New India Assurance Company Ltd vs The General Manager
2024 Latest Caselaw 5338 AP

Andhra Pradesh High Court - Amravati

New India Assurance Company Ltd vs The General Manager on 9 July, 2024

APHC010111882004
                   IN THE HIGH COURT OF ANDHRA PRADESH
                                 AT AMARAVATI               [3397]
                          (Special Original Jurisdiction)

                    TUESDAY, THE NINTH DAY OF JULY
                   TWO THOUSAND AND TWENTY FOUR

                              PRESENT

  THE HONOURABLE SRI JUSTICE VENUTHURUMALLI GOPALA
                    KRISHNA RAO

                      FIRST APPEAL NO: 112/2004

Between:

   1. NEW INDIA ASSURANCE COMPANY LTD, 10-3,VASAVI
      NILAYAM, MAIN ROAD,GAJUWAKA, VISAKHAPATNAM-530026.

                                                     ...APPELLANT

                                 AND

   1. THE GENERAL MANAGER, HINDUSTHAN STEEL WORKS
      CONSTRUCTION LIMITED (HSCL), STEEL PLANT AREA,

   2. SRI D.LOKANADHA REDDY, C/O.D.CHINNA REDDY DOOR
      NO.23-98,VENKANNAPALEM,           PEDAGANTYADA,
      VISAKHAPATNAM-530026.

   3. D.CHINNA   REDDY,        S/O.D.DALAYYA       DOOR    NO.23-
      98,VENKANNAPALEM,       PEDAGANTYADA,       VISAKHAPATNAM-
      530026.

                                               ...RESPONDENT(S):

Counsel for the Appellant:

   1. C PRAKASH REDDY
                                    2                                VGKRJ
                                                             AS 112 of 2004




Counsel for the Respondent(S):

     1. SAI GANGADHAR CHAMARTY

The Court made the following:

JUDGMENT:

-

This Appeal, under Section 96 of the Code of Civil Procedure [for short 'the C.P.C.'], is filed by the Appellant/defendant No.3 challenging the Decree and Judgment, dated 29.08.2003, in O.S. No.68 of 2001 passed by the learned Senior Civil Judge, Gajuwaka [for short 'the trial Court']. The Respondents herein are the plaintiff and the defendants 1 and 2 in the said Suit.

2. The respondent No.1/plaintiff filed the Suit for recovery of a sum of Rs.2,97,695.65 paise towards the compensation paid by the plaintiff to its employees for the act of the second defendant.

3. Both the parties in the Appeal will be referred to as they are arrayed before the trial Court.

4. The brief averments of the plaint, in O.S. No.68 of 2001, are as under:

The first defendant is the owner and the second defendant is the driver of Mahindra Jeep bearing registration No.ADD 1810, the vehicle is insured with the third defendant under policy No.620301/31/99/11312, dated 28.12.1999 valid up to 27.12.2000. The jeep is under hire to the plaintiff for its official work. On 16.01.2000 at 10.30 p.m. the Mahindra Jeep was carrying the officials of the plaintiff and the second defendant was driving the vehicle at a high speed in a rash and negligent manner and hit an electrical pole in Ukkunagaram township. As a result of it the 3 VGKRJ AS 112 of 2004

vehicle turned upside down and the officials of the plaintiff sustained several injuries. The injured officials were taken to CDR hospital, Gajuwaka, where they were admitted as inpatients. The plaintiff paid Rs.1,64,311/- towards hospital charges and Rs.1,27,731.65 paise towards compensation. Thus the plaintiff incurred a total sum of Rs.2,91,936.65 paise. The plaintiff incurred the expenditure on account of the injuries sustained by its employees due to rash and negligent act of the second defendant.

5. The defendants 1 and 2 remained exparte. The third defendant filed a written statement by denying some of the averments mentioned in the plaint and further contended as under: -

This defendant is not aware of the extent of the injuries sustained by the officials of the plaintiff and the incurring of expenditure by the plaintiff. The policy was an act policy and the insurers liability is limited to Rs.5,000/- in respect of each passenger subject to the limit fixed under the provisions of Motor Vehicles Act. However, the third defendant is not at all liable to pay even this amount as the accident did not occur due to negligent driving of the second defendant. The plaintiff company is government undertaking and it is liable to meet all the medical expenses incurred by their staff members, workers for sustaining any injuries during the course of employment. There is no contract of insurance between the plaintiff and the third defendant. The third defendant was not informed either by the plaintiff or by the first defendant regarding the accident immediately or after the accident.

6. Based on the above pleadings, the trial Court framed the following issues:

4 VGKRJ AS 112 of 2004

(i) Whether the accident took place and if so the officials of the plaintiff received injuries in the accident and whether it was on account of the gross negligence of the defendants?

(ii) Whether the plaintiff is entitled to claim the suit amount?

(iii) To what relief?

7. During the course of trial in the trial Court, on behalf of the Plaintiff, PW1 and PW2 were examined and Ex.A1 to Ex.A23 were marked. On behalf of the Defendant No.3 DW1 was examined and Ex.B1 and Ex.B2 were marked. Defendant Nos.1 and 2 are remained set exparte.

8. After completion of the trial and on hearing the arguments of both sides, the trial Court decreed the suit with costs vide its judgment, dated 29.08.2003, against which the present appeal is preferred by the appellant/defendant No.3 in the Suit questioning the Decree and Judgment passed by the trial Court.

9. Heard Sri M.V.Vijayaditya Reddy, learned counsel, representing Sri C.Prakash Reddy, learned counsel for appellant/defendant No.3 and Sri Sai Gangadhar Chamarthy, learned counsel for respondent No.1/plaintiff.

10. The learned counsel for the appellant would contend that the civil Court has no jurisdiction to entertain the claim and he would further contend that the trial Court failed to come to conclusion that the injured persons who are the workmen of the plaintiff are not covered under the policy. He would further contend that the trial Court failed to see that the plaintiff having admitted hire of the vehicle and the plaintiff has no locus standi to claim the amount under any head against the appellant and 5 VGKRJ AS 112 of 2004

there is no relationship of insured and insurer in between the appellant and the plaintiff.

11. Per contra, the learned counsel for respondent No.1/plaintiff would contend that on appreciation of entire evidence on record, the learned trial Judge rightly decreed the suit and there is no need to interfere with the finding given by the learned trial Judge.

12. Having regard to the pleadings in the suit, the findings recorded by the trial Court and in the light of rival contentions and submissions made on either side before this Court, the following point would arise for determination:

Whether the trial Court is justified in decreeing the suit against the appellant/defendant No.3 ?

13. Point :

The first defendant is the owner and the second defendant is the driver of Mahindra Jeep bearing registration No.ADD 1810 and the said vehicle is insured with the third defendant under policy No.620301/31/99/11312, dated 28.12.1999 and it is valid up to 27.12.2000 and the jeep is under hire to the plaintiff for its official work.

The plaintiff further pleaded that on 16.01.2000 at 10.30 p.m. the Mahindra Jeep was carrying the officials of the plaintiff and the second defendant drove the vehicle at high speed in a rash and negligent manner and dashed to an electrical pole in Ukkunagaram township, due to that five employees of the plaintiff sustained injuries and the plaintiff incurred a total expenditure of Rs.2,91,936.55 paise towards compensation and medical expenditure of the employees of the plaintiff.

6 VGKRJ AS 112 of 2004

14. The defendants 1 and 2, owner and driver of the offending jeep were remained set exparte. To substantiate the claim of the plaintiff, the plaintiff examined the Deputy Manager as PW1, he reiterated the contents of the plaint in his evidence affidavit as PW1. In cross examination he admits that the jeep is having insurance policy and the injured who were travelling in the jeep did not file any petition in the Motor Accident Claims Tribunal, claiming compensation. He pleaded ignorance that whether the third defendant insurance company is a party to the proceedings before the commissioner under Workmen Compensation Act. He further admits that he has not filed any document to show that the alleged accident occurred due to rash and negligent driving of the jeep driver. He further admits their company will reimburse all the medical expenses of their officials in case of any accident during the course of employment. He further admits their company has not obtained any policy under Workmen Compensation Act covering the officials who are the injured in the present case. He further admits the policy obtained by the owner of the vehicle is an Act policy. He fairly admits there is no contract of insurance in between the plaintiff and third defendant insurance company.

15. PW2 is none other than the employee of the plaintiff. As per his evidence he is one of the persons who sustained injuries in a Motor Vehicle Accident that had been taken place. In cross examination, he admits that the accident was occurred while he was on duty and their company will bear the medical expenses if anybody met with the accident while they are on duty. He further admits their company paid all the expenses to him and 5 members were travelling in the jeep at the time of accident. It is not in dispute by the plaintiff that 5 employees of the plaintiff company by name Hindustan Steelworks Construction Limited, 7 VGKRJ AS 112 of 2004

Visakhapatnam, are travelling in a jeep which was hired by the plaintiff from the first defendant at the time of accident. PW2 further admits that he has not filed any suit against the jeep driver, owner of the jeep or the insurer for claiming compensation.

16. As per the own admissions of the plaintiff, the jeep is hired by the plaintiff from the first defendant and the plaintiff is not the owner of the jeep. The first defendant is owner of the jeep, second defendant is a driver of the jeep, the first defendant insured the jeep with third defendant under act policy but not a comprehensive policy and the said Act policy is in force by the date of alleged accident. It is also not in dispute that the employees of the plaintiff company are travelling in the hire jeep during the course of employment and they sustained injuries since the driver of the jeep dashed to the electrical pole. As per the admissions of PW1, their company will reimburse all medical expenses to the employees, in case they sustained accident during the course of employment. It is fairly admitted by the deputy manager of the plaintiff company i.e., PW1 in his evidence in cross examination their company will reimburse all the medical expenses of their officials in case of any accident occurred during the course of employment. Admittedly, the employees of the plaintiff company who are travelling in a hire jeep did not file any petition in the Motor Accident Claims Tribunal for claiming compensation and they filed a petition for claiming compensation before the commissioner under Workmen Compensation Act. It is also not in dispute that the plaintiff has not obtained any policy under Workmen Compensation Act covering the officials of the plaintiff who were injured in the present case. Another important admission made by the Deputy Manager of the plaintiff i.e., PW1 in his evidence in cross examination itself is that there is no contract of insurance between the plaintiff and the third defendant insurance 8 VGKRJ AS 112 of 2004

company and they have not obtained any policy for Workmen Compensation Act.

17. The documentary evidence on record clearly goes to show that the employees of the plaintiff sought compensation under Workmen Compensation Act before the commissioner and the commissioner under Workmen Compensation Act awarded compensation to the workmen against the employer/ plaintiff under Workmen Compensation Act.

18. In a case of Sanjeev Kumar Samrat vs. National Insurance Company Limited1, the Apex Court held as follows:

It is worthy to note that Section 147(1)(b) sub-clause (i)(c) refers to an employee who is being carried in the vehicle covered by the policy. Such vehicle being a goods carriage, an employee has to be covered by the statutory policy. On an apposite reading of Sections 147 and 167 the intendment of the Legislature, as it appears to us, is to cover the injury to any person including the owner of the goods or his authorised representative carried in a vehicle and an employee who is carried in the said vehicle. It is apt to state here that the proviso commences in a different way. A policy is not required to cover the liability of the employee except an employee covered under the 1923 Act and that too in respect of an employee carried in a vehicle. To put it differently, it does not cover all kinds of employees. Thus, on a contextual reading of the provision, schematic analysis of the Act and the 1923 Act, it is quite limpid that the statutory policy only covers the employees of the insured, either employed or engaged by him in a goods carriage. It does not cover any other kind of employee and therefore, someone who travels not being an authorised agent in place of the owner of

(2014) 14 SCC 243 9 VGKRJ AS 112 of 2004

goods, and claims to be an employee of the owner of goods, cannot be covered by the statutory policy and to hold otherwise would tantamount to causing violence to the language employed in the Statute.

In the case on hand, admittedly there is no contract of insurance in between the appellant and the plaintiff, the plaintiff failed to produce any documentary evidence or oral evidence to show that there was a contract in between the plaintiff and the third defendant/appellant. As per the case of the plaintiff, there was a contract in between the plaintiff and hirer. If any clause is there in the policy, the hirer is liable to pay the compensation. Admittedly, the vehicle is a hire vehicle, the policy obtained by the first defendant is an act policy, but not a comprehensive policy. In the case on hand, there is no contract in between the appellant and the plaintiff. Admittedly, the plaintiff has not obtained any policy under Workmen Compensation Act. As per the own admissions of PW1 there is no contract of insurance between the plaintiff and third defendant insurance company. In the absence of any contract in between the appellant and plaintiff, the appellant is not at all liable to pay any compensation to the plaintiff.

19. It is settled principle that liability of an insurer for payment of compensation could be either statutory or contractual. On reading of the proviso to sub section (1) of Section 147 of the Act, it is demonstrable that the insurer is required to cover the risk of certain category of employees of the insured stated therein. The insurance company is not under statutory obligation to cover all the kinds of employees of the insurer as the statute does not show command. That apart, the liability of the insurer in respect of said covered category of employees is limited to 10 VGKRJ AS 112 of 2004

the extent of liability that arises under 1923 Act. In the case on hand, admittedly the injured are not the employees of the hirer and the policy obtained by the hirer is act policy but not a comprehensive policy.

20. It is worth noticing that under Section 3 of the Act, the employer is liable to pay compensation to the workman in respect of personal injury or death caused by an accident arising out of or in the course of his employment. Here, the injured or workman of the plaintiff and the plaintiff have not obtained any policy under Workmen Compensation Act.

21. The case of the plaintiff is that the plaintiff had incurred the expenditure on account of the injuries sustained by its employees due to the negligence of second defendant in driving the vehicle at the time of accident, accordingly, the first defendant as a owner of the vehicle and third defendant as the insurer thereof along with the defendant No.2 are jointly and severally liable to indemnify the plaintiff for an amount of Rs.2,91,936.65 paise which was incurred by the plaintiff. I am unable to accept the said contention of the plaintiff that the appellant is jointly and severally liable to indemnify the plaintiff along with the defendants 1 and 2. Admittedly, the first defendant is the owner of the vehicle and second defendant is the driver of the vehicle and first defendant obtained act policy and the injured are not the employees of the first defendant and the injured persons in this case are the employees of the plaintiff. The plaintiff is a company constituted under Companies Act, which is a Central Government undertaking. As per the own admissions of PW1, the plaintiff is liable to incur all the medical expenses spent by their employees during the course of employment.

22. The plaintiff company is a Government of India undertaking and incorporated under the Indian Companies Act and that the plaintiff 11 VGKRJ AS 112 of 2004

company is liable to meet all the medical expenses incurred by their staff members/ workers for sustaining any injuries during the course of employment. In the case on hand, the employees of the plaintiff met with an accident and sustained injuries during the course of employment and therefore the plaintiff company has to meet all the medical expenditure and they have to pay the compensation as per the provisions of Workmen Compensation Act. Admittedly, the plaintiff did not obtain any policy under Workmen Compensation Act from the appellant. Furthermore, there is no contract of insurance in any manner in between the plaintiff and the appellant.

23. The material on record reveals that no claim was received by the appellant from any one of the injured and the appellant also not issued any policy under the provisions of Workmen Compensation Act to the plaintiff. Admittedly, there is no contract of insurance in any manner in between the plaintiff and the appellant. Furthermore, the injured ought to have file a petition before the Motor Accident Claims Tribunal claiming compensation, if there is any sufficient evidence to prove that the alleged accident was occurred due to rash and negligent driving of the driver of the jeep. When there is no contract of insurance as admitted by PW1 in between the plaintiff and the appellant/ third defendant, the appellant/third defendant is not at all liable to pay compensation to the plaintiff. Accordingly the point is answered.

24. In the result, the Appeal Suit is allowed and the decree and Judgment dated 29.08.2003, in O.S.No.68 of 2001 passed by the learned Senior Civil Judge, Gajuwaka against the appellant/ third defendant is liable to be set aside. No order as to costs.

12 VGKRJ AS 112 of 2004

As a sequel, miscellaneous petitions, if any, pending in the Appeal shall stand closed.

_________________________ V.GOPALA KRISHNA RAO, J Date: 09.07.2024 sj 13 VGKRJ AS 112 of 2004

THE HON'BLE SRI JUSTICE V.GOPALA KRISHNA RAO

APPEAL SUIT No.112 OF 2004

Date: 09.07.2024

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