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2003 DIGILAW 684 (KAR)

BHIMAVVA v. SHANKAR ALIAS ADYA

2003-08-14

H.G.RAMESH, MOHAN M.SHANTANAGOUDAR, N.K.JAIN, T.S.THAKUR, V.G.SABHAHIT

body2003
N. K. JAIN, V. G. SABHAHIT, J. ( 1 ) IN view of the order dated 29-7-2003, passed by the Chief Justice, this reference is placed before us on 6-8-2003. The Division Bench vide order dated 7-7-2003 had referred these matters to the Full bench considering the law declared in noorulla v. P. K. Prabhakar, ILR 1999 Kant 2725 : (AIR 2000 Karnataka 1) is no longer good law in the light of the pronouncements of the Supreme Court. The Full Bench of this Court, on consideration that Full Bench cannot sit in judgment on the decision of a co-ordinate Bench has made this Reference to a Five Judge Bench vide order dated 29-7-2003 in M. F. A. No. 2124/1993 c/w mfa Nos. 3586, 3808 and 4340 of 1997, mfa 3797/1994 and MFA 1800/1998. The question that arises for determination before this Bench is the extent of liability of insurance company to indemnify the owner under the Act policy against the compensation awarded by Motor Accidents Claims Tribunal under the Motor Vehicles Act (hereinafter called the M. V. Act) in a claim by injured workman or legal representatives of deceased workman who has opted to file claim petition before the Tribunal under the act. Whether such liability of insurance company to indemnify the owner is unlimited or limited to the extent of liability under the workmens Compensation Act, 1923 (hereinafter called W. C. Act ). ( 2 ) THE necessary facts leading to the reference, as stated by the learned counsel, are : one Hanumantharaya and three others alleged to be employed with Pampanagouda were travelling in tractor trolly bearing No. MEP 3725 driven by Shankar on 11-7-1989. Due to rash and negligent driving, at about 6 p. m. , the tractor trolly turned turtled near dyamonal resulting in death of Hanumantharaya and two other employees and causing injury to another employee. The mother and two minor children of Hanumantharaya filed claim petition in M. V. C. No. 348/1989 claiming compensation of Rs. 3,70,000/- from respondents 1 to 3 being driver, owner and insurer of the said tractor. The petition was clubbed with other claim petitions arising out of the samg accident. After enquiry, the Tribunal held that the accident occurred due to rash and negligent driving of tractor by the first respondent and awarded compensation of rs. 3,70,000/- from respondents 1 to 3 being driver, owner and insurer of the said tractor. The petition was clubbed with other claim petitions arising out of the samg accident. After enquiry, the Tribunal held that the accident occurred due to rash and negligent driving of tractor by the first respondent and awarded compensation of rs. 25,000/- with interest at 6% per annum from the date of petition and further held that compensation awarded shall be paid by respondents 1 and 2 jointly and severally and the Tribunal dismissed the claim petition against the insured, the third respondent-Insurance Company. Being aggrieved by the award passed, the claimants preferred m. F. A. 2124/93, seeking for enhancement of compensation and to fasten liability on third respondent-Insurance Company. ( 3 ) BEFORE the Division Bench, the learned counsel appearing for the claimants submitted that insurance company is liable to satisfy the award irrespective of limit of their liability in respect of death or bodily injury to any workman under the Compensation act and relfed upon the provisions of Sec. 147 of the Act and the Full Bench decision of this Court in Noorulla v. P. K. Prabhakar, ilr 1999 Kajit 2725 : AIR 2000 Karnataka 1. Per contra, the learned counsel for Insurance Company submitted that its liability is limited to liability under the Compensation Act and in absence of any additional liability undertaken by collecting additional premium, the liability cannot become higher or unlimited. He also submitted that in view of the provisions of Sec. 147 (1) and (2) of the Act and subsequent decisions rendered, noorullas case requires reconsideration. ( 4 ) THE Division Bench felt that in view of the decisions of the Supreme Court in New india Assurance Co. Ltd. v. C. M. Jaya, AIR 2002 SC 651 , New India Assurance Co. Ltd. v. Asha Rani, AIR 2003 SC 607 and in Oriental Insurance Company Ltd. v. Devireddy konda Reddy, AIR 2003 SC 1009 , the decision in Noorullas case may not be good law and held that it would be appropriate if the matter is referred to a Full Bench. As stated, accordingly the matter was placed before the larger Bench of Five Judges. ( 5 ) SRI S. P. Shankar, learned counsel appearing for the claimant-appellants submitted that Section 147 is totally a new version of the law prior to 1991. As stated, accordingly the matter was placed before the larger Bench of Five Judges. ( 5 ) SRI S. P. Shankar, learned counsel appearing for the claimant-appellants submitted that Section 147 is totally a new version of the law prior to 1991. Section 95 (1) of the M. V. Act creates liability depending upon the vehicle carrying the persons. The several exceptions to liability enumerated in sections 95 (1) and 95 (2) of the old Act are done away within the new Act. The provisions of Section 147 of the Act, 1988 have removed all restrictions on the liability of insurance Company that had been placed under Section 95 (2) of the 1939 Act. He also submits that the Supreme Court points out that the liability of the insurer is co-extensive with the insured. This concept is not noticed in any of the decisions and, therefore, they are not applicable and they are pertaining to 1991. He also submits that justice Bharukas decision in Noorullas case is good for Section 95 (1) but not for section 147. The proviso to Section 147 carves out an exception to Section 95 and section 147 falling in two different worlds; where the liability arises out of the death and injury, the liability of the employer is limited by what is granted under the W. C. Act. The passing observations made by the supreme Court in Asha Rani and devireddys cases, which pertain to Section 95 are not helpful. In support of his contentions, he has relied upon the observations made by the Supreme Court in A. D. M. , jabalpurv: S. Shukla, AIR 1976 SC 1207 : 1976 Cri LJ 945 and in Municipal Corporation, Greater Bombay v. Thukral Anjali, AIR 1989 SC 1194 . ( 6 ) SHRI A. K. Bhat, learned counsel appearing for claimant-appellant, submits that the proviso to Section 147 is an exception to the general rule by which it tries to take something out of the general category and out of that one more exception is created. Counsel further submits that proviso cannot limit the liability of Insurance Company which is not limited under the substantive provisions of Section 147 (1) as proviso is not independent of the Section and its object is to carve out from the main Section a class or category to which the main section does not apply. Counsel further submits that proviso cannot limit the liability of Insurance Company which is not limited under the substantive provisions of Section 147 (1) as proviso is not independent of the Section and its object is to carve out from the main Section a class or category to which the main section does not apply. In support of his contention he has relied upon the observations made in the treatise "n/s. Bindras Interpretation of Statues" (Eighth edition) with regard to liability and "employers liability acts". ( 7 ) SRI. B. C. Seetharam Rao, learned counsel appearing for the Insurance Company, submits that Section 95 is almost identical or similar to Section 147. By virtue of Amendment Act 100/57 the coverage was provided under the Act policy. They are of two types. Act policy without paying any additional premium to the extent of compensation and that would be calculated having recourse to the schedule under the W. C. Act. Under the old Act also there was a proviso to cover all contractual liability. The owner of the vehicle by paying additional premium can make liability vast and unlimited Without paying additional premium the insurer is liable to indemnify the owner to the extent stated under the W. C. Act. The proviso is clear and there is no ambiguity and what has been stated in the statute has been incorporated. The issue that is being decided by this Court is what is liability of the insurer who has issued the insurance policy to comply with the provisions of Section 147 of the M. V. Act. What benefit he should get is not the issue. He has made reference to AIR 1991 Karnataka 2045 and also Paragraph 2 of Noorullas case and submits that Section 147 is not with a view to run the business of Insurance Company but/ it is actually meant to protect the innocent third party and liability under Section 147 (l) would only cover liability in respectof insured in respect of death or bodily injury to employees mentioned in the proviso under Section 147 (1) and does not get extended nor become unlimited when claimant opts to file claim petition before the Tribunal under the Act and, therefore, he is not entitled to get more than the insurance covered. He submits that the point in issue has been considered by the Apex Court and in view of the interpretation placed upon the liability of the Insurance Company by the supreme Court in C. M. Jaya, Asha Rani and devi Reddys case, the decision rendered in noorullas case is no more good law. ( 8 ) THE learned counsel appearing for the insurance Company has not disputed the legal position mentioned in A. D. M. Jabalpurs case and Municipal Corporation greater Bombays case, but contends that they are not applicable to the facts of the given case. ( 9 ) IN rejoinder, Sri Shankar, learned counsel, also made reference to Section 149. ( 10 ) WE have heard and given our anxious consideration to the respective contentions of the learned Counsel for the parties, perused the materials placed on record, considered the provisions of Section 95 of 1939 act, Sections 167and 147 of 1988 Act, and the decisions relied upon. ( 11 ) FIRST we take up Noorullas case, which arose under the 1939 Act. The two questions which had been referred for decision of Full Bench comprising of three judges were as follows: "i) Whether, under Section 95 (1) of the act, the owner of a goods vehicle is required to compulsorily insure against the risk of death or bodily injury of his employees arising out of and in the course of their employment because of the use of the vehicle in a public place?ii) Whether the insurer will be liable to indemnify the owner against the compensation, awarded only in proceedings commenced under the Compensation Act or will be so liable even if the compensation is awarded by the Tribunal under the Act and in either case, to what extent"? ( 12 ) THE Full Bench was unanimous in answering question No, (i ). However, a majority of two Judges of the Bench answered question No. (ii) by holding that insurer is liable to indemnify the owner against the compensation awarded by the Tribunal subject to limitation prescribed under Section 95 (2) of the Act and not limited to amount payable under the Compensationact, if the accident takes place due to rash and negligent driving of the vehicle and merely because the claim is made before the Tribunal for compensation the insurer is not absolved of his liability to pay compensation pre (Contd. on Col. on Col. 2) scribed under the Compensation Act. The other Judge dissented from the majority view and held that the liability of Insurance Company would arise only if there is determination of claim under the Compensation Act and if the claimant opts to file petition beore the tribunal under the Act, the Insurance Company is not liable to pay compensation determined by the Tribunal under the act. ( 13 ) THE short question in this reference is whether determination is necessary under W. C. Act and whether additional coverage is necessary or not. ( 14 ) TO appreciate the respective arguments, we consider the word Liability as defined in Section 145 (c) of the Act and other relevant Sections : liability, wherever used in relation to the death of or bodily injury to,any person, includes liability in respect thereof under section 140", section 146 refers to necessity for insurance against third party risk, Section 147 regarding requirements of policies and limits of liability and Section 167 relates to option regarding claims for compensation in certain cases. The relevant provisions of the motor Vehicles Acis, 1939 and 1988 pertaining to necessity for insurance against the 1939 ACT the 1988 ACT"94. NECESSITY FOR INSURANCE AGAINST THIRD PARTY RISK : (1) No person shall use except as a passenger or cause or allow any other person to use a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person, or that other person, as the case may be, a policy of insurance complying with the requirements of this chapter". "146. NECESSITY FOR INSURANCE AGAINST THIRD PARTY RISK : (1) No person shall use, except as a passenger or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be a policy of insurance complying with the requirements of this chapter". 95. REQUIREMENTS OF POLICIES AND LIMITS OF LIABILITY : 1) In order to comply with the requirements of this Chapter a policy of insurance must be a policy which "147. 95. REQUIREMENTS OF POLICIES AND LIMITS OF LIABILITY : 1) In order to comply with the requirements of this Chapter a policy of insurance must be a policy which "147. REQUIREMENTS OF POLICIES AND LIMITS OF LIABILITY : 1) In order to comply with the requirements this Chapter, a policy of insurance must be a policy which a) is issued by a person who is an authorised insurer or by a co-operative society allowed under Section 108 to transact to the business of an insurer, and b) Insures the person or Classes of persons specified in the policy to the extent a) is issued by a person who is an authorised insurer or by a co-operative society allowed under Section 108 to transact to the business of an insurer, and b) Insures the person or classes of persons specified in the policy to the extent specified in sub-section (2 ). specified in sub-section (2 ). I) against any liability which may be incurred i) against any liability which may be incurred by him in respect of the death of, or by him in respect of the death of or bodily injury to any person or damage to any bodily injury to any person or damage to any property of a third party, caused by or arising property of a third party caused by or arising out of, the use of the vehicle in a public out of the use of the vehicle in a public place. place;ii) against the death of or bodily injury to (ii) against the death or bodily injury to any passenger of a public service vehicle any passenger of a public service vehicle caused by or arising out of the use of the caused by or arising out of the use of the vehicle in a public place. vehicle in a public place. vehicle in a public place. Provided that a policy shall not be required provided that a policy shall not be requiredi) to cover liability in respect of the death, i) to cover liability in respect of the death, arising out of and in the course of his employment, arising out of and in the course of his employment, of the Employee of a person insured of the employee of a person insured by the policy or in respect of bodily by the policy or in respect of bodily injury sustained by such an employee arising injury sustained by such an employee arising out of and in the course of his employment out of and in the course of his employment other than a liability arising under the other than a liability arising under the workmens Compensation Act, 1923, in respect workmens Compensation Act, 1923 in respect of the death of or bodily injury to, any of the death of, or bodily injury to, any such employee; such employeea) engaged in driving the vehicle or a) engaged in driving the vehicle, orb) if it is a public service vehicle, engaged b) if it is public service vehicle engaged as a conductor of the vehicle or in examining as a conductor of the vehicle or in examining tickets on the vehicle or tickets on the vehicle, orc) if it is a goods vehicle, being carried in c) if it is a goods carriage, being carried the vehicle, or in the vehicle, orii) except 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 to cover liability in respect of the death of or bodily injury to persons being 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, or (III) to cover any contractual liability, ii) to cover any contractual liability. EXPLANATION : For the removal of explanation : For the removal of doubts, it is hereby declared that the death doubts, it is hereby declared that the death of or bodily injury to any person or damage of or bodily injury to any person or damage to any property of a third party, shall be to any property of a third party shall be deemed to have been caused by, or to have deemed to have been caused by or to have arisen out of, the use of a vehicle in a public arisen out of, th,e use of a vehicle in a public place notwithstanding that the person, who place notwithstanding that the person who is dead or injured or the property which is is dead or bodily injured or the property damaged, was not in a public place, at the which is damaged was not in a public place time of the accident, if the act or omission at the time of the accident, if the act or omis- which occurred led to the accident occurred sion which led to the accident occurred in a in a public place". public place. "95 (2) Subject to the proviso to sub-section 147 (2) Subject to the proviso to sub-Section (1), a policy of Insurance shall cover any (1) a policy of insurance referred to in liability incurred in respect of any one accident up to the following limits, namely : a) where the vehicle is a goods vehicle, a limit of one lakh and fifty thousand rupees in all, including the liabilities, if any, arising under the Workmens Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, employees (other than the driver), not exceeding six in number, being carried in the vehicl sub-section (1), shall cover any liability incurred in respect of any accident, upto the following limits namely : a) save as provided in Clause (b), the amount of a liability incurred; b) in respect of damage to any property of a third party, a limit of rupees six thousand; Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier. third parties, requirements of policy and limits of liability, and providing for options are: section 167 of the Act reads as follows :"167. OPTION REGARDING CLAIMS FOR compensation IN CERTAIN CASES : notwithstanding anything contained in the Workmens Compensation Act, 1923 (8 of 1923) where the death of, or bodily injury to any person gives rise to a claim for compensation under this Act and also under the workmens Compensation Act, 1923, the person entitled to compensation may without prejudice to the provisions of Chapter X claim such compensation under either of those Acts but not under both". ( 15 ) THE argument of Mr: Shankar is that proviso to Section 147 (1) (b) (ii) should be read after Section 147 (2 ). On consideration, we find that the Legislature has placed the proviso in between and not at the end of section 147 (2 ). The same cannot be read as suggested as sub-section (2) of Sec. 147 is subject to sub-section (1) of Sec. 147. A particular provision has to be read with its simple and plain meaning as per the object. This Court cannot either add or subtract any word. Therefore, the argument is not acceptable. ( 16 ) IT is well-settled that the liability of insurance Company for payment of compensation couldbe statutory or contractual. We find from a bare perusal of Section 167 of 1988 Act, which starts with a non-obstante clause, that the claimants are entitled to claim compensation under either of the Acts, but not under both Acts. A perusal of Sec147 also reveals that the policy of insurance is required and as per the proviso to Section 147 (1) (b) (ii) taking of policy is not necessary for the liability other than a liability arising under the W. C. Act. The liability cannot be more than what is required under the statute itself. Therefore, the claimant is entitled to receive compensation as per the statutory limit, but in order to get higher compensation it should be as per contractual liability and for that the insured has to pay additional premium. The liability cannot be more than what is required under the statute itself. Therefore, the claimant is entitled to receive compensation as per the statutory limit, but in order to get higher compensation it should be as per contractual liability and for that the insured has to pay additional premium. ( 17 ) A plain reading of the proviso to subsection (1) of Section 147 of the Act states that an insurer is not compulsorily required to cover the risk of all employees of the insured but is only required to cover the risk in respect of certain employees of the insured stated therein to the extent of the liability arising under the W. C. Act in respect of death of or bodily injury to any such employee. ( 18 ) IN other words, everybody has to take a policy against any liability which may be incurred by him in respect of death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place, but no such policy cover for his employees is necessary except to such employees stated in the proviso to sub-section (1) of Section 147 to the extent of liability arising under the W. C. Act, meaning thereby, it is not required to the extent of liability mentioned in the W. C. Act. The liability cannot be more than what is required under the statute itself, but for higher compensation he has to take a policy of wider cover. ( 19 ) THEREFORE, in our considered view, the majority view of the Full Bench (in noorullas case) while considering Section 95 (2) that an insurers liability is unlimited is not correct. ( 20 ) THE other argument of Sri. S. P. Shankar that Section 147 of the new Act is very wide and liability under it is unlimited, is not acceptable. As seen from above, Sections 95 (1) and 147 (1) are almost similar insofar as it relates to coverage of liability of the insurer pertaining to death or bodily injury of the employee, which is limited to compensation payable under the W. C. Act. As seen from above, Sections 95 (1) and 147 (1) are almost similar insofar as it relates to coverage of liability of the insurer pertaining to death or bodily injury of the employee, which is limited to compensation payable under the W. C. Act. ( 21 ) IT is also clear from the perusal of S. 95 (2) of 1939 Act and S. 147 (2) of 1988 Act that both are identical insofar as it relates to liability of Insurance Company which is limited to liability under W. C. Act as it is clear that the provisions of sub-section (2) of S. 147 of 1988 Act and sub-section (2) of section 95 of 1939 Act is subject to the proviso to sub-section (1) that is liability of insurance Company limited to liability under w. C. Act, 1923 and, wherefore, deletion of amount of extent of liability in respect of different categories of claims in S. 95 (2) of 1939 Act, which is deleted in 1988 Act in S. 147 (2) would not in any way extend or make unlimited liability of insurance Company limited to liability under W. C. Act. ( 22 ) THE Apex Court while considering the difference in the language of the definition of goods vehicle as appearing in the 1939 Act and goods carriage in the 1988 act in Devireddy Konda Reddys case observed :"the difference in the language of "goods vehicle" as appearing in the old Act and "goods carriage" in the Act is of significance. A bare reading of the provisions makes it clear that the legislative intent was to prohibit goods vehicle from carrying any passenger. This is clear from the expression "in addition to passengers" as contained in the definition of "goods vehicle" in the old Act. The position becomes further clear because the expression used is "goods carriage" is solely for the carriage of "goods". Carrying of passengers in a goods carriage is not contemplated in the Act. There is no provision similar to Clause (ii) of the proviso appended to Section 95 of the old Act, prescribing requirement of insurance policy. Even Section 147 of the Act mandates compulsory coverage against death of or bodily injury to any passenger of "public service vehicle". Carrying of passengers in a goods carriage is not contemplated in the Act. There is no provision similar to Clause (ii) of the proviso appended to Section 95 of the old Act, prescribing requirement of insurance policy. Even Section 147 of the Act mandates compulsory coverage against death of or bodily injury to any passenger of "public service vehicle". The proviso makes it further clear that compulsory coverage in respect of drivers and conductors of public service vehicle and employees carried in goods vehicle would be limited to liability under the Workmens Compensation Act. 1923. There is no reference to any passenger in "goods carriage". (Emphasis supplied) their Lordships approved the three judges Bench decision in Asha Ranis case wherein it has been held that the case of new India Assurance Co. v. Satpal Singh, 1999 AIR SCW 4337 : ( AIR 2000 SC 235 ) was not correctly decided and allowed the appeal setting aside the respective judgments. ( 23 ) THE argument of Shri Shankar that the decisions in Asha Ranis case and devireddy Konda Reddys case do not constitute binding precedent is not acceptable, even though mere passing remarks or consent order cannot be a precedent. Section 95 (1) and Sec. 147 (1) are in part materia except for the definitions as stated above. The Act of 1939 gave an indication that goods vehicle could carry some passengers. The definition in 1988 Act has omitted the words in addition to passengers and states that goods carriage means any motor vehicle constructed or adapted for use solely for the carriage of goods. ( 24 ) THE decisions in Municipal Corporation of Greater Bombay and A. D. M. Jabalpur are not helpful nor the facts are helpful. It is also clear from the perusal of Sec. 95 (2) of 1939 Act and Sec. 147 (2) of 1988 Act that both are identical insofar as it relates to liability of insurance company which is limited to liability under the W. C. Act as it is clear that the provisions of sub-section (2) of Sec. 147 of 1988 Act and sub-section (2) of Sec. 95 of 1939 Act are subject to provisions of the proviso to sub-section (1) that is liability of insurance company is limited to liability under W. C. Act, 1923 and, therefore, deletion of amount of extent of liability in respect of different categories of claim in sec. 95 (2) of 1939 Act which is deleted in 1988 Act in Sec. 147 (2) would not in any way extend or make unlimited liability of insurance company limited to liability under the W. C. Act. ( 25 ) THEREFORE, the decision of the Apex court has already decided the controversy raised before this Court. It is also seen that the Constitution Bench in C. M. Jayas case while considering the provisions of Section 95 observed that the liability of Insurance company could be statutory or contractual. Their Lordships also observed that in Amrit lal Soods case, AIR 1998 SC 1433 the terms of the policy were wide enough to cover wider risk and due to specific clause contained in the policy in that case that decision is not binding and approved the decision of shanthi Bais case, AIR 1995 SC 1113 . ( 26 ) THE Supreme Court in C. M. Jayas case, while considering liability of Insurance Company to pay compensation, held that the Insurance Company not taking any higher premium for payment of compensation to third party, is not liable to pay entire amount, merely on grounds that insured had taken a comprehensive policy and the liability of Insurance Company is limited to Rs. 50,000 in terms of insurance policy. In that case it was observed that:"further, reference to the case of pushpabai, AIR 1977 SC 1735 , it was observed that the said decision was based upon the relevant clause in the insurance policy in that case which restricted the legal liability of the insurer to the statutory requirement under Section 95 of the Act. As such, that decision had no bearing on Amrit Lal soods case as the terms of the policy were wide enough to cover a gratuitous occupant of the vehicle. Thus it is clear that the specific clause in the policy being wider, covering higher risk, made all the difference in amrit Lal Sbods ease as to unlimited or higher liability. The Court decided that case in the light of the specific clause contained in the policy. The said decision cannot be read as laying down that even though the. liability of the insurance company is limited to the statutory requirement, an unlimited or higher liability can be imposed on it. The liability could be statutory or contractual. A statutory liability cannot be more than what is required by the statute itself. The said decision cannot be read as laying down that even though the. liability of the insurance company is limited to the statutory requirement, an unlimited or higher liability can be imposed on it. The liability could be statutory or contractual. A statutory liability cannot be more than what is required by the statute itself. However, there is nothing in Section 95 of the Act prohibiting the parties from contracting to create unlimited or higher liability to cover wider risk. In such an event, the insurer is bound by the terms of the contract as specified in the policy in regard to unlimited or higher liability as the case may be. In the absence of such a term or clause in the policy, pursuant to the contract of insurance, a limited statutory liability cannot be expanded to make it unlimited or higher. If it is so done, it amounts to re-writing the statute or the contract of insurance which is not permissible". (Emphasis supplied) ( 27 ) IN Asha Ranis case the question that fell for examination was as to the extent of liability of the Insurance Company in terms of Section 95 of 1939 Act in relation to the employees of the insured. The Court held that insofar as employees of the owner of the motor vehicle are concerned, an insurance policy was not required to be taken in relation to their liability other than the one arising in terms of the provisions of the W. C. Act. The following passage is in this regard instructive : thus, it may be noticed that so far as employees of the owners of the motor vehicle are concerned, an insurance policy was not required to be taken in relation to their liability other than arising in terms of the provisions of the Workmens Compensation act, 1923. On the other hand, proviso (ii) appended to Section 95 of 1939 Act, enjoined a statutory liability upon the owner of the vehicle to take out an insurance policy to cover the liability in respect of a person who was travelling in a vehicle pursuant to a contract of employment. The Legislature has consciously not inserted the said provision in 1988 Act". It was further observed in Paras 25 and 28:"section 147 of 1988 Act, inter alia prescribes compulsory coverage against the death or bodily injury to any passenger of public service vehicle. The Legislature has consciously not inserted the said provision in 1988 Act". It was further observed in Paras 25 and 28:"section 147 of 1988 Act, inter alia prescribes compulsory coverage against the death or bodily injury to any passenger of public service vehicle. Proviso appended thereto categorically states that compulsory coverage in respect of drivers and conducts of public service vehicle and employees carried in a goods vehicle would be limited to the liability under the Workmens Compensation Act. It does not speak of any passenger in a goods carriage. An owner of a passenger carrying vehicle must pay premium for covering the risks of the passengers. If a liability other than the limited liability provided for under, the Act is to be enhanced under an insurance policy, additional premium is required to be paid. But if the ratio of this Courts decision in new India Assurance Company v. Satpal singh, (2000) 1 SCC 237 : AIR 2000 SC 235 is taken to its logical conclusion, although for such passengers, the owner of a goods carriage need not take out an insurance policy, they would be deemed to have been covered under the policy wherefore even to premium is required to be paid". ( 28 ) THE Apex Court reiterated the position in Devireddy Konda Reddys case in the context of the provisions of M. V. Act, 1988. The relevant passage from the said decision reads:"even S. 147 ofthe Act new Act mandates compulsory coverage against death or bodily injury to any passenger of public service vehicle. The proviso makes it further clear that compulsory coverage in respect of drivers and conductors of public service vehicle and employees carried in goods vehicle would be limited to liability under the Workmens Compensation, Act, 1923. There is no reference to any passenger in goods carriage. The inevitable conclusion, therefore, is that provisions of the new Act do not enjoin any statutory liability on the owner of a vehicle, to get his vehicle insured for any passenger travelling in a goods carriage and the insurer would have no liability therefor". ( 29 ) UNDER the circumstances of the case, the point in controversy pertaining to Sec. 147 has already been decided and the argument) that the observations made in Asha ranis and Reddys cases are only in the nature of passing remarks and not binding decisions, are not acceptable. ( 29 ) UNDER the circumstances of the case, the point in controversy pertaining to Sec. 147 has already been decided and the argument) that the observations made in Asha ranis and Reddys cases are only in the nature of passing remarks and not binding decisions, are not acceptable. ( 30 ) THE learned Counsel appearing for the insurance Company also does not dispute that in view of the award, the Insurance, Company would be liable to satisfy the award under the Act without anydetermination under the W. C. Act. However, he contended that the argument that its liability is not limited to amount payable under W. C. Act is not correct, as the liability would not get enlarged or become unlimited unless there is specific contract to accept higher or unlimited liability by accepting additional premium. So also the minority view that liability of insurance Company will arise only if there is determination of claim under W. C. Act is also not correct. On consideration, we are in full agreement with the argument of the learned Counsel for the Insurance Company for the reasons stated above. However, the owner and the driver as the case may be has to pay the amount awarded in excess of the said limit. It is always open to the insurer to cover wider liability over and above the statutory requirements. ( 31 ) IN view of the above discussion, we are unable to agree with the contention of learned Counsel for the claimant and both minority view in Noorullas case holding that insurance company would be liable only when there is determination under the W. C. Act and majority view in Noorullas case that liability is not restricted to liability under w. C. Act are no longer good law and it stands overruled. ( 32 ) ACCORDINGLY, we answer the question by holding that Insurance Company is liable to satisfy the award passed by the Tribunal without determination in terms of w. C. Act in respect of an employee covered under the Act Policy and liability is limited as per the provisions of W. C. Act. ( 33 ) THE appeals shall be posted before appropriate Bench for final hearing. Per Thakur, J. (For Himself And H. G. Ramesh, J.) ( 34 ) : We have had the advantage of going through the Judgment in draft proposed by the Honble Chief Justice. ( 33 ) THE appeals shall be posted before appropriate Bench for final hearing. Per Thakur, J. (For Himself And H. G. Ramesh, J.) ( 34 ) : We have had the advantage of going through the Judgment in draft proposed by the Honble Chief Justice. We entirely agree with the conclusion drawn by his Lordship that the liability of an Insurance Company to pay compensation to the employee of an insured or his legal representatives is limited to the amount payable under the Workmens Compensation act if the policy secured by the insured does not provide a coverage wider than the bare minimum prescribed u/s. 147. We also agree with the view that the Full Bench decision of this Court in Noorulla v: P. K. Prabhakar, ILR 1999 Kar 2725 : AIR 2000 karnataka 1 does not correctly state the legal position in this regard. We would however like to add a few words of our own in support of those conclusions. ( 35 ) SECTION 146 of the Motor Vehicles act inter alia provides that no person shall use, except as a passenger or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, a policy of insurance complying with the requirements of Chapter 11. The requirements of any such mandatory policy are prescribed in Section 147 which appears in Chapter 11 of the Act. A conjoint reading of the two provisions makes it amply clear that the existence of a policy of insurance that satisfies the bare minimum prescribed u/s. 147 of the Act is absolutely essential for the use of any motor vehicle in a public place. It is also evident from a reading of the provisions of Sections 146 and 147 that while existence of an insurance Policy satisfying the requirements of Section 147 is essential, the owner of a motor vehicle is free to secure a policy of insurance providing a coverage wider than the one envisaged by Section 147. In the event of any such wider coverage, the liability of the Insurance Company will be governed by the terms of the policy so issued, the liability to the extent it goes beyond the requirements of Section 147 being contractual in nature. In the event of any such wider coverage, the liability of the Insurance Company will be governed by the terms of the policy so issued, the liability to the extent it goes beyond the requirements of Section 147 being contractual in nature. ( 36 ) WE are not in the instant case dealing with a situation where the extent of liability of the Insurance Company has to be determined by reference to a wider cover obtained by the insured. We are on the contrary called upon to determine the extent of liability in a case where no such wider cover is obtained by the insured owner of the vehicle and the policy of insurance is limited to the requirements of Section 147 of the act. What is the extent of liability which the insurance Company owes qua an employee who is injured or the legal representatives of an employee who is killed in a motor accident is the only question to be answered in the context of an Act policy. Any such determination would of necessity depend upon the requirements of Section 147 itself. That is because if no wider cover is taken by the insured, the policy issued by the Insurance Company would create a. liability only to the extent such liability must be covered in terms of Section 147. ( 37 ) A closer reading of Section 147 of the Act makes it manifest that a policy of insurance would comply with the provisions of Section 146 and Chapter 11 of the Act if (A) the policy is issued by an authorised insurer or by a co-operative society allowed u/s. 108 to transact business of an insurer and (B) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) against any liability incurred by the insured in respect of the death of or bodily (injury to any person, including owner of the goods or his authorised representative carried in the vehicles) or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place. ( 38 ) THE provision further stipulates that the policy of insurance must insure the owner of the vehicle against any liability arising on account of the death or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place. What is significant is that in terms of the proviso to Section 147 (1) of the Act, the requirement of a policy of insurance does not extend to liabilities arising from death or injury to the employees of the insured except those specified therein and to the extent of the liability under the Workmens Compensation Act The proviso may at this stage be extracted:"provided that a policy shall not be required i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the workmens Compensation Act, 1923 (8 of 1923) in respect of the death of, or bodily injury to, any such employee a) engaged in driving the vehicle, or b) if it is a public service vehicle engaged as a conductor of the vehicle or in examining tickets on the vehicle, or c) if it is a goods carriage, being carried in the vehicle, or ,ii) to cover any contractual liability. " ( 39 ) A plain reading of the above would show that the policy of insurance required to be taken in terms of Section 146 need not cover the liability in respect of the death or bodily injuries arising out of and in the course of the employment of every employee of the person insured under the policy. Such liability must however be covered in respect of three classes of employees of the insured namely (A) an employee engaged in driving the I vehicle covered by the policy. B) an employee engaged as a conductor of the vehicle or for examining the tickets on the vehicle if the vehicle insured under the policy is a public service vehicle andc) an employee who is being carried in the vehicle covered by the policy if such vehicle is a goods carriage. B) an employee engaged as a conductor of the vehicle or for examining the tickets on the vehicle if the vehicle insured under the policy is a public service vehicle andc) an employee who is being carried in the vehicle covered by the policy if such vehicle is a goods carriage. ( 40 ) SIGNIFICANTLY even in regard to the aforementioned classes of employees, the liability required to be covered by the insurance policy in terms of Section 147 need not be a liability other than the one arising under the Workmens Compensation Act, 1923. Consequently a policy of insurance would satisfy the requirements of Section 146 and proviso to Section 147 of the Motor vehicles Act if the same covers the liability of thi insured arising from the death or bodily injuries to the employees mentioned in the proviso even when such coverage is limited to the liability that would arise against the insured under the Workmens Compensation Act. The language of Sections 146 and 147 of the Act and in particular the proviso to Section 147 is much too clear to admit of any other interpretation. The argument that the insurance policy must cover qua such employees, the entire liability arising against the owner and not just the liability that arises under the Workmens Compensation act does not find any support from the plain language employed in the proviso. The expression "other than a liability arising under the Workmens Compensation Act" appearing in the proviso simply means that no liability in excess of what arises under the said Act need be compulsorily covered by the insurance policy. To hold otherwise would clearly tantamount to rewriting the provision or doing violence to the same. ( 41 ) IT was feebly argued by Mr. Shankar that in terms of sub-section (2) to Section 147, a policy of insurance referred to in subsection (1) must cover the entire liability incurred in respect of any accident. That being so, the liability arising from the death or bodily injury to an employee of the insured must in its entirety be covered by the policy for the proviso to Section 147 (1) cannot override the requirement of sub-section (2 ). That argument is in our opinion without any merit for two precise reasons. Firstly, because the provisions of sub-section (2) to section 147 are subject to the proviso to subsection (l ). That argument is in our opinion without any merit for two precise reasons. Firstly, because the provisions of sub-section (2) to section 147 are subject to the proviso to subsection (l ). Secondly, because sub-section (5) to section147 enjoins upon the insurancecompany to indemnify the person or classes of persons specified in the policy in respect of any liability "which the porcy purports to cover in the case of that person or those classes of persons". What is important then is that the extent of liability to be covered will necessarily be determined by reference to the policy of insurance which policy must in order to satisfy the requirements of Section 147 cover the liability to the extent indicated in sub-section (1) and the proviso thereto. If the policy issued by the Insurance Company covers liability in respect of employees falling under the proviso only to the extent the said liability arises under the workmens Compensation Act, the question of extending the same beyond the said limit does not arise. Suffice it to say that on a plain interpretation of Section 147 in particular the proviso to sub-section (1) thereof it is manifest that the liability of an Insurance Company arising out of death or bodily injury to an employee of the insured falling under the said proviso does not go beyond the liability that may arise in respect of any such death or injury under the workmens Compensation Act. The decisions of the Supreme Court in New India assurance Co. Ltd. v. Asha Rani ( AIR 2003 sc 607 ) and Oriental Insurance Co. Ltd. , v. Devireddy Konda Reddy, AIR 2003 SC 1009 , to the extent, the same declare the liability of the Insurance Company in the case of an act Policy to be limited to the liability arising under the Workmens Compensation Act qua the employees specified in the proviso, simply state the obvious. The majority view in Noorullahs case, therefore, does not appear to be legally sound either on a plain interpretation of Section 147 or in the light of the decisions of the Supreme Court in the two cases mentioned above. ( 42 ) THERE is one other aspect to which we must at this stage advert. The majority view in Noorullahs case, therefore, does not appear to be legally sound either on a plain interpretation of Section 147 or in the light of the decisions of the Supreme Court in the two cases mentioned above. ( 42 ) THERE is one other aspect to which we must at this stage advert. In Noorullahs case, the minority view taken by Bharuka j. , suggests that the liability qua the Insurance Company even to the extent the same is relatable to Workmens Compensation Act cannot arise unless such liability has been adjudged in proceedings under the Workmens Compensation Act. We see no real basis for incorporating in the scheme of Section 147 any such requirement of limitation. Apart from the fact that Section 167 of the motor Vehicles Act, 1988, starts with a non obstante clause and gives the person concerned the option to raise a claim for compensation either under the Workmens Compensation Act or under the Motor Vehicles act, 1988, we are of the view the obligation of the Insurance Company to indemnify a person specified in the policy is enforceable under the Motor Vehicles Act in view of the provisions of Section 147 (5) which reads as under:" (5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons. " ( 43 ) THE above makes it clear that the insurer shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover even in proceedings under the Motor Vehicles Act without such liability having been first determined or adjudged under the Workmens Compensation act. In the case of an insurance policy which conforms to the bare requirements of Section 147 of the Act, the liability of the Insurance Company shall be limited to the liability arising under the Workmens Compensation Act but any such liability would be enforceable under the Motor Vehicles Act even without an adjudication under the workmens Compensation Act. In the case of an insurance policy which conforms to the bare requirements of Section 147 of the Act, the liability of the Insurance Company shall be limited to the liability arising under the Workmens Compensation Act but any such liability would be enforceable under the Motor Vehicles Act even without an adjudication under the workmens Compensation Act. The minority view to the extent it purports to make a prior adjudication of the liability under the workmens Compensation Act essential for enforcement of the liability is not supported by either the provisions of the Act or any rule of interpretation. With the above observations, we concur with the view taken by the Honble Chief Justice as already indicated earlier. Order accordingly. --- *** --- .