N. K. Palasingri v. Palaniammal — 1991 DIGILAW 8 (MAD)

Judgement JUDGMENT :- This appeal against the award of the Motor Accidents Claims Tribunal (District Court), Salem, in M.A.C.O.P. No. 408 of 1983, has been preferred by the owner of the motor vehicle bearing registration No. TNS 6297, which was involved in an accident on 28-9-1982 resulting in the death of one Thangavelu Achari. The legal heirs of deceased Thangavelu Achari, who are respondents 1 to 3 herein, in M.A.C.O.P. No. 408 1983, stated that the accident in which Thangavelu Achari lost his life took place only on account of the rash and negligent driving of the vehicle by its driver, the fifth respondent herein, and that they should be awarded compensation in a sum of Rs. 50,000/-. The appellant herein resisted the claim so made on the ground that the accident took place while the driver of the vehicle attempted to avoid a boy who suddenly crossed the road and in that process, the vehicle capsised and that the deceased jumped out of the vehicle and that resulted in the accident. The fourth respondent-insurance company also disputed its liability for payment of compensation. On a consideration of the oral as well as the documentary evidence, the Tribunal found that the accident took place only on account of the rash and negligent driving of the vehicle belonging to the appellant by its driver. Considering the quantum of compensation awardable to respondents 1 to 3, the Tribunal found that the deceased could have contributed to his family Rs. 3,200 /- per annum and at that rate, owing to the death of Thangavelu Achari, respondents 1 to 3 had lost the benefit of contribution to the tune of Rs. 64,000 /-. Towards loss of consortium for the first respondent, the Tribunal awarded Rs. 5,000/- and to respondents 2 and 3, towards loss of a predominantly happy life and parental affection, compensation in a sum of Rs. 5,000/- was awarded. Deducting from out of the compensation as determined 10% towards lump sum payment and other uncertainties in life, the Tribunal determined the amount of compensation payable to respondents 1 to 3 at Rs. 50,000/-. Dealing with the question of liability for the payment of the amount of Rs. 50,000/- by way of compensation, the Tribunal took the view that the fourth respondent-insurance company would be liable to pay Rs. 50,000/-. Dealing with the question of liability for the payment of the amount of Rs. 50,000/- by way of compensation, the Tribunal took the view that the fourth respondent-insurance company would be liable to pay Rs. 19,200/ - and the balance of the amount of compensation should be paid by the appellant. Certain other directions were given by the Tribunal regarding the investment of the amount of compensation. It is the correctness of this award that is challenged in so far as it imposed a liability on the appellant for the payment of compensation in a sum of Rs. 30,800 /-. 2. Learned counsel for the appellant contended that deceased Thangavelu Achari lost his life while travelling in the motor vehicle belonging to the appellant and he was on the vehicle in pursuance of a contract of employment, though not with the owner of the vehicle, and for business reasons of the owner and, therefore, the Tribunal was in error in not festening liability on the insurance company under Section 95(2)(b)(i) of the Motor Vehicles Act (hereinafter referred to as 'the Act'). Reference was also made by learned counsel to certain decisions which have construed the words "by reasons of or in pursuance of a contract of employment" as not limited to a case of employment by the owner; to contend that the entire liability for the payment of compensation should be borne by the insurance company. On the other hand, learned counsel for the insurance company submitted that both under the relevant provision of the Motor Vehicles Act as well as the terms of the policy, the liability of the insurance company for payment of compensation is listed to that payable under the provisions of the Workmen's Compensation Act and the Tribunal was, therefore, quite right in having made the insurance company liable for payment of Rs. 19,200/- only and in festening the liability for the balance of the amount of compensation on the appellant. Attention was also drawn by learned counsel in this connection to the decisions reported in Janab Abdul Jabbar Sahib v. Muniammal, (1981) 1 ACC CJ 543 : ( AIR 1981 Mad 112 and G. Dayananand v. Zaamni Bi, 1982 ACC CJ 399 : ( AIR 1982 Mad 311 ). 3. Attention was also drawn by learned counsel in this connection to the decisions reported in Janab Abdul Jabbar Sahib v. Muniammal, (1981) 1 ACC CJ 543 : ( AIR 1981 Mad 112 and G. Dayananand v. Zaamni Bi, 1982 ACC CJ 399 : ( AIR 1982 Mad 311 ). 3. Before proceeding to ascertain the liability of the appellant and the insurance company for the payment of compensation awarded by the Tribunal, certain undisputed facts have to be borne in mind. That the accident took place only on account of the rash and negligent driving of the vehicle belonging to the appellant by the fifth respondent as found by the Tribunal has not been disputed before this Court. Similarly, the quantum of compensation awardable to respondents 1 to 3 in a sum of Rs. 50,000/- has also not been challenged before this Court. The only point for consideration is, whether the fourth respondent-insurance company, would be liable for the payment of compensation only to the extent of Rupees 19,200/- or whether it would be liable to pay the entire compensation amount of Rs. 50,000/-. A decision on this question would necessarily depend upon the circumstances under which deceased Thangavelu Achari was found to have travelled in the vehicle belonging to the appellant. It is in this connection that the evidence of P.W. 2 is relevant. Accordingly to his evidence, at about the time when the accident took place he was building a house in which deceased Thagavelu Achari was working as a carpenter and that on the day of the accident, he and deceased Thangavelu Achari went to Erode to purchase asbestos sheets and were returning in the vehicle of the appellant. The further evidence of P.W. 2 is that he was seated next to the driver and deceased Thangavelu Achari was seated next to him P.W. 2 clearly stated that he did not pay any amount for the purpose of travelling in the vehicle and that for bringing the goods to his place, he paid Rs. 85/-. In the course of cross-examination of P.W. 2 by the fourth respondent, P.W. 2 stated that the driver did not object to P.W.2 and deceased Thangavelu Achari accompanying him in his vehicle. In the absence of evidence of either the appellant or the fifth respondent there is no reason as to why the evidence of P.W.2 should not be accepted. In the course of cross-examination of P.W. 2 by the fourth respondent, P.W. 2 stated that the driver did not object to P.W.2 and deceased Thangavelu Achari accompanying him in his vehicle. In the absence of evidence of either the appellant or the fifth respondent there is no reason as to why the evidence of P.W.2 should not be accepted. Indeed, no material was placed before this Court to show that this testimony of P.W. 2 regarding the circumstances under which deceased Thangavelu Achari was found to be travelling in the vehicle is not acceptable. Therefore, from the evidence of P.W. 2, it is clearly established that P.W. 2, after having bought the asbestos sheets required for the construction of his house, with the assistance of deceased Thangavelu Achari, had loaded the goods in the vehicle of the appellant and had also accompanied the goods in the vehicle along with deceased Thangavelu Achari, when the accident took place. Whether in such circumstances deceased Thangavelu Achari could be stated to have been found on the vehicle in pursuance of a contract of employment is the question. 4. It in seen that under S.95(2)(b)(i) of the Act that where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, the limit of liability of the insurance company is stated to be Rupees 50,000/- in respect of persons other than passengers carried for hire or reward. If that provision is applicable, on the footing that Thagavelu Achari was carried in the vehicle by reasons of or in pursuance of a contract of employment, then, undoubtedly, the fourth respondent-insurance company would be liable for the entire compensation awarded. It is significant that the words used with reference to the carriage of passengers in the vehicle are "by reason of or in pursuance of a contract of employment." While setting out under the proviso to Section 95(1) of the Act cases in which a policy shall not be required, care has been taken to specify that the employees referred to therein should be the employees of a person insured by the policy. However, under sub-clause (ii) of the proviso to S.95(1) of the Act, carving out the exception to the non-requirement of a policy, it is stated that if the vehicle is a vehicle in which passengers are carried by reason of or in pursuance of a contract of employment, then a coverage would be necessary in respect of death or bodily injury to such persons carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises. The liability imposed under Section 95(2)(b)(i) of the Act is with reference to the passengers so carried by reason of or in pursuance of a contract of employment in a sum of Rs. 50,000 /- in all. However, it has not been clearly stated either in sub-clause (ii) of the proviso to S.95(1) or in S.95(2)(b)(i) of the Act with whom the contract of employment should have been entered into, viz., whether with the owner of the vehicle or with the hirer. It is in view of this that Lord Wright in Izzard v. Universal Insurance Co. Ltd., 1937 AC 773 : (1937) 3 All ER 79, dealing with S. 36 of the Road Traffic Act, 1930, comparable to S. 95 of the Act, observed as follows :- "I cannot accept the respondents' contentions that 'contract of employment' should be construed in the Act subject to the implied limitation 'with the person insured by the policy." Such a departure from the clear language used cannot, I think, be justified. I think the Act is dealing with the persons who are on the insured vehicle for sufficient practical on business reasons, and has taken a contract of employment in pursuance of which they are on the vehicle as the adequate criterion of such reasons. But there is no sufficient ground for holding that this criterion should be limited to employees of the insured person. Such employees, if injured or killed would ordinarily fall under Exception (1), though I am not prepared to say that there might not be in certain events an employee of the assured who could claim as a passenger. But such cases must be rare. Such employees, if injured or killed would ordinarily fall under Exception (1), though I am not prepared to say that there might not be in certain events an employee of the assured who could claim as a passenger. But such cases must be rare. The most probable case is where the man killed or injured was on the vehicle in pursuance of a contract not with the owner of the vehicle but with some one else, for instance, with the person whose goods were being carried on the vehicle; thus a commercial vehicle carrying a contractor's or merchant's goods would frequently and perhaps even normally have on it an employee of the goods-owner to see to loading or unloading or delivering the goods or caring for them in transit. For these purposes such a man may be carried as a passenger." Referring to the aforesaid decision, in Venguard Insurance Co. Ltd. v. Chinnammal, 83 Mad LW 47 : 1969 Acc CJ 226 : ( AIR 1970 Mad 236 ), this Court laid down that though on a superficial view of the section it might appear that the words 'contract of employment' found in S.95 of the Act would cover only a contract of employment with the owner of the insured vehicle, there is a preponderance of authority in favour of the other view that it would cover not only such persons, but also persons who are on the vehicle in pursuance of a contract of employment with the owner of the goods carried in it. In that case also, the deceased was the employee not of the insured but of the person whose goods were carried in the insured vehicle and this Court held that the insurance company cannot be permitted to deny its liability for the payment of compensation. In that case also, the deceased was the employee not of the insured but of the person whose goods were carried in the insured vehicle and this Court held that the insurance company cannot be permitted to deny its liability for the payment of compensation. In South India Insurance Co., Ltd. v. Subramanian, (1971) 2 Mad LJ 198 : ( AIR 1972 Mad 49 ), the decision in Venguard Insurance Co., Ltd. v. Chinnammal, 83 Mad LW 47 : 1969 Acc CJ 226 : ( AIR 1970 Mad 236 ) was noticed and distinguished on the ground that the owner of the goods travelled in the lorry and there is, therefore, no contract of employment necessitating his travelling in lorry in question and that even on the footing that the words 'contract of employment" included not only the employees of the insured but also the employees of the owner of the goods, the first respondent in that case cannot be said to have travelled in the lorry by reason of or in pursuance of a contract of employment, for, there was no question of employment as such in that case. However, what is significant is that it had not been pointed out in South India Insurance Co., Ltd. v. Subramanian, (1971) 2 Mad LJ 198 : ( AIR 1972 Mad 49 ) that the principle laid down in Venguard Insurance Co., Ltd. v. Chinnammal, 83 Mad LW 47 : 1969 Acc CJ 226 : ( AIR 1970 Mad 236 ), it not correct. On the factual absence of a contract of employment, the Court proceeded to hold that the insurance company could not be made liable. However, in this case, though P.W. 2 as owner of the goods had accompanied them, the deceased was under a contract of employment with P.W. 2, viz., to look after the carpentry work for his house and to procure the necessary materials therefor and it was in that connection that he accompanied P.W. 2 to Erode and while returning with the materials bought, met with the accident. Therefore, whatever may be the position of P.W. 2 as such in this case, in so far deceased Thangavelu Achari is concerned, he was undoubtedly under a contract of employment with P.W. 2 and was carried in the vehicle of the appellant pursuant to such a contract of employment with P.W. 2 and in the absence of words indicating that the contract of employment should only be with the insured, in my view, it would take in even cases where pursuance to a contract of employment, a person is carried on a vehicle, though such a contract may not be with the insured. The view taken in Venguard Insurance Co., Ltd. v. Chinnammal, 83 Mad LW 47 : 1969 Acc CJ 226 : ( AIR 1970 Mad 236 ), has been uniformly followed by several other Courts as well. It would suffice to make a brief reference to some of them. In State Information Dept., State Insurance Officer, Trivandrum v. Sosamma Mani, 1978 Acc CJ 504 : ( AIR 1979 Ker 15 ), the claim for compensation on behalf of a deceased person, who was travelling in a goods vehicle accompanying the goods, was held to be payable by the insurer, as the deceased could be said to have travelled in the vehicle in pursuance of a contract of employment. In Oriental Fire and General Insurance Co., Ltd. v. Ganchi Ramanlal Kant Lal, 1979 Acc CJ 65 (1979 Lab IC 531) (Guj), the words 'contract of employment' were interpreted to mean that the passengers carried in a vehicle must be passengers who were either employed by the insured or whose employment with some one else have a reasonable and notional association with the business which the insured was carrying on. With reference to claims relating to death of persons, who were the servants of the owner of the goods, who had travelled in a goods vehicle, in Hukam Chand Insurance Co., Ltd. v. Badruddin, 1980 Acc CJ 164 (Madh Pra), the insurance company was held liable to pay compensation, even though the contract of employment of the deceased was with a person other than the insured. In National Insurance Co. In National Insurance Co. Ltd. v. Lakmi Devi, 1985 Acc CJ 48 : ( AIR 1984 Ori 197 ), the employee of the owner of the goods travelled in a goods vehicle along with the goods and he was held to be a passenger travelling on a contract of employment within the meaning of Section 95(1)(b) proviso (ii) of the Act, as the contract of employment need not only be with the owner of the vehicle, but should be given a wider meaning as to take in persons on the vehicle in pursuance of a contract of employment with the owner of the goods also. Similarly, in Patharibai Karan Singh v. Firm Lalji Shankarlal, 1985 Acc CJ 526 : (AIR 1985 Mad Pra 103), a truck carried the labourers of the hirer of the vehicle for lifting bags and on the death of one of them, the insurer was held liable to pay compensation in respect of the claim made, as the deceased had travelled in the truck on a contract of employment with the hirer of the vehicle and the contract of employment need not necessarily to be with the owner of the vehicle. It is thus seen that the view in Venguard Insurance Co., Ltd. v. Chinnammal, 83 Mad LW 47 : 1969 Acc CJ 226 : ( AIR 1970 Mad 236 ), has been shared by other Courts as well and there is no justification whatever for limiting the amplitude of the words "contract of employment" and restricting its applicability only to cases of contract of employment with the insured. 5. The two decisions strongly relied on by learned counsel for the insurance company may now be considered. In Janab Abdul Jabbar Sahib v. Kuniammal, 1981 Acc CJ 543 : ( AIR 1981 Mad 112 ), it was found that the contract in that case was for the carriage of the passengers and not the goods and as there was no contract to carry goods and the owner accompanying his goods, the decision in Venguard Insurance Co., Ltd. v. Chinnammal 83 Mad LW 47 : 1969 Acc CJ 226 : ( AIR 1970 Mad 236 ) was held to be inapplicable. It is also further seen that the injured person was carried in a lorry for hire. Those considerations are inapplicable here and that decision also cannot be pressed into service by the insurance company. It is also further seen that the injured person was carried in a lorry for hire. Those considerations are inapplicable here and that decision also cannot be pressed into service by the insurance company. In G. Dhyanand v. Zaamni Bi, 1982 Acc CJ 399 : ( AIR 1982 Mad 311 ), the insurance company was held to be not liable, as by the terms of the policy, its liability in respect of a passenger in the lorry, has been specifically excluded. In this case, under the terms of the insurance policy Exhibit B-1, with reference to the carriage of persons by reason of or in pursuance of a contract of employment, there is no exclusion of the liability of the insurance company as such. Therefore, the decisions relied on by learned counsel for the insurance company would be inapplicable. Under those circumstances, the award of the Tribunal holding that the appellant would be liable to pay compensation to respondents 1 to 3 in a sum of Rs. 30,000 / - cannot be sustained. In other words, the entire liability for the payment of compensation in a sum of Rs. 50,000/-should be borne only by the fourth respondent-insurance company. In that view, the Civil Miscellaneous Appeal is allowed and the award passed by the Tribunal is modified as indicated above and respondents 1 to 3 will be entitled to recover the compensation amount of Rs. 50,000/- from the appellant and respondents 4 and 5, but payable under the policy by the fourth respondent-insurance company with the interest at 6% per annum from the date of the claim petition, as awarded by the Tribunal. There will be, however, no order as to costs.