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2018 DIGILAW 137 (GAU)

United India Insurance Co. Ltd. v. Prajesh Sharma

2018-01-25

KALYAN RAI SURANA

body2018
JUDGMENT : Kalyan Rai Surana, J. 1. Heard Mr. S. Dutta, the learned Senior Counsel, assisted by Mr. R. Hazarika, the learned Counsel for the appellant. None appears on call for the respondent. 2. This appeal under Section 30 of the Workmen's Compensation Act, 1923 is directed against the judgment and award dated 29.03.2001 passed by the learned Commissioner, Workmen's Compensation, Guwahati in W.C. Case No. 241/2000, thereby awarding a sum of Rs. 1,18,236/- as compensation in favour of the claimant. 3. The case of the respondent is that he was the owner-cum-driver of an Auto bearing Registration No. AS-15/3274 and on 24.11.1999 while he was driving the vehicle from Barpeta Road towards Barpeta, the vehicle met with an accident at about 8-30 PM near D.I.C. Office. Consequently, he had suffered fracture of his left clavicle. It was projected that the respondent had a valid driving licence at the relevant time and the vehicle was covered by insurance policy of the appellant. 4. The learned senior counsel for the appellant submits that written statement was filed by the appellant denying the liability of paying compensation and the respondent was put to strict proof of his claim. 5. In support of the claim, the respondent examined himself as P.W. 1 and exhibited prescriptions, medical certificate, X-ray plates, X-ray report, police certificate, accidental information report of Barpeta police station. 6. No issue was framed during the trial. The learned Commissioner, by relying on the documents and accepting the Doctor's opinion regarding the injuries, considered 50% disablement of the claimant. His age was taken as 35 years and monthly income was assessed at Rs. 4000/- per month. The learned Commissioner assessed the loss of earning capacity at 50% and held that the respondent No. 1 was entitled to compensation under the provisions of Section 4(1)(b) of the Workmen's Compensation Act. The applicable multiplier factor was taken as 197.06 and the compensation was computed as under: Rs. 1200 X 197.06 X 50% = Rs. 1,18,236/- The appellant was directed to deposit the awarded sum within 30 days and failing which interest @ 9% was ordered to be levied from the date of filing of the claim petition i.e. 30.12.2000 till realization. 7. 1200 X 197.06 X 50% = Rs. 1,18,236/- The appellant was directed to deposit the awarded sum within 30 days and failing which interest @ 9% was ordered to be levied from the date of filing of the claim petition i.e. 30.12.2000 till realization. 7. The learned senior counsel for the appellant has urged three major points: Firstly, that the respondent i.e. the victim, who was the owner-driver of the offending vehicle was not covered within the meaning of 'Third Party' as prescribed under Section 147 of the Motor Vehicles Act, 1988 and, as such, the liability of any suffering by the owner-driver, was not covered in the contract of insurance. Secondly, that the Doctor, who had issued the certificate of disability, did not assess the loss of earning capacity as was required under the provisions of Workmen's Compensation Act. Therefore, without the exercise of determining the loss of earning capacity, the learned Commissioner had, on the basis of conjectures and surmises, concluded the loss of earning capacity by 50%. Thirdly, it is well settled that interest can be levied only from the lapse of one month from the date of passing of the award and, as such, the interest levied on the award from the date of filing of the claim petition is not sustainable. 8. On a perusal of records, it appears that this appeal was admitted vide order dated 16.07.2002, however, without framing any substantial question of law, on which this appeal would be heard. Accordingly, on the basis of the submissions of the learned senior counsel for the appellant, the following substantial questions of law are framed on which this appeal is being heard: 1. Whether the liability of the owner-driver was covered by the Act policy issued under Section 147 of the Motor Vehicles Act, 1988? 2. Whether the learned Commissioner had the jurisdiction to assess the loss of earning capacity in absence of such determination by the qualified medical practitioner? 3. Whether, the liability to pay interest from the date of filing of the claim petition can be imposed on the appellant? 9. 2. Whether the learned Commissioner had the jurisdiction to assess the loss of earning capacity in absence of such determination by the qualified medical practitioner? 3. Whether, the liability to pay interest from the date of filing of the claim petition can be imposed on the appellant? 9. Before appreciating the appeal on merit, it must be mentioned herein that for last several years, the requisition of this Court for records from the court of the learned Commissioner, Workmen's Compensation, Guwahati was not complied with and, as such, by the order dated 02.08.2017, a direction was issued by this Court seeking explanation from the dealing assistant of the office of the learned Commissioner, Workmen's Compensation, Guwahati, as to why the records were not transmitted. Later on, reconstructed record was placed before this Court along with the affidavit filed by the learned Commissioner explaining that the records were missing and expressed his unconditional apology. Accordingly, the reconstructed record was accepted and this Court by the order dated 18.12.2017, wherein it had been indicated that although the original exhibits, viz. X-ray plates, X-ray reports were not there, and on the said date, the learned counsel for the appellant had submitted that he was in a position to argue the matter on the basis of available records. Hence, the matter was listed for hearing. 10. As per the reconstructed records, a reading of the certificate of insurance reveals that the risk of the owner-driver was not insured. However, only the liability of the employee-driver was insured. In support of the contention that the owner-driver was not covered by the contract of insurance under Section 147 of the Motor Vehicles Act, the learned senior counsel for the appellant has relied on the following two citations: 1. Oriental Insurance Company Ltd. v. Rajni Devi and others, (2008) 5 SCC 736 ; and 2. HDFC Chubb General Insurance Company Ltd. v. Shantidevi Rajbalsingh Thakur and another, (2008) ACJ 1280. 11. In the case of Shantidevi Rajbalsingh Thakur (supra), a detailed explanation has been given for the reasons as to why the owner-driver of a vehicle cannot be considered to be 'Third Party'. The relevant paragraphs No. 11, 23, 28, 30 to 33, 40, 44 and 45 thereof are extracted below: "11. 11. In the case of Shantidevi Rajbalsingh Thakur (supra), a detailed explanation has been given for the reasons as to why the owner-driver of a vehicle cannot be considered to be 'Third Party'. The relevant paragraphs No. 11, 23, 28, 30 to 33, 40, 44 and 45 thereof are extracted below: "11. It is contended on behalf of the respondent No. 1 that the driver of the motor cycle who is not the insured would be the third party. It will have to be seen whether the term 'third party' or 'any person' would mean and include the driver of the motor cycle at the relevant time, i.e., the deceased. For the liability to third parties section II of the contract of insurance covers occupants carried in the vehicle. Under the aforesaid section 'any person' is shown to be the owner of the goods or his representative carried in the vehicle. The indemnity of the insurance company necessarily implies damage caused by the driver which can be indemnified. Hence, unless there is primary liability of the driver, the liability of the insurance company as the indemnifier would not arise. Consequently, under that section and as per the aforesaid clauses of the contract of insurance, the driver who owes certain liabilities to third parties by a tortious act can be indemnified. Consequently, he himself cannot be compensated as a victim; he would be only indemnified. Similarly, the driver would not also be an 'occupant carried in an insured vehicle'; that occupant would necessarily be someone other than the driver. In this case that other person would be only the pillion rider. The pillion rider is specifically covered under the contract. A premium of Rs. 35 is paid for personal accident cover for pi lion passengers. The pillion rider has been compensated." ....... "23. It must be appreciated that the standard of proof required by an innocent victim of hit-and-run motor accident was made less stringent because they find it impossible to prove negligence of a driver of a motor vehicle whose identity cannot be ascertained in spite of reasonable efforts for the purpose. The pillion rider has been compensated." ....... "23. It must be appreciated that the standard of proof required by an innocent victim of hit-and-run motor accident was made less stringent because they find it impossible to prove negligence of a driver of a motor vehicle whose identity cannot be ascertained in spite of reasonable efforts for the purpose. Hence if such victim fell within a specified income bracket and applied for compensation on a structured formula basis, he need not go through the normal channel to prove negligence and the extent of his injury and claim compensation on the basis of actual liability incurred by the tortfeasor. Such victim must, therefore, necessarily be a person other than the tortfeasor himself. A tortfeasor, who, because of his own negligence, met with death, however unfortunate, cannot, therefore, be equated with a victim of the accident." ...... "28. The term 'any person' or 'third party' under the aforesaid provision contained in Section 147(1)(b)(i) would, therefore, have to be considered. It may be mentioned that the interpretation of the term 'victim' in Section 163-A would be governed by the interpretation of the terms 'any person' or 'third party' in Section 147. Hence the counsel for both the parties have drawn the court's attention to several judgments, not strictly under Section 163-A showing the case of victims thereunder, but essentially under Section 147 of the M.V. Act." ......... "30. In the case of United India Insurance Co. Ltd. v. Etnoori Yadagiri Goud, it was held that a driver of a motor cycle belonging to his brother was not a third party when the motor cycle was insured for third party risk. It has been observed in that case that the person driving the motor cycle himself does not fall under the term 'third party' in Section 147(1) of the M.V. Act. The contention that deceased could be considered as a passenger when no extra premium was paid for covering the risk of passenger was rejected. Even the contention that the deceased being the brother of the owner can claim compensation in the capacity of the owner was rejected by Andhra Pradesh High Court. 31. The contention that deceased could be considered as a passenger when no extra premium was paid for covering the risk of passenger was rejected. Even the contention that the deceased being the brother of the owner can claim compensation in the capacity of the owner was rejected by Andhra Pradesh High Court. 31. In the case of Minu B. Mehta v. Balkrishna Ramchandra Nayan, 1977 ACJ 118 (SC), considering Section 95(1)(b)(i) of the M.V. Act, 1939, which is analogous to Section 147(1) of the M.V. Act, 1988, it has been observed that the policy of insurance must be a policy which insures the person against any liability which may be incurred by him in respect of the 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. The liability for death or bodily injury must be covered by the insurance. In that case only upon proof of negligence, can an owner be held liable vicariously for the acts of his servant and only if the insurance cover extends to such liability arising out of the use of the vehicle by the person driving the vehicle could the insurance company be made liable. In that case, the deceased was observed to be in the position of the owner himself, in the sense that he was driving the vehicle belonging to his brother who was the owner of the vehicle. The insurance company covered third party risk. It was held that the driver of the vehicle would not constitute a third party for the purpose of Section 95 of the Act. Drawing from the case of Cooper v. Motor Insurance Bureau 1985 QB 575 (AC), it was held that 'A policy covering him' in respect of third party risks does not include the actual driver of the vehicle at the time of the use of the vehicle which give rise to the damage under Section 145 of the Road Traffic Act, 1972. Hence, the driver of the vehicle was held excluded from the expression 'third party' in Section 147(1)(b)(i) of the M.V. Act, 1988. 32. In the case of New India Assurance Co. Ltd. v. Babasaheb Anna Mali, a pillion rider was also held not covered under third party policy in the absence of extra premium paid for his coverage. Hence, the driver of the vehicle was held excluded from the expression 'third party' in Section 147(1)(b)(i) of the M.V. Act, 1988. 32. In the case of New India Assurance Co. Ltd. v. Babasaheb Anna Mali, a pillion rider was also held not covered under third party policy in the absence of extra premium paid for his coverage. Hence, it was held that insurance company could not also be saddled with no fault liability in such a case. In this case, the pi lion rider has been specifically covered. Hence, separate premium for the pi lion rider has been paid. Consequently, the pillion rider was compensated. It has been held in para 7 of this judgment that the proposition that the expression 'third party' is an expression of wide import covering all persons except the insured and insurer is misconceived and cannot stand legally on face of proviso (ii) to Section 95(1) which is analogous to Section 147(1)(ii) and which provides that the insurance cover is not available to the passengers except where 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. 33. In the case of New India Assurance Co. Ltd. v. Asha Rani, Section 147(1)(b)(i) prior to the amendment of 1994 was considered in terms of injury to the owner of the goods or its authorised representative carried in a goods vehicle. It was held in that case that the statutory third party risk under Section 147 did not extend to death or bodily injury to anyone other than the owner of the goods or the authorised representative carried in the vehicle prior to the 1994 amendment. Considering the objects and reasons of the Amending Act for statutory third party liability it was held that the addition of the words 'including owner of the goods or his authorised representative carried in the vehicle' was not clarificatory or amplificatory of the pre-existing statute. It was held that the expression showed that the legislature made it compulsory for the insurer to insure third party risks even in case of a goods vehicle. Therefore, in cases prior to the amendment of 1994, the insurer was not liable to pay compensation to the owner of the goods or his authorised representative carried in the goods vehicle for death or bodily injury. Therefore, in cases prior to the amendment of 1994, the insurer was not liable to pay compensation to the owner of the goods or his authorised representative carried in the goods vehicle for death or bodily injury. The judgment considered the objects and reasons of Clause 46 of the Amendment Act 54 of 1994 by which an amendment to Section 147(1)(b)(i) came to be made to specially include the owner of the goods or his authorised representative carried in the vehicle for the purpose of liability under the insurance policy. Consequently in that case the case of New India Assurance Co. Ltd. v. Satpal Singh, was specifically overruled. Though that case related to a goods vehicle and considered the distinction in the definitions of 'goods vehicle', 'public service vehicle', 'stage carriage' and the 'transport vehicle' under Section 2(8), (25), (29) and (33) of the 1939 Act (per S.B. Sinha, J.), the substance of what was held in that case was that a very wide interpretation on the words 'any person' could not be placed. Consequently in para 26 of the judgment it was held that expression 'any person' must be attributed having regard to the context in which they have been used, i.e., 'a third party'. Hence, it was held that the owner was not statutorily enjoined to get his vehicle insured for any passenger travelling in a goods vehicle and consequently the insurers would not be liable therefor. In para 28 of the judgment it has been specially observed that the owner of the passenger carrying vehicle must pay additional premium for covering the risks of the passengers. Hence, the case of Satpal Singh (supra) has been overruled observing that if the ruling in that case were to prevail the owner of the vehicle would not need to take out an insurance policy. He would be deemed to have been covered under the policy even when no premium is paid." .............. "40. It is, therefore, seen that the case of National Insurance Co. Ltd. v. Swaran Singh, has been overruled. He would be deemed to have been covered under the policy even when no premium is paid." .............. "40. It is, therefore, seen that the case of National Insurance Co. Ltd. v. Swaran Singh, has been overruled. The case of Tilak Singh and Asha Rani, narrowing the ambit of the term 'any person' to mean and include only a 'third party' has been upheld and consequently following upon Asha Rani in which a passenger travelling in a goods vehicle was not included under the said expression and following Tilak Singh in which case gratuitous passenger in a private vehicle was held not included, it was held in the case of Meena Variyal, that the driver who was the employee of the owner of the car was also not covered under the statutory third party risk." ................ "44. Though the application is under Section 163-A, which does not require proof of negligence for claiming compensation, the requirements of the policy and the limits of liability of the insurance company would be under Section 147 of M.V. Act and no other. Consequently, the term 'any person', as including only a third party which, upon a consideration of the aforesaid cases excludes the gratuitous driver, a gratuitous passenger, the employee of the owner or a pillion rider in the absence of a specific cover must apply to the driver of the motor cycle who met with the fatal accident also. Upon the same analogy, therefore, the 'victim' under Section 163-A would exclude these persons. It would include only third parties which are taken to be pedestrians, passers-by and such other persons not in the motor vehicle and who specifically could not be covered under the insurance policy. It would also not include a person himself negligent and on whose account even the owner would not be vicariously liable as he cannot claim damages. As held in the case of United India Insurance Co. Ltd. v. Kantabai, by the Division Bench of this Court it is difficult to entertain the contention that the liability in respect of tortfeasor himself would be covered by the insurance company and that such tortfeasor (or his legal heir) could sue the insurance company under the contract of indemnity or under law of Torts to pay compensation. Hence no driver can claim compensation for the accident de son tort. Hence no driver can claim compensation for the accident de son tort. Consequently, the liberal construction of Section 163-A of the M.V. Act sought by the advocate of respondent No. 1 cannot be granted, ignoring the very purpose of the legislation and which would render it liable to large scale abuse of drivers neither confirming with standards of care and caution and owners not taking cover against such action by a special contract with insurance companies upon payments of the requisite premium to cover such risks. 45. Consequently, the claim of respondent No. 1 granted by the learned trial Judge cannot be sustained against the appellants. The appellant insurance company is not liable to indemnify the owner for the death of the gratuitous driver of the insured motor cycle (since he was not otherwise covered under the Workmen's Compensation Act) as a 'victim'. Hence, the appeal succeeds. The judgment and order of the learned trial Judge dated 16.6.2005 granting compensation of Rs. 4,12,500 against the appellant insurance company is set aside. Liability of respondent No. 2, who never opposed the original claim and who has not appeared in this appeal also, is not interfered with." 12. Moreover, the Hon'ble Apex Court in the case of Dhanraj v. New India Assurance Company Ltd. and another, (2004) 8 SCC 553 and Rajni Devi (supra), has held that the insurance policy under Section 147 of the Motor Vehicles Act, 1988 did not cover any liability of personal injury of the insured and that the liability of paying compensation under the Motor Vehicles Act is on the owner of the vehicle and since a person cannot be both as claimant and/or recipient, the claim of the owner cannot be maintainable as 'Third Party'. The relevant paragraphs No. 8 & 9 of Dhanraj (supra) and para-7 of Rajni Devi (supra) are extracted below: "8. Thus, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorized representative) carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. Section 147 does not require an Insurance Company to assume risk for death or bodily injury to the owner of the vehicle. 9. In the case of Oriental Insurance Co. Section 147 does not require an Insurance Company to assume risk for death or bodily injury to the owner of the vehicle. 9. In the case of Oriental Insurance Co. Ltd. v. Sunita Rathi & Ors., 1998 ACJ 121 it has been held that the liability of an Insurance Company is only for the purpose of indemnifying the insured against liabilities incurred towards third person or in respect of damages to property. Thus, where the insured i.e. an owner of the vehicle has no liability to a third party the Insurance Company has no liability also." ........... "7. It is now a well settled principle of law that in a case where third party is involved, the liability of the insurance company would be unlimited. Where, however, compensation is claimed for the death of the owner or another passenger of the vehicle, the contract of insurance being governed by the contract qua contract, the claim of the insurance company would depend upon the terms thereof. The Tribunal, in our opinion, therefore, was not correct in taking the view that while determining the amount of compensation, the only factor which would be relevant would be merely the use of the motor vehicle." 13. In view of the aforesaid position, this Court has no hesitation to hold that the liability of the respondent No. 1 was neither covered under the contract of policy nor such liability was covered within the meaning of 'Third Party' under Section 147 of the Motor Vehicles Act. Hence, the liability of paying compensation to the owner-driver cannot be imposed on the appellant herein. Accordingly, the first substantial question of law No. 1 is answered in the negative and in favour of the appellant. It is held by the Hon'ble Supreme Court as well as by the Bombay High Court in the above referred cases that the insurer is not liable to indemnify the owner-driver for his claim in respect of personal injuries. 14. Accordingly, the first substantial question of law No. 1 is answered in the negative and in favour of the appellant. It is held by the Hon'ble Supreme Court as well as by the Bombay High Court in the above referred cases that the insurer is not liable to indemnify the owner-driver for his claim in respect of personal injuries. 14. In respect of the substantial question of law No. 2, in view of the findings recorded in the substantial question of law No. 1, nonetheless, this Court is inclined to refer the case of Rajkumar v. Ajay Kumar, (2011) 1 SCC 43, wherein it has been held that while dealing with personal accident case, the Tribunal should not be a silent spectator when medical evidence is tendered in regard to the injuries and their effect, in particular the extent of permanent disability. The disability must be assessed not only to the functionality with reference to the whole body, or more often than not, with reference to a particular organ. Moreover, as per the provisions of Workmen's Compensation Act, the Commissioner is required to even assess the loss of earning capacity on the basis of the assessment done by a qualified medical practitioner. Therefore, in the absence of any evidence by the Doctor and without any assessment by qualified medical practitioner, the learned Commissioner is found to have no jurisdiction to assess the loss of earning capacity of its own. Accordingly, under the facts and circumstances of this case, the substantial question of law No. 2 is answered, by holding that in this case, the learned Commissioner had erred in law in assessing the loss of earning capacity without disclosing any reason thereof in the impugned judgment and award. 15. Insofar as the third substantial question of law is concerned, it is no longer res-integra that liability of payment of interest arises from the date of adjudication. Hence, the imposition of liability of interest from the date of filing of the claim petition cannot be sustained. If one requires any authority on the said proposition, the case of New India Assurance Company Limited. v. Sri Gopal Shill and another, 2012 (4) GLT 718 may be referred to. Accordingly, the substantial question of law No. 3 is answered in favour of the appellant. 16. In view of the above discussions, this appeal stands allowed. If one requires any authority on the said proposition, the case of New India Assurance Company Limited. v. Sri Gopal Shill and another, 2012 (4) GLT 718 may be referred to. Accordingly, the substantial question of law No. 3 is answered in favour of the appellant. 16. In view of the above discussions, this appeal stands allowed. Resultantly, the judgment and award dated 29.03.2001 passed by the learned Commissioner, Workmen's Compensation, Guwahati in W.C. Case No. 241/2000, is hereby set aside. It is needless to say that if any amount paid by the appellant to the respondent, the appellant would be at liberty to recover the same in accordance with law. At this juncture, the learned senior counsel for the appellant submits that the entire awarded sum was deposited before the learned Commissioner, Workmen's Compensation and out of which 50% was permitted to be withdrawn by the order dated 24.04.2002 passed in Misc. Case No. 118/2002. The appellant is at liberty to recover the same and the rest of the undisbursed amount, if any, shall be refunded back to the appellant. 17. The appeal succeeds. 18. Send back the LCR (containing reconstructed records).