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2007 DIGILAW 484 (GAU)

Oriental Insurance Co. Ltd. v. Himangshu Ch. Deb

2007-07-25

A.B.PAL, I.A.ANSARI

body2007
JUDGMENT A.B. Pal, J. 1. This appeal by the insurer, Oriental Insurance Co. Ltd., is directed against the judgment dated 30.7.2002 passed by learned Commissioner, Workmen's Compensation, West Tripura, Agartala in T.S. (WC) No. 21 of 1997 whereby after awarding Rs. 1,87,182 in favour of the claimant-respondent as compensation for the injuries sustained by him in a motor accident, the insurer appellant has been held liable to pay the amount awarded with interest at the rate of 12 per cent per annum and penal interest at the rate of 16 per cent per annum on failure to pay the amount within a period of three months from the date of judgment and award impugned. 2. We have heard Mr. Gautam, learned Counsel appearing for the appellant insurer and Mr. Dutta, learned Counsel appearing for the claimant-respondent. None appears on behalf of the owner, respondent No. 1 herein. 3. The short question which has fallen for consideration is whether the insurer can be held liable under the relevant provisions of the Motor Vehicles Act (for short 'the M.V. Act'), the Workmen's Compensation Act (for short 'the W.C. Act') and the terms and conditions of the insurance policy in respect of the vehicle involved in the accident to pay any amount of compensation for the injuries sustained by the claimant-respondent, who was admittedly an employee of the owner of the vehicle working as assistant at the relevant time. The factum of the accident, the status of the claimant-respondent and the insurance covered by the policy issued by the insurer appellant in respect of the vehicle being not in dispute, a brief outline of the episode would suffice to understand and appreciate the controversy raised in this appeal. 4. Claimant-respondent was appointed as assistant by the owner of the vehicle (jeep No. TRT 1407), respondent No. 2 herein, on a monthly wage of Rs. 2,300 including food allowance. It was a passenger carrying vehicle with sitting capacity of 6 + 1 as indicated in the policy of insurance issued by the insurer appellant for a period from 10.3.1996 to 9.3.1997. On 12.5.1996 the vehicle went to a place known as Rathtilla to carry passengers. The claimant-respondent was on duty in the vehicle when it was moving towards Khowai from Rathtilla with some passengers in it. On the way the vehicle came under extremist attack by gunfire. On 12.5.1996 the vehicle went to a place known as Rathtilla to carry passengers. The claimant-respondent was on duty in the vehicle when it was moving towards Khowai from Rathtilla with some passengers in it. On the way the vehicle came under extremist attack by gunfire. Eight passengers died on the spot and the assistant, the claimant-respondent herein, sustained severe bullet injuries. After prolonged treatment in the G.B. Hospital at Agartala his right leg had to be amputated rendering him permanently disabled. He was then only 30 years old. He approached the learned Commissioner for Workmen's Compensation claiming Rs. 5,00,000 to compensate the injuries sustained by him. 5. In his written objection, the owner, respondent No. 2 herein, had admitted the entire facts narrated by the assistant of his jeep, but contended that the vehicle having been covered by the insurance policy, issued by the appellant herein, any liability arising from the said incident would fall on the insurer only. Contending, inter alia, that no accident did occur due to any negligence on the part of the driver, he asserted that the wage of the assistant at the relevant time paid by him was only Rs. 1,500 p.m. including tiffin allowance of Rs. 40 per day. 6. The insurer in its written statement and additional written statement raised the principal contention that assistant of the vehicle was not covered by the policy of insurance issued in respect of the said vehicle and, therefore, the liability, if any, arising from the injury sustained by the claimant-respondent from the extremist attack cannot be fastened on the insurer. The other contentions raised by insurer to the written statement are of sundry nature having no direct relevance to disposal of the present appeal. 7. Situated in the facts and respective contentions noticed above, the learned Commissioner had no difficulty to assess the amount of compensation on the basis of the age of the victim, his loss of earning capacity to the extent of 75 per cent in consideration of the permanent disablement certificate and the relevant factor given in the Schedule to the Workmen's Compensation Act. As regards the principal contention whether the assistant of the vehicle was covered by the policy of insurance, the learned Commissioner has not entered into any comprehensive discussion except saying that as the insurance policy revealed sitting capacity of the vehicle was 6 + 1, it did not necessarily mean that the vehicle cannot carry any assistant or the insurer was not liable to pay any compensation to the assistant. We are of the view that this issue being at the centre of controversy as to whether the owner or the insurer would be liable to pay the compensation, it deserved more elaborate discussion, closer examination and careful adjudication. 8. Mr. Gautam, learned Counsel for the appellant insurer has strenuously argued to bring home the principal contention that in the facts situation of the present case, the appellant insurer cannot be held liable to pay any compensation, if considered on the anvils of the terms and conditions of the policy as well as the provision contained in Sections 146 and 147 of the Motor Vehicles Act. The policy as we have briefly noticed above, would show that it was an 'Act policy' covering the vehicle, passengers and driver as shown in the Schedule of premium, which provides as follows: Act only Basic Rs. 300 Passenger Rs. 600 Driver Rs. 15 ---------- Net premium Rs. 915 Service tax Rs. 46 ---------- Total premium Rs. 961 ---------- The policy thus leaves no doubt that no other employee except the driver engaged by the owner for the said vehicle was covered by the policy of insurance issued by the appellant herein. It seems the contents of the policy escaped notice of the learned Commissioner when he observed that the sitting capacity of the vehicle being 6+1, it cannot be said that the assistant was not covered by the said policy. Mr. Gautam has taken us through the provision of Section 146(1) of the Motor Vehicles Act, which appears in Chapter XI of that Act under subject 'insurance of motor vehicles against third party risks'. It provides that no person shall use a motor vehicle in public unless there is a valid policy of insurance which complies with the requirements of this Chapter. The mandatory requirements of such insurance policy have been provided in Section 147. It provides that no person shall use a motor vehicle in public unless there is a valid policy of insurance which complies with the requirements of this Chapter. The mandatory requirements of such insurance policy have been provided in Section 147. What is relevant for the present controversy is the proviso to Section 147(1), which deals with the liability in respect of death or bodily injury to any employee of a motor vehicle after providing for the liability to a third party or to any passenger in Clause (b) of that sub-section. The proviso thereunder reads as follows: 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 Workmen's 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. It would appear from the above proviso that the policy compulsorily to be taken under the Act would be restricted to the liability arising under the Workmen's Compensation Act in respect of the death or bodily injury to any such employee who may be a driver or conductor or ticket examiner if the vehicle is a public service vehicle. Admittedly, the jeep in question was a public service vehicle for carrying passengers and, therefore, the policy to be obtained compulsorily under the Act need not cover any other employee except those mentioned above. However, there may be a separate contract to cover other employees. It is nobody's contention in the present case that apart from the policy in question, there was any other contract between the insurer and the insured to cover any other employee of the vehicle. 9. In support of his submission that neither under the Act nor under the policy in question, the appellant insurance company is liable to pay the compensation. Mr. 9. In support of his submission that neither under the Act nor under the policy in question, the appellant insurance company is liable to pay the compensation. Mr. P. Gautam has sought to rely on a decision of the Apex Court in Ramashray Singh v. New India Assurance Co. Ltd. (2003)IIILLJ740SC . In that case, a question had arisen whether a khalasi was covered by the definition of conductor to press into service the benefits of Section 147 of the Motor Vehicles Act. Explaining the real import and intent of the provision in Section 147, the Apex Court observed in paras 10, 12 and 13 of the judgment, which make abundantly clear the persons intended to be covered by the policy compulsorily to be taken under the Motor Vehicles Act. The said observations are profitably quoted below: (10) The appellant's first submission was that Shashi Bhushan Singh was a passenger. The appellant's submission that the phrases 'any person' and 'any passenger' in Clauses (i) and (ii) of Sub-section (b) of Section 147(1)are of wide amplitude, is correct. [See New India Assurance Co. Ltd. v. Satpal Singh AIR2000SC235 ]. However, the proviso to the sub-section carves out an exception in respect of one class of persons and passengers, namely, employees of the insured. In other words, if the 'person' or 'passenger' is an employee, then the insurer is required under the statute to cover only certain employees. As stated earlier, this would still allow the insured to enter into an agreement to cover other employees, but under proviso to Section 147(1)(b), it is clear that for the purposes of Section146(1), a policy shall not be required to cover liability in respect of the death arising out of and in the course of any employment of the person insured unless-first: the liability of the insured arises under Workmen's Compensation Act, 1923, and second; if the employee is engaged in driving the vehicle and if it is a public service vehicle, is engaged as conductor of the vehicle or in examining tickets on the vehicle. If the concerned employee is neither a driver nor a conductor nor examiner of tickets, the insured cannot claim that the employee would come under the description of 'any person' or 'passenger'. If this was permissible, then there would be no need to make special provisions for employees of the insured. If the concerned employee is neither a driver nor a conductor nor examiner of tickets, the insured cannot claim that the employee would come under the description of 'any person' or 'passenger'. If this was permissible, then there would be no need to make special provisions for employees of the insured. The mere mention of the word 'cleaner' while describing the seating capacity of the vehicle does not mean that the cleaner was therefore a passenger. Besides the claim of the deceased employee was adjudicated upon by the Workmen's Compensation Court, which could have assumed jurisdiction and passed an order directing compensation only on the basis that the deceased was an employee. This order cannot now be enforced on the basis that the deceased was a passenger. (12) So a person carried in pursuance of a contract of employment would be a passenger and would be covered as such. The exclusion of this clause in the proviso to Section 147(1)(b) of the present Act bolsters our reasoning that employees other than the three mentioned are not covered by Section147(1)(b). (13) The appellant's next submission was that the concerned employee was a 'conductor'. It is doubtful whether a khalasi and a conductor are the same. But assuming this were so, there is nothing to show that the appellant had paid any additional premium to cover the risk of injury to a conductor. On the contrary, the policy shows that the premium was paid for 13 passengers and 1 driver. There is no payment of premium for a conductor. 10. Mr. Dutta, the learned Counsel for the claimant-respondent would argue that the policy is a comprehensive one and, therefore, the arguments advanced by Mr. Gautam, learned Counsel for the appellant insurance company with reference to provisions under Sections 146 and 142 of the Motor Vehicles Act have no relevance in as much as the premium paid intended to cover every person travelling in the said vehicle including the assistant and other employees of the vehicle. 11. We are not convinced. By no stretch of argument it can be said that an assistant of the vehicle is also a passenger. The policy clearly mentions three heads of the premium, which include passengers and driver, not any other employee. 11. We are not convinced. By no stretch of argument it can be said that an assistant of the vehicle is also a passenger. The policy clearly mentions three heads of the premium, which include passengers and driver, not any other employee. We are also not convinced that the policy in question is comprehensive one, the way the learned Counsel for claimant-respondent intended to mean for the purpose of covering the employees other than the driver of the vehicle. As regards the meaning of comprehensive policy, the Apex Court in Ramashray Singh, (2003)IIILLJ740SC , observed in para 14 as follows: (14) The appellant's final submission was that as the policy was a comprehensive one, it would cover all risks including the death of the khalasi. The submission is unacceptable. An insurance policy only covers the person or the classes of persons specified in the policy. A comprehensive policy merely means that the loss sustained by such person/persons will be payable up to the insured amount irrespective of the actual loss suffered. [See New India Assurance Co. Ltd. v. C.M. Jaya [2002]1SCR298 , Colinvaux's Law of Insurance, 7th Edn., pp. 93-94]." In view of the above legal position and the contents of the policy in question, argument raised by the learned Counsel for the claimant-respondent appears to us to be misconceived and misplaced. 12. There is none to address the court on behalf of the owner respondent, who would be finally responsible to pay the compensation. Record shows that though the owner was duly served, he preferred not to appear and contest this appeal. 13. From the discussions made above, we are of the view that though the amount of compensation awarded has not to be interfered with, the liability to pay the compensation shall be with the employer, i.e., the owner of the vehicle, the insured respondent herein. 14. The question that has been agitated next by the appellant is regarding interest part of the judgment impugned, which is also to be paid by the insurer appellant along with the award. 15. No doubt, if the employer of the victim is found to be liable to pay the compensation, the question raised herein would call for no adjudication. 14. The question that has been agitated next by the appellant is regarding interest part of the judgment impugned, which is also to be paid by the insurer appellant along with the award. 15. No doubt, if the employer of the victim is found to be liable to pay the compensation, the question raised herein would call for no adjudication. The question posed is that if it is found that the insurer remains liable to pay the compensation awarded whether the interest part of the award can also be slapped on the insurer in view of the relevant provisions of the Workmen's Compensation Act. 16. Because of our decision recorded above, that the owner of the vehicle being employer of the victim shall be liable to pay the compensation awarded in view of the legal position noticed above, it remains of academic interest only whether in the case in hand, the appellant insurer could be made liable to pay the interest. The answer must be in the negative even if the insurer is found to be liable to pay the compensation awarded. This question has been elaborately dealt with by one of us (LA. Ansari, J.) in National Insurance Co. Ltd. v. Kanai Dasgupta W.P. (C) No. 440 of 2005, giving a deeper look to the provisions of Section 4A of the Workmen's Compensation Act with the help of the decisions of the Apex Court in Mafatlal Industries Ltd. v. Union of India 1997(89)ELT247(SC) ; State v. Navjot Sandhu (2003)6SCC641 ; and Surya Devi Rai v. Ram Chander Rai (2003) 6 SCC 575. It was held that the insurer could not be held liable to indemnify the insured employer the interest which the insured employer would be liable to pay. We noted the said decision to enable us to take the view that the decision of the learned Commissioner fixing the liability to pay interest on the insurer is not legally sustainable even after his decision that insurer would also be liable to pay the compensation awarded. However, for the decision of us aforementioned, the insurer appellant is neither liable to pay the compensation nor the interest awarded and the entire liability shall firmly remain with the owner respondent. 17. For the reasons and discussions aforementioned, this appeal has merit and the same is accordingly allowed. However, for the decision of us aforementioned, the insurer appellant is neither liable to pay the compensation nor the interest awarded and the entire liability shall firmly remain with the owner respondent. 17. For the reasons and discussions aforementioned, this appeal has merit and the same is accordingly allowed. The part of the judgment impugned whereby the insurer appellant has been held liable to pay the compensation awarded along with interest is hereby set aside and quashed. It is hereby directed that owner-respondent No. 2 herein, being the employer of the claimant-respondent shall be liable to pay the entire amount of compensation with interest and to that extent the judgment impugned shall stand modified. No costs. Appeal allowed.