New India Assurance Co. Ltd. vs Kamparaju Sunkamma and Others

Chennakesav Reddi, J.—Whether an application u/s 110-A of the Motor Vehicles Act, 1939 (hereinafter referred to as the ''Act'') for compensation is maintainable in respect of death or bodily injury arising out of and in the course of employment of a person employed by the owner of the motor vehicle covered by policy of insurance against third party risk is the perplexing question that arises in this appeal.

The facts giving rise to the question shortly stated are these. On the night of 24th May, 1976, the lorry A.P.A. 6261 met with an accident on the Cuddapah-Madras road. As a result, one Kampuraju Kumaraswamy (as Kumar), who was employed as a cleaner of the lorry, received injuries and died in the Cuddapah hospital on the next day. The mother and the minor brother of the deceased Kumar filed an application u/s 110-A of the Act before the Motor Accidents Claims Tribunal-Cum-District Judge, Cuddapah claiming compensation of Rs. 15,000. The owner of the lorry, New India Assurance Company Limited, Anantapur, and the driver of the lorry were impleaded as Respondents 1 to 3 respectively to the petition. The third Respondent remained ex parte. The petition was resisted only by the Respondents 1 and 2. The first Respondent i.e., owner of the lorry, admitted that the deceased Kumar was a cleaner appointed under him on a monthly salary of Rs. 160. He also admitted that the third Respondent was employed as a driver. But, however, denied that the driver drove the vehicle in a rash and negligent manner. It was also pleaded that the amount of compensation claimed was excessive and that in any case he was not liable to pay any compensation since the vehicle was insured against Workmen''s Compensation also. The second Respondent contended inter alia that the accident did not take place on account of rash and negligent act of the driver, but it took place beyond the control of the driver, that the deceased Kumar did not die on account of the accident but due to the reason that he jumped from the lorry and sustained injuries and that in any event the damages claimed were excessive. It was further pleaded that the Petitioners should prove regarding the actual income of the deceased per month at the time of accident, that the application u/s 110-A of the Act against the assurance company was not maintainable and that the remedy of the claimants was only under the Workmen''s Compensation Act.

The Motor Accidents Claims Tribunal, on a consideration of the evidence, held that the accident took place on 24th May, 1976 due to rash and negligent driving of the lorry A.P.A. 6261 by the third Respondent. As regards the quantum of damages, he held that the deceased was employed as a cleaner of the lorry, that he was earning a sum of Rs. 250 per month while he was alive, that he was aged about 22 years at the time of his death and was hale and healthy. Taking the facts and circumstances into consideration and also the fact that the second Petitioner is a minor, and the deceased if alive would have educated him and settled him in life, a sum of Rs. 12,000 was awarded by way of general damages for loss of earning capacity and compensation for pain and suffering, and a sum of Rs. 500 by way of special damages and directed the Respondents 1 and 2 to pay the compensation with interest @ 6% per annum from the date of filing of the petition to the date of realisation of the said amount.

In this appeal by the second Respondent, New India Assurance Company Limited, the learned Counsel firstly submits that in view of the proviso to Section 95(1)(b) of the Act excluding the liability of insurer in respect of death or bodily injury arising out of and in the course of employment of an employee covered by the policy an application under the Act for compensation is not maintainable. According to him, compensation can be claimed only under the Workmen''s Compensation Act and only for such compensation as is determined under the Workmen''s Compensation Act, the assurance company can be made liable for the death or bodily injury to any such employee. He argues that the policy of insurance taken u/s 95(1) of the Act is only against third party risk and it does not cover the liability in respect of death or bodily injury of any workman employed in the motor vehicle at the time of accident. It is, therefore, necessary to read Section 95 of the Motor Vehicles Act.

Requirements of policies and limits of liability:

(1) In order to comply with the requirements of this chapter, a policy of insurance must be a policy which:

(a) is issued by a person who is an authorised insurer, or by a cooperative society allowed u/s 108 to transact the business of an insurer; and ):

(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 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 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, in respect of the death of, or bodily injury to, any such employee-

(a) engaged in driving the vehicle; or):

(b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle ; or):

(c) if it is a goods vehicle, being carried in the vehicle ; or):

(ii) except where the 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 to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises, or ):

(iii) to cover any contractual liability.

Explanation.- For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.

(2) Subject to the proviso to Sub-section (1), a policy of insurance shall cover any liability incurred in respect of any one accident upto the following limits, namely:

(a) where the vehicle is a goods vehicle a limit of fifty thousand rupees in all including the liabilities if any arising under the Workmen''s Compensation Act, 1923, in respect of the death of or bodily injury to, employees (other than the driver) not exceeding six in number, being carried in the vehicle ;

(b) * * * *

(c) * * * *

(d) * * * *

Proviso to Section 95(1)(b) expressly excludes the liability of the insurer in respect of death or bodily injury to employees of the insured except the liability if any arising under the Workmen''s Compensation Act, 1923. Clause (a) of Sub-section (2) limits the total liability under the policy in all to Rs. 50,000 in respect of a goods vehicle including the liability arising under the Workmen''s Compensation Act, 1923, in respect of death or bodily injury to employees carried in the vehicle other than the driver. It is thus clear that the policy of insurance covers the liability arising under the Workmen''s Compensation Act, in respect of death or bodily injury to employees other than the driver. Therefore, the contention of the learned Counsel that no application is maintainable u/s 110-A for compensation in respect of death or bodily injury to and employee of a person covered by the policy cannot be acceded to on a close and combined reading of the proviso to Section 95(1) and Clause 2 (a). Such an application is maintainable even in cases where an application is maintainable under the Workmen''s Compensation Act, 1923, is made more explicit by the insertion of Section 110-AA by Act LVI of 1969. Section 110-AA provides that in a case where the death or bodily injury to any person gives rise to a claim for compensation under this Act and also under the Workmen''s Compensation Act, 1923, the person entitled to claim compensation notwithstanding anything contained in the Workmen''s Compensation Act, 1923, may claim compensation under either of those Acts. I am, therefore, clearly of opinion that the application is maintainable, but the limit of liability of the insurance company is limited to the liability arising under the The Orissa Cooperative Insurance Society Ltd. Vs. Sarat Chandra Champati and Another, in that case also, the kalasi of a motor truck claimed compensation in respect of bodily injury suffered by him as a result of an accident. There, as here, the contention advanced by the insurance company was that the insurer was not liable under the policy to pay compensation to the claimant. The learned Judge held:

Therefore, it is not correct to say that an ''Act policy'' does not cover the liability arising under the Workmen''s Compensation Act, in respect of death or injury to a workman. Clause (a) to Sub-section (2) of Section 95 also clearly gives the same indication. This clause while laying down the limit of compensation payable, says that such maximum limit shall include the liability, if any, arising under the Workmen''s Compensation Act. This reference to the liability under the Workmen''s Compensation Act, is indicative of the position that the ''Act Policy'' shall cover the liability arising in respect of death or injury to a workman as defined in the Workmen''s Compensation Act....

The Madras High Court also expressed the same view in General Assurance Society, Ltd. Vs. N.A. Mohamed Hussain and Another,

The question that then remains is, as to what is the limit of liability of the insurer. The Tribunal below has awarded a sum of Rs. 12,500 as compensation u/s 110-A of the Act and directed both the Respondents 1 and 2 viz., the owner of the vehicle and the insurance company to pay the said amount. But under the proviso to Section 95(1)(b) of the Act, the liability of the insurer is limited to the liability under the Workmen''s Compensation Act, and the insurer is absolved from all liability arising thereunder. But the liability of the employer under the Workmen''s Compensation Act, for injury to the workman has not been determined. It would result in great harassment if the Petitioners are now referred to the Commissioner for Workmen''s Compensation for determination of the amount of compensation. An appeal is provided to the High Court u/s 30 of the Workmen''s Compensation Act, 1923, against the orders of the Commissioner awarding compensation. Both the learned Counsel agree that the amount of compensation payable under Section4 read with Schedule IV to the Workmen''s Compensation Act, can be fixed by this Court. Under item No. 18 of Schedule IV the amount of compensation for a workman who ha s been in receipt of monthly wages falling within the limits of Rs. 200 to Rs. 300 and where the injury resulted in the death is, Rs. 8,000. Therefore, the compensation payable by the second Respondent is limited to Rs. 8,000 and the balance of Rs. 4,500 shall be paid by the insured viz., the 1st Respondent in the O.P. i.e., the owner of the vehicle.

But for the aforesaid modification relating to the apportionment of the amount of compensation awarded between Respondents 1 and 2 this appeal is dismissed with costs.

Appeal partly allowed in regard to compensation.