Gujarat High Court

Rameshwari Bhajanlal Wife vs Valjibhai Naranbhai Miyatra on 5 July, 2023

Bench: Gita Gopi

     C/FA/3772/2022                                 ORDER DATED: 05/07/2023




           IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                      R/FIRST APPEAL NO. 3772 of 2022

==========================================================
                       RAMESHWARI BHAJANLAL WIFE
                                   Versus
                       VALJIBHAI NARANBHAI MIYATRA
==========================================================
Appearance:
MR. HEMAL SHAH(6960) for the Appellant(s) No. 1,2,3,4,5
MS E.SHAILAJA(2671) for the Defendant(s) No. 4
RULE SERVED for the Defendant(s) No. 1,2,3
==========================================================

 CORAM:HONOURABLE MS. JUSTICE GITA GOPI

                              Date : 05/07/2023


                               ORAL ORDER

1. The claimants aggrieved and dissatisfied

by the judgment and award dated 14.12.2021 passed

by Motor Accident Claims Tribunal, Rajkot in MACP

No.1395 of 2016, have preferred the present First

Appeal under section 173 of the M.V. Act, mainly

contending the ground that the deceased was paid

driver and his risk was covered since additional

premium was paid, and, thus have raised

contention that 50% deduction in the compensation

amount considering the negligence of the deceased

C/FA/3772/2022 ORDER DATED: 05/07/2023

is contrary to the judgment of this Court in

Valiben Laxmanbhai Thakore (Koli) Wd/o Late

Laxmanbhai Ramsingbhai Thakore (Koli) Vs. Kandla

Dock Labour Board, reported in 2021 (4) GLH 77.

2. The facts of the case, as noted in the

impugned judgment, in brief, are that on

07.01.2016 at 5:00 in the morning, the deceased

was driving Truck No.GJ-12-AZ-1455 on the

highway, when he reached near Adsar Police Check

Post, suddenly the driver of Tanker No.GJ-12.-BT-

9544 came on the road. The deceased tried to

control his vehicle by applying brakes and to

slow down his vehicle, but the Truck dashed the

rear side of the Tanker, and he sustained fatal

injuries and succumbed to death on the spot.

3. Mr. Hemal Shah, learned advocate for the

appellants submitted that though the learned

Tribunal has observed the said fact and has

reflected in the judgment regarding the insurance

C/FA/3772/2022 ORDER DATED: 05/07/2023

policy, Exh.51, which was produced on record,

reflects the same of Commercial Vehicle Package

Policy and the policy premium schedule shows that

Rs.100 was recovered towards additional premium

for LL to paid driver and Rs.150 was recovered

towards additional LL to paid driver, conductor,

cleaner, employeed etc., in spite of that, has

deducted 50% of the compensation amount

attributing it as deceased negligence.

4. Ms. E.Shailaja, learned advocate for

respondent no.4 submitted that the deceased as

was negligent, the compensation cannot be claimed

for the deceased's negligent act, and the learned

Tribunal has rightly deducted the amount.

5. Advocate Mr. Hemal Shah submitted that

in the full bench judgment in Valiben Laxmanbhai

Thakore (Koli) Wd/o Late Laxmanbhai Ramsingbhai

Thakore (Koli) (supra), it has been held that an

additional premium is accepted, then the

C/FA/3772/2022 ORDER DATED: 05/07/2023

insurance company undertakes to indemnify the

owner for the paid driver / conductor and upon

the death or injury to paid driver / conductor,

the Insurance Company is liable to satisfy such

claim, and the Insurance Company could not

dispute its liability on the ground that self

negligence of driver solely responsible for

accident.

6. The deceased was 25 years of age at the

time of accident and he was working as a truck

driver. The learned Tribunal has laid down 50%

negligence of the deceased truck driver and on

that basis after considering the income of the

deceased, the amount of compensation has been

granted under conventional and non-conventional

heads, and, total compensation which the learned

Tribunal has considered the claimants to be

entitled is Rs.13,01,000/-; however, considering

the deceased responsible for the accident to the

C/FA/3772/2022 ORDER DATED: 05/07/2023

extent of 50%, has deducted 50% amount, and,

therefore considered that the applicants were

entitled for the compensation of Rs.6,50,500/-.

7. In case of Valiben Laxmanbhai Thakore

(Koli) Wd/o Late Laxmanbhai Ramsingbhai Thakore

(Koli) (supra), the full bench of this Court, in

paragraph-10, observed as under:

"10. Chapter XI of the Act covers the subject 'Insurance of Motor Vehicles Against Third Party Risks' under section 146(1) of which no person shall use a motor vehicle in public unless there is a valid policy of insurance which complies with the requirements of the chapter. Section 147 provides for mandatory requirements of such insurance policy. It deserves to be noted that as per the provisions of Section 147 r/w 149 of the Act, the risks which are covered are statutorily provided, however, parties may enter into a contract by which the insurer agrees to cover

C/FA/3772/2022 ORDER DATED: 05/07/2023

additional risks by charging / payment of additional payment. It also deserves to be noted that the policy has a clause which defines the limits of liability in respect of death or bodily injury to any person caused by or arising out of the use of the motor vehicle under section 11(i) of the terms and conditions of the policy. In proviso

(b) to section II (1), which reads as under:

"Except so far as is necessary to meet the requirements of the Motor Vehicles Act, the company shall not be liable in respect of death of or bodily injury to any person in the employment of the insured arising out of and in the course of such employment"

Thus, the insurance policy would cover only the person or classes of persons specified in the policy.

Thus, when the Insurance Company accepts the additional premium for legal liability to paid Driver and /

C/FA/3772/2022 ORDER DATED: 05/07/2023

or Conductor and / or Cleaner, employed in connection with the operation of the insured vehicle, by accepting additional premium as per IMT 28, the Insurance Company shall entail liability of indemnifying and legal liability is created towards paid Driver and / or Conductor and/ or Cleaner. In case when such additional premium is paid, the policy includes following clause:

             "In         consideration                    of          an
             additional                    premium                    of
             notwithstanding               anything         to      the

contrary contained in the policy it is hereby understood and agreed that the insurer shall indemnify the insured against the insured's legal liability under the Employees Compensation Act 1923 the Fatal Accidents Act, 1855 or at Common Law and subsequent amendments of these Acts prior to the date of this Endorsement in respect of personal injury to any paid driver and/or conductor and/or cleaner whilst engaged in the

C/FA/3772/2022 ORDER DATED: 05/07/2023

service of the insured in such occupation in connection with the vehicle insured herein and will in addition be responsible for all costs and expenses incurred with its written consent."

The aforesaid clause therefore, clearly prescribes that it covers the insured against the insured's legal liability under the Employee's Compensation Act, 1923, the Fatal Accidents Act, 1855 or at Common Law. It may be noted that statutory policy would cover liability under the Employee's Compensation Act, 1923 as far as Driver is concerned. By accepting additional premium as per the IMT 28, the same added liability under Common Law and Fatal Accidents Act. Motor accidents liability predates the imposition of this liability under any form of statute and such liability would be part of Common Law till the time it was made a statutory liability."

7.1 By referring to various judgments and

C/FA/3772/2022 ORDER DATED: 05/07/2023

the provisions of the M.V. Act, the full bench of

this Court has held regarding the liability of

the Insurance Company, when additional premium is

accepted in following terms:

"13. Thus, when the owner of a vehicle pay additional premium and same is accepted by the Insurance Company, liability of the Insurance Company gets extended under the Motor Vehicles Act. Section 147 of the Act clearly prescribes for statutory liability to cover risk of paid Driver and Conductor under the Insurance Policy, which is a matter of contract. On payment of such additional premium by the owner, the liability of the owner shifts upon the Insurance Company. Thus, the risk of paid Driver and Conductor would be covered under the Insurance Policy. Only when the additional premium is not paid, liability would be as per the Employees Compensation Act, 1923 and in such cases, compensation would be computed as prescribed under the Act which is limited to the extent provided under

C/FA/3772/2022 ORDER DATED: 05/07/2023

provisions of the Act. However, when owner pays additional premium to cover the legal liability of his paid driver and conductor to the Insurance Company, as such, the Insurance Company is enlarging the scope for unlimited liability for payment of compensation, when additional premium is accepted. The liability of the Insurance Company gets extended and it has no right to raise issue of self negligence or otherwise of the such class of the driver of the Insured vehicle. By accepting additional premium as per the IMT 28, the Insurance Company expressed its willingness to extend its liability under the Clause of Legal Liability to the Paid driver and conductor as envisaged under Section 147 of the Act. Thus, in our opinion, Insurance Company has no legal right to avoid its legal liability under the indemnity clause arising from the contract of insurance towards the insured - owner of such classes of vehicles."

7.2 The proposition of law, as laid down in

C/FA/3772/2022 ORDER DATED: 05/07/2023

Valiben's case, clarifies that on payment of

additional premium by the owner, the liability of

the owner shifts upon the Insurance Company, and,

when owners pays additional premium to cover

legal liability of his paid driver and conductor

to the Insurance Company, the Insurance company

is enlarging the scope for unlimited liability

for the payment of compensation, when additional

premium is accepted.

8. Here, in this case, as has been noted by