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2006 DIGILAW 648 (AP)

NATIONAL INSURANCE CO. LTD. v. LAGAMANNA

2006-06-08

CHIDANANDA ULLAL, V.JAGANNATHAN

body2006
V. JAGANNATHAN, J. ( 1 ) IN this appeal, national Insurance Co. Ltd. has questioned the finding of Tribunal saddling liability on it to pay the compensation to the injured-claimants. ( 2 ) WE have heard learned counsel Mr. A. N. Krishnaswamy for the appellant and the learned counsel, Mr. Vigneshwar Shastri for the respondents. It is contended by mr. A. N. Krishnaswamy that the policy in question does not cover the risk of the coolies carried in the tractor-cum-trailer as no extra premium was paid to cover such a larger liability and in view of this position, it is not in dispute between the parties that tribunal could not have fastened the entire liability on the insurance company, but at the most, it could have confined the liability of the respondent insurance company to that which arises out of the Workmen's compensation Act. In this regard, reliance is placed on the decision of Apex Court. So far as the quantum of compensation is concerned, learned counsel for respondent has got no grievance. Therefore, the only issue is whether the Claims Tribunal was right in fastening the entire liability on the insurance company. ( 3 ) IN view of there being no dispute insofar as the facts of the case are concerned and the policy in force not indicating extra premium being paid to cover the case of the injured-claimant who was travelling in the vehicle in question, the Tribunal could not have put the entire liability on the insurance company. This conclusion of ours is fortified by the law laid down by the Supreme Court in the case of National insurance Co. Ltd. v. Prembai Patel, 2005 acj 1323 (SC ). In the said case, the Apex court laid down the following proposition of law: " (12 ). . . The expression 'such liability as is required to be covered by a policy under clause (b) of sub-section (1) of section 147 (being a liability covered by the terms of the policy)' occurring in sub-section (1) of section 149 is important. It clearly shows that any such liability, which is mandatorily required to be covered by a policy under clause (b)of section 147 (1), has to be satisfied by the insurance company. It clearly shows that any such liability, which is mandatorily required to be covered by a policy under clause (b)of section 147 (1), has to be satisfied by the insurance company. The effect of this provision is that an insurance policy, which covers only the liability arising under the Workmen's Compensation Act in respect of death of or bodily injury to any such employee as described in sub-clauses (a) or (b) or (c) of proviso (i) to section 147 (1) (b) of the Act is perfectly valid and permissible under the Act. Therefore, where any such policy has been taken by the owner of the vehicle, the liability of the insurance company will be confined to that arising under the workmen's Compensation Act. (13) The insurance policy being in the nature of a contract, it is permissible for an owner to take such a policy where-under the entire liability in respect of the death of or bodily injury to any such employee as is described in sub-clauses (a) or (b) or (c) of proviso (i) to section 147 (1) (b) may be fastened upon the insurance company and insurance company may become liable to satisfy the entire award. However, for this purpose the owner must take a policy of that particular kind for which he may be required to pay an additional premium and the policy must clearly show that the liability of the insurance company in case of death of or bodily injury to the aforesaid kind of employees is not restricted to that provided under the Workmen's compensation Act and is either more or unlimited depending upon the quantum of premium paid and the terms of the policy. (15 ). . . 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 compensation Act. (16 ). . . The insurance policy taken by the owner contained a clause that it was a policy for 'act liability' only. This being the nature of policy the liability of appellant would be restricted to that arising under Workmen's Compensation act. The judgment of the High Court, therefore, needs to be modified accordingly. (18 ). . . (16 ). . . The insurance policy taken by the owner contained a clause that it was a policy for 'act liability' only. This being the nature of policy the liability of appellant would be restricted to that arising under Workmen's Compensation act. The judgment of the High Court, therefore, needs to be modified accordingly. (18 ). . . In case the appellant insurance company has already deposited the entire amount awarded by the High Court with the Motor Accidents Claims Tribunal or it has paid the said amount to the claimants, it will be open to it to recover the amount which exceeds its liability under the Workmen's Compensation Act from the owner of the vehicle in accordance with law. " ( 4 ) IN the light of the above said settled position in law, we hold that Tribunal was in error in putting the entire liability on the insurance company. Therefore, the liability has to be worked out in terms of the provisions of the Workmen's Compensation Act. That will come to Rs. 2,62,164 with interest that is payable by the insurance company on the said amount. Therefore, out of the award amount of Rs. 6,18,000, the liability of the insurance company is restricted to the above said amount and as far as the balance is concerned, it is the responsibility of the owner of the vehicle in question to pay the compensation to the claimants. The claimants are given liberty to proceed against the owner insofar as the balance amount is concerned. ( 5 ) IF the amount in deposit is in excess of the liability of the insurance company as fixed by us, as above, the same shall be refunded to the insurance company. If on the other hand, amount deposited is lesser than what we have fixed, the balance shall be deposited by the insurance company. ( 6 ) OUT of the amount which insurance company has deposited, the respondent-claimant shall be paid Rs. 1,50,000 for future treatment. The respondent-claimant is at liberty to approach the Tribunal for the said purpose. ( 7 ) IN the result, appeal stands allowed. Appeal allowed. - .