1981 (9) TMI 302 - SC - Indian Laws

Summary

Issues Involved:
1. Delay in compensation for motor vehicle accidents.
2. Liability of insurance companies under Section 95(2) of the Motor Vehicles Act, 1939.
3. Interpretation of the term "any one accident" in Section 95(2)(a) of the Motor Vehicles Act, 1939.
4. Apportionment of liability between insurance companies and vehicle owners.

Detailed Analysis:

1. Delay in Compensation for Motor Vehicle Accidents:
The judgment highlights the significant delays in the final disposal of motor accident compensation cases, which undermine the effectiveness of compensation laws. The court notes that victims or their dependents often face prolonged legal battles against insurance companies that contest liability on various grounds. This delay, coupled with inflation, significantly reduces the value of the compensation received. The court urges the government to address this issue urgently and find a satisfactory method to ameliorate the woes of road accident victims.

2. Liability of Insurance Companies Under Section 95(2) of the Motor Vehicles Act, 1939:
The court examines the statutory limits of liability for insurance companies under Section 95(2) of the Motor Vehicles Act, 1939. The section mandates that a policy of insurance must cover liabilities incurred in respect of any one accident up to specified limits. The court notes that the provision has undergone amendments, with the 1956 amendment introducing the words "in all" to limit the overall liability of the insurer to twenty thousand rupees. The 1969 amendment further increased this limit to fifty thousand rupees.

3. Interpretation of the Term "Any One Accident" in Section 95(2)(a) of the Motor Vehicles Act, 1939:
The court delves into the interpretation of the term "any one accident" in Section 95(2)(a). It considers whether this term should be viewed from an objective or subjective perspective. The court concludes that the term should be interpreted subjectively, from the point of view of each individual claimant. This means that each person injured in an accident is entitled to make a separate claim, and the insurer's liability extends to a sum of twenty thousand rupees in respect of the injuries suffered by each individual, rather than a collective limit for all injuries arising from a single incident.

4. Apportionment of Liability Between Insurance Companies and Vehicle Owners:
The court addresses the issue of apportioning liability between the insurance company and the vehicle owner. It rejects the argument that the insurer's liability should be limited to twenty thousand rupees in total for all claims arising from a single accident. Instead, the court holds that the insurer is liable to pay compensation up to the statutory limit for each individual claimant. The balance, if any, should be borne by the vehicle owner. The court emphasizes the need to avoid interpretations that produce unfair and absurd results, such as disproportionately compensating heirs of affluent victims over those of indigent victims.

Conclusion:
The court affirms the Gujarat High Court's judgment, which held that the insurance company is liable to pay the full amount of compensation to each claimant, provided each amount is less than twenty thousand rupees. The appeals are dismissed with costs in favor of the respondents. The court also reiterates the urgent need for legislative reform to ensure prompt, adequate, and uncontested compensation for victims of road accidents.