K. Easwaramma vs Shaik Khader Mohiddin and Others

G. Radhakrishna Rao, J.—The cleaner of a lorry which was involved in a major accident that occurred on 3.2.1984 died. His father, mother, wife and brother filed the petition claiming that they are entitled for Rs. 1,00,000/-. After a consideration of the entire material on record the Tribunal below found that there is rash and negligent act on the part of the driver of the lorry and, therefore, the respondents are liable to pay Rs. 43,500/- towards the compensation to the claimants. However, the Tribunal below restricted the liability of the insurance company to Rs. 18,000/- only as per the Table prescribed under the Workmen''s Compensation Act, 1923 as the cleaner was only aged 22 years at the time of the accident. As against this restriction that has been imposed by the Tribunal with regard to the fixation of the liability, the owner filed the present appeal.

It is contended on behalf of the owner that since she has paid the additional premiums covering two drivers and one conductor, restricting the liability of the insurance company to that of Rs. 18,000/- is bad.

Section 95 (1) of the Motor Vehicles Act, 1939 which is relevant for our purpose reads as follows:

Requirements of policies and limits of liability.--(I) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which--

(a) XXX XXX XXX (b) insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2)--

(i) 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;

(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place;

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.

Under the proviso (i) to Clause (ii) of Section 95 (1) (b), the policy was statutorily required to cover liability in respect of the death of, or bodily injury to, any employee of the insured arising out of and in the course of his employment, if such employee was carried in the goods vehicle, only to the extent of the liability arising under the Workmen''s Compensation Act, 1923.

As seen from Exh. B-1, the owner of the offending vehicle has paid an additional amount of Rs. 24/- covering the risk of two drivers and one cleaner and the cover that was offered by the insurance company had a wider cover. Since an additional amount has been paid, the liability of the owner-insured for compensation in respect of the death of the deceased was covered by the wider coverage contained in the insurance policy and, therefore, the insurance company must reimburse the owner-insured in respect of the entire liability arising out of the accident in question since it was within the limits stipulated in the policy. Therefore, the question of restricting the liability by invoking the provisions under the Workmen''s Compensation Act does not arise.

A Bench of the Gujarat High Court in Gujarat Mineral Development Corporation Ltd. Vs. Varjubhai Lallubhai Bhil and Others etc., , considered a similar case as the one before me, and also relied upon an earlier Bench judgment of the same court in Premier Insurance Co. Ltd. v. Gambhirsing Galabsingh AIR 1975 Guj 133. In the latter case it was observed that Section 95 (1) does not make any distinction between the death of or injury to a workman, employee or a passenger on the one hand and the death of or injury to any other third party on the other because Section 95 (1) contemplates the coverage of the liability arising out of death of or injury to ''any person'' and does not say that the minimum limits of compulsory coverage fixed by it in certain specified cases must always remain unaltered even by voluntary contract between the parties. Therefore, the statutory limits of liability u/s 95 can be extended by contract between the parties.

In Gujarat Mineral Development Corporation Ltd. Vs. Varjubhai Lallubhai Bhil and Others etc., , P.D. Desai, J., (as he then was) speaking on behalf of the Bench observed:

It would thus appear that in cases of this nature where compensation is claimed by the injured person against the owner of a vehicle on the basis of the negligent act of the driver during the course of his employment, the law which applies is the common law. If an award comes to be made in such a proceeding, it is made on the principles of common law. The liability, therefore, arises at common law. If the owner of the vehicle has insured himself in consideration of an additional premium against such liability by provision such as the one contained in Endorsement No. IMT 16 herein, the insurance company will be liable to indemnify the owner in respect of such liability. In such a case, it could not be said that the liability was confined only to the extent of the liability under the Workmen''s Compensation Act.

Now, coming to the facts of this case, as per Exh. B-1, the owner of the vehicle has paid an extra premium covering a wider risk in the event of the death of the cleaner also. Therefore, the liability of the insurance company cannot be confined only to the liability under the Workmen''s Compensation Act, and the entire liability that was found by the Tribunal below has to be fastened to the insurance company only and not to the owner of the vehicle.

The order of the lower court is modified accordingly and the appeal is allowed. No costs.