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2022 DIGILAW 161 (TS)

New India Assurance Co Ltd v. Hanumaiah

2022-03-08

P.SREE SUDHA

body2022
ORDER : 1. C.M.A.No.1161 of 2005 is filed by the New India Assurance Company, against the orders of the Commissioner for Workmen’s Compensation and Assistant Commissioner of Labour, Mahabubnagar, in W.C.No.22 of 2000 dated 31.12.2004 whereby the Commissioner awarded an amount of Rs.1,99,060/- to the applicant. 2. C.M.A.No.1162 of 2005 is filed by the New India Assurance Company, against the orders of the Commissioner for Workmen’s Compensation and Assistant Commissioner of Labour, Mahabubnagar, in W.C.No.21 of 2000 dated 31.12.2004 whereby the Commissioner awarded an amount of Rs.1,51,640/- to the applicant. 3. These cases arise out of the same crime, they are amenable for disposal by way of this common order. 4. In C.M.A.No.1161 of 2005, learned counsel for the appellant disputed the employer-employee relationship between the owner and the deceased and also granting of interest by the Commissioner. He would further contend that the deceased was not a cleaner on the lorry but he was an unauthorized passenger travelling in the vehicle at the time of the accident. In C.M.A.No. 1162 of 2005, learned counsel for the appellant would aver that the owner of the vehicle did not pay any additional premium for the labourers/coolies and it amounts to violation of the conditions of the policy and thus, they are not liable to pay the compensation, but the Commissioner erred in fixing the liability against the Insurance Company. 5. Heard the arguments of both the counsel. Perused the record and the case law cited by both sides. 6. The learned Commissioner observed that the applicant in W.C.No.21 of 2000 was working as a labourer, and the deceased in W.C.No.22 of 2000 was working as a cleaner in lorry bearing No.AP 22 T 7709. The applicant in W.C.No. 21 of 2000 received injuries, when the accident occurred during the course of his employment on 25.03.1999, whereas the cleaner received fatal injuries and died. The owner of the vehicle filed counter admitting the employment and wages of the injured labourer and the deceased cleaner. The lorry was insured with New India Assurance Company Limited. The Commissioner held that the owner of the vehicle and the insurer are jointly and severally liable to pay the compensation in both the cases. The owner of the vehicle filed counter admitting the employment and wages of the injured labourer and the deceased cleaner. The lorry was insured with New India Assurance Company Limited. The Commissioner held that the owner of the vehicle and the insurer are jointly and severally liable to pay the compensation in both the cases. The Commissioner directed them to pay compensation with interest at the rate of 6% per annum from the date of filing the petition till realisation to be paid within 30 days from date of the order, failing which they shall pay interest at 18% per annum from date of petition, and also penalty under Section 4A of the Workmen’s Compensation Act, 1923 in both the cases. 7. It was contended by the Appellants that the F.I.R., Charge sheet and other oral and material evidence, which showed that the injured and the deceased were travelling as passengers in the vehicle, but was not considered by the Commissioner while granting the award. 8. Learned counsel for the appellant would argue that in case of breach of terms and conditions of the policy, the company is not liable to pay the compensation. He would further argue that pay and recovery also cannot be ordered under Workmen’s Compensation Act. He would also submit that the provisions of Motor Vehicles Act are not applicable to the workmen’s Compensation Act. But in the case of RITA DEVI V/s. NEW INDIA ASSURANCE CO. LTD., (2000) 5 SCC 113 , it was held ‘the object of both acts, i.e., the Motor Vehicles Act and the Workmen’s Compensation Act is to provide compensation to the victims of accidents. The only difference between the two enactments is, Workmen compensation act is confined to workmen as defined under the Act, and the relied under the Motor Vehicles Act is available to all the victims of an accident involving a motor vehicle. As per S.167, of the M.V. Act, the claimants are at liberty to claim compensation either under Workmen’s compensation Act or under the Motor Vehicles Act. Both the enactments are beneficial enactments operating in the same field.’ Therefore, the argument of the learned counsel for the appellant that the provisions of Motor Vehicles Act are not applicable to the victims under Workmen’s Compensation Act, cannot be accepted. 9. Both the enactments are beneficial enactments operating in the same field.’ Therefore, the argument of the learned counsel for the appellant that the provisions of Motor Vehicles Act are not applicable to the victims under Workmen’s Compensation Act, cannot be accepted. 9. The insurance company contended that it was an Act policy and their liability was limited and no extra premium was paid for making the liability unlimited. But it was not accepted by the Hon’ble Apex Court in JAMES KUTTY JACOB V/s. UNITED INDIA INSURANCE COMPANY LIMITED, (2003) 7 SCC 131 cited by the counsel of the respondent. 10. Learned counsel for the applicant relied upon the 3-Judge Bench Judgment of the Supreme Court in NATIONAL INSURANCE CO. LTD. V/s. SWARAN SINGH, (2004) 3 SCC 297 , wherein it was held that the person who alleges breach must prove the same. The insurance company is therefore required to establish the said breach by cogent evidence. Moreover, a bare perusal of Section 149 of the Act leads to only one conclusion that the usual rule is that once the assured proves that the accident is covered by the compulsory insurance clause, it is for the insurer to prove that it comes within an exception. In the event the insurance company fails to prove that there has been breach of conditions of policy on the part of the insured, the insurance company cannot be absolved of its liability. It was also held in the case that mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant time. Minor breaches of licence conditions, such as want of medical fitness certificate, requirement about age of the driver and the like not found to have been the direct cause of the accident, would be treated as minor breaches of inconsequential deviation in the matter of use of vehicles. Minor breaches of licence conditions, such as want of medical fitness certificate, requirement about age of the driver and the like not found to have been the direct cause of the accident, would be treated as minor breaches of inconsequential deviation in the matter of use of vehicles. Such minor and inconsequential deviations with regard to licensing conditions would not constitute sufficient grounds to deny the benefit of coverage of insurance to third party. 11. Learned counsel for the applicant would also argue that the expression ‘third party’ is wide enough to cover any person other than insured and the insurer. As the labourers who met with the accident are third parties to the contract of insurance, the insurance company is not exonerated from paying the compensation. At the best, the company can recover the same from the owner of the vehicle in case of breach of terms and conditions of the policy. He would also contend that insurance company is liable to pay the compensation if there is no pleading or leading evidence by framing specific issue that the inmates are not covered by the act policy and no separate premium was paid for them. It is his further contention that Workmen’s Compensation Act is a beneficial legislation and as such when two interpretations are possible, one in favour of victims is to be considered, as it is a beneficial legislation. 12. Learned counsel for the insurance company relied upon UNITED INDIA INSURANCE COMPANY V/s. BALASWAMY, 2012 (4) ALD 539, in which it was held that policy covered the risk in respect of driver alone, for which a premium was paid, and no premium was paid covering the risk of labourers. In such circumstances, it was held, that the fastening of joint and several liability of insurer is unsustainable. They also relied upon the Judgment of this Court in NEW INDIA ASSURANCE COMPANY V/s. GADDIMIDI PAPAIAH, 2015 (4) ALD 164 , wherein it was held that, in a case of injuries sustained by workman travelling in trailer and tractor as labourer, the insurance company is not liable to pay compensation since the act policy was issued permitting them to use the tractor only for agricultural purpose and no separate premium was paid for the labourers. No other person, other than the driver, was covered under the act policy. No other person, other than the driver, was covered under the act policy. Thus, the insurance company would not be liable to pay the compensation. He also relied upon another judgment of this Court in NEW INDIA ASSURANCE COMPANY V/s KURVA NAGAMMA, 2015 (1) ALT 661 , wherein it was held that, unless premium is paid in respect of persons or employees not covered by Section 147 of the Motor Vehicles Act, the insurance company is not liable to pay the compensation in respect of risk of such persons or employees in motor accidents wherein the policy is an act only policy. 13. It is for the owner of the vehicle to pay additional premium for covering the risk of the labourers when he engaged labourers to work on his vehicle, but he to do so. In the absence of payment of additional premium, the insurance company is not liable to pay the compensation and the owner of the vehicle alone is liable to pay the compensation to the labourers who sustained the injuries. However, the general practice in Workmen’s Compensation Act, at the time of preferring the appeal, is that the insurance company has to deposit the entire compensation amount and the claimants are permitted to withdraw 50% of the same while the appeal is being admitted. 14. Considering the nature of work of the applicants and the meagre amount of compensation granted to them and as the compensation amount was already deposited by the Insurance Company in all the cases, this Court finds it reasonable to direct the insurance company to recover the same from the owner in execution proceedings. 15. The applicants are also entitled for interest at the rate of 12% per annum from the date of accident to the date of realisation in accordance with the decision of the Supreme Court in the case of SABERABIBI YAKUBBHAI SHAIKH V/s. NATIONAL INSURANCE COMPANY, 2014 (2) SCC 298 . 16. In the above cases, as the amount was already deposited, and as it is a beneficial legislation, the applicants are entitled to withdraw the balance amount. They are also entitled for interest from the date of accident till the date of deposit of amount by the insurance company, from the owner of the vehicle. 16. In the above cases, as the amount was already deposited, and as it is a beneficial legislation, the applicants are entitled to withdraw the balance amount. They are also entitled for interest from the date of accident till the date of deposit of amount by the insurance company, from the owner of the vehicle. The insurance company is at liberty to recover the amount of compensation already deposited by it form the owner of the vehicle in execution proceedings. 17. Accordingly, both the appeals are disposed of. However, there shall be no order as to costs. 18. Miscellaneous Petitions, if any, pending in this appeal shall stand closed in the light of this final order.