NATIONAL INSURANCE CO LTD vs BEHARI LAL

The Supreme Court examined the scope of the proviso to sub-section (2) of Section 147 of the Motor Vehicles Act, 1988, in relation to the liability of an insurance company under a policy issued under the previous Motor Vehicles Act, 1939. The Court held that the liability of the insurance company is not limited to Rs.15,000 per passenger as per the Old Act, but is co-extensive with that of the owner and driver under the New Act. Consequently, the High Court's modification of the Tribunal's award was upheld, affirming the insurance company's unlimited liability under the New Act.