Telangana High Court

M/S. Shriram General Insurance Co. ... vs Bablu Uruma, Hyd And 5 Othrs on 1 February, 2024

     THE HONOURABLE SMT. JUSTICE M.G.PRIYADARSINI

       CIVIL MISCELLANEOUS APPEAL No.306 of 2013
                         AND
       CIVIL MISCELLANEOUS APPEAL No.348 of 2014


COMMON JUDGMENT:

1. These two Civil Miscellaneous Appeals arose out of the

common order dated 21.12.2012 passed in W.C.No.194 of

2011, on the file of the Commissioner for Employees'

Compensation and Assistant Commissioner of Labour-IV,

Hyderabad (hereinafter referred to as 'the Commissioner').

The said claim petition was filed by the applicants therein

seeking compensation of Rs.9,00,000/- for the death of

Smt.Bhoomi Uruma, hereinafter called as 'the deceased', that

occurred in an accident and the learned Commissioner has

partly allowed the claim application granting compensation of

Rs.4,94,435/-which is payable by both the opposite party

Nos.1 & 2 within a period of thirty (30) days from the date of

receipt of order. If the said amount is not deposited within 30

days, the applicants are entitled for interest @ 12% per

annum from the date of expiry of the period of 30 days from

the date of order till the date of realization. Aggrieved by the

said order, the applicants before the Commissioner filed

MGP,J CMA Nos.306 of 2013and 348 of 2014

C.M.A.No.348 of 2014 and Respondent No.2-Insurance

Company filed C.M.A.No.306 of 2013. Since both the appeals

are arising out of same order, they are being dealt with by

way of this common judgment.

2. For the sake of convenience, the parties hereinafter be

referred as they were arrayed before the Commissioner.

3. It is the case of the applicants, who are the husband

and children of the deceased -Smt.Bhoomi that the deceased

was working as a labourer on the lorry bearing No.KA 04A

6545 under employment of opposite party No.1 and that

opposite party No.2 is the insurer of the said lorry. On

15.06.2011, as per the directions of opposite party No.1, the

deceased and other labourers have joined duty on the said

lorry and were proceeding from B.N.Reddy Nagar to

Secunderabad for the purpose of loading and unloading sand

and on the way at about 00.30 hours, when they reached

near GENPACT on Uppal to Habsiguda road, the driver of the

said lorry, drove it in a rash and negligent manner at high

speed and dashed against the road divider. As a result, the

lorry turned turtle, due to which, the deceased and other

MGP,J CMA Nos.306 of 2013and 348 of 2014

labourers sustained grievous injuries and fractures.

Immediately, the deceased was shifted to Gandhi Hospital,

Secunderabad, for treatment. But the deceased died at about

2.30 hours while undergoing treatment. Based on a

complaint, P.S., Uppal, registered a case in Crime NO.314 of

2011 under Section 304-A IPC. The applicants stated that

the deceased was aged 30 years as on the date of accident

and used to earn wages of Rs.4,500/- per month along with

Batta of Rs.100/- per day which is being paid by opposite

party No.1. The applicants stated that as the deceased died

during the course and out of her employment as labourer

under the employment of Opposite party No.1 and as the

vehicle-Lorry was insured with opposite party No.2 and the

policy was valid as on the date of accident, therefore, both the

opposite party Nos.1 & 2 are jointly and severally liable to pay

Rs.9,00,000/- towards compensation along with interest.

4. Opposite party No.1 filed his counter admitting the

occurrence of accident on 15.06.2011, including employment

of the deceased as cleaner, manner of the accident, wages,

batta, age. He also stated that the lorry was insured with

MGP,J CMA Nos.306 of 2013and 348 of 2014

opposite party No.2 under valid insurance from 10.04.2011 to

09.04.2012 and prayed to dismiss claim against him.

5. Opposite party No.2 filed its counter denying the

employment of the deceased as labourer on the subject lorry

including, occurrence, narration of the accident, driver of the

lorry having valid driving license at the time of accident and

also stated that the compensation claimed is excess and

exorbitant and hence prayed to dismiss the claim against it.

6. In support of their case, the applicant No.1 got

examined as AW1 on behalf of all the applicants and got

marked Exs.A1 to A9 on their behalf. On behalf of opposite

party No.1, the owner of the lorry got himself examined as

RW1. On behalf of the opposite party No.2, no witness was

examined. However Ex.B1- Insurance policy was marked

with the consent of either parties.

7. After considering the pleadings and evidence on record,

the Commissioner held that the applicants had successfully

proved their case. Hence, the claim petition was partly

allowed holding that both the respondents were jointly and

severally liable to pay compensation of Rs.4,94,435/- within

MGP,J CMA Nos.306 of 2013and 348 of 2014

thirty days from the date of receipt of copy of the said order

failing which the applicants are entitled for further interest @

12% per annum on the amount of compensation from the

date of expiry of period of one month from the date of order.

Aggrieved by the same, the applicants preferred CMA.No.348

of 2014 and the opposite party No.2 preferred CMA.306 of

2013.

8. Heard both sides.

9. The contention of the learned counsel for the

appellants/applicants in C.M.A.348 of 2014 is that the

learned Commissioner ought to have considered the wages @

Rs.8,000/- per month as per Gazette Notification dated

31.05.2010. He also contended that as the

respondents/opposite party Nos.1 & 2 failed to deposit the

awarded amount within thirty days from the date of award, as

such, the opposite party Nos.1 & 2 are liable to pay interest at

12% per annum on the awarded amount and hence prayed to

modify the order passed by the Commissioner.

10. The contention of learned Standing Counsel for opposite

party No.2/Insurance company i.e., appellant in

MGP,J CMA Nos.306 of 2013and 348 of 2014

C.M.A.No.306 of 2013 is that the Commissioner erred in

allowing the claim application as Ex.B-1-Insurance policy is

not covered to the labourers who are working as unauthorized

passengers. It also contended that the policy issued by

respondent No.2 does not cover the risk of the labourers as no

additional premium was paid by respondent No.1, hence, the

learned Commissioner erred in fastening the liability on the

Insurance Company and prayed to set aside the order of the

learned Commissioner.

11. Now the points for determination are as follows:

"1. Whether the findings of the learned Commissioner suffer from any illegality?

2. Whether the policy under Ex.B-1 covers the risk of labourer i.e., the deceased without payment of additional premium?

3. Whether the findings of the Commissioner with regard to determination of the compensation and interest thereon suffer from any illegality?"

Point Nos.1 to 3:

12. This Court has perused the entire evidence and material

placed on record. The applicant No.1 got examined himself as

AW1 and reiterated the contents of his claim petition. In

support of his contention, he got marked Exs.A1 to A9. In the

MGP,J CMA Nos.306 of 2013and 348 of 2014

cross-examination, he denied the suggestions given by

respondent No.2 with regard to employee and employer

relationship, age, wages, manner of accident and other

aspects.

13. Opposite party No.1, who is the owner of the subject

lorry, got himself examined as RW1. In his evidence he stated

that he had taken the insurance policy covering the risk of

the cleaner/labourer and the said policy is subsisting as on

the date of accident. He also admitted the employment of the

deceased as labourer on his lorry bearing No.KA-04-A-6545,

payment of wages of Rs.4,500/- towards monthly salary of the

deceased and Batta of Rs.100/- per day. In the cross-

examination by opposite party No.2, he denied the suggestion

that the deceased was traveling as a gratuitous passenger and

to avoid the liability, he had taken a plea that she was

working as a labour under him. He stated that he had not

filed any documents to show that the deceased was working

under him and he had not obtained any receipts from

deceased for payment of monthly salary to her.

MGP,J CMA Nos.306 of 2013and 348 of 2014

14. The main and primary contention of opposite party

No.2/ Insurance company is that though the insurance policy

under Ex.B-1 is subsisting as on the date of the accident, the

policy does not cover the risk of labourers, as no additional

premium was paid by the opposite party No.1/owner of the

lorry.

15. In this regard, it is apt to refer to the decision of

Oriental Insurance Company Limited v. Thukaram

Adappa 1 of the High Court of Karnataka, wherein it was held

as follows:

"In Asha Rani's case, Devi Reddy Konda Reddy's case, Ajit Kumar's case and Baljit Kaur's case, the Supreme Court has held that the legislative intent was to prohibit goods vehicle from carrying any passenger. Carrying passengers in a goods vehicle is not contemplated under the Act. Though the Act mandates compulsory coverage against death of or bodily injury to any passenger of a public service vehicle and compulsory coverage in respect of drivers and conductors of public service vehicle and employees carried in goods vehicle, the liability was limited to liability under the Workmen's Compensation Act, 1923. The legislature never intended to cover the risk of any passenger in goods carriage. The premium paid under the new Act would only cover a third party, any passenger of a public service vehicle as also the owner of the goods or his authorised representative and not any passenger carried in a goods vehicle whether for hire or reward or otherwise. However,

1 2007 ACJ 1497

MGP,J CMA Nos.306 of 2013and 348 of 2014

once such a policy is taken to paying the premium, statutorily the employees of the insured such as driver, conductor, ticket collector and who are carried in the goods carriage, are also covered to the extent of the liability under the Workmen's Compensation Act, 1923."

16. Further, in P. Venkata Ramana v. Chintaguntla

Kumari 2, the High Court for the erstwhile State of Andhra

Pradesh held that putting a vehicle to use, the drivers,

irrespective of the nature of the vehicle, conductors in public

service vehicle and the coolies or labourers, engaged on a

goods carriage are the essential operators and it is they, who

become instrumental in operating the vehicle.

17. In, Oriental Insurance Company Limited v. Meena

Variyal 3, the Hon'ble Supreme Court observed as under:

"Uninfluenced by authorities, we find no difficulty in understanding this provision as one providing that the policy must insure an owner against any liability to a third party caused by or arising out of the use of the vehicle in a public place and against death or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of vehicle in a public place. The proviso clarifies that the policy shall not be required to cover an employee of the insured in respect of bodily injury or death arising out of and in the course of his employment. Then, an exception is provided to the last foregoing to the effect that the policy must cover a liability arising under the Workmen's Compensation Act, 1923 in respect of the death or

2 2010 (2) ALD 281 3 (2007) 5 SCC 428

MGP,J CMA Nos.306 of 2013and 348 of 2014

bodily injury to an employee who is engaged in driving the vehicle or who serves as a conductor in a public service vehicle or an employee who travels in the vehicle of the employer carrying goods if it is a goods carriage. Section 149(1), which casts an obligation on an insurer to satisfy an award, also speaks only of award in respect of such liability as is required to be covered by a policy under clause

(b) of subsection (1) of Section 147 (being a liability covered by the terms of the policy). This provision cannot therefore be used to enlarge the liability if it does not exist in terms of Section 147 of the Act.

14. The object of the insistence on insurance under Chapter XI of the Act thus seems to be to compulsorily cover the liability relating to their person or properties of third parties and in respect of employees of the insured employer, the liability that may arise under the Workmen's Compensation Act, 1923 in respect of the driver, the conductor and the one carried in a goods vehicle carrying goods."

18 In, National Insurance Company Limited v. Prembai

Patel 4, the Hon'ble Supreme Court held as under:

"15. Though the aforesaid decision has been rendered on Section 95(2) of the Motor Vehicles Act, 1939 but the principle underlying therein will be fully applicable here also. It is thus clear that in case the owner of the vehicle wants the liability of the insurance company in respect of death of or bodily injury to any such employee as is described in clauses (a) or (b) or (c) of proviso (i) to Section 147(1)(b) should not be restricted to that under the Workmen's Act but should be more or unlimited, he must take such a policy by making payment of extra premium and the policy should also contain a clause to that effect. However, where the policy mentions "a policy for Act Liability" or "Act Liability", the liability of the insurance company qua the employees as aforesaid would not be

4 AIR 2005 SC 2337

MGP,J CMA Nos.306 of 2013and 348 of 2014

unlimited but would be limited to that arising under the Workmen's Act."

19. In, United India Assurance Company Limited v.

Shandoorapu Gangavva 5 the Single Judge of this Court,

while dealing with the liability of insurance company, in

respect of death of a driver in case of the policy taken by the

owner of the vehicle as 'Act Liability' without payment of extra

premium, has dismissed the appeals filed by the insurance

company by taking similar view, which was observed in

Prembai Patel case and held that liability of insurance

company qua employees of the owner could not be unlimited

but it would be limited to that arising under Workmen's

Compensation Act, 1923. It was further observed that in New

India Assurance Company Limited v. Satpal Singh

Muchal 6 the Honourable Supreme Court held that statutorily

the employees of the insured such as driver, conductor and

ticket collector, who are carried in the goods carriage, are

covered to the extent of the liability under the Act without

payment of any additional premium. Though, the judgment of

Satpal Singh's case was over ruled by the Apex Court in the

Common judgment, dt. 09.03.2023, CMA (SR) Nos. 4208, 4214 and 4220 of 2006 6 2000 ACJ 1 SC

MGP,J CMA Nos.306 of 2013and 348 of 2014

case of New India Assurance Company Limited v. Asha

Rani 7. However, it is to be seen that the Hon'ble Supreme

Court in Prembai Patel's case (supra), which is subsequent

to Asha Rani's (11th cited supra), held that where the policy

mentions "a policy for Act Liability" or "Act Liability", the

liability of the insurance company qua the employees as

aforesaid would not be unlimited but would be limited to that

arising under the Workmen's Act.

20. In view of the above discussion and by taking into

consideration the principle laid down in the above said cases,

the evidence of RW1, who is the owner of the subject lorry,

clearly stated that the said Insurance policy covers the risk of

the cleaner/labourer and since the deceased is not a

gratuitous passenger as she is an employee working under

opposite party No.1 as labourer on the said lorry, the

contention of the learned counsel for Opposite party

No.2/Insurance company that the policy does not cover the

risk of labourers in view of non-payment of additional

premium, is unsustainable. Therefore, opposite party

No.2/Insurance company is liable to indemnify opposite party

(2003 (2) SCC 223)

MGP,J CMA Nos.306 of 2013and 348 of 2014

No.1 i.e., owner of the lorry. Further, the Appellant/Insurance

company, except making contentions, has not adduced any

proper evidence to disprove the case set up by the applicants.

Hence, the contention of the learned counsel for the

Appellant/ Insurance company is rejected.

21. Coming to the contention made by the learned counsel

for the appellants/applicants in claim petition is that the

learned Commissioner should have taken the wages of

deceased @ 8,000/- per month as per Gazette Notification

dated 31.05.2010. In this regard, it is pertinent to refer the

evidence of RW1, who is the owner of lorry, who stated that he

used to pay Rs.4,500/- per month towards salary and

Rs.100/- per day as batta to the deceased. But he failed to

produce any documentary proof to that effect evidencing the

same. However, the Commissioner determined the wages of

the deceased @ Rs.4393.25/- as per the minimum wages

fixed by the Government vide G.O.Ms.No.83, L.E.T & F (Lab-

II) Department, dated 22.11.2006, w.e.f.04.12.2006. This

Court is of the considered opinion that the learned

Commissioner has granted just and reasonable compensation

MGP,J CMA Nos.306 of 2013and 348 of 2014

after determining all the aspects and interference of this

Court is unwarranted.

22. Insofar as rate of interest is concerned, it is apt to refer

to the decision of the Hon'ble Supreme Court in P. Meenaraj

v. P. Adigurusamy 8, wherein it is held as follows:

"10. As regards the date of commencement of the liability of interest, the learned counsel for the appellant appears to be right that even in the case of Pratap Narain Singh Deo (supra), this Court has not laid down the law that the interest would be payable only 30 days after the accident. In our view too, the said statutory period of 30 days does not put a moratorium over the liability of interest. Such interest is related with the amount of compensation receivable by the claimant and there appears no reason for not allowing interest for 30 days from the date of accident. In fact, in the referred decisions too, this Court has allowed interest from the date of accident. That being the position, the questioned part of the order of the High Court calls for interference and the same is modified to the extent that the appellant would be entitled to interest from the date of accident."

23. In view of the principle laid down in the above said case,

it is evident that the petitioner is entitled for interest at 12%

per annum on the compensation amount from the date of

accident till date of deposit. Hence, this Court is inclined to

award interest at 12% per annum on the compensation

amount from the date of accident till the date of deposit.

8 Civil Appeal No 209 of 2022, decided on 6 January 2022

MGP,J CMA Nos.306 of 2013and 348 of 2014

24. In the result, the Civil Miscellaneous Appeal No.306 of

2013 is dismissed and Civil Miscellaneous Appeal No.348 of

2014 is partly allowed by modifying the impugned order

passed by the Commissioner to the extent of granting interest