Karnataka High Court
The Branch Manager vs Malappa And Anr on 23 July, 2025
Author: Ravi V Hosmani
Bench: Ravi V Hosmani
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MFA No. 201225 of 2021
C/W MFA No. 200615 of 2021
HC-KAR
IN THE HIGH COURT OF KARNATAKA,
KALABURAGI BENCH
DATED THIS THE 23RD DAY OF JULY, 2025
BEFORE
THE HON'BLE MR. JUSTICE RAVI V HOSMANI
MISCL. FIRST APPEAL NO. 201225 OF 2021 (ECA)
C/W
MISCL. FIRST APPEAL NO. 200615 OF 2021
IN M.F.A.NO.201225/2021
BETWEEN:
THE BRANCH MANAGER,
THE ORIENTAL INS. CO. LTD.,
S.S. FRONT ROAD VIJAYAPUR,
(NOW REPRESENTED BY
REGIONAL MANAGER, R.O.HUBLI)
...APPELLANT
Digitally signed (BY SMT PREETI PATIL MELKUNDI, ADVOCATE)
by RAMESH
MATHAPATI AND:
Location: HIGH
COURT OF
KARNATAKA 1. MALAPPA
S/O BASAWARAJ DALWAI,
AGE: 24 YEARS,
OCC: EARLIER COOLIE,
NOW NIL, R/O: TAJPUR - H,
TQ: DIST: VIJAYAPURA - 586 101.
2. SHRISHAIL
S/O SHANKAREPPA KAMBAR,
AGE: 51 YEARS,
OCC: BUSINESS,
R/O: JIGAJINNI, TQ: INDI,
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MFA No. 201225 of 2021
C/W MFA No. 200615 of 2021
HC-KAR
DIST: VIJAYAPURA - 586 101.
...RESPONDENTS
(BY SRI SANGANAGOUDA V. BIRADAR, ADVOCATE FOR R1;
SRI G.V.DESHPANDE, ADVOCATE FOR R2)
THIS MFA IS FILED UNDER SECTION 30 (1) OF E.C. ACT,
PRAYING TO CALL FOR THE RECORDS AND ALLOW THE ABOVE
APPEAL BY SETTING ASIDE THE IMPUGNED COMMON
JUDGMENT AND AWARD DATED 19.08.2019 IN
E.C.NO.168/2014 PASSED BY THE I ADDITIONAL SENIOR CIVIL
JUDGE AND COMMISSIONER FOR EMPLOYEES COMPENSATION
AT VIJAYAPURA, IN THE INTEREST OF JUSTICE AND EQUITY.
IN M.F.A.NO.200615/2021
BETWEEN:
THE BRANCH MANAGER,
THE ORIENTAL INS. CO. LTD.,
S.S. FRONT ROAD, VIJAYAPUR,
(NOW REPRESENTED BY
REGIONAL MANAGER, R.O.HUBLI)
...APPELLANT
(BY SMT PREETI PATIL MELKUNDI, ADVOCATE)
AND:
1. GURUSHANT
S/O SHARANAPPA KANADI,
AGE: 24 YEARS,
OCC: EARLIER COOLIE,
NOW NIL, R/O: TAJPUR - H,
TQ: DIST: VIJAYAPURA - 586 101.
2. SHRISHAIL
S/O SHANKAREPPA KAMBAR,
AGE: 51 YEARS,
OCC: BUSINESS,
R/O: JIGAJINNI, TQ: INDI,
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NC: 2025:KHC-K:4177
MFA No. 201225 of 2021
C/W MFA No. 200615 of 2021
HC-KAR
DIST: VIJAYAPURA - 586 101.
...RESPONDENTS
(BY SRI SANGANAGOUDA V. BIRADAR, ADVOCATE FOR R1;
SRI G.V.DESHPANDE, ADVOCATE FOR R2)
THIS MFA IS FILED UNDER SECTION 30 (1) OF E.C. ACT,
PRAYING TO CALL FOR THE RECORDS AND ALLOW THE ABOVE
APPEAL BY SETTING ASIDE THE IMPUGNED COMMON
JUDGMENT AND AWARD DATED 19.08.2019 IN
E.C.NO.170/2014 PASSED BY THE I ADDITIONAL SENIOR CIVIL
JUDGE AND COMMISSIONER FOR EMPLOYEES COMPENSATION
AT VIJAYAPURA, IN THE INTEREST OF JUSTICE AND EQUITY.
THESE MFA'S COMING ON FOR ADMISSION, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE RAVI V HOSMANI
ORAL JUDGMENT
Challenging judgment and award dated 19.08.2019
passed by I Additional Senior Civil Judge and Commissioner for
Employees Compensation, Vijayapur (hereinafter referred to as
'Commissioner', for brevity) in ECA No.168/2014 and ECA
no.170/2014, these appeals are filed.
2. Smt.Preeti Patil Melkundi, learned counsel
submitted appeals were by insurer, challenging finding of
Commissioner about relationship of claimant with owner of
insured vehicle as employee and employer and thereby avoid
liability under award.
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3. It was submitted, brief facts as stated by
respondents were that respondent no.2 (employer) employed
them as hamalis/coolie (workmen) in goods vehicle bearing
no.KA-28/A-5093 owned by him and insured with appellant
(insurer), on monthly wages of `5,000/- and `50/- per day as
bhata. It was further stated that as per instruction of employer,
at about 1.30 p.m. on 24.03.2012, when workmen were on
duty in aforesaid vehicle for transporting grapes towards
Tajpur, near Vithal-Rukmini Temple at Tantnapur village, driver
drove it in rash and negligent manner and lost control over it.
Due to which it toppled down by side of road and caused
accident and workmen sustained injuries. Despite treatment,
they did not recover fully and sustained permanent partial
physical disability.
4. Claiming compensation for same, they filed
application under Section 22 of Employees Compensation Act
read with Section 2(A), 4 and 7 (Amendment), Act, 2009 (for
short 'EC Act').
5. On contest, owner of vehicle denied age and
monthly income of claimants, but admitted accident and
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employment of claimants as coolies for his goods vehicle but on
monthly wages of `2,500/- and daily bhata of `30/- and
claimed to be indemnified by insurer. Insurer opposed claim
denying accident, but admitted issuance of insurance policy and
denied liability on ground that claimants were gratuitous
passengers and not covered under insurance policy.
6. Based on pleadings, Commissioner framed issues
and recorded evidence. Claimants examined themselves and
Dr.SV Havinal as PWs.1 to 3 and got marked Exs.P-1 to P-17.
Insurer examined its official as RW-1 and got marked copy of
insurance policy as Ex.R-1.
7. On consideration, Commissioner held claimants
established relationship of employer and employee and about
accident occurring during course of and out of employment. It
determined workman in ECA no.168/2014 was 18 years,
earning monthly income of `5,000/-. It assessed disability at
4%. And applying relevant factor i.e., 226.38, awarded total
compensation of `6,79,200/-.
8. Likewise in ECA no.170/2014, it determined
workman was 19 years, his monthly income was `5,000/-. It
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determined disability was at 6%. And applying relevant factor
of 226.38, awarded compensation of `6,75,700/-.Commissioner
directed insurer to pay interest at 12% per annum from
24.03.2012 i.e., from date of accident till its realization.
Aggrieved, appeals were filed by insurer.
9. It was firstly submitted as per police investigation
records, claimants were not employees, but gratuitous
passengers, whose risk was not covered. It was submitted
insured vehicle was a 'Medium Goods Vehicle' with carrying
capacity of 1 + 2 and premium paid was to cover risk of Driver,
Conductor and Cleaner, but not coolies.
10. It was further submitted though permanent partial
physical disability sustained by claimants was assessed at 4%
and 6% respectively, it failed to account for same while
calculating compensation, resulting in excessive award. In view
of above, substantial questions of law about liability as well as
quantum of compensation being opposed to law arose for
consideration.
11. On other hand, Sri Sanganagouda V.Biradar,
opposed appeals.
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12. Heard learned counsel, perused impugned
judgment and award as well as records.
13. From above, substantial question of law that would
arise for consideration are:
1) When claimants were not travelling in Goods
Vehicle either as driver, conductor or cleaner,
but, as coolies, whether Commissioner was
justified in holding insurer liable to pay
compensation in Employees Compensation
Claim?
2) When Commissioner determined functional
disability, whether assessment of compensation
without referring to same was contrary to law
and call for interference?
14. With consent of learned counsel, matter was heard
on said substantial questions of law.
15. Challenge on liability is on two grounds. Firstly, that
claimants were gratuitous passengers and not employees and
even if they were coolies, they were not covered under Ex.R1-
Insurance Policy.
16. In order to establish their relationship with owner of
vehicle, claimants not only relied on their assertions in
pleadings but also on admission by owner in pleading. Since
finding of Commissioner to this extent is based on clear
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admission, and would be finding of fact, no substantial question
of law would arise for consideration.
17. Further, though Ex.R1-Insurance Policy would not
cover risk of coolies and premium paid was to cover risk of
driver, conductor and cleaner, admittedly vehicle in question is
a MGV. Rule 100 of Motor Vehicle Rules would authorize
carriage of three coolies in MGV for purposes of loading and
unloading of goods. Admittedly, vehicle was transporting
grapes when it met with accident.
18. A similar issue arose for consideration before a
Division Bench of this Court in case of National Insurance
Company Limited v. Maruthi, reported in 2010 SCC OnLine
Kar 4533, wherein it was held:
"34. As of now, there are only two types of policies
envisaged under the Standard Forms as
contemplated under Section 6 of the Indian Motor
Tariff. Their liability under the liability only policy and
package policy reads as under:
(i) Liability Only Policy: This cover Third Party
Liability for bodily injury and/or death and Property
Damage Personal Accident cover for Owner Driver is
also included.
(ii) Package Policy: This covers loss or damage to the
vehicle insured in addition to (i) above.
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35. By reading the above two types of policies, it is
clear package policy is nothing short of
comprehensive policy with all the contents almost
similar to the comprehensive policy which was in
vogue earlier to the introduction of this package
policy.
36. The fully worded policy now produced refers to
limits of liability as envisaged in Commercial Vehicles
'B' Policy (Misc. & special type of vehicles). Section 1
refers to loss of damage to the insured vehicle,
tractor-trailer combination; Section-II refers to
liability to third parties and Section-III refers to
towing disabled vehicle. We are concerned with sub-
Section (i) of Section II which reads as under:
Subject to the limits of liability as laid down in the
schedule herein, the company will indemnify the
insured against all sums including-the claimants
costs and expenses which the insured shall become
legally liable to pay in respect of death of or bodily
injury to any person (including the loading and/or
unloading) of the Motor vehicle."
37. The wordings of the fully worded policy makes it
clear that the vehicle in question is a goods vehicle.
Therefore, the respondents were justified in saying
appellant cannot plead other than what is stated in
the policy. If the general exception in the policy were
to exclude the liability of the insurer to cover the
coolies employed for loading and unloading then the
argument of the appellants was justified Though the
fully worded policy refers to the terms of contract
between the parties, IMT 7, 21, 24, 36 and 48, on
perusal of the same except IMT 36 none of the other
IMTs. are relevant. As a matter of fact IMT 7 & 48 do
not find a place in the fully worded policy. IMT 21
refers to exclusion of riots, strikes and terrorism
coverage. IMT 24 refers to replacement of parts.
When the very policy is referred to as a special
package policy, unless the insured was fully made
known the exact terms of contract by including them
in the terms of policy, it is nothing but with-holding
necessary and important information from the
insured. Depending upon the user of the vehicle
whether for agricultural purpose or for commercial
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purpose, the liability of the insurer would be decided.
When the intention of the Legislation was to cover
compulsorily all the risk arising out of the use of the
motor vehicle and that the liability of the insurer is
co-extensive with that of the insured subject to
Section 147 (1)(b), coolies or employees are
compulsorily covered. Therefore, the argument that
Rule 100(6) r/w Rule 226 of the Karnataka Motor
Vehicles Rules is relevant is rejected and the same
will not authorise or permit the insurer to avoid the
liability.
.........
40. The combination of tractor-trailer is nothing short
of a goods carriage. Therefore, when once it is held
as goods carriage vehicle, by virtue of Section-II-
1(1) of fully worded policy and also provisions of
Section 147, the claim of the claimants on hand is
covered The claimants in the present case have
rightly approached the Workmen's Commissioner and
the Commissioner was justified in holding that the
injured claimants were coolies under the owner viz.,
the insured. In the present case, they were carrying
stones for constructing a ridge in the land belonging
to the insured so as to store the water. This is
nothing but part and parcel of agricultural
operations. The Claimants were neither gratuitous
passengers nor persons who were travelling in the
tractor-trailer for the purpose other than agricultural
operations. Looking to the avocation of the
claimants, the computation of the compensation by
the Commissioner is just and proper. Viewed from
any angle, we do not find any good ground to
interfere with the awards of the Commissioner.
Therefore the claimants in the present case were
rightly held as covered under Ex.R-2 policy."
19. A single Judge of this Court in case of Oriental
Insurance Co. Ltd. v. Gadi Lingappa, reported in 2013 SCC
OnLine Kar 2162, has thereafter held:
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"3. The question of law arises for consideration
in these appeals is:
"Whether the Commissioner is justified in
fastening the liability against the insurer of the
offending vehicle or not?
4. The learned counsel for the appellant-
insurance company submits that claimants
having travelled in the offending tractor trailer
as coolies, their risk is not covered and the
insurer is not liable to indemnify the owner of
the vehicle and to pay compensation to the
claimants.
5. The said question has been answered by the
Division Bench of this Court in MFA Nos. 6556,
6557, 6558, 6559 of 2006 between National
Insurance Company Limited v. Sri Maruti
reported in ILR 2011 KAR 4139 holding that the
insurer is liable to indemnify the insured and pay
compensation to the claimants.
6. Hence, the question of law is answered
against the appellant-insurance company."
20. In view of above elucidation, substantial question of
law no.1 is answered in affirmative.
21. On quantum, it is not in dispute that Commissioner
had assessed permanent partial physical disability ('PPPD' for
short) at 4% and 6% respectively but failed to apply same
while computing compensation. Therefore, computation of
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compensation would be contrary to statute and would call for
re-computing as follows:
a) In ECA no.168/2014 income claimed is `5,000/- + `50
per day as bhata, which would be `6,500/-. Factor
applicable to age determined at 18 would be 226.38
and PPPD at 4%. Thus compensation towards loss of
earning capacity would be :
`6,500/- x 60% x 4% x 226.38 = `35,315/-
b) In ECA no.170/2014 income claimed is `5,000/- + `50
per day as bhata, which would be `6,500/-. Factor
applicable to age determined at 19 would be 225.22
and PPPD at 6%. Thus compensation towards loss of
earning capacity would be :
`6,500/- x 60% x 6% x 225.22 = `52,701/-
22. Substantial question of law no.2 is thus answered in
affirmative respectively.
23. Accordingly, following :-
ORDER
i) Appeals are allowed in part only on quantum.
ii) Judgment and award dated 19.08.2019 passed by I
Additional Senior Civil Judge and Commissioner for
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Employees Compensation, Vijayapur, in ECA
nos.168/2014 and 170/2014 are modified.
iii) Appellant in ECA no.168/2014 is held entitled for
total compensation of `35,315/- and appellant in
ECA no.170/2014 is held entitled for total
compensation of `52,701/- with interest at rate of
12% per annum from date of accident i.e.,
24.03.2012 till deposit which shall be deposited
within a period of six weeks from date of receipt of
certified copy of this judgment.
iv) On deposit, entire compensation is to be released.
Sd/-
(RAVI V HOSMANI)
JUDGE
MSR
