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2006 DIGILAW 688 (GAU)

National Insurance Co. Ltd. v. Momina Begum

2006-07-28

MAIBAM B.K.SINGH

body2006
JUDGMENT M.B.K. Singh, J. 1. Heard Mr. Joydeep Nath, learned Counsel appearing on behalf of the Appellant at length. None appears on the side of the Respondents without showing any cause and as such hearing has been proceeded in the absence of the Respondents. 2. This appeal is directed against the award dated 18.8.2000 passed in Claim Case No. 30(A) of 1999 by the Commissioners for Workmen's Compensation, Manipur by which the present Appellant (O.P. No. 2 in the claim case) was directed to deposit on or before 10.10.2000 a sum of Rs. 2,16,910/- (Rupees Two Lakhs Sixteen thousand Nine Hundred and Ten) with simple interest @ Rs. 12 per annum from the date of accident puportedly for payment to the present Respondent Nos. 1 and 2, who were claimant Nos. 1 and 2 in the claim case. The present Respondent Nos. 1 and 2 filed the said claim case alleging that Md. Sanatomba, who was a workmen employed by the O.P. No. 1 in the case (the present Respondent No. 3) in the capacity of Clearner in respect of the latter's Tata Truck bearing Registration No. MN-01/3825, died along with three others occupants of the said truck in an accident involving the said truck on 16.9.99 at 7 p.m. at Lilong Litanmakhong and that being widow and father of the deceased Sanatomba they were entitled to compensation. The present Appellant (the O.P. No. 2 in the case) contested the case by filing its written statement. One of the points pleaded by the present Appellant in the said written statement was to the effect that under the terms of the Insurance Company of the said truck the insurance policy was not liable to indemnify the owner of the truck in the nature and character of the case. One of the relevant issues framed in connection with the said pleading was Issue No. 5." whether the opposite party No. 2 is liable to indemnify the opposite party No. 1 the liability to pay compensation as is due?" 3. On the basis of the materials, the learned Commissioner for Workmen's Compensation, Manipur decided the said issue against the opposite party No. 2. On the basis of the materials, the learned Commissioner for Workmen's Compensation, Manipur decided the said issue against the opposite party No. 2. According to the learned Commissioner, the insurance policy issued by the opposite party No. 2 under the M.V. Act, 1988 should satisfy all the requirements of the Chapter XI of the M.V. Act, 1988 including the compensation payable under the said Act in respect of the deaths of employees of the opposite party No. 1 employed in the said vehicle. Further, according to the learned Commissioner, Section 147(I)(a) and Section 147(I)(b)(i)of the M.V. Act provide for the liability to be covered by an insurance policy. Furthermore, the learned Commissioner held to the effect that the premium of Rs. 30 paid by the owner/employer was to indemnify his liability in respect of deaths or bodily injuries of all employees engaged in the truck and as such the Insurance Company (the present Appellant) was liable to indemnify the opposite party No. 1 (the present Respondent No. 3) in respect of the compensation liable to be paid in connection with the death of the said Md. Sanatomba. There is no dispute in respect of other issues in the case. 4. Being aggrieved by the impugned award passed by the Commissioner for Workmen's Compensation. Manipur imposing liability on the Insurance Company (the present Appellant), this appeal has been filed. 5. According to the present Appellant, as per the terms and conditions of all India Motor Tariff for Commercial Vehicle and of the terms of commercial vehicle Insurance Policy of the Appellant and of the endorsement No. IMT-17 of the Insurance Policy, an owner of a vehicle is entitled to insure his vehicle for the third party risk and the damage of his vehicle on payment of requisite premium for the purpose and he is also entitled to insure the risk of liability for death and injuries of the employees of his vehicle upto 6 in number on payment of additional premium @ Rs. 15 only for each employee. Further, according to the present Appellant, in the present case the owner of the vehicle (the present Respondent No. 3) insured the risk of only two employees by paying a sum of Rs. 30 in this regard @ Rs. 15 only for each employee. Further, according to the present Appellant, in the present case the owner of the vehicle (the present Respondent No. 3) insured the risk of only two employees by paying a sum of Rs. 30 in this regard @ Rs. 15 per employee and as such when the learned Commissioner had already made the Insurance Company (the present Appellant) liable in respect of the present Respondent No. 3's two employees, who had been involved in the same accident in which the said Md. Sanatomba had also died, by passing awards in claim case No. 32/99 and claim case No. 33/99, the learned Commissioner should not have made the present Appellant liable for the compensation payable in connection with the death of the 3rd employee, Md. Sanatomba. It is the case of the Appellant that there was no insurance contract in between the Insurance Company (the present Appellant) and the owner of the vehicle (the present Respondent No. 3) for covering the risk in connection with the death or injuries of the 3rd employee. 6. On perusal of the relevant terms of the policy relevant in this case, including the terms in endorsement IMT-17 of the Commercial Vehicles Insurance B policy of the Appellant Insurance Company, I am of the opinion that the Appellant's case has merit. The policy schedule (Ext. A/5) which was produced before the Commissioner for Workmen's Compensation, Manipur clearly shows that the premium paid by the owner of the said vehicle in respect of the limited liability to employees was only Rs. 30/- Since the prescribed rate of premium is Rs. 15/- per employee, the said premium paid by the owner/employer was only in respect of two employees. Accordingly, since the learned commissioner had already made the Insurance Company to indemnify the labilities of the owner (the present Respondent No. 3) in respect of two employees, as evident from the copies of orders passed on 28.2.2000 in claim Case No. 32 of 1999 and Claim Case No. 33 of 1999, there was no legal basis for making the Insurance Company (the present Appellant) to indemnify the owner (the present Respondent No. 3) in respect of his liability for the death of the 3rd employee in the said accident. 7. In New India Insurance Co. Ltd. v. Harshad bhai Amrut bhai Modhiya and Anr. 7. In New India Insurance Co. Ltd. v. Harshad bhai Amrut bhai Modhiya and Anr. AIR 2006 SC 2352, the Supreme Court, after referring to Sections 3, 4, 5, 8, 12 and 17 of the Workmen's Compensation Act, held at paras 14 and 15: 14. By reason of the provisions of the act, an employer is not statutorily liable to enter into a contract of insurance. Where, however, a contract of insurance is entered into by and between the employer and the insurer, the insurer shall be liable to indemnify the employer. The insurer, however, unlike under the provisions of the Motor Vehicle Act docs not have a statutory liability. Section 17 of the Act does not provide for any restriction in the matter of contracting out by the employer vis-a-vis the insurer. 15. The terms of a contract of insurance would depend upon the volition of the parties. A contract of insurance is governed by the provisions of the Insurance Act. In terms of the provisions of the Insurance Act, an insured is bound to pay premium which is to be calculated in the manner provided for therein. With a view to minimize his liability, an employer can contract out so as to make the insurer not liable as regards indemnifying him in relation to certain matters which do not strictly arise out of the mandatory provisions of any statute. Contracting out, as regards payment of interest by an employer, therefore, is not prohibited in law. 8. The present case is not a case where an accident has occurred by use of a motor vehicle in respect of whereof the contract of insurance would be governed by the provisions of the M.V. Act, 1988. In the Workmen's Compensation Act, there is no provision corresponding those in the M.V. Act, requiring the insurer to cover the entire liability arising out of an award towards compensation to a 3rd party arising out of a motor accident. No law stands in the way of the Insurance Company and the insured entering into a contract confining the obligations of the Insurance Company to indemnify to a particular head or to a particular amount or only to a limited number of employees when it relates to claim for compensation to a 3rd party arising under the Workmen's Compensation Act. No law stands in the way of the Insurance Company and the insured entering into a contract confining the obligations of the Insurance Company to indemnify to a particular head or to a particular amount or only to a limited number of employees when it relates to claim for compensation to a 3rd party arising under the Workmen's Compensation Act. The Workmen's Compensation can unlike the M.V. Act does not confer a right on the claimant for compensation under that Act to claim the payment of compensation in its entirety from the insurer himself. Under the Workmen's Compensation Act, the concerned claimant is entitled to claim the compensation from the concerned employer. As between the employer and the insurer, the rights and obligations would depend upon the terms of the insurance contract. 9. In the present case, as per terms of the insurance contract in between the present Appellant (the Insurance Company) and the employer/owner (the present Respondent No. 3), the liability of the insurance company/insurer to indemnify the insured (the present Respondent No. 3) is to be limited in respect of only two employees for which premium have been paid. Therefore, the portion of the impugned award directing the present Appellant Insurance Company (O.P. No. 2 in the claim case) to pay the amount of compensation liable to be paid for the death caused to the 3rd employee of the insured/owner (the O.P. No. 1 in the claim case) is not sustainable in the eye of law. The said portion is liable to be quashed and it is hereby quashed. However, it has been brought to my notice that the present Appellant (the Insurance Company) has already deposited the amount of compensation, i.e., Rs. 2,16,910/- (Rupees Two Lakhs Sixteen thousand Nine Hundred Ten) and that out of the said deposited amount, a sum of Rs. 2,00,000/- has already been withdrawn by the claimants as per direction of this Court dated 9.11.2000. The present Appellant shall be entitled to get refund of the remaining amount of Rs. 16,910/- from the Commissioner for Workmen's Compensation, Manipur. The claimants of the claim case No. 30(A) 1999 shall be entitled to get the remaining amount of compensation payable under the impugned award from the owner/employer (the present Respondent No. 3) and not from the Insurance Company (the present Appellant). 16,910/- from the Commissioner for Workmen's Compensation, Manipur. The claimants of the claim case No. 30(A) 1999 shall be entitled to get the remaining amount of compensation payable under the impugned award from the owner/employer (the present Respondent No. 3) and not from the Insurance Company (the present Appellant). At the same time, the Insurance Company is at liberty to recover the said amount of Rs. 2,00,000/- from the insured/O.P. No. 1 in the claim case by proceeding in accordance with law, but not from the claimant in the claim case. 10. This appeal is allowed to the extent stated above and it stands disposed of. Appeal allowed