Oriental Fire and Genral Insurance Co. Ltd. and Another vs Mira Devi and Another

Bhawani Singh, J.—Oriental Fire & General Insurance Co. Ltd. and the owner of the vehicle have assailed the award of Motor Accident Claims Tribunal, Mandi in Claim Petition No. 68 of 1981, decided on 10-6-1982 thereby allowing the claim moved by the claimants, by-awarding Rs. 46,200/- by way of compensation for the death of deceased Sukh Ram, the driver of Truck No HPM 7087.

The facts, briefly, are that late Shri Sukh Ram was the driver of Truck No. HPM-7087 employed by Basakhu Ram- Balak Ram and Co. Chauntra, Tehsil Joginder Nagar, District Mandi. This vehicle was insured with the Oriental Fire and General Insurance Company Ltd. The deceased was thirty years of age and it is alleged by the claimants that he was drawing Rs. 800/- per month as wages in addition to Rs. 200/- from other sources. The truck met with an accident on 24-5-1981 at about 8 pm at Khar-Nalla, 30 Kilometres away from Mandi on Kataula-Mandi Road. It had been deployed for carrying timber from the stacking depot at Kataula. It is alleged that it was deployed during night time and met with an accident on account of sudden brake down of the machinery. Negligence of the owner in not caring to get the vehicle examined and checked before directing the deceased to ply it during the night time, has been alleged.

On the other hand, the owner of the vehiclehas admitted that the deceased was the driver with the vehicle which met with an accident. However, it has been denied that the deceased was receiving salary of Rs. 800/- per month in additioin to Rs. 200/- that he was earning from other sources. It has also been denied that the vehicle met with an accident due to their negligence in not keeping the same in good condition. It is alleged that it was a new vehicle and was quite fit and roadworthy. The Insurance Company has stated that the claim petition was not maintainable, since no negligence has been attributed. The allegations, according to it, were thoroughly vague and did not disclose any cause of action. It has also been stated that under the Policy of Insurance, the liability of the Insurance Company was limited to the amount that was receiveable under the Workmen''s Compensation Act.

On the basis of the pleadings of the parties, the Tribunal framed the following issuees:

Whether late Sh. Sukh Ram sustained fatal injuries in the accident of truck No. HPM 7087 as alleged? OPP.

Whether the truck No. HPM-7087 was not in a road-worthy condition as it was allegedly out of control due to sudden break down of the machinery ? If so its effect ? OPP.

To what amount of compensation are the Petitioners entitled and from whom ? OPP.

Relief.

Parties led the evidence and on issue No. 2, the Tribunal found that no negligence was attributable to the owner of the vehicle. However, after placing reliance on New India Assurance Co. Ltd. v. Sumitra Devi (1971 A.C.J 58), the Tribunal held that the liability of Insurance Company was absolute and accordingly compensation amount was ordered to be paid to the claimants.

The sole question for determination in this case is whether in view of negative findings on the question of negligence, the Tribunal could award the compensation to the claimants or ask them to agitate the matter under the Workmen''s Copensation Act, 1923. K.D. Sood, learned Counsel for the Company, submitted that the Tribunal committed error by following decision of Division Bench of Patna High Court reported in 1971 A.C.J. 58 (New India Assurance Co. Ltd. v. Sumitra Devi and Ors.) without caring to see that the principle laid down by this decision was no longer correct in view of the decision of Supreme Court in 1977 A.C.J. 118 (Minu B. Mehia and Anr. v. Balkrishna Ramchandra Nayan and Anr.). It is most relevant to refer to paras 22, 28, 29 and 36 of this judgment:

The liability of the owner of the cars to compensate the victim in a car accident due to the negligent driving of his servant is based on the law of tort. Regarding the negligence of the servant the owner is made liable on the basis of vicarious liability. Before the master could be made liable it is necessary to prove that the servant was a cting during the course of his employment and that he was negligent. The number of the vehicles on the road increased phenomenally ieading to increase in road accidents. To remedy the defect various steps were taken. In England the owners of the vehicle volutarily insured against the risk of injury to other road users. With the increase of traffic and accidents it was found that in a number of cases hardship was caused where the person inflicting the injury was devoid of sufficient means to compensate the person afflicted. In order to meet this contingency the Road Traffic Act, 1930. The Third Parties (Rights against Insurers) Act, 1930 and the Road Traffic Act., 1934 were enacted in England. A system of compulsory insurance was enacted by the Road Traffic Act, 1930. Its object was to reduce the number of cases where judgment for personal injuries obtained against a motorist was not met owing to the lack of means of the defendent in the running-down action and his failure to insure against such a liability. It is sufficient to state that complusory insurance was introduced to cover the liability, which the owner of the vehicle may incur."

This plea ignores the basic requirements of the owner''s liability and the claimants right to receive compensation. The owner''s liability arises out of his failure to discharge a duty cast on him by law. The right to receive compensation can only be against a person who is bound to compensate due to the failure to perform a legal obligation. If a person is not liable legally he is under no duty to compensate any one else. The claims Tribunal is a tribunal constituted by the State Government for expeditious disposal of the motor claims. The general law applicable is only common law and the law of torts. If under the law a person becomes legally liable then the person suffering the injuries is entitled to be compensated and the Tribunal is authorised to determine the amount of compensation which appears to be just. The plea that the Claims Tribunal is entitled to award compensation which appear to be just when it is satisfied on proof of injury to a third party arising out of the use of a vehicle on a public place without proof of negligence if accepted would lead to strange result.

Section 110(1) of the Act empowers the State Government to constitute one or more Motor Accidents Claims Tribunals for such area as may be specified for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death or bodily injury to persons. The power is optional and the State Government may not constitute a Claims Tribunal for certain area. When a claim includes a claim for compensation (Sic. the claimant) has an option to make his claim before the Civil Court. Regarding claims for compensation therefore in certain cases Civil Courts also have jurisdiction. If the contention put forward is accepted far as the Civil Court is concerned it would have to determine the liability of the owner on the basis of common law or torts while the Claims Tribunal can award compensation without reference to common law are torts and without coming to the conclusion that the owner is liable. The concept of owner''s liability without any negligence is opposed to the basic principles of law. The mere fact that a party received an injury arising out of the use of a vehicle in public place cannot justify fastening liability on the owner. It may be that a person bent upon committing suicide may jump before a car in motion and thus get himself killed. We cannot perceive by what reasoning the owner of the car could be made liable. The proof of negligence remains the lynch pin to recover compensation. The various enactments have attempted to mitigate a possible injury to the claimant by providing for payment of the claims by insurance."

The Patna High Court in New India Assurance Co. Ltd. v. Sumitra Devi and others held that the liability of the insurance company is absolute but is only limited to the extent provided by the insurance policy. As against this view all the other High Courts have held that the liability to compensate arises only on a finding of negligence. It may not be out of place to mention that though automobile accidents are subject to the law of negligence modern proposals consistently favour the social insurance model under which benefits are payable directly by the firms without any reference at all to the injured while retaining an option for the victim to claim either limited benefits on a non fault basis or full damage for negligence.

Reliance in 1986 A.C.J. 951 (United India Insurance Co. Ltd. v. Jagatsinh Valsinh and others) was also placed. In para 6 of the judgment, the learned Judges of Gujarat High Court observed that:

The claimant is held to be a tort-feasor. It is beyond comprehension as to how a tort-feasor can be awarded compensation for the tortious act committed by him. If the claimant sustained injuries and suffered disablement as a result of such injuries he has to blame himself for it was his own negligence which caused these injuries. If the claimant was negligent, he cannot come forward and say "pay me compensation for my own negligence". The Tribunal has not examined whether the position of a tort feasor who is employee, would be different from other tort-feasors. In the instant case, the claimant was employed by Respondent No. 2 to drive his Matador. It was in the course of his employment that the claimant sustained injuries, resulting in permanent disablement. Therefore, the question arises whether even apart from Workmen''s Compensation Act, under general law, can the employee claim compensation for the injuries sustained by him in the course of his employment even in a case where he is found to be negligent. This aspect of the case has not been examined at all by the Tribunal. It is not disputed that the claimant could have preferred claim under the Workmen''s Compensation Act, but the question which is posed above is whether even apart from the provisions of the Workmen''s Compensation Act, the claimant could have claimed compensation from his employer and the Appellant insurance company with whom the Matador was insured on the ground that he has sustained injuries in the course of his employment.

In 1982 A.C.J.467 (D. Jayamma and Anr. v. S. Govindaswamy and Ors.), the Division Bench of the High Court of Kamataka held that a person who claims compensation u/s 110-A of the Motor Vehicles Act, has to establish that the accident causing injury or death was due to actionable negligence. But, that is not necessary under the provisions of the Workmen''s Compensation Act, where the liability is statutorily fixed and negligence committed by the driver does not require any proof by the claimants on his death, and the only thing they have to establish is the monthly pay packet and the age of the deceased.

Again, in 1989 A.C.J. 867 (Orissa state Road Transport Corporation v. Shankar Sahu), the Division Bench of Orisa High Court, while examining the two Acts, namely, Workmen''s Compensation Act and Motor Vehicles Act, held that a claimant cannot claim compensation under both the Acts. An application u/s 110-A would lie under the Motor Vehicles Act, in case the facts of the case make out such a claim under the provisions of this Act. Since it has to be shown that the accident took place due to the actionable negligence of the tort-faros, this kind of actionable negligence need not be established under Workmen''s Compensation Act where a statutory liability of the employer has been created, even if the accident took place on account of the negligence of the employee. The quantum of compensation under this Act is quantified in the Schedule itself and the process of assessment becomes mechanical once the pay packet of the claimant is known, whereas it is tardy under the Motor Vehicles Act where under the Tribunal has to assess the just compensation''. It is important to quote pares 17 and 18 of this judgment:

Before the Claims Tribunal, he can claim damages/compensation against the tort-feasor, i. e. a third party, for causing the injury or even death. In such a case the calculation of compensation will be done by the Tribunal in the same manner as is done in the case of any other claimant. There is no question of enriching him. Similarly, when the claim happens to be confined only against his employer, where there is no outsider or a tort-feasor, he can get the compensation from his employer only when he proves that the accident occurred due to the negligence of his employer. In that case, he can get a higher amount than the scheduled amount under the Workmen''s Compensation Act. The Parliament has deliberately provided this remedy to him. As stated earlier the accident may occur on account of the negligence of the employer in violating various requirements for the safety of his employees exposing them to the risk of injuries as well as loss of life. In such cases, it might have been thought that the employer should not be let off on payment only of a ''standardised'' compensation and he must be exposed to the liability of the payment of higher compensation commensurate with the extent of the loss or injury, which could be assessed and found on the evidence brought on the record and might appear to be ''just compensation''.

I think, the above principles explain fully the justification for awarding higher compensation to such employees who suffer on account of the latches and negligence of their employers. While coming to the Claims Tribunal, the employees or their legal representatives, as the case may be, would be runing the risk of not getting any compensation, if it is established that the accident took place only on account of the mistake or negligence of the employee himself. In that event, there is ''no actionable negligence'' in the case as was also found by a Bench of the Karnataka High Court in D. Jayamma v. S. Govindaswamy 1982 ACJ 467 (Karnataka).

M.L. Sharma, Id. counsel for the claimants, referred to Section 92(2) of the Motor Vehicles Act and submitted that the present appeal is not maintainable, since the Insurance Company could challenge the award only on those grounds which are specifically mentioned under these provisions. Reference to decisions like United India Fire and General Insurance Co. Ltd., Kanpur and Another Vs. Gulab Chandra Gupta, Ananda Ram Saikia Vs. Nurul Haque and Another, was made.

There is no dispute about the principle laid down in the judgment, however, the controversy in the present case moves entirely on a different plane. The issue raised goes to the roots of the matter and has been challenged by both, the insurer and the insured. As soon as the Tribunal came to the conclusion that there was no negligence on the part of the owner of the vehicle, the only conclusion that could be drawn on this kind of finding was to be that the accident took place due to negligence of the driver himself. On this kind of finding, the petition was not maintainable before the Tribunal under the Motor Vehicles Act, since the basis for claim under this Act is the actionable negligence of some-one other than the claimants. In view of this kind of position, the Tribunal erred in not rejecting the petition and directing the claimants to move the Commissioner under the Workmen''s Compensation Act for the statutory compensation available there under.

The result is that there is merit in this appeal and the same is allowed. The award is set-aside.

Now, the question is what should be done in this case after this distance of time? The recourse directing the parties to approach the Commissioner after this long lapse of time, may put the claimants in serious difficulties. At this stage, K.D. Sood, Id. counsel for the Company, submitted that he has instructions from the Co. to offer Rs. 21000/- to the claimants out of the amout deposited in this case, if they desire to avail this concession. I highly appreciate this kind of stand taken by the Company and its Id. counsel. This is the only way to save the claimants from future litigation. Accordingly, I allow the claimants to withdraw amount of Rs. 21000/- alongwith interest that has accrued on this amount by this time. In case the claimants have already withdrawn some amount out of Rs. 21000/-, the same shall be deducted from the total amount of Rs. 21000/-. In case they do not avail this offer within a period of three months from today, the amounts deposited in this case be released to the party who has deposited the same.