Comprehensive motor insurance does not expand third-party passenger liability beyond the statutory limit without an express higher-risk agreement.

Under a comprehensive motor insurance policy, the insurer's third-party liability for passenger death or bodily injury remains confined to the statutory limit unless there is an express agreement to assume greater risk. Payment of additional premium for passengers, by itself, does not create unlimited or enhanced cover; the premium structure must clearly support a special contract for higher liability. In the absence of such an agreement, liability is limited to the coverage mandated by the Motor Vehicles Act, 1939.

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Issues: Whether, under a comprehensive policy of insurance for a passenger vehicle, the insurer's liability towards a passenger's death or bodily injury was confined to the statutory limit in the absence of a specific agreement to extend liability beyond that limit.

Analysis: A comprehensive policy covering the vehicle on the basis of its estimated value does not, by itself, enlarge the insurer's liability for third party risk beyond the limit fixed by Section 95(2)(b)(ii) of the Motor Vehicles Act, 1939. The policy showed payment of premium at Rs. 12 per passenger, which corresponded to the statutory cover of Rs. 15,000 per passenger and not to unlimited liability. Mere payment of additional premium for passengers was insufficient to establish a special contract for higher or unlimited liability. In the absence of an express agreement undertaking greater risk, the insurer remained liable only to the extent mandated by statute.

Conclusion: The insurer's liability was confined to Rs. 15,000 per passenger and it was not liable for any amount beyond the statutory limit.

Ratio Decidendi: A comprehensive motor insurance policy does not automatically extend an insurer's third party liability beyond the statutory limit unless there is a specific agreement supported by separate premium for the enhanced liability.

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