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2022 DIGILAW 162 (TS)

New India Assurance Co. Ltd. v. amavath Bashya

2022-03-08

P.SREE SUDHA

body2022
ORDER : P.SREE SUDHA, J. 1. C.M.A.No.635 of 2005 is preferred by the New India Assurance Company, against the order of the Commissioner for Workmen’s Compensation and Assistant Commissioner of Labour, Nalgonda, in W.C.No.64 of 2003 dated 30.04.2004 whereby the Commissioner awarded compensation of Rs.94,719/- to the applicant. 2. C.M.A.No.1237 of 2005 is preferred by the New India Assurance Company, against the order of the Commissioner for Workmen’s Compensation and Assistant Commissioner of Labour, Nalgonda, in W.C.No.99 of 2002 dated 17.06.2003 whereby the Commissioner awarded compensation of Rs.2,13,864/- to the applicant. 3. C.M.A.No.334 of 2008 is preferred by the New India Assurance Company, against the order of the Commissioner for Workmen’s Compensation and Assistant Commissioner of Labour, Nalgonda, in W.C.No.17 of 2003 dated 30.04.2004 whereby the Commissioner awarded compensation of Rs.1,42,078/- to the applicant. 4. C.M.A.No.528 of 2008 is preferred by the New India Assurance Company, against the order of the Commissioner for Workmen’s Compensation and Assistant Commissioner of Labour, Nalgonda, in W.C.No.11 of 2003 dated 30.04.2004 whereby the Commissioner awarded compensation of Rs.74,976/- to the applicant. 5. C.M.A.No.109 of 2011 is preferred by the New India Assurance Company, against the order of the Commissioner for Workmen’s Compensation and Assistant Commissioner of Labour, Nalgonda, in W.C.No.62 of 2003 dated 30.04.2004 whereby the Commissioner awarded compensation of Rs.68,335/- to the applicant. 6. C.M.A.No.854 of 2011 is preferred by the New India Assurance Company, against the order of the Commissioner for Workmen’s Compensation and Assistant Commissioner of Labour, Nalgonda, in W.C.No.16 of 2003 dated 30.04.2004 whereby the Commissioner awarded compensation of Rs.2,13,864/- to the applicant. 7. Though the Commissioner disposed of the cases individually, in view of the fact that the appeals arise out of the same crime, they are amenable for disposal by way of this common order. 8. The applicants viz., Ramavath Bashya, Ramavath Anasurya, Ramavath Balu, Ramavath Budda, Ramavath Keshya and Ramavath Bujji and others respectively, were working as labourers for loading and unloading purpose on the lorry bearing No.AAP-9441 belonging to the second respondent herein. The said lorry was covered under Policy Cover Note No.152908 valid from 23.12.2001 to 22.12.2002 issued by New India Assurance Company Limited. On 22.07.2002 while the applicants are on duty, the lorry met with an accident, due to which the applicants and other labourers received grievous injuries and three of them died on spot. The said lorry was covered under Policy Cover Note No.152908 valid from 23.12.2001 to 22.12.2002 issued by New India Assurance Company Limited. On 22.07.2002 while the applicants are on duty, the lorry met with an accident, due to which the applicants and other labourers received grievous injuries and three of them died on spot. The applicants filed the above cases seeking compensation under Workmen’s Compensation Act, 1923. 9. The Commissioner in his order dated 30.04.2004 observed that ‘in common parlance, other than the insured and insurer, every other person who suffered injury or death by the use of the vehicle can be taken as third parties. Therefore, the driver, cleaner and labourers also come under this category. The insurance company failed to bring in any authority to negate these categories as third parties. Therefore, I am convinced that despite of breach of policy if any, the insurance company is liable to pay compensation to the insured.’ The Commissioner also relied upon a case in ANIL CHANDRA SHARMA V/s. ALKA RANI GHOSH, 1999 1 LLJ 1356 holding to the effect that ‘it is almost settled law that whenever the commissioner for Workmen’s Compensation deals with cases of claimants of motor transport undertakings, the Insurance Policies are to be interpreted on the lines of the Motor Accidents Claims Tribunal under the M.V.Act, 1998. Therefore, the objection of the learned counsel for Opposite Party No.2 has no place for consideration. As a result, I hold both the Opposite parties are jointly and severally liable for the payment of compensation to the dependants of the deceased and in case of any breach of policy condition, the Opposite Party No.2 is at liberty to initiate separate proceedings before the legal authority for the recovery of such amounts paid towards compensation.’ In all the cases, the Commissioner held that the insurer and the owner of the vehicle are jointly and severally liable and further directed to deposit the above said compensation amounts within thirty days from the date of receipt of the orders. But, in all these cases, the learned Commissioner failed to award interest on the compensation amount. Although in W.C.No.16 of 2003, which dealt with a case of death, on a failure to deposit the compensation within the stipulated time, an interest of 9% per annum would be imposed from the date of filing of the application. 10. But, in all these cases, the learned Commissioner failed to award interest on the compensation amount. Although in W.C.No.16 of 2003, which dealt with a case of death, on a failure to deposit the compensation within the stipulated time, an interest of 9% per annum would be imposed from the date of filing of the application. 10. Learned counsel for the appellant in all these appeals would contended 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, the insurance company is not liable to pay compensation and that the learned Commissioner erred in fixing the liability it. He would also contend that in case of breach of terms and conditions of the policy, the Company is not liable to pay the compensation. He would also contend 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 that “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. He would also contend that it was an Act Policy and their liability was limited and no extra premium was paid for making the liability unlimited, to which learned counsel for the applicants in all these case would rely upon a judgment of the Hon’ble Supreme Court in its decision reported in JAMES KUTTY JACOB V/s. UNITED INDIA INSURANCE COMPANY LIMITED, (2003) 7 SCC 131. 11. 11. Heard the learned counsel on either side. Perused the record including the case law cited by them. 12. Learned counsel for the applicants would rely upon a Three-Judge Bench Judgment of the Hon’ble Apex 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, it cannot absolve 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. 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. He 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. He 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 the 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. He also advocated that the Workmen’s Compensation Act is a beneficial legislation and when two interpretations are possible, one in favour of victims is to be considered, as it is a beneficial legislation. 13. Learned counsel for the appellant would rely upon a decision reported in UNITED INDIA INSURANCE COMPANY V/s. BALASWAMY, 2012 (4) ALD 539 holding to the effect 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. He 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. Thus, the insurance company would not be liable to pay the compensation. He also relied upon another judgement 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. 14. From the above, it is for the owner of the vehicle to pay additional premium for covering the risk of the labourers when he engaged the labourers to work on his vehicle, but he did not do so in paying additional premium. 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. 15. Considering the nature of work of the claimants and the meagre amount of compensation granted to them and as the compensation amount was already deposited by the Insurance Company in all the above cases, this Court finds it reasonable to direct the insurance company to recover the same from the owner in execution proceedings. 16. Further, the applicants in all these appeals are also entitled for interest at the rate of 12% per annum from the date of accident to the date of realisation as per the dicta laid down by the Hon’ble Supreme Court in SABERABIBI YAKUBBHAI SHAIKH V/s. NATIONAL INSURANCE COMPANY, 2014 (2) SCC 298 . 17. In all these appeals, as the amount was already deposited, and as it is a beneficial legislation, the claimants 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 and the appellant is at liberty to recover the amount of compensation already deposited by it form the owner of the vehicle in execution proceedings. 18. With the above observation, the Civil Miscellaneous Appeals are disposed of. There shall be no order as to costs. Pending Miscellaneous Petitions, if any, in this appeal shall stand closed in the light of this final order.