read in both clauses (a) and (b). This being so, in my view, the ruling of the Supreme Court in Sheikhupura's case is distinguishable and it is the ruling in Modi's case that is attracted.

14. A reference may be made also, at this stage, to the decision of the Kerala High Court in Madras Motor and General Insurance Co. Ltd. v. V.P Balakrishnan (supra). A Division Bench of the Kerala High Court while dealing with a situation similar to one before me, observed in paragraph 10 as under:—

“Reliance on the above passages may at the first flush appear to be sound. But it can be seen that the plaintiff cannot sustain the support that he seeks from the passages quoted above. It has to be noted that the Supreme Court in that case was concerned with section 95(2)(a), as it existed on February 1, 1966, when the collision in that case took place. The Supreme Court referred to the changes that section 95(2) underwent from time to time and traced its history to appreciate the scope of the contention raised in that case. It was after considering the section as it stood after amendment by the Motor Vehicles (Amendment) Act, 100 of 1956, that it was held that the insurance company could be made liable for an amount in excess of the statutory limit of Rs. 20000/-, as it stood then, and that on the basis that each injured was involved in a separate accident. The question that fell for consideration before the Supreme Court in that case was whether the award of damages of Rs. 29125/- to the legal representatives of the driver who died in the accident and the passenger who travelled in the car was proper, in view of the limit of Rs. 20000/- fixed by the section as it then stood. We do not think it necessary to consider the applicability of the ratio of that decision for the reason that we are in this case Concerned with the section as it stands after the amendment brought to section 95(2) of the Motor Vehicles Act, by the Motor Vehicles (Amendment) Act, 56 of 1969, which came into force on 2nd March 1970. By the said amendment, Section 95(2)(b)(ii)(4) has been introduced which reads as follows:—

“(4) Subject to the limits aforesaid ten thousand rupees for each individual passenger where the vehicle is a motor cab and live thousand rupees for each individual passenger in any other case.”

The plaintiff's counsel found it extremely difficult to reconcile his submission with this sub-clause. He could not pursue his submissions based on the ratio of the decision under reference when confronted with this sub-clause. We have given our anxious consideration to this aspect of the case in view of the principle settled by the Supreme Court in the above decision. We hold that the decision could be distinguished on its facts. The section applicable in the present case is the amended section 95(2) as it now stands with effect from 2nd March 1970. Clause (4) limits the claim of each individual passenger in a case like this to Rs. 5000/-. Therefore we hold that the appellant in A.S No. 36 of 1977 could be made liable only for the amount of Rs. 5000/- in respect of each injured individual passenger and that the decree against the 3rd defendent has to be modified accordingly restricting its liability to Rs. 5000/- instead of Rs. 20000/- decreed by the Court below.”

15. It is clear from the quoted observations that the decision of the Kerala High Court is based exclusively in the wording of sub-clause (4) of the Act. It however appears that the Division Bench of the Kerala High Court did not analyse the said sub-clause (4) in detail and have thus failed to appreciate that the said provision of law is ambiguous in its language. No explanation was sought to be given for the existence of two limits of liability and as to how to conciliate them, and further, the purpose of the compulsoriness of the insurance had not been considered in the context of Section 95. In my view, as I have already observed, the fact the insurance was made compulsory in order to assure a victim of a motor vachicle accident of quick payment of the compensation is of vital importance and makes all the difference. Thus with the utmost respect for their opinion, I am unable to agree with the learned Judges of the Karala High Court and to accept their above referred to view.

16. I am, therefore, firmly of the opinion that the limit of liability of the insurer in respect of insured passengers prescribed in sub-clause (4) is subordinate to the overall limit of the insurer's liability. Therefore, if the total compensation payable to the victim or victims of a motor vehicle accident does not exceed the overall limit of liability, the insurer will be liable to pay such compensation in to. If, however, the compensation awarded exceeds that outer limit, the insurer would be liable up to the said limit, the owner of the vehicle being liable for the payment of the excess thereof. The subordinate limit of the liability prescribed in sub-clause (4) constitute only minimum limit of liability of the insurer towards any individual passenger who gets injured or dies in a motor vehicle accident. In this view of the matter, these appeals partly succeed. Accordingly, while affirming the award in its generality, it is held and declared that the liability of the insurance company, the seventh respondent herein, goes up to the limit of the insurance policy. The impugned award, is, therefore, modified accordingly. Costs by the respondents.

Appeals partly allowed.