NEW INDIA ASSURANCE CO vs C.M. JAYA

The Supreme Court addressed the liability of insurers under Section 95(2) of the Motor Vehicles Act, 1939, in light of conflicting judgments in New India Assurance Co. Ltd. v. Shanti Bai and Amrit Lal Sood v. Kaushalya Devi Thapar. The court held that if an insurance policy does not cover higher liability despite a higher premium, the insurer's liability is limited to the statutory amount under Section 95(2). The matter was referred to a larger bench to resolve the conflict between the previous decisions.