M/s. United India Insurance Company Limited vs Razak and Others

A.S. Pachhapure, J.—The appellant has challenged the Judgment and Award of the Commissioner for Workmen''s Compensation, imposing the liability on the appellant to indemnify the owner, of the vehicle involved in the accident. The facts reveal that Akheel, the husband of the 3rd respondent herein was a driver of the jeep bearing reg. No. MH-10 C-3389. On 14.05.2006, while he was driving the jeep, sustained severe injuries in the accident and succumbed to the said injuries on the spot. Respondents 1 to 4 being the parents, wife and daughter of the deceased, made a claim for compensation.

After recording the evidence and hearing the parties, the Commissioner has awarded a sum of Rs. 4,30,560-00 as compensation with interest. Challenging the liability to pay the compensation, the insurer is in the appeal.

Though the matter has been heard and admitted on 08.11.2012, the substantial question of law was not raised. Anyhow, the following substantial question of law is raised for consideration:

When the vehicle was hired on the date of the accident and the policy does not cover the liability of the inmates, whether the claimants [legal representatives of the deceased driver of the vehicle] could maintain a claim for compensation against the insurer?

I have heard learned counsel for the parties.

It is the contention of learned counsel for the appellant that on the date of the accident, the vehicle was hired and as the policy covers use of the vehicle for any purpose other than the hire or reward, the claimants being the legal representatives of the deceased driver are not entitled to claim compensation and there is a breach of condition of the policy.

On the other hand, learned counsel for the respondents supports the Judgment and Award of the Tribunal.

Admittedly, on the date of the accident, the vehicle in question was carrying the passengers more than the permitted capacity on hire. So far as the limitation with regard to use of the vehicle is concerned, learned counsel for the appellant has made available the copy of the insurance policy and it reveals the limitation as to use of the vehicle. The policy covers use of the vehicle for any purpose other than hire or reward and therefore, the learned counsel submits that as the vehicle was hired on the date of the accident, there is a breach of the condition of the policy. It is relevant to note that the insurer has collected a sum of Rs. 25-00 towards the liability under the Workmen''s Compensation Act for an employee on the vehicle. Admittedly, the driver [deceased Akheel] was employed by the owner to drive the vehicle on the date of the accident. Coverage of the liability so far as the driver who is an employee is concerned, the contract between the employer and the insurance Company is to indemnify the owner in case if the accident occurs in the course of employment and out of the employment and the death was also during the course of employment. This contract between the insurer and the owner of the vehicle is separate so far as an employee on the vehicle is concerned. Breach of policy condition by hiring the vehicle applies to other inmates of the vehicle. Therefore, merely because on the date of the accident the vehicle was hired does not itself exempt the insurer from the liability to compensate the legal representatives of the deceased employee as the contract to indemnify the owner could be bifurcated and the conditions incorporated in the policy apply to the inmates of the vehicle other than the employees. As against the driver, there is an independent contract between the owner and the insurer. It is for this reason that the insurance company was held responsible to indemnify the owner of the vehicle by directing to pay the compensation.

In the aforesaid facts and circumstances, I am of the opinion that so far as the claim in respect of the employee of the vehicle in question is concerned, the condition incorporated in the policy do not apply to the claimants and hence, I do not find any merit in this appeal. Consequently, the appeal fails and it is accordingly dismissed.

The amount in deposit in this Court be transmitted to the jurisdictional Commissioner. The Office is directed to send back the records to the jurisdictional Commissioner.