New India Assurance Co. Ltd. vs Thippamma and Others

A.S. Bhate, J.—The appeal is filed for challenging the order passed in the Motor Accidents Claims Tribunal, Mahabubnagar in O.P. No. 140 of 1990.

Respondent No. 1 is the mother while respondent No. 2 is the mother-in-law and respondent No. 3 is the daughter of one M. Parvathamma. The said Parvathamma is hereinafter referred to as the ''deceased''. Respondent No. 4 is the owner of the tractor bearing No. AAM 3236. The said tractor was admittedly insured with the appellant. On 2-1-1990 in the afternoon the deceased, who was a labourer employed by respondent No. 4 for loading and unloading sand carried in the Trolley of the Tractor, was travelling in the said Tractor. When she was so travelling the driver of the Tractor due to rash and negligent driving caused the throwing out of the trolley from the Tractor resulting in fall of deceased. As a result of the said fall, the deceased received injuries and succumbed to them subsequently. The deceased was about 25 years of age and was working as a labourer earning daily wages. Due to her death, claim was made by respondents 1 to 3 before the Tribunal.

Respondent No. 4 challenged the claim. He denied that the accident took place due to rash and negligent driving of the Tractor by the driver. However, he did not disown the ownership of the Tractor and trolley, nor did he disown relationship of employer and employee between him and the deceased. It was however urged that the claim was excessive and exhorbitant. Lastly it was said that whatever the liability, it was of Insurance Company (appellant) and not of respondent No. 4.

The appellant by its separate counter contended that there was no rashness on the part of the Tractor-driver. It was denied that the deceased was earning any thing. The most important plea raised was that the liability of the appellant was limited to the terms and conditions of the policy and was not unlimited. A plea was taken that the deceased was a passenger and not a labourer and therefore, the Insurance Company was not liable.

The evidence adduced before the Tribunal persuaded the Tribunal to hold in favour of the claimants. The claim was for a total amount of Rs. 1,00,000/-. The same was decreed and apportionment of the amount was made between petitioner No. 1 and 2 as Rs. 25,000/- each and for petitioner No. 3 as Rs. 50,000/-. The liability of the Insurance Company was held to be in its entirety though jointly. Interest of 12% p.a. was granted.

No appeal was preferred by the owner though the decree was joint and several against owner as well as the appellant. As far as the owner is concerned, the decree has become final. The owner has not appeared in this appeal also though served.

The contention of the learned Counsel for the appellant is that the liability of the Insurance Company cannot exceed the liability which arises under the insurance cover issued by it to the owner. Though it was tried to be urged that the victim was not a labourer and was a mere gratuitous passenger, the said plea has not been canvassed with any seriousness. The evidence on that point is very clear and has remained unrebutted. The quantum of compensation awarded in favour of the claimants is also not disputable by the Insurance Company. The only plea which the Insurance Company can take and, has in fact been advanced now, is the extent of liability.

The issue has been squarely covered by various judgments of various Courts including observations made by this Court. In particular in Oriental Insurance Company Limited v. Guru Outran Saren, 1992 (2) ACJ 693 this point came specifically for decision. There also claim was by a workman for a injury sustained by him in course of employment when a tractor in which he was an employee met with an accident. It was held by the Court that the injured being a workman, he was entitled to claim as against the Insurance Company amount which was payable under the Workmen''s Compensation Act and not more, The ratio decided in the said case applies to the present case. The claimant cannot have any claim as against the Insurance Company beyond the limits of insurance cover which has been issued to the employer. The same was the case in New India Assurance Company Limited v. Pathu and Ors. 1992 (2) ACJ 877 The learned Counsel for the claimants made attempt to rely on the decision in Mandulova Satyanarayana Vs. Bodiredoy Lokeshwari and others, . The Head Note of the said case was somewhat misleading. From the Head Note it may appear that the employee or his legal representative has not only option to sue the owner either under the Workmen''s Compensation Act or under the Motor Vehicles Act but the Insurer''s liability is unlimited if the claim is made under the Motor Vehicles Act. On a reading of the judgment, it would be clear that the Court did not intend to lay down such principle as such. What the Court has said will be found on page 326 Column No. 1. The Court has observed:

"But where an agreement was entered into and a policy is taken under which the company undertakes the liability prescribing a limit, it is bound by the policy...........If the liability of the Insurance Company is restricted to that specified under the Workmen''s Compensation Act, the object of Section 110-AA of the Motor Vehicles Act would be frustrated. In the present case, the amount of compensation awarded is Rs. 25,000/-. In asmuch as the Insurance Company has undertaken the liability to the extent of Rs. 50,000/- under the Policy, Ex.B-5, the Company is liable to pay the entire amount.........."

The entire amount in that case was Rs. 25,000/-. That amount was less than the amount which was payable under the Contract of Insurance. In those circumstances, the observations were made by the Court that the claimants were entitled to recover the whole amount from the Insurance Company and the liability of Insurance Company was in respect of the whole amount claimed by the claimants.

In the instant case it is nobody''s contention that the liability of the Insurance Company is unlimited or exceeds the liability arising under the provisions of Workmen''s Compensation Act. Therefore, even though the claimants were entitled to approach either the Commissioner under the Workmen''s Compensation Act or, the Tribunal under the Motor Vehicles Act, the liability as far as the Insurance Company was concerned, would be restricted to the terms of the policy agreement only. As far as the owner is concerned, no such restriction arises and the liability of owner would be complete and will be to the extent of Award/decree passed in the case. It is only the liability of the Insurance Company which is restricted unless the Insurance Company had recovered additional premium for covering larger liability. That is not so in the instant case. In the circumstances, the appeal deserves to be allowed to that extent.

The appeal is therefore, partly allowed with a direction that the liability of the Insurance Company would be only to pay Rs. 52,000/- along with interest at 12% p.a. on Rs. 52,000/- from the date of petition till the date of realisation. Rest of the Award amount shall be payable by the owner and not by the Insurance Company. No costs.