Case Note & Summary
The dispute arose from a claim for compensation following the death of the appellant's husband in an accident involving a truck insured by the respondent. The accident occurred on April 5, 1970, while the insurance policy was valid from June 30, 1969, to June 29, 1970. The appellant sought compensation under the Motor Vehicles Act, 1939, but the insurer contested liability, arguing that its statutory limit was Rs. 20,000 based on the policy's issuance date. The Tribunal awarded Rs. 60,000 but limited the insurer's liability to Rs. 50,000, which the High Court later reduced to Rs. 20,000, leading to the appellant's appeal to the Supreme Court. The Supreme Court held that the insurer's liability should be determined based on the law in effect at the time of the accident, which was after the amendment increasing the limit to Rs. 50,000. The court emphasized that the relevant date for liability is when the cause of action arose, not when the policy was issued. Consequently, the Supreme Court restored the Tribunal's award and allowed the appeal with costs.
Headnote
A) Insurance Law - Insurer's Liability - Determination of Liability - Motor Vehicles Act, 1939, Section 95(2)(a) - The material date for ascertaining the extent of liability of the insurer is the date of the accident, thus the insurer's liability for accidents occurring after the amendment must be determined based on the amended provisions. Held that the insurer's liability is determined by the law in force at the time of the accident, not the policy issuance date (Paras 248-250).
Issue of Consideration
Whether the insurer's liability for third party risks under the statutory policy is limited to Rs. 20,000 or can be extended to Rs. 50,000 based on the date of the accident.
Final Decision
The Supreme Court set aside the High Court's judgment, restored the Tribunal's award of Rs. 50,000, and allowed the appeal with costs.
Law Points
- Insurance liability
- statutory policy
- amendment applicability
- cause of action
- breach of contract
