Passenger insurance liability is cumulative: aggregate vehicle limits and per-passenger ceilings both apply under the Motor Vehicles Act.

Section 95(2)(b)(ii) of the Motor Vehicles Act, 1939 was construed to impose cumulative limits on an insurer's liability for passengers carried for hire or reward: an aggregate limit tied to the vehicle's seating capacity, and a separate ceiling for each individual passenger. The provision was read as giving effect to both the overall cap and the per-passenger restriction, and earlier passenger-vehicle authorities were followed while contrary High Court views were rejected. On the stated facts, a bus carrying more than thirty but not more than sixty passengers attracted an aggregate limit of Rs. 75,000 and a per-passenger limit of Rs. 5,000.

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Issues: Whether, under Section 95(2)(b)(ii) of the Motor Vehicles Act, 1939, the insurer's liability in respect of a passenger bus accident was confined to the aggregate limit for the class of vehicle or was further restricted by the per-passenger ceiling under sub-clause (4).

Analysis: Section 95(2)(b)(ii) was construed as containing two cumulative limits in respect of passengers carried for hire or reward: first, an aggregate limit depending on the seating capacity of the vehicle, and secondly, a separate ceiling for each individual passenger. The opening words of the provision and the structure of sub-clauses (1) to (4) showed that both the overall limit and the passenger-wise limit had to be given effect. Earlier decisions on analogous passenger-vehicle claims were followed, and contrary High Court views were rejected as overlooking the cumulative operation of the provision. On the facts, the bus carried more than thirty but not more than sixty passengers, so the aggregate limit was Rs. 75,000 and the liability in respect of each passenger was limited to Rs. 5,000.

Conclusion: The insurer's liability was not confined to the aggregate limit alone and was also subject to the per-passenger ceiling under Section 95(2)(b)(ii)(4); the petitioner's challenge failed.

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