SHAH, J.

(1) BRIEF Facts : The Motor Accidents Claims Tribunal, Baroda, has awarded compensation amount of Rs 53,400/- by judgment and order dated 3/04/1978 to the heirs of the deceased, Sultan Singh, who expired on 8/01/1976. That order is challenged by the Insurance Company by filing this Civil Appeal. The Insurance Company contended that, when a person is travelling by a "goods vehicle" even by paying fare, the Insurance Company is not liable to indemnify the insured or, in any case, its liability under the statutory insurance coverage is limited. The entire matter is referred to Larger Bench by the Division Bench of this Court after hearing the learned Advocates for the parties. Before referring the entire matter for decision to the Larger Bench, the Division Bench of this Court has suggested the following questions, which are required to be determined by this Court : (i) What would be the extent of liability of the insurer under Sec. 95 (2)in respect of death or bodily injury to the passengers carried for hire or reward in a truck (ii) Which clause amongst (a), (b) or (c) will apply (iii) Whether the judgment of the Division Bench in Oriental Fire and General insurance Co. Ltd. v. Husseinbhai Abdulbhai Shaikh and Ors. , First appeal No. 851 of 1977, decided on 26/07/1983 (reported in 1984 GLH (UJ) 8), is correctly decided and is correctly followed in some other cases ii. 2. Repeatedly, Insurance Companies are attempting to avoid their liability to pay compensation arising because of the benevolent provisions under the motor Vehicles Act. The reason is - the helpless victims of the accident mainly being poor were compelled to travel by a goods vehicle (truck) - a reality of life - as at the relevant time no public service vehicle was available and were not in a position to afford any other luxurious vehicle. They or their dependants are kept in dark for years; whether they are entitled to get some amount from the Society for their survival depends upon long drawn legal submissions. The question for decision is whether such sufferers of vehicular accidents are entitled under law to get something for their survival or should be left without redress. Today, vehicular accidents are increasing manifoldly. In this background, it would be worthwhile to refer to the observations of Lord Denning, M. R. in the case of Lmnchbury v. Morgans, 1971 (2) QB 245, as under:

"a Motor vehicle is a powerful engine of death and destruction. It is capable of doing much damage to persons and to property unless it is driven with due care and attention. As the number of cars increase and as their speeds get faster and faster, so the danger grows. More and more people are killed. More and more are Injured. More and more property is damaged. The sufferers ought not to be left without redress. So Parliament and Judges hare done their best to see that they are compensated to their loss. "

(Emphasis supplied)To see that the sufferers are not left without redress or at the mercy of the driver or the owner of the vehicle who in most of the cases plead their insolvency to pay the compensation, the Parliament has made it compul- sory to take out a insurance cover, even though the choice of whether or not to take out insurance cover is normally for a voluntary decision to be made. By taking an insurance cover, the burden is on the shoulders of the insurance Company (i. e. , the Society because of nationalisation of Insurance companies) who are able to withstand the loss and it lessens the prospects of the financial perdition of the owner or the driver of the vehicle. Secondly, it obviates the undesirable state of affairs of a victim or his heirs being left without compensation for which he has obtained judgment after a long-drawn legal battle.

(2) THIS benevolent object of the legislation is considered by the Supreme court in a number of cases. Firstly, we would refer to the decision of the supreme Court in the case of Skandia Insurance Co. Ltd. v. Kokilaben chandravadan, AIR 1987 SC 1184 [LQ/SC/1987/348] , wherein the Court has observed that the law may provide for compensation to victims of the accidents who sustain injuries in the course of an automobile accident or compensation to the dependants of the victims in the case of a fatal accident. However, such protection would remain a protection on paper unless there is a guarantee that the compensation awarded by the Courts would be recoverable from the persons held liable for the consequences of the accident. A Court can only pass an award or a decree. It cannot ensure that such an award or decree results in the amount awarded being actually recovered from the person held liable who may not have the resources. The exercise undertaken by the law courts would then be an exercise in futility. To see that the exercise undertaken by the law Courts does not remain to be an exercise in futility and that the victim or his heirs get adequate compensation, the Legislature has provided that no person shall use except as a passenger or cause or allow any other person to use a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of Chapter VIII of the.

(3) FURTHER, while interpreting the words "in all and any one accident used in Sec. 95 (2) of the Motor Vehicles Act, the Supreme Court, in the case of Motor Owners Insurance Co. Ltd. v. J. K. Modi, AIR 1981 SC 2059 [LQ/SC/1981/395] , observed as under :

"we are, therefore, of the opinion that the ambiguity in the language used by the legislature in the opening part of Sec. 95 (2) and the doubt arising out of the correlation of the language with the words in all which occur in Clause (I), must be resolved by having regard to the underlying legislative purpose of the provisions contained in Chapter VIII of the which deals with third party risks. That is a sensitive process which has to accommodate the claims of the society as reflected in that purpose. Indeed, it is in this area of legislative ambiguities, unfortunately not receding, that Courts have to fill gaps, clear doubts and mitigate hardships. "

(Emphasis supplied)

(4) APART from the aforesaid aspects, it should be noted that because of death of or bodily injury to the bread-earner of the family, the entire family suffers. The task of approaching the law Courts by engaging lawyers for filing application for compensation may also add to their miseries. Subsequent delays in the law Courts are well-known which require no elaboration in this matter and, as observed by the Supreme Court, till the infant of the victim attains majority, he would not get compensation. To meet this social need and to save miseries of the victims of the accident or their dependents from economic disaster, some adequate method of compensation is required to be provided. If it is done through the Insurance Companies, it would be in the interest of the Society; the method may be, to pay minimum compensation periodically, say, quarterly or half-yearly to the victim or his dependents till the case is decided. Further, instead of giving lumpsum compensation, it would be in the interest of the victims and the Society to evolve a formula or method of paying compensation periodically - may be monthly, quarterly or half-yearly for a fixed period - say - about 20 years. This method may, to some extent, alleviate the serious prevailing drawbacks, because it is stated that, before the compensation reaches the hands of the victims or their heirs, the lions share of the compensation is pocketed by the middlemen or so-called power of attorney holders who trade in their miseries. It may also save to some extent the huge expanses including Advocates fees which are required for litigation before getting compensation and may ensure safe custody of compensation amount awarded to the victims which, ultimately, would be in the interest of the society. III. In this background, we would deal with the entire question under the following heads : a. Whether risk of the passengers travelling by a goods vehicle by paying fare is covered under Sec. 95 (2) (b) (ii) (4). B. Whether risk of the passengers travelling by a goods vehicle by paying fare is statutorily required to be covered. C. Whether risk of the passenger travelling by a goods vehicle by paying fare is covered under Sec. 95 (2) (a) or 95 (2) (c). D. Whether the compensation amount should be paid in lump sum or by periodical instalments. A. RE : Whether risk of the passengers travelling by a goods vehicle by paying fare is covered under Sec. 95 (2) (b) (ii) (4)

(5) WE would deal with this question after referring to the submissions of the learned Advocates. Submissions mr. Mehta, learned Advocate appearing on behalf of the Insurance company, submitted that in such a situation the goods vehicle is considered to be a public service vehicle and, therefore, the insurance coverage would be as provided under Sec. 95 (2) (b) (ii) (4) and not on the basis of the residuary clause 95 (2) (c). Mr. B. R. Shah, learned Advocate, who is also appearing on behalf of the Insurance Company, submitted that in no set of circumstances Sec. 95 (2) (b) (ii) would be applicable and, therefore, there is no question of applying Sec. 95 (2) (b) (ii) (4). As against this, Mrs. Yagnik, learned Advocate appearing on behalf of the claimants, submitted that, whem the victim was travelling in a goods vehicle as a passenger by paying fare, neither Sec. 95 (2) (a) nor (2) (b) would be applicable but residuary clause 95 (2) (c)would be applicable.

(6) BEFORE deciding this question, we make it clear that, while interpreting the Section, if the language is clear and capable of only one interpretation, the words of the Section are required to be interpreted from the language used by the Legislature by ignoring the harsh consequences flowing therefrom. However, in a case where language is ambiguous and equivocal but which permits the meaning serving the purposes of both, i. e. , the Legislature and the Society, then benign provision is to be interpreted accordingly. To do otherwise would amount to nullfying the benign provision.

(7) AT this stage, we would refer to the provision of Sees. 94 and 95 of the, as it stood prior to 1982, which are as under :

"94. Necessity for Insurance against third party risk : (1) No person shall use except as a passenger or cause or allow any other person to use a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of Insurance complying with the requirements of this Chapter. Explanation:- xxx xxx xxx (2) xxx xxx xxx (3) xxx xxx xxx provided xxx xxx xxx explanation :- xxx xxx xxx 95. Requirements of policies and limits of liability : (I) In order to comply with the requirements of this Chapter, a policy of Insurance must be a policy which - (a) xxx xxx xxx and (b) insures the person or classes of persons specified in the policy to the extent specified in sub-sec. (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 properly 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 Workmens Compensation act, 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 a 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: xxx xxx xxx 95 (2). Subject to the proviso to sub-sec. (1), a policy of Insurance shall cover any liability incurred in respect of any one accident upto the following limits, namely; (a) Where the vehicle is a goods vehicle, a limit of fifty thousand rupees in all, including the liabilities, if any, arising under the Workmens 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- (1) a limit of fifty thousand rupees in all where the vehicle is registered to carry not more than thirty passengers; (2) a limit of seventy-five thousand rupees in all where the vehicle is registered to carry more than thirty but not more than sixty passengers; (3) a limit of one lakh rupees in all where the vehicle is registered to carry more than sixty passengers; and (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 ease; (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 two thousand in all in respect of damage to any property of a third party. "

Section 95 of the Motor Vehicles Act, 1939 provides for requirements of the policy of the insurance, which must be complied with by the owner of the motor vehicle, and the limits of the liabilities thereunder. At present, we would deal with clause (b) of sub-sec. (2) of Sec. 95. It deals with a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, for which, the limit of insurance coverage is provided in two-fold manner. Sub-clause (i) of clause (b) provides a limit of fifty thousand rupees in all in respect of persons other than passengers carried for hire or reward. Sub-clause (ii) is further divided into four parts, it deals with the liability in respect of. death of or bodily injury to the passengers travelling by vehicles having different registered capacity to carry passengers. The first limits is Rs. 50,000. 00 in all where the vehicle is registered to carry not more than 30 passengers; secondly, Rs. 75,000. 00 in all where the vehicle is registered to carry more than 30 but not more than 60; and, thirdly, Rs. 1,00,000. 00in all where the vehicle is registered to carry more than 60 passengers. After laying down the aforesaid limits for insurance coverage of vehicles, further limit is provided by sub-clause (4) of clause (ii) in respect of each passenger by providing that, subject to the limits aforesaid. Rs. 10,000. 00for each individual passenger where the vehicle is a motor cab and in any other case the liability is extended to Rs. 5,000. 00 for each individual passenger. Therefore, there is no substance in the contention of learned Advocate Mr. Mehta that sub-clause (4) of clause (b) (ii) would govern a situation where the passenger is travelling in a goods vehicle by paying fare. The said subclause only provides an outer limit of liability with regard to each passenger in a case where the vehicle is registered to carry passengers as provided in sub-clauses (1) to (4). Sub-clauses (1), (2) and (3) provide aggregate liability of insurance coverage for a vehicle. Sub-clause (4) provides second outer limit of Rs. 10,000. 00 for each individual passenger where the vehicle is a motor cab and Rs. 5,000. 00 for each individual passenger in the case of any other vehicle. Sub-clause (4) is inter-connected with the provisions of sub-clauses (1), (2) and (3) and it is not a residuary sub-clause. As stated earlier, it provides second outer limit of insurance coverage for the passengers carried in a vehicle registered to carry a particular number of passengers.

(8) FURTHER, with regard to the interpretation of clause (b) of Sec. 95 (2), it is concluded by the decision of the Supreme Court in the case of M. K. Kunhimohammed v. P. A. Ahmedkutty, AIR 1987 SC 2158 [LQ/SC/1987/623] . The relevant discussion in paragraph 4 is as under :

"4. Section 95 (2) (b) as it existed before its amendment in 1982 dealt with the limits of the liability of an insurer in the case of motor vehicles in which passengers were carried for hire or reward or by reason of or in pursuance of a contract of employment. Sub-clause (i) of Sec. 95 (2)b) provided that in respect of death of or injury to persons other than passengers carried for hire or reward a limit of Rs. 50. 000/- in all was the limit of the liability of the insurer. Sub-clause (ii) dealt with the liability in respect of death of or injury to passengeis. Under that sub-clause there were two specific limits on the liability of the insurer in the case of motor vehicles carrying passengers. The first limit related to the aggregate liability of the insurer in any one accident. It was fixed at Rs. 50,000. 00 in all where the vehicle was registered to carry not more than thirty passengers-, at Rs. 75. 000. 00 in all where the vehicle was registered to carry more than thirty but not more than sixty passengers and at rs. 1,00,000/- in all where the vehicle was registered to carry more than sixty passengers. The said sub-clause proceeded to lay down the other limit in respect of each passenger by providing that subject to the limits aforesaid as regards the aggregate liability, the liability extended upto Rs. 10. 000/- for each individual passenger where (he vehicle was a motor cab and Rs. 5,000. 00 for each individual passenger in any other case. Neither of the two limits can be ignored. In the present case the vehicle in question being a bus carrying passengers for hire or reward registered to carry more than thirty but not more than sixty passengers the limit of the aggregate liability of the insurer in any one accident was Rs. 75,000. 00 and subject to the said limit the liability in respect of each individual passenger was Rs. 5. 000/ -. We find it difficult to hold that the limit prescribed in Sec. 95 (2) (b) (ii, (4) was only the minimum liability prescribed by law. The amount mentioned in that provision provides the maximum amount payable by an insurer in respect of each passenger who has suffered on account of the accident. This appears to us to be a fair construction of Sec. 95 (2) of the as it existed at the time when the accident took place. Our view receives support from at least two decisions of this Court. "

In view of the aforesaid decision, in our view, the contention raised by learned advocate Mr. Mehta that the present case is covered by Sees. 95 (2) (b) (ii) (4)is without any substance and requires to be rejected. B. RE : Whether risk of the passengers travelling by a goods vehicle by paying fare is statutorily required to be covered.

(9) THE aforesaid question is required to be first examined for determining the question as to : whether in such case Sec. 95 (2) (a), which prescribes limit of Rs. 50;000/- in all, would be applicable, or Sec. 95 (2) (c), which deals with the vehicle of any other class, would be applicable Sub-clause (c) does not provide any limit for insurance coverage. It provides that insurance coverage should be the amount of liability incurred.

(10) BEFORE dealing with the contention raised by the learned Advocates for the parties, it would be proper to refer to the interpretation given to Sees. 95 and 96 of the by this Court and by the Supreme Court.

(11) THE aforesaid Sections came up for consideration before Full Bench of this Court in the case of New India Assurance Co. v. Smt. Nathiben [1982 (1)] XXIII (1) GLR 411. The Court was required to decide the question :

"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, whether a passenger on payment will get the benefit of the statutory insurance "

In that case also, the Insurance Company, which had insured a public carrier (Leyland Goods Truck), disclaimed its liability to satisfy the awards made in three different but connected motor accident claim cases, on the ground that the vehicle in question was, on the date of the contract of insurance, a vehicle not covered by a permit to carry passengers for hire or reward and that it was, at the time of the accident, stated to have been actually used to carry three passengers for hire or reward and that therefore the Insurance company was not liable to satisfy the awards made in favour of one of such passengers who was injured and the dependants of the other two of such passengers who met with their death in the course of the accident. After considering the provisions of Sec. 95, the Court summarised requirements which are to be complied with by the policy of insurance issued in relation to the use of a particular vehicle. They are (at page No. 418 of GLR) :" (1) the policy must be issued by a person who is an authorised insurer or by a Co-operative Society allowed to transact the business of an insurer under sec. 108; (2) such policy must specify the person or classes of persons who must be insured with respect to their following liabilities: (a) any liability incurred in respect of the death of or bodily injury to any person or damage to any property of a third party, and (b) any liability in respect of 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; (3) such policy shall not be required, however, to cover liability in respect of the death of or bodily injury sustained by an employee of the insured arising out of and in the course of his employment except a liability arising under the Workmens Compensation Act, 1923, in regard to the death of or bodily injury to the following categories of such employees : (a) an employee engaged in driving the vehicle, or (b) if it is a public service vehicle, an employee engaged as a conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods vehicle, an employee being carried in the vehicle; (4) such policy shall not also be required 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, except 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; (5) such policy shall not furthermore be required to cover any contractual liability; and (6) such policy must specify the extent of liability which must extend to the extent specified in sub-sec. (2). "

After considering various decisions cited at the Bar and the definition of public service vehicle, goods vehicle and Rule 118 of the Bombay Motor Vehicles rules, 1959 which deals with the carriage of persons in goods vehicles and grant of permit by the Regional Transport Authority to carry large number of persons in the goods vehicle on certain conditions, the Court dealt with the question referred to the Full Bench. For that purpose, the Court summarised the assumed or admitted fact-situation on the basis of which the question was required to be answered in the following terms (at page No. 426 of GLR) :"1. The claim of statutory coverage was advanced in respect of a passenger who was carried on the vehicle on payment of charges when the accident giving rise to the claim occurred, and 2. the said vehicle was, on the date of the contract of insurance, not covered by a permit to ply for hire or reward. "

Now, we have seen earlier :" (I) that under Sec. 95 (l) (b) (ii), the statutory insurance must cover the passenger risk in respect of the passengers carried in or upon a public service vehicle, (2) that under Sec. 95 (l) (b) (i) read with the second clause of the proviso, the statutory insurance must also cover the passenger risk in respect of passengers carried for hire or reward or in pursuance of a contract of employment in a vehicle other than a public service vehicle such as a goods vehicle which can lawfully carry passengers under certain circumstances and to the specified extent, (3) that only such restrictive conditions incorporated in the statutory policy will be effective qua the liability as are referred to in Sec. 96 (2) (b)and that upon the issuance of the certificate of insurance any other restrictive conditions in such policy will be inoperative qua the rights of third parties, (4) that the statutory insurance makes the insurer liable to indemnify the person or classes of persons specified in the policy to the extent specified in Sec. 95 (2) against any liability incurred by them which is required to be covered under such insurance, (5) that once the insurer has issued the certificate of insurance, he has to satisfy any decree which a person receiving injuries or the dependants of a person who was injured and died in the course of the accident obtain/obtains against any person covered by the statutory policy in respect of such liability, (6) that the liability to satisfy the decree is, however, subject to the right of the insurer to defend the action after being made a party thereto on any one or more of the grounds specified in Sec 96 (2), (7) that if the insurer successfully raises any of the defences therein mentioned, he can validly avoid the liability to satisfy the decree, and (8) that one of the grounds on which the insurer can defend the action under sec. 96 (2) (b) (i) is that there was a breach of a specified condition of the policy, namely, a condition excluding the use of the vehicle, for hire or reward, where the vehicle was, on the date of the contract of insurance, a vehicle not covered by a permit to ply for hire or reward. "

We have also seen earlier :"1. that the necessity for a permit is only in respect of a transport vehicle (a public service vehicle or a goods vehicle) and 2. that the permit is necessary not only in respect of a motor vehicle which is actually used or constructed or adapted to be used as a public service vehicle and which is registered as such, but also when the owner of any motor vehicle uses or permits the use of such vehicle for carrying passengers for hire or reward, even if such user is occasional. "

The Court finally answered the question as under :"the liability in respect of the death of or bodily injury to a passenger carried for hire or reward on the insured vehicle when the accident giving rise to the claim occurred, including the liability in respect of the owner or hirer of the insured vehicle or his bona fide employees within the permissible limit, will be covered by the statutory insurance either by virtue of Sec. 95 (1) (b) (i) read with the second clause of the proviso or by reason of Sec. 95 (l) (b) (ii) of the In such a case, the insurer will have to pay to the person entitled to the benefit of the award the sum assured, which shall rot be less than the sum specified in Sec. 95 (2), subject, however, to the right of the insurer to disclaim the liability inter alia, under Sec. 96 (2) (b) (i) (a),"

The Court further held :"the insurer in order to successfully disclaim his liability on that ground will have to establish : 1. that on the date of the contract of insurance, the insured vehicle was expressly or implicitly not covered by a permit to carry any passenger for hire or reward. 2. that there was a specified condition in the policy which excluded the use of the insured vehicle for the carriage of any passenger for hire or reward, and 3. that the vehicle was, in fact, used in breach of such specified condition on the occasion giving rise to the claim by reason of the carriage of the passenger therein for hire or reward. "

(12) AT this stage, we would refer to the decision of the Supreme Court in the case of Skandia Insurance Co. Ltd. [air 1987 SC 1184 [LQ/SC/1987/348] ] (supra), wherein the Court was required to consider the question as to whether the insurer is entitled to claim immunity from a decree obtained by the dependents of the victim of a fatal accident on the ground that the insurance policy provided 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 and that such exclusion was permissible in the context of Sec. 96 (2) (b) (ii) for claiming immunity against the obligation to satisfy the judgments against the insured in respect of third party risks. The court considered Sec. 96 (2) (b) which inter alia provides for grounds of defence which may be taken by the Insurance Company that there has been a breach of condition of policy such as 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. The Court held that the very concept of infringement or violation of the promise that the expression breach carries within itself induces an inference that the violation or infringement on the part of the promisor must be a wilful infringement or violation. The Court observed that if the insured is not at all at fault and has not done anything he should not have done or is not amiss in any respect, how can it be conscientiously posited that he has committed a breach It is only when the insured himself places the vehicle in charge of a person who does not hold a driving licence, that it can be said that he is guilty of the breach of the promise that the vehicle will be driven by a licensed driver. It must be established by the Insurance Company that the breach was on the part of the insured and that it was the insured who was guilty of violating the promise or infringement of the contract. Unless the insured is at fault and is guilty of a breach the insurer cannot escape from the obligation to indemnify the insured and successfully contend that he is exonerated having regard to the fact that the promisor (the insured) committed a breach of his promise. Not when some mishap occurs by some mischance. When the insured has done everything within his power inasmuch as he has engaged a licensed driver and has placed the vehicle in charge of a licensed driver, with the express or implied mandate to drive himself it cannot be said that the insured is guilty of any breach. And it is only in case of a breach or a violation of the promise on the part of the insured that the insurer can hide under the umbrella of the exclusion clause. The Court finally held :

"if the insured is not at all at fault and has not done anything he should have done or is not amiss in any respect how can it be conscientiously posited that he has committed a breach It is only whom the insured himself places the vehicle in charge of a person who does not hold a driving licence, that it can be said that he is guilty of the breach of the promise that the vehicle will be driven by a licensed driver. It must be established by the Insurance Company that the breach was on the part of the insured and that it was the insured who was guilty of violating the promise or infringment of the contract. "

The Court further held :"to do otherwise would amount to nullifying the benevolent provision by reading it with a non-benevolent eye and with a mind not turned to the purpose and philosophy of the legislation without being informed of the true goals sought to be achieved. What the legislature has given the Court cannot deprive of by way of an exercise in interpretation when the view which renders the provision potent is equally plausible as the one which renders the provision impotent. "

(13) FROM the aforesaid judgment, it can be stated that it is for the insurance Company to establish that there has been a breach of specific condition of policy and that it is done by the insured himself or at his instance and that the insured was guilty of violating the promise or infringement of the contract. Unless the insured is at fault and is guilty of breach, the insurer cannot escape from the obligation to indemnify the insured who in turn is required to pay compensation to the victim or his heirs.

(14) THE decision in the case of Skandia Insurance Co. Ltd. (supra) is reaffirmed by the Supreme Court in the case of Kashiram Yadav v. Oriental fire and General Insurance Co. , AIR 1989 SC 2002 [LQ/SC/1989/399] . The Court has further observed :

"we affirm and reiterate the statement of law laid down in the above case. We may also state that without the knowledge of the insured, if by drivers acts or omission others meddle with the vehicle and cause an accident, the insurer would be liable to indemnify the insured. The insurer in such a case cannot take the defence of a breach of the condition in the certificate of insurance. "

(15) FURTHER, dealing with the similar contention, the Supreme Court in the case of Bishan Devi v. Sirbaksh Singh, AIR 1979 SC 1862 [LQ/SC/1979/340] , has held that it is the duty of the insurer to have substantiated his plea under See. 96 (2) (b) (ii) that the vehicle was driven by a person who was not duly licensed.

(16) IN view of the aforesaid decisions of the Supreme Court, it can be held that, in addition to three grounds which are stated by this Court in the case of New India Assurance Co. v. Smt. Nathiben [1982 (1)] XXIII (1) GLR 411] (supra), in order to successfully disclaim its liability, one additional ground is required to be established by the Insurance Company, i. e.

" (4) that the vehicle was used by the insured or at his instance in breach of specific conditions including a condition that in the goods vehicle passengers for hire or reward were not to be carried. If it is done without knowledge of the insured by the drivers acts or omission, the insurer would be liable to indemnify the insured. "

Submissions of learned Advocates :

(17) IN spite of the aforesaid decisions, the learned Advocates for the insurance Companies contended that the Insurance Companies are not liable to satisfy the claim of victims who are travelling by paying fare in a goods vehicle.

(18) MR. Shah, learned Advocate appearing on behalf of the Insurance company, submitted that insurance coverage is a matter of contract. Still, however, by statutory provision minimum coverage is prescribed under Sec. 95 and that a third party to the contract, i. e. , victim or his dependants can enforce it. It is his submission that considering Sec. 95 (2) insurance coverage is provided under the nature of vehicle, i. e. , (a) goods vehicle, (b) passengers vehicle and (c) remaining vehicles such as tractors, motor-cycles and other vehicles. It is his contention that, at the time of entering into a contract for giving of insurance coverage, classes of vehicles are required to be taken into consideration and not their use. He emphatically submitted that goods vehicle would not cease to be a goods vehicle for the purpose of insurance simply because on occasions it is used as passenger vehicle, and for contract of insurance it remains to be a goods vehicle. It is his contention that Sec. 95 (2) requires that there should be insurance coverage on the basis of class of vehicle and, therefore, it should be the only factor which should be taken into consideration for making insurer liable for satisfying the claim of the victims as required by Sec. 95 read with Sec. 96 of the Motor Vehicles Act. He further submits as under : (i) With regard to the goods vehicle if a passenger is travelling by paying fare, the liability of the Insurance Company would be nil if it satisfies the conditions laid down under Sec. 96 (2) (b), That is to say, if there is breach of conditions by the insured, then the Insurance Company would not be liable. If breach of the conditions is not established, then qua goods vehicle as a goods vehicle, the Insurance Companys liability is limited as provided in Sec. 95 (2) (a). If it is to be treated as a public service vehicle, then the liability qua passengers would be as provided in Sec. 95 (2) (b) (ii) but in no set of circumstances it would be covered by Sec. 95 (2) (c). (ii) When a particular vehicle like goods vehicle cannot be used for carriage of passengers, the Insurance Company is not expected to cover the passenger risk. In the case of such a vehicle, there would be no policy in regard to the liability for passengers and, therefore, the Insurance company would not at all be liable to reimburse the insured for the compensation for death of or bodily injury to the passengers wrongly carried in the vehicle. (iii) If the goods vehicle is used to carry passengers, it would be in violation of Sec. 42 and is punishable under Sec. 123 of the Motor Vehicles Act. Therefore, for such an act, which is illegal, the Insurance Company would not be liable.

(19) MR. Mehta, learned Advocate for the Insurance Company, also submitted that, with regard to the goods vehicle, the Insurance Company is not required to cover the risk of the passengers, as the passengers are not permitted to be carried in the goods vehicle.

(20) AS against this, Mrs. Yagnik, learned Advocate for the insured, submitted that Sec. 95 (l) (b) (i) specifically requires that a policy of insurance must be a policy which insures persons or classes of persons against any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place. Proviso to the said clause carves out an exception to the extent that a policy shall not be required to cover liability in respect of the death of or bodily injury to the employee of a person insured. To that original proviso, which was enacted in 1939, an amendment was made to the effect that a policy of insurance should also cover a liability arising under the Workmens Compensation Act, 1923 and, therefore, the remaining part starting from "other than a liability arising under the Workmens compensation Act, 1923" was added in the first part of the proviso. Second part of the said proviso carves out an exception that a policy shall not be required to cover liability in respect of death of or bodily injury to persons being carried in the vehicle at a time of occurrence of the event out of which claim arises except where the vehicle is a vehicle in which passengers are carried for hire or reward. She submitted that second part of the proviso only means that - (i) in a vehicle in which passengers are carried for hire or reward by reason of or in pursuance of the contract of employment, a policy is required to cover the liability arising out of the use of the vehicle as stated therein; and (ii) a policy would not be required to cover the liability in case of the vehicle in which passengers are not carried for hire or reward or by reason of or in pursuance of the contract of employment. But it nowhere provides that it should be a public service vehicle. She submitted that the legislature has not used the phrase public service vehicle but has used the word vehicle. Therefore, in a goods vehicle, where the passengers are carried for hire or reward, the statutory policy is required to cover the liability of the insured in respect of the death of or bodily injury to any parson caused by or arising out of the use of the vehicle in a public place.

(21) FOR appreciating the contentions raised by the learned Advocates for the parties, we would refer to the relevant part of Sec. 95 (1) which is as under :

" (1) in order to comply with the requirements of this Chapter, a policy of insurance must be a policy which - (a) xxx xxx xxx and (b) insures the person or classes of persons specified in the policy to the extent specified in sub-sec. (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 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 Workmens Compensation act, 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 a 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: xxx xxx xxx"

(22) AT this stage, we would note that the Supreme Court and different high Courts have unequivocally expressed the view that Sec, 96 is equivocal and ambiguous.

(23) READING clauses (b) (i) and (b) (ii) of Sec. 95 (1), it can be stated that :

" (i) the policy of insurance must be a policy which insures the person against any liability which may be incurred by him in respect of the death of or bodily injury to any person caused by or arising out of use of the vehicle in a public place; (ii) it is also required to cover damage to any property of a third party; (iii) the policy of insurance must also be a policy which insures the person 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. Sub-clause (b) (ii) deals with insurance coverage of passengers of a public service vehicle. Under sub-sec. (25) of Sec. 2, public service vehicle means any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward, and includes a motor cab, contract carriage and stage carriage; and (iv) the extent of insurance coverage is specified in sub-sec. (2). "

(24) TO the aforesaid sub-clause (b), an exception is carved out by the proviso. Proviso (i) deals with insurance coverage to the employees of the insured. It can be divided into two parts. Firstly, it provides that the Insurance company shall not be required to cover the 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. Thereafter, another exception is carved out with regard to some employees. By reading it positively, it means that the policy of insurance is required to cover liability arising under the Workmens Compensation Act, 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 good vehicle, being carried in the vehicle. Further, it is apparent from sub-clauses (a), (b) and (c), that the legislature has used different words, namely, vehicle public service vehicle and goods vehicle in these clauses. This indicates that the words are used with a pacific object of conveying different meanings. Proviso (ii) :

(25) SIMILARLY, proviso (ii) provides that the policy of insurance shall not be required 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, except 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. Reading it positively, this would mean that the policy shall be required to cover liability in respect of death of or bodily injury to persons being carried in the vehicle 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.

(26) THE aforesaid exception is to be read along with clause (b) (i) of Sec. 95 (1) which provides that the policy of insurance must be a policy which insures the person against any liability which may be incurred by him in respect of the death of or bodily injury to any person caused by or arising out of use of the vehicle in a public place. Because of the proviso, in the case of any vehicle in which passengers are not carried for hire or reward, the insurance policy is not required to cover the 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. It should be noted that : (a) Clause (ii) of the proviso does not deal with the liability of the passengers being carried in public service vehicle. It requires that the insurance policy should cover the liability arising out of use of the vehicle by persons being carried in a vehicle in which the persons are carried for hire or reward. It appears that this exception is carved out for those persons who have not paid fare (gratuitous passengers) and were travelling by the vehicles in which passengers are not carried for hire or reward. (b) This exception is restricted in a case where accident occurs because of the use of the vehicle at the time of being carried in or upon or entering or mounting or alighting from the vehicle and not at the time when the persons are in the vehicle itself. (c) The legislature has not used the phrase public service vehicle in clause (ii) of the proviso even though the phrase public service vehicle is specifically used in clause (i) of the proviso. Sub-clause (b) of clause (.) of the proviso specifically provides that if it is a public service vehicle the policy shall be required to cover the liability of any such employee engaged as a conductor of the vehicle or in examining tickets on the vehicle. The phrase public service vehicle is also used in clause (ii) of Sec. 95 (l) (b). (d) Further, as stated earlier, in clauses (a), (b) and (c) of proviso (i), the words vehicle, public service vehicle and goods vehicle are used and in context it is abundantly clear that they are used for definite purpose of conveying different meanings. The word vehicle used in clause (a)includes all types of vehicles and that an employee who is engaged in driving any vehicle would be covered by it. Applying the said analogy, the word vehicle used in proviso (ii) would cover all types of vehicles and there is no reason to confine the meaning of the vehicle to public service vehicle. Therefore, when the legislature has used different words or phrases in different parts of the same section, then it can be stated that the legislature intended to give different meaning to the said phrases. Apart from the aforesaid aspects, goods vehicle can be adapted for carrying passengers. The word goods vehicle is defined under Sec. 2 (8) of the Motor vehicles Act to mean any motor vehicle constructed or adapted for use for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods solely or in addition to passengers. Therefore, goods vehicle can also be used for carrying passengers for hire or reward on some occasions.

(27) IN any case, in this matter, it is not necessary to discuss this question further, in view of the decision of the Full Bench of this Court in the case of Nathiben [ (1982 (1)) XXIII (1) GLR 411 ] (supra), wherein the Court has, inter alia, observed :

"the second clause of the proviso provides cover in respect of the risk to passengers even if they are carried in a vehicle which is not a public service vehicle but to a limited extent and the limitation is that the passengers must have been carried for hire or reward or by reason of or in pursuance of a contract of employment. This position is now no longer open to doubt or debate. "

After considering various sections of the Motor Vehicles Act, and the decisions including a decision of the Supreme Court in the case of State of mysore v. Syed Ibrahim, AIR 1967 SC 1424 [LQ/SC/1967/41] , the Court has inter alia held that the statutory insurance policy must also cover the passengers risk in respect of passengers carried for hire or reward or in pursuance of a contract of employment in a vehicle other than a public service vehicle such as a goods vehicle which can lawfully carry passengers under certain circumstances and to the specified extent. Further observations of the Court are already quoted in the previous paragraphs.

(28) IN view of the aforesaid decision of this Court, which is consistently followed, and also earlier decisions of this Court [sakinabibi v. Gordhanbhai prabhudas Patel, ((1974)XV GLR 428), Jaw Shri Satji v. Dand Taiyab (1978) XIX GLR 404), Ambaben v. Usmanbhal Amirmiya, (1978) XIX GLR 913) which are referred to and approved by Full Bench, in our view,it would not be necessary to refer to other decisions citedby Mr. Pandya and Mr. Mehta, Iearned Advocates appearing for the Insurance company, in support of the contention that the Insurance Company is not required to cover the liability of insured when the passengers are carried in a goods vehicle. Still however, we state that Mr. Pandya and Mr. Mehta, learned advocates appearing for Insurance Company, have relied upon the decision of Full Bench of the Karnataka High Court in the case of Re : National insurance Company Ltd. , AIR 1992 Karnataka 3. It should be noted that in the aforesaid case the Karnataka High Court fully agreed with the view taken by this Court in the case of Nathiben [1982 (1) GLR 411 [LQ/GujHC/1982/10] ] (supra), as stated in paragraph 28. The Karnataka High Court has referred to decisions of different high Courts and arrived at the following conclusion :

"in a motor vehicle, the insurance policy issued by the Insurance Company in conformity with Sec. 95 of the Motor Vehicles Act, is not liable, by the force of clause (ii) of the proviso to Sec. 95 (I) (b) of the, to pay compensation in respect of death of or bodily injury to any person travelling in a vehicle which is not a vehicle constructed or adapted and meant in law for carrying passengers for hire or reward such as a goods vehicle even to the extent of number of passengers/ persons permitted to be carried in the vehicle, except in respect of the owners of the goods travelling in a poods vehicle having engaged the vehicle under an agreement with the owner for carrying goods for hire or reward, and the goods carried are those as defined in Sec. 2 (7) of the, subject to the condition that such liability shall cover only upto the extent of the number of persons permitted to be carried in the goods vehicle under Rule 161 of the Karnataka Motor Vehicles Rules, 1963. "

With all respects, it is difficult for us to agree with the aforesaid final conclusion arrived at by the Karnataka High Court. We fully agree with the ratio laid down by the Full Bench of this Court in the case of New India assurance Co. v. Smt. Nathiben [ (1982 (1)) XXIII (1) GLR 411] (supra) and in the case of Ambaben v. Usmanbhai Amiimiya, (1978) XIX GLR 913.

(29) FURTHER, in a case, where there is ambiguity in the language, the interpretation, which mitigates the hardships and which is in conformity with the object which is sought to be achieved by the legislature, is to be adopted. In the case of Ambaben [ (1978) XIX GLR 913] (supra), in the concluding paragraph, this Court observed :

"we must point out that in innumerable cases all over the country, passengers are in fact carried for hire or reward by the driver of the vehicle or sometimes free lifts are given by the drivers of goods vehicle or public service vehicle and if an event occurs which gives rise to a claim against the owner of the vehicle and against the insurer, such passengers who are not carried for hire or reward would have nothing to fall back upon except the claim against the owner of the vehicle. The practice of carrying such passengers is fairly wide spread and, therefore, it is desirable that the legislature by suitable amendment makes a provision for covering all risks of injuries to such passengers as well. "

Further, dealing with the similar contention, while interpreting sub-sec. (2)of Sec. 95 of the Motor Vehicles Act, particularly the words in all and any one accident, the Supreme Court, in the case of Motor Owners Insurance co. Ltd. v. J. K. Modi, AIR 1981 SC 2059 [LQ/SC/1981/395] , held that it is for the judges to interpret laws in the light of their purpose, where the language used by the law-makers does not yield to one and one meaning only. The court has also considered the difficulty of recovering the compensation amount from the truck owners and observed that there are proverbial difficulties in proving ownership of goods vehicles and the truck owners are quite known for the case with which they proclaim their insolvency. It is worthwhile to reproduce the relevant observations made by the Supreme Court in this context:"the icy hand of death may have fallen in one stroke on two victims of desperate economic status but then the arithmetic of the appellants argument will perpetuate the gross inequality between the two even after their death. We must avoid a construction which will produce such an unfair result, if we can do so without doing violence to the language of the section. The owner of the truck will undoubtedly be liable to pay the balance but common experience shows that the woes of the injured and of the heirs of those who perish in automobile accidents begin after they embark upon the adventure of execution proceedings. There are proverbial difficulties in proving ownership of goods vehicles, particularly if they are subject to a hirepurchase agreement and truck owners are quite known for the case with which they proclaim their insolvency. It is therefore no consolation that the left-over liability fall on the insured. "

The Court further held that expression any one accident is to be interpreted from the point of view of the various claimants, each of whom is entitled to make a separate claim for the accident suffered by him and not from the point of view of the insurer. The relevant discussion is as under :"18. We are, therefore, of the opinion that the ambiguity in the language used by the legislature in the opening part of Sec. 95 (2) and the doubt arising out of the correlation of that language with the words in all which occur in clause (a), must be resolved by having regard to the underlying legislative purpose of the provisions contained in Chapter VIII of the which deals with third party risks. That is a sensitive process which has to accommodate the claims of the society as reflected in that purpose Indeed, it is in this area of legislative ambiguities, unfortunately not receding, that Courts have to fill gaps, clear doubts and mitigate hardships. In the words of Judge learned Hand -"it is one of surest indexes of a nature and developed jurisprudence. . . . . . . . . . . . to remember that statutes always have some purpose or object to accomplish whose sympathetic and imaginative discovery is the surestguide to their meaning". Cabell v. Markham (1945) 148 F 2d 717, 739. There is no table of logarithms to guide or govern statutory construction in this area, which leaves a sufficient and desirable discretion for the Judges to interpret laws in the light of their purpose, where the language used by the law-makers does not yield to one and one meaning only. Considering the matter that way, we are of the opinion that it is appropriate to hold that the word accident is used in the expression any one accident" from the point of view of the various claimants, each of whom is entitled to make a separate claim for the accident suffered by him and not from the point of view of the insurer. "considering the principles discussed in the aforesaid judgment while interpreting sub-sec. (2) of Sec. 95 and other decisions discussed above, the ratio laid down by Full Bench of this Court in the case of Nathiben [ (1982 (1)) XXIII (1) GLR 411] (supra) does not call for reconsideration. It accommodates the claims of the Society as reflected in the underlying legislative purpose of the necessity of compulsory insurance coverage for a motor vehicle. The practice of carrying passengers in a goods vehicle is fairly wide spread. Further, even if two interpretations are equally plausible, as observed by the Supreme Court, "what the legislature has given, the Court cannot deprive of by way of an exercise in interpretation when the view which renders the provision potent is equally plausible as the one which renders the provision impotent".

(30) AT this stage, we would deal with the contention of the learned Advocates for the Insurance Company that, the act of carrying passengers in a goods vehicle would be in violation of Sec. 42 and, as that act is punishable under Sec. 123 of the Motor Vehicles Act, the Insurance Company would not be liable to cover such risk. This contention requires to be rejected because the liability under tort arises out of a wrongful act which also can be illegal. The basis of damages under tort is wrongful or illegal act. The illegal or wrongful act would hardly be a ground for holding that the person is not liable to pay damages under tort. Under Sec. 95, insurance coverage is given to tortious or wrongful act of using vehicle in a public place. Similar contention is considered by the Supreme Court in the case of Pushpabai Parshottam Udeshi v. M/s. Ranjit Ginning and Pressing Co. Pvt. Ltd. , air. 1977 SC 1735 [LQ/SC/1977/154] . The Court referred to the test laid down by Lord Justice denning in the case of Young v. Edward Box and Co. Ltd. , 1951 (1) TLR 789. The relevant discussion is as under :

"8. It is now firmly established that the masters liability is based on the ground that the act is done in the scope or course of his employment or authority. The position was stated by Lord Justice Denning in Young v. Edward Box and Co Ltd. , 1951 (1)TLR 789, 793. The plaintiff and fellow workmen were given a lift on one of the defendants lorries with the consent of his foreman and of the driver of the lorry. On a Sunday evening the plaintiff, in the course of that journey, was injured by the negligence of the driver of the lorry and the plaintiff brought an action against the defendants claiming damages for his injuries. The defence was that the plaintiff, when on the lorry, was a trespasser. The traffic manager of the defendants pleaded that he had never given instructions to the foremen that he should arrange for lifts being given to the plaintiff and his fellow-workman on Sundays and, that the foreman had no authority to consent to the plaintiffs riding on the lorry. While two learned Judges held that the right to give the plaintiff leave to ride on the lorry was within the ostensible authority of the foreman, and that the plaintiff was entitled to rely on that authority and in that respect was a licensee. Lord Denning held that although the plaintiff, when on the lorry, was a trespasser, so far as the defendants were concerned, the driver was acting in the course of his employment in giving the plaintiff a lift and that was sufficient to make the defendants liable and that he did not base his judgment on the consent of the foreman. Lord Justice Denning stated the position thus : . . . . . . the first question is to see whether the servant was liable. If the answer is Yes, the second question is to see whether the employer must shoulder the servants liability. So far as the driver is concerned, his liability depends on whether the plaintiff was on the lorry with his consent or not xxx xxx the next question is how far the employers are liable for their servants conduct. In order to make the employers liable to the passenger it is not sufficient that they should be liable for their servants negligence in driving. They must also be responsible for his conduct in giving the man a lift. If the servant has been forbidden, or is authorised, to give any one a lift, then no doubt the passenger is a trespasser on the lorry so far as the owners are concerned, but that is not of itself an answer to the claim xxx xxx xxx in my opinion, when the owner of a lorry sends his servant on a journey with ft, thereby putting the servant in a position, not only to drive it, but also to give people a lift in it, then he is answerable for the manner in which the servant conducts himself on the journey, not only in the driving of it, but also in giving lifts in it, provided, of course, that in so doing the servant is acting in the course of his employment. Lord Justice Denning concluded by observing that the passenger was therefore a trespasser, so far as the employers were concerned; but nevertheless the driver was acting in the course of his employment, and that is sufficient to make the employers liable. It will thus be seen that while two of the learned Judges held that the right to give the plaintiff leave to ride on the lorry was within the ostensible authority of the foreman and the plaintiff was entitled to rely on that authority as a licensee. Lord Denning based it on the ground that even though the plaintiff was a trespasser so far as the defendants were concerned, as the driver was acting in the coarse of his employment in giving the plaintiff a lift, it was sufficient to make the defendants liable. Applying the test laid down there can be no difficulty in concluding that the right to give leave to Purshottam to ride in the car was within the ostensible authority of the Manager of the Company who was driving the car and that the Manager was acting in the course of his employment in giving leave to Purshottam. Under both the tests the respondents would be liable. " (Emphasis supplied)After discussing other decisions cited at Bar, the Court further observed in paragraph 14 as under : "before we conclude, we would like to point out that the recent trend in law is to make the master liable for acts which do not strictly fall within the term in the course of the employment as ordinarily understood. "

C. RE: Whether the risk of the passengers travelling by a goods vehicle by paying fare is covered under Sec. 95 (2) (a) or 95 (2) (c)

(31) THE next question would be whether the liability of the Insurance company would be as provided in Sec. 95 (2) (c), as if the vehicle is a vehicle other than a goods vehicle. We have reproduced Sec. 95 (2) earlier. Reading sec. 95 (2) (a), (b), (c) and (d) together, we agree with the contention of learned advocate Mr. B. R. Shah for the Insurance Company that the insurance coverage is on the classification of the vehicles, that is, (a) goods vehicles, (b) vehicles in which passengers are carried, and (c) vehicles other than goods vehicles or passenger vehicles. Sub-sec. (2) of Sec. 95, inter alia. provides that the policy of insurance shall cover any liability incurred, where the vehicle is a goods vehicle, upto Rs. 50,000. 00in all in respect of any one accident. The insurance coverage is qua vehicle. Under sub-sec. (2) of Sec. 95, the insurance coverage is not on the basis of use of the vehicle. For the extent of liability of the Insurance Company or insurance coverage by the policy, the vehicles are classified as (i) goods vehicle, (ii) passengers vehicle and (iii)other vehicles i. e. , other than goods vehicles or passengers vehicles), The result is : the statutory insurance coverage is qua vehicle. It would be difficult to hold that, when accident occured, the motor truck was not a goods vehicle, because, admittedly, at the relevant time, it was a goods vehicle. Therefore, for the purpose of insurance coverge or fur the extent of liability of the Insurance Company, it would be as provided under Sec. 95 (2) (a). Section 95 (2) (a) provides that policy of insurance shall cover any liability incurred in respect of any one accident upto Rs. 50,000. 00 (at the relevant time prior to amendment in year 1982) in all where the vehicle is a goods vehicle. As against this, Sec. 95 (2) (c) specifically provides that where the vehicle is a vehicle of any other class, the amount of liability incurred. This would mean that, where vehicle is covered by clause (a) or (b), it would not fall within the ambit of clause (c). Hence, if vehicle is not a goods vehicle or a passenger vehicle, the liability of insurance company would be as per clause (c), i. e. , the amount of liability incurred. This also would be clear if we refer to clause (d)of Sec. 95 (2). That deals with damage to any property of a third party. The limit of liability irrespective of class of vehicle is Rs. 2000. 00 in all in respect of damage to any property of a third party. Farther, as discussed earlier, clause (b) would have no application, because the vehicle is not registered to carry a particular number of passengers; nor it was used for carrying passengers by reason of or in pursuance of a contract of employment. Hence, there is no question of applicability of clause (b).

(32) IN this view of the matter, with profound respect, it would be difficult for us to agree with the view taken by a Division Bench of this Court in civil Appeals Nos, 851 to 858 of 1977 and others, decided on 26/07/1983 [oriental Fire and General Insurance Co. Ltd. v. Husseinbhai A. Shaikh, 1984 GLH (UJ) 8]. wherein the Court had held that residuary clause (c) would be applicable in such type of cases. The relevant discussion in the said judgment is as under :

"in the case on hand, we might be inclined to say that for technical purposes, even if we have to call the vehicle as a vehicle in which the passengers are carried for hire or reward, the said clause (b) will not be attracted. Our reasons are that clause (a) will not ex-facie apply because it is confined to persons other than passengers carried for hire or reward. Clause (b) also will not be attracted because it is pertaining to a vehicle which is registered to carry a particular number of passengers. In the case on hand, there is nothing on record to show that the goods vehicle in question was registered to carry particular number of passengers. In other words, clauses (1), (2)and (3) of clause (ii) of Sec. 95 (2) (b) will not at all be attracted. If clauses (1), (2)and (3) of clause (ii) of Sec. 95 (2) (b) are not attracted, the conjectively joint clause (4) dealing with passenger-wise limited liability also will not get attracted because in our view clauses (1), (2), (3) and (4) are inter-connected and clause (4) cannot be dissected from the context. So clause (c) which is a residuary clause and which provides for no limits on the liability will stand attracted. "

(Emphasis supplied)With respect, it is difficult for us to agree with the reasons given by the Court that clause (a) will not ex-facie apply because it is confined to persons other than passengers carried for hire or reward. As stated earlier, sec. 95 (2) provides for extent of coverage of insurance and clause (a) of Sec. 95 (2) provides for extent of coverage of insurance for goods vehicle. The limit of insurance coverage is given on the basis of classification of vehicles. The insurance coverage is qua vehicles based on classification of vehicles in three different categories. With regards to goods vehicles, the limit of liability of insurance coverage is as provided in clause (a). As stated earlier, the insurance coverage by an Act policy is to be determined on the basis of classification of the vehicles, namely, goods vehicles, passenger vehicles and other vehicles and not on the basis of their use. Therefore, clause (a) would be applicable and not clause (c), which is a residuary clause for the vehicles other than. goods vehicles and passenger vehicles. The truck, in which passengers were carried for hire or reward, was admittedly a goods vehicle. D. RE : Whether compensation amount should be paid in lump sum or by periodical instalments.

(33) THE learned Advocates for the Insurance Companies vehemently submitted that, by the benevolent interpretation of the provisions of the Motor vehicles Act, the compensation amount is awarded to the victims or their dependants but the said amount is, in most of the cases, frittered away because of various reasons including illiteracy or ignorance on the part of the victims towards their rights, influence of middlemen and heavy expenses in the litigation including fees for the Advocates. Therefore, the Motor Accidents Claims tribunal should be directed to award the amount of compensation in such a manner that it should not be a lump sum amount but it should be periodical payment on the basis of loss of earnings by the victim or dependants.

(34) FOR this purpose, learned Advocate Mr. Pandya referred to a passage from the Book "accidents, Compensation and the Law" by P. S. Atiyah (Second edition), which is as under:

"but quite apart from the possibility of varying the amounts payable, there is the additional question whether a lump sum is an appropriate method of compensation for lost earnings-whatever the arguments may be about other heads of damage such as pain and suffering and loss of amenities. It is true that if the trial or settlement is delayed long enough, all the lost earnings may be a matter of past history. and a lump sum award may be quite appropriate; but where lost earnings are still to be anticipated, or where the action is brought by dependants of someone killed in an accident, a large part of the award is for future lost earning, and it is hard to see that it is appropriate to compensate these by a lump sum payment. A lump sum could, of course, be invested to provide an income or used to purchase an annuity but in practice the sums awarded for lost earnings would often be insufficient to provide an income of the order of that which has been lost. In any event the recipients may be quite inexperienced in the handling of large sums of money and they may dissipate the money, or fall a prey to confidence tricksters or invest if in reckless and hopeless enterprises. They are, of course, entitled to do this if; they wish. but since the money is largely found by society, and since society will have to bear the burden - or some of the burden - of maintaining these people if they should be reduced to utter poverty again, society has some right to say how the compensation should be paid. It is noticeable that nearly all social security payments are made in the form of periodically weekly sums, even though no question arises in most of these cases of an increase or a decrease in the amount as a result of a change of circumstances. "

(Emphasis supplied) In our view, in this country, there would not be a legal hitch in paying compensation by periodical instalments because Sec. 110-B (as it was) of the Motor Vehicles Act, 1939 and Sec. 168 of the Motor Vehicles Act, 1988 specifically empower the Claims tribunal to award just compensation. The phrase just compensation would include payment of compensation by periodical instalment.

(35) THIS question is also considered by the Supreme Court in the case of Bishan devi v. Sirbaksh Singh, [air 1979 SC 1862 [LQ/SC/1979/340] ] (supra), and the Court suggested that, instead of lump sum payment, it would be advantageous to pay minimum compensation by regular monthly instalments with a liberty to the dependants to pursue their remedies before the Motor Accidents Claims Tribunal if they are not satisfied with the minimum compensation. The relevant observations are as under : "the insurance companies are now nationalised and the necessity for awarding lump sum payment to secure the interest of the dependants is no longer there. Regular monthly payments could be made through one of the nationalised banks nearest to the place of residence of the dependants. Payment of monthly instalments and avoidance of lump sum payment would reduce substantially the burden on the insurer and consequently of the insured. Ordinarily in arriving at the lump sum payable, the Court takes the figure at about 12 years payment. Thus in the case of monthly compensation of Rs. 250 payable, the lump sum arrived at would be between 30,000 and 35,000. Regular monthly payment of Rs. 250 can be made from the interest of the lump sum alone and the payment will be restricted only for the period of dependency of the several dependants. In most cases it is seen that a lump sum payment is not to the advantage of the dependants as large part of II is frittered away during litigation and by payment to persons assisting in the litigation. It may also be provided that if the dependants are not satisfied with the minimum compensation payable they will be at liberty to pursue their remedies before the Motor Accidents Claims Tribunal. " (Emphasis supplied)

(36) FURTHER, to avoid any mal-practices in the payment of compensation to the dependants and from frittering away the amount of compensation during litigation, this Court, in the case of Muljibhai v. United India Insurance Co. Ltd. , [1982 (1)] xxiii (1) GLR 756, has suggested a formula that the amount should be invested in a Nationalised Bank. That judgment of this Court is referred to and relied upon by various High Courts. The relevant observations are as under (at page No. 757 of GLR):

"we are distressed to note that Claims Tribunals do not realise that it is not sufficient to award compensation to the victim of the accident or his legal representatives, as the case may be, but it is also its duty to ensure that the amount awarded is not frittered away. It must be remembered that lump sum compensation is paid to the claimants who are either the victims of the accident or their legal representatives by applying an appropriate multiplier with a view to providing for his or their future. In other words, instead of spreading out the amount of compensation over a number of years having regard to the estimated future life span, as a measure of convenience, lump sum payment is ordered. If the whole or substantial part of the compensation money is paid to claimants who have never handled such huge amounts in their lives there is the danger of their frittering away the amount for want of fiscal discipline in their lives. If the amount is squandered away, which in all probability may happen, the socio-economic objective intended to be achieved by the award of compensation will be wholly defeated. We are, therefore, of the opinion that in such cases it is imperative on the Claims tribunal to protect such claimants, no matter they are adults, by directing the investment of lump sum compensation awarded to them. "

Thereafter, the Court indicated broad guidelines which the Claims Tribunals should follow while disposing of the claim applications arising under the Motor vehicles Act, 1939, to scotch complaints of misapplication of compensation money. The Court, inter alia, directed that the amount should be invested in a nationalised Bank as fixed deposit on a condition that the Bank will not permit any loan or advance on the fixed deposit and interest on the amount invested is paid monthly directly to the claimant or his guardian, as the case may be.

(37) IN spite of the aforesaid safeguards provided by this Court, it is pointed out that unscrupulous persons withdraw the amount of compensation, which is deposited in the nationalised Banks, by various dubious methods. For this purpose, Mr. Pandya, learned Advocate appearing for the Insurance Company, has referred to the decision of the Andhra Pradesh High Court in the case of New India Assurance Co. Ltd. v. Madapati Naramma, AIR 1990 AP11, wherein the Court observed as under :

"thus, this evil practice of non-payment of the full amount awarded by the Claims tribunal to the dependants or victims of the accident has been judicially recognised throughout the country and attempts are being made to bail squarely this pernicious practice with a desire to see that the compensation award would reach the dependents or the victims. "

After verification of the records from the Claims Tribunal, the Court found that the results were shocking. The relevant observations are as under :"when the registry wrote letters to the Claims Tribunals of the procedure being followed pursuant to the rule laid down in Srisailam Devasthanams case and the effect thereof, the replies sent by the Presiding Officers of the Tribunals reveal shocking results, nullifying the salutory effect of the rule. Accounts in advance are being opened, signatures of the parties on blank withdrawals forms are obtained, the withdrawals are following closely the heels of the deposit made on the same day. In some cases, even impersonation is practised. Even the Bank officials are also hand in glove for the fraud. Some Bank officials are non-co-operative to open for the account for deposits not being remaining for some time at least. After discussions with the Bank officials, one member suggested to keep the amount in fixed deposits for long times and payment of interest would have longing effect. Thus, the record is replete with endless, methods to sabotage the salutary rule laid down by this Court and deprivation of the poor, illiterate and unfortunate dependents of victims of the accident are practised remoreseless. The illiterate, poor or victims of the accidents have become mere pawns in the hands of unscrupulous persons to have unjust enrichment at the formers expense"

(Emphasis supplied)The Court, after referring to the decisions of various High Courts, inter alia, observed as under :"the more serious question raised by Sri Somayajulu is that despite the direction given by this Court, which has become a rule of practice before the Claims Tribunals that on awarding compensation to the dependents of the deceased or the victim and despite opening an account in the nearest nationalised Bank or Post office convenient to the parties and deposit thereof by the Court, the evil of sabotaging the salutory procedure envisaged has not been eradicated. Immediately on deposit the entire amount is being withdrawn annihilating the salutory effect of the evolved procedure to mitigate the hardship to the dependents of the loss of dependency. Therefore, appropriate procedure should be adopted by the Courts to see shat the amount emanating from the nationalised Insurance Companies -the public money, would reach the dependents and the dependents must reap the fruits thereof. "

In that case, the Court also referred to the decision in the case of Srisailam devasthanam v. Bhavani Pramilamma (AIR 1983 AP 297 [LQ/TelHC/1982/265] ) wherein it is held :"the benefits in the award are not being received in full by the legal representatives of the deceased or the victims of the accident. The middlemen and in some cases the persons involved in the adjudicatory process are making hay taking advantage of the illiteracy, ignorance and innocence of the legal representatives of the deceased or the victims of the accident. Many of the poor citizens are ignorant of their right and are not aware of how to vindicate their right and realise the fruits thereof. As a result, a major part of the amount awarded is being knocked off by the middlemen and in some cases the persons involved in the adjudicatory process and only a paltry sum is being received by the legal representatives of the deceased or the victim, as the case may be With a view to put an end to this pernicious evil percolating into the portals of the Courts, to maintain the administration of justice unsullied and to continue to infuse confidence of the public in the administration of jastice. . . . . . "

(Emphasis supplied)The Court further negatived the contention that the procedure for reaching the compensation awarded to the claimants would be violative of Art. 300a or art. 14 of the Constitution of India by giving elaborate reasons in paragraph 9 of the judgment. For this purpose, the Court relied upon the decision of this Court in the case of Muljibhai Ajarambhai Harijan v. United India Insurance co. Ltd. , [1982 (1)] XXIII (1) GLR 756. The Court also relied upon the judgment in the case of Nav Bharat Builders v. Pyarabhai, 1985 Ace CJ 79, wherein the Court observed that provision for payment of compensation is part of social security scheme and the defendants cannot be permitted to be robbed by antisocial elements. The Court also referred to the decisions in the case of G. M. Orissa S. R. T. Corporation v. Maheswar Rout, AIR 1983 Orissa 128, and in the case of M/s. Shivalik Agro Poly Products Ltd. v. Jagdish, AIR 1986 Himachal pradesh 4.

(38) IN view of the aforesaid discussion and the views expressed by the supreme Court in the case of Bishan Devi [air 1979 SC 1862 [LQ/SC/1979/340] ] (supra), by this Court in the case of Muljibhai [ (1982 (1)) XXXIII (1) GLR 756] (supra)and by other High Courts, as stated above, it would be in the interest of justice to direct the Motor Accidents Claims Tribunal to award compensation amount by periodical instalments only and not in lump sum. This type of order is required to be passed to see that: (i) the major part of the compensation amount reaches the victims or their dependants; (ii) large part of the compensation amount is not frittered away; (iii) victims or their dependants are not again left at the mercy of the society; and (iv) the amount, which is paid by the nationalised Insurance Companies, serves its purpose and the socio-economic object of the legislation is not defeated. Conclusions

(39) IN the result : a. I. The contention that risk of the passenger who is travelling by a goods vehicle by paying fare is covered by Sec. 95 (2) (b) (ii) (4)is rejected on the ground that the said Section deals with passenger vehicle only having a specified registered capacity to carry passengers. II. The decision of the Full Bench of this Court in the case of Nathiben [ (1982 (1)) XXIII (1) GLR 411] (supra) is reaffirmed and it is further held that the insurer, in order to successfully disclaim his liability on the ground mentioned in Sec. 96 (2) (b), has to establish : (i) that on the date of the contract of insurance, the insured vehicled was expressly or implicitly not covered by a permit to carry any passenger for hire or reward, (ii) that there was a specified condition in the policy which excluded the use of the insured vehicle for the carriage of any passenger for hire or reward, (iii) that the vehicle was, in fact, used in breach of such specified condition on the occasion giving rise to the claim by reason of the carriage of the passenger therein for hire or reward, and (iv) that the vehicle was used by the insured or at his instance in breach of specific conditions including a condition that in the goods vehicle passengers for hire or reward were not to be carried. If it is done without knowledge of the insured by the drivers acts or omission, the insurer would be liable to indemnify the insured. III. The extent of statutory limit of the Insurance Company to indemnify the insured in case where the passenger is travelling by a goods vehicle by paying fare would be covered by clause (a) of subsec. (2) of Sec. 95 which provides limit for insurance coverage for goods vehicle and not by clause (c) of sub-sec. (2) of Sec. 95 which provides limit of insurance coverage for the vehicles other than goods vehicle and passenger vehicle. Upto 1/10/1982 statutory limit was Rs. 50,000. 00. After amendment in clause (a)of sub-sec. (2) of Sec. 95, from 1/10/1982 the limit for statutory coverage is Rs, 1,50,000/- for goods vehicle. B. Further having regard to the prevailing malpractices in the case of payment of compensation in lump sum, it would be just and proper to slightly modify the directions for depositing the amount in the nationalised Banks given in the case of Muljibhai [ (1982 (1)) XXIII (1) GLR 756 ] (supra) as under : (i) Normally, the Claims Tribunal should direct the Insurance Company to pay the amount of compensation periodically by quarterly instalments by calculating interest at the rate of 15% per annum on the total amount of compensation determined by it and to pay the principal amount at the end of 10 to 20 years having regard to the facts of each case. (ii) A further provision be made in case where the compensation amount is large or in case the claiments are illiterate and/or poor to pay the corpus after the prescribed period by 2 or 3 instalments depending upon the circumstances in each case. (ii-a) It would be open to the Insurance Company to make the necessary arrangement through the General Insurance Corporation of India for making payment of annuity or periodical instalments as per the direction of the Motor Accidents Claims Tribunal. (iii) If the concerned Insurance Company or the General Insurance corporation of India is not ready and willing to pay the amount in the aforesaid manner, it may be directed to deposit the amount of compensation with the Life Insurance Corporation of India. The Life insurance Corporation of India may be directed, on receiving the said deposit, to provide for payment by an appropriate annuity to the claimants. Learned Advocate Mr. B. R. Shah, after obtaining instructions from the concerned authority, has stated that the Life insurance Corporation of India is having a large net-work and would pay the amount with interest by appropriate scheme of annuity. (iv) In the case of MINOR claimants, the Tribunal shall order that the amount of compensation shall be kept with the Insurance Company till the minor attains the age of 21 years but in any case not before expiry of 10 years from the date of the award. (v) In personal injury cases if treatment is necessary the Claims Tribunal on being satisfied about the same may after recording reasons for such satisfaction direct the Insurance Company to pay such amount to the claimant as is necessary for incurring the expenses for such treatment. This permission should be granted strictly after verifying the necessity of medical expenses. (vi) These directions would also apply in the case of liability arising under sec. 92 of the or under Sec. 140 of the Motor Vehicles Act, 1988 - that is to say, in case of no fault liability. These guidelines for keeping the amount with the Insurance Companies or depositing it with the Life Insurance Corporation of India are not exhaustive. It would be open to the Claims Tribunal to find out such other modes of investment and disbursement of compensation by annual instalments ranging from 10 years to 20 years depending upon the facts and circumstance of each case with a specific direction that in no set of circumstances the claimants or their authorised agents would be permitted to withdraw the corpus.

(40) IN view of the aforesaid discussion and the findings given by the Tribunal, the appeal requires to be dismissed.

(41) IT arises out of compensation awarded to the heirs of the deceased, sultan Singh, who expired on 8/01/1976. The deceased was carrying some goods in his own truck. The truck of the deceased came to a halt because its rear axle had broken. Therefore, the deceased requested opponent no. 2, who was driving motor truck bearing registration No. GTV 6308, to take him to Baroda to purchase a rear axle. The deceased paid Rs. 4/~ as fare for going to Baroda. It is the say of the claimants that opponent no. 2 was driving the truck rashly, negligently and at excessive speed knowing full well that the front-wheel tyre of his truck was damaged. Because of rash and negligent driving by opponent No. 2, the front-wheel tyre burst and the truck dashed against a tree and fell into a ditch. The deceased. Sultan Singh, who was sitting in the cabin of the truck, received serious injuries. Immediately he was removed to the Civil Hospital, Bharuch, but on the way he died. It is the say of the claimants that the deceased was 50 years of age and was earning Rs. 600 per month and was having excellent physique. The Motor Accidents Claims Tribunal, Baroda, by the judgment and order dated 3/04/1978, awarded a sum of Rs. 53,400. 00. The Tribunal has held that the Insurance Company. opponent No. 3, is liable to pay the said amount. It is an admitted fact that the Insurance company has deposited the said amount as directed by the Tribunal. As held above, the insurance coverage with regard to goods vehicle would be Rs. 50,000. 00 only, as the accident took place on 8/01/1976. But, considering the smallness of the remaining amount, the order passed by the Tribunal after lapse of 15 years does not call for any interference. Still, however, we clarify that it would be open to the Insurance Company, to recover the said amount of Rs. 3,400. 00 from the insured. Hence, with these observations, the appeal is dismissed with costs.

(42) A copy of this order may be placed before the Honourable the chief Justice for his direction to circulate the same to all the Claims Tribunal in the State so that the amount of compensation is disbursed as stated in paragraph 40-B.