The New India Assurance Co.Ltd., ... vs Smt. Usha Devi (Kumari) And Others
2012 Latest Caselaw 4645 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 
RESERVED
 

 
Case :- FIRST APPEAL FROM ORDER No. - 248 of 2002
 

 
Petitioner :- The New India Assurance Co.Ltd., Bareilly
 
Respondent :- Smt. Usha Devi (Kumari) And Others
 
Petitioner Counsel :- Rakesh Bahadur
 
Respondent Counsel :- R.K.Misra,B.D.Sharma,R.A.Shukla,R.N.Maurya,Radha Mohan Pandey,Sudhir Kr.Srivastava
 
			Connected with
 
Case :- FIRST APPEAL FROM ORDER No. - 249 of 2002
 

 
Petitioner :- The New India Assurance Co.Ltd., Bareilly
 
Respondent :- Smt. Shakuntla Devi And Others
 
Petitioner Counsel :- Rakesh Bahadur
 
Respondent Counsel :- R.K.Misra,R.A.Shukla,R.N.Maurya,Radha Mohan Pandey,S.K.Srivastava
 

 
Hon'ble Prakash Krishna,J.

Hon'ble Arvind Kumar Tripathi (II),J.

(Delivered by Prakash Krishna,J)

These two appeals filed under Section 30 of Workmen's Compensation Act were heard together and are being disposed of by a common judgment. Learned counsel for the parties jointly stated that common questions of law and facts are involved in both the appeals.

Tractor bearing registration no. UP-25-B/8706 owned by the respondents no. 2 to 4 jointly was insured with the present appellant for own goods. The owners had employed two labourers, namely, Rakesh Kumar S/o Buddh Sen and Rakesh Kumar s/o Bihari Lal. The owners on 25th November, 1995 send the tractor along with aforesaid two labourers to bring sugarcane and when the tractor reached on Brijpuri railway crossing, a coming train hit the tractor which caused fatal injuries to aforesaid two labouers. They died during the course of employment and each one of them was getting Rs.1,800/- per month as wages. This led to filing two claim petitions being Case Nos. 49/WCA/99 and 50/WCA/99 before the Workmen's Compensation Commissioner.

Therein, besides the owners, Insurer-appellant herein were impleaded as respondents in the claim proceedings. They contested the claim petitions by filing separate replies. It was not disputed by the Insurance Company that the tractor in question was not insured with them on the fateful day. They came out with the case that the driver of the tractor was not holding valid and effective driving license. The insurance policy covers the risk of paid driver of the tractor only and it does not cover the risk of labourers of the said tractor. It was further pleaded that registration certificate of the vehicle in question would show that the sitting capacity of the said vehicle is only one.

The claimants led evidence in support of their claim petitions. They were cross examined by the Insurer. The Workmen's Compensation Commissioner has awarded a sum of Rs.2,01,600/- in Case Nos. 49/WCA/99, Smt. Usha Devi versus M/s New India Insurance Co. Ltd. and others and Rs.1,90,61/- in Case No. 50/WCA/99, Smt. Shakuntala Devi versus M/s New India Insurance Co. Ltd. and others as compensation amounts.

Shri Rakesh Bahadur, learned counsel for the appellant submitted that Insurer is not liable to indemnify the owners of the tractor as two labourers were unauthorizedly travelling in the tractor. Tractor was being driven against terms of insurance policy. He also submitted that the tractor is 'goods vehicle' and insurer is not liable to pay compensation in respect of such labourers whose risk was not covered under insurance policy. It was also submitted that the registration certificate of the insurance policy of the tractor itself shows that the sitting capacity of the said vehicle was only one and accordingly the insurer took insurance of one paid driver amounting to Rs.15/- only which is mentioned in the insurance policy.

In reply, learned counsel for the claimants submitted that the insurance policy was a comprehensive insurance policy as found by the Workmen's Compensation Commissioner also, the insurer is liable to pay compensation amount to the claimants notwithstanding anything. Accident occurred during the course of employment and the labourers were on duty on the fateful day. These two unfortunate labourers were in the tractor. They were on duty and were carrying out the order of their employer to bring sugarcane on the tractor. It was also submitted that only such pleas are available to the insurer which are available to the owners under the Workmen's Compensation Act.

Considered the respective submissions of the learned counsel for the parties and perused the record.

At the very outset, it may be noted that on the pleadings of the parties, Workmen's Compensation Commissioner had framed six issues for determination. All issues have been decided in favour of the claimants-respondents. The dispute sought to be raised in the present appeal is with regard to the liability of the insurer to indemnify the owners of the tractor. In this regard, issue no. 2 was framed before the Workmen's Compensation Commissioner and the findings returned thereunder are important. Issue no. 2 is to the effect― whether Tractor No. UP-B/8706 of the opposite parties no. 2 to 4 was validly insured with opposite party no. 1 the New India Assurance Co. Ltd., on the date of accident i.e. on 25th November, 1995. Under the said issue, it has been found that the tractor was validly insured with the appellant. To this extent, there appears to be no dispute between the parties. Contention of the insurer that only the risk of driver was insured, has been negatived on the finding that from the insurance cover in addition to the risk of driver, the person responsible for upkeep of the tractor were also covered under the insurance policy. This is the core issue for decision in these appeals.

Learned counsel for the appellant referred the following cases in support of proposition that there is no liability of insurance company in respect of death or injury to such persons who were travelling in a tractor. Tractor is a goods vehicle and in view of the provisions of Motor Vehicle Act, no liability could be fastened on the insurer for death of the person who was travelling in the tractor. The referred cases are as follows:

1. New India Assurance Co. Ltd. versus Smt. Tarawati and others, 1994 (1) T.A.C. 679;

2. New India Assurance Company Ltd. versus Sudesh Kumari and others, 2007 (3) T.A.C. 895 (H.P.); and

3. National Insurance Co. Ltd. versus Kottam, 2003 (2) T.A.C. 849 (Ker.).

All these decisions were rendered in regard to the claim petitions filed under the Motor Vehicles Act and were decided in the light of the provisions of that Act.

The said argument may hold good in a proceeding under the Motor Vehicle Act. To what extent such argument can be accepted in proceeding under Workmen's Compensation Act is a different question.

The Apex Court in the case of National Insurance Co. Ltd. versus Mastan and another, 2006 (1) T.A.C. 321, has considered the provisions of Motor Vehicle Act vis-a-vis Workmen's Compensation Act. It has noticed that Chapter-X of Motor Vehicle Act will have effect on the proceedings before Workmen's Compensation Commissioner notwithstanding anything contained in the provisions of the said Act or any other law for the time being enforced. Chapter-X of Motor Vehicle Act deals with liability without fault in certain cases. In para-14 of the report, it has been stated that Applicability of the provisions of the 1988 Act in a proceeding under the 1923 Act is confined to a matter coming within the purview of Chapter X only. It cannot be stretched any further. For the sake of convenience, paras-13 & 14 are reproduced below:

"13. Section 143 occurs in Chapter X of the 1988 Act. Section 144 contains a non-obstante clause stating that the provisions of the said chapter shall have effect notwithstanding anything contained in any other provisions of the said Act or of any other law for the time being in force. Chapter X deals with liability without fault in certain cases. Chapter X, therefore, will have no application in relation to a claim made in terms of Chapter XI of the 1988 Act.

14. Applicability of the provisions of the 1988 Act in a proceeding under the 1923 Act is confined to a matter coming within the purview of Chapter X only. It cannot be stretched any further."

It has been further laid down that an insurer, subject to the terms and conditions of contract of insurance, is bound to indemnify the insured under the Workmen's Compensation Act also under the Motor Vehicle Act. Keeping in view the nature and purport of the two statutes, the pleas which be raised by the insurer being different, the scope and ambit of appeal are also different. The relevant paras are reproduced below:

"21. An insurer, subject to the terms and conditions of contract of insurance, is bound to indemnify the insured under the 1923 Act as also the 1988 Act. But as noticed hereinbefore, keeping in view the nature and purport of the two statutes, the defences which can be raised by the insurer being different, the scope and ambit of appeal are also different.

22. Under the 1988 Act, the driver of the vehicle is liable but he would not be liable in a case arising under the 1923 Act. If the driver of the vehicle has no licence, the insurer would not be liable to indemnify the insured. In a given situation, the Accident Claims Tribunal, having regard to its rights and liabilities vis-`-vis the third person may direct the insurance company to meet the liabilities of the insurer, permitting it to recover the same from the insured. The 1923 Act does not envisage such a situation. Role of Reference by incorporation has limited application. A limited right to defend a claim petition arising under one statute cannot be held to be applicable in a claim petition arising under a different statute unless there exists express provision therefor. Section 143 of the 1988 Act makes the provisions of the 1923 Act applicable only in a case arising out of no fault liability, as contained in Chapter X of the 1988 Act. The provisions of Section 143, therefore, cannot be said to have any application in relation to a claim petition filed under Chapter XI thereof. A fortiori in a claim arising under Chapter XI, the provisions of the 1923 Act will have no application. A party to a lis, having regard to the different provisions of the two Acts cannot enforce liabilities of the insurer under both the Acts. He has to elect for one.

23. Section 167 of the 1988 Act statutorily provides for an option to the claimant stating that where the death of or bodily injury to any person gives rise to a claim for compensation under the 1988 Act as also the 1923 Act, the person entitled to compensation may without prejudice to the provisions of Chapter X claim such compensation under either of those Acts but not under both. Section 167 contains a non-obstante clause providing for such an option notwithstanding anything contained in the 1923 Act."

The ratio of the above pronouncement is that a claimant has an option to claim the compensation either under Motor Vehicle Act or under Workmen's Compensation Act but not under both Acts.

A person who has claimed compensation under no fault liability under Motor Vehicle Act cannot subsequently claim compensation in addition, under Workmen's Compensation Act. The claimant is put to election to choose either of them but not both. A reading of the above precedent, further shows that under two Acts, such defences which are available to insurer may not be available to such insurer if the proceedings are under Workmen's Compensation Act. To an insurer in a proceeding under the Workmen's Compensation Act, only such defences which are available to the owner would be available.

The aforesaid decision has been relied upon in Gottumukkala Appala Narasimha Raju and others versus National Insurance Company Limited and another, (2007) 13 SCC 446. In this case, after noticing its earlier judgment, the Apex Court in para-25 of the report has made the following observations:

"The ingredients for maintaining a proceeding under 1988 Act and 1923 Act are different. The purpose for which a contract of insurance is entered into may be different, whereas 1988 Act, it will bear repetition to state, a contract of insurance would be mandatory; for the purpose of applicability of the 1923 Act, it will be optional and as indicated hereinbefore, in Harshadbhai Amrutbhai Modhiya (supra), even contracting out is permissible, as under the 1923 Act, the liability of the insurer is limited to the claim of the workman. The liability under Section 147(2)(b) of the 1988 Act, on the other hand, extends to third party."

Section 147 of the Motor Vehicle Act, 1988 provides for requirements of policies and limits of liability. For the sake of convenience, Section 147 of the Motor Vehicle Act, 1988 and its proviso is reproduced below which reads as follows:

"147. Requirements of policies and limits of liability.-- (1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which--

(a) is issued by a person who is an authorised insurer; and

(b) insures the person or classes of persons specified in the policy to the extent specified in sub- section (2)--

(i)against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;

(ii)against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:

Provided that a policy shall not be required--

(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen' s Compensation Act, 1923 , (8 of 1923 .) in respect of the death of, or bodily injury to, any such employee--

	(a)     engaged in driving the vehicle, or 
 
		(b)     if it is a public service vehicle engaged as a conductor 
 
			of the vehicle or in examining tickets on the vehicle, or
 
	(c)     if it is a goods carriage, being carried in the vehicle, or
 
(ii)	to cover any contractual liability.
 

 
     Explanation.-- For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any 
 

property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.

(2) Subject to the proviso to sub- section (1), a policy of insurance referred to in sub- section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely:--

		(a) save as provided in clause (b), the amount of 		      liability incurred;
 
		(b) in respect of damage to any property of a third 		      party, a limit of rupees six thousand:
 

 

Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.

(3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases.

(4) Where a cover note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe.

(5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons."

A plain reading of the aforesaid proviso would show that the policy shall cover liability arisen under the Workmen's Compensation Act, 1923 in respect of death of, or bodily injury to, any such employee (i) engaged in driving the vehicle, or (ii) if it is a goods carriage, being carried in the vehicle.

Here, it is a case where deaths were caused due to use of Motor Vehicle and in the course of employment. The two persons were in the tractor in the course of their employments to bring the sugarcanes.

It has been found as a fact that these two unfortunate labourers were travelling in the tractor which is goods carriage for the purposes of loading of sugarcane on the instructions of their employer. This being so, the risk of injury or death caused to them in the course of employment would be covered under the insurance policy.

There is another angle also. We have examined the original record containing insurance cover. It is mentioned thereunder that the insurance policy is comprehensive policy, the fact which was also pleaded by the owners in their written statement. In the insurance cover, it is not mentioned that the policy is 'Act policy' instead it is 'Comp. Ins'. It implies that the insurance policy was comprehensive insurance policy, so also has been found by the Workmen's Compensation Commissioner. This being so, obviously the risk of lives of labourers and bodily injuries would also be covered under the insurance policy.

Learned counsel for the claimants argued out that 15% loading was charged. It is indicative of the fact that it was comprehensive policy. In reply, learned counsel for the insurer submits that it relates to tariff. Be that as it may, we are of the opinion that the insurance policy being comprehensive insurance policy, the risk of third party's injury and death are also covered . In other words, risk of the life of labourers who were in the tractor in the course of their employment on instructions of their employer, were also covered and they would be treated as third party qua the owners of tractor.

'Comprehensive Insurance' has been defined in Black's Law Dictionary 5th edition as 'All risk insurance' which in turn is defined as follows:-

" Type of insurance policy which ordinarily covers every loss that may happen, except by fraudulent acts of the insured. Miller v. Boston Ins. Co. 218 A. 2d 275, 278, 420 Pa. 566. Type of policy which protects against all risks and perils except those specifically enumerated."

The aforesaid definition has been reproduced by the Apex Court in the case of Amrit Lal Sood & another vs Smt. Kaushalya Devi Thapar & others, JT 1998 (2) SC 484. This is a decision rendered by three Hon'ble Judges delivered under the provisions of Motor Vehicle Act, 1939. The issue involved therein was whether the insurer, is liable to satisfy the claim for compensation made by a person travelling gratuitously in the car. The insurer had issued comprehensive insurance, insuring the car. The Court proceeded to decide this issue on the footing that the liability of the insurer in this case depends on the terms of the contract between the insured and the insurer as evident from the policy. In the case before us, insurer (appellant) has admitted that the tractor was insured with them. It has not filed the copy of insurance policy but we find copy of insurance certificate wherein against the column 'Limitation As To Use 'Comp. Ins.' have been mentioned.

In view of the fact that the insurance policy in the present case being comprehensive insurance it would cover all risk insurance except loss caused by fraudulent act by the insured. The burden was upon the insurer to produce copy of insurance policy to show that the case on hand, was under the except clause, if any. It was neither pleaded nor proved by the insurer that they are not liable to compensate the claimants notwithstanding the fact that it is a case of comprehensive insurance.

In the subsequent decision of the Apex Court in Oriental Insurance Co. Ltd. vs Cheruvakkara Nafeessu and others, JT 2001 (1) SC 341, the decision given in the case of Amrit Lal Sood (supra) has been noticed and considered. It has been held that insurer is liable to pay the entire award amount to the claimants. Upon making such payment the appellant can recover the excess amount from the insured by executing this award against the insured to the extent of such excess as per Section 174 of the Motor Vehicles Act, 1988.

The upshot of the above discussion is that the appellant is liable to satisfy the award passed by the Workmen's Compensation Commissioner and to indemnify the insured person.

Argument of the appellant is that the premium was paid for paid driver only and normally in the tractor except the driver there is no seat. Learned counsel for the appellant in this connection has filed a document as annexure-4 to the affidavit filed in support of the stay application. It is dated 20th February, 2002. It is R.C. Verification Report, Surveyor & Loss Assessor. The said document should not have been referred by the appellant as it is not part of record of the Workmen's Compensation Commissioner as also it came into existence after award. The award is dated 20th December, 2001. In all fairness, the appellant should have sought permission of the Court to lead additional evidence in the appeals before referring the said document in the course of argument. The argument proceeded on the footing that the said document found part of record but on verification from the original record, we find that it is not so. We deprecate such practice.

Any other point was not pressed.

We do not find any merit in the appeals. Both the appeals are, hereby, dismissed with costs.

(A.K. Tripathi (II),J)           (Prakash Krishna,J)
 
Date :- 1st October, 2012
 
MK/