NATIONAL INSURANCE CO. LTD. vs KESHAV BAHADUR .

The Supreme Court held that under Section 95(2)(b)(i) of the Motor Vehicles Act, 1939, the insurer's liability for third-party claims is limited to Rs.50,000, and thus the award of Rs.72,000 by the Tribunal was beyond the statutory limit. The Court also ruled that the stipulation of penal interest at 18% for non-payment was not supported by any provision in the Act, as only Section 110CC governs interest on compensation. Consequently, the Court set aside the High Court's order regarding the excess compensation and the penal interest, affirming the insurer's liability to pay only Rs.50,000 with interest at the statutory rate.