National Insurance Co. Ltd. vs Anjana Shyam - Supreme Court Case
National Insurance Co. Ltd. vs Anjana Shyam - Supreme Court Case Important Judgments -
On 20th August, 2007, a two Judges Bench in National Insurance Co. Ltd. vs Anjana Shyam & Ors [Civil Appeal Nos. 2422-2459 of 2001] held that the “insurance company can be made liable only in respect of the number of passengers for whom insurance can be taken under the Motor Vehicles Act and for whom insurance has been taken as a fact and not in respect of the other passengers involved in the accident in a case of overloading.”
The question which then arose before the Bench was how to determine the compensation payable or how to quantify the compensation since there was no means of ascertaining who out of the overloaded passengers constituted the passengers covered by the insurance policy as permitted to be carried by the permit itself. Keeping in mind that the “purpose of the Act is to bring benefit to the third parties who are either injured or dead in an accident” and “that it serves a social purpose”, the Bench held that “the insurance company, in such a case, would be bound to cover the higher of the various awards and will be compelled to deposit the higher of the amounts of compensation awarded to the extent of the number of passengers covered by the insurance policy.