United India Insurance Co. Ltd. vs Sridhar and M. Manjunath

K.N. Keshavanarayana, J.—This appeal is filed u/s 30(1) of the Workmens'' Compensation Act (for short the ''Act'') by the insurer questioning the legality and correctness of the order dated 23.5.2003 passed by the Labour Officer and Commissioner for Workmens'' Compensation (for short Commissioner), Bellary, in case No. WCA.CR.NF.67/98

The facts leading to the presentation of this appeal in brief are as under,

Respondent No. 2 herein by name Manjunath is the registered owner of maxicab bearing registration No. KA-35-2261 which is a passenger carrying public service vehicle. Respondent No. 1 herein claims that he was employed by Respondent No. 2 as a cleaner in the said maxicab. That on 29.12.1997, the said maxicab met with an accident while carrying the passengers. At the time of accident, Respondent No. 1 herein was also proceeding in the said vehicle as cleaner. As a result of the accident, Respondent No. 1 and the passengers carried in the vehicle sustained injuries. In respect of the injuries sustained by him Respondent No. 1 filed claim petition before the Commissioner, Bellary u/s 3 of the Act seeking compensation of Rs. 2.00 lakhs from the owner and also the insurer of the said maxicab. The Appellant-insurer contested the said petition mainly on the ground that the policy issued by it in respect of the vehicle in question do not cover the risk of the cleaner. Therefore, the insurance company is not liable to indemnify the insured in respect of the claim made by the cleaner. The Commissioner after holding enquiry, by the order under appeal allowed the claim petition of Respondent No. 1 and awarded compensation of Rs. 26,894/- together with interest at 12% p.a. from the date of accident to the date of payment and directed the Appellant insurance company to pay the same. Being aggrieved by the said order of the Commissioner, the insurer has presented this appeal.

The Appellant has raised the following substantial questions of law for consideration of this appeal, as required by Section 30(1) of the Act.

(a) Whether the finding of the Commissioner that the policy of insurance issued in respect of a passenger vehicle also covers the liability to a cleaner, is proper or not?

(b) Whether the amount granted by the Court below without Doctor specifying the loss and earning capacity is justified?

Upon service of notice of this appeal, Respondent No. 1 has appeared through his Counsel However, notice to Respondent No. 2 has been dispensed with as he had remained absent before the Commissioner.

I have heard the learned Counsel appearing on both side and perused the records of the Commissioner.

The undisputed facts are that, Respondent No. 1 filed claim petition before the Commissioner seeking compensation with a specific case that he was employed as a cleaner of the maxicab in question by its owner viz., Respondent No. 2. It is also an undisputed fact that the maxicab in question has been insured with the Appellant and the Appellant has issued a policy of insurance in conformity with Section 146 of the Motor Vehicles Act. Now, the question of law involved in this appeal is, whether the policy of insurance issued by the Appellant covers the risk of the person employed as a cleaner of the vehicle by the insured.

The perusal of the order of the Commissioner indicates that though the Commissioner notices that the insurance policy issued in conformity with Section 146 of the Motor Vehicles Act, does not statutorily cover the risk of a cleaner carried in a public service vehicle and u/s 147 of the Motor Vehicles Act, only certain categories of empolyees engaged in a public service vehicle are statutorily covered and that Respondent No. 1-claimant do not fall under any one of those categories, has proceeded to fastened, liability on the insurance company by treating the claimant as a passenger.

As already noticed, it is the specific claim of the claimant that he was an employee of the insured viz., cleaner in respect of a public service vehicle. It is only because he claims to be an employee of the insured in respect of the vehicle in question and it is only because he contended that he suffered injuries during the course of employment, he invoked the jurisdiction of the Commissioner. If he claims to be a passenger, claim petition could not have been filed before the Commissioner. Section 3 of the Act deals with employer''s liability for compensation. According to Sub-section (1) of Section 3 of the Act, if personal injury is caused to a workmen while and in the course of employment, his employer shall be liable to pay compensation in accordance with the provisions of Chapter II. Therefore, to invoke the jurisdiction of the Commissioner under the Act, for award of compensation, there must be relationship of an employer and employee. If there is no such relationship of employer and employee, the Commissioner has no jurisdiction to entertain the claim petition. Therefore, the Commissioner in this case could not have treated Respondent No. 1 herein as a passenger.

Section 147 of the Act deals with the requirements of policy and limits of liability. As per proviso to Clause (b) of Sub-section (1) of Section 147 of the Motor Vehicles Act, the policy so issued is required to cover the liability in respect of 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 only to the extent of liability arising under the Workmens'' Compensation Act Even such liability is only in respect of certain categories of employees namely person engaged in driving the vehicle and if it is a public service vehicle, it would cover the risk of the person engaged as conductor or person engaged for examining the tickets on the vehicle and if it is a goods vehicle, the employee carried in such vehicle. Therefore, reading of Section 147(1)(b) of the Motor Vehicles Act makes it clear that a policy issued is not statutorily required to cover any categories of employees other than mentioned in proviso to Clause (b) of Sub-section (1) of Section 147 of the Act Risk of cleaner carried in a public service vehicle is not statutorily covered u/s 147(1)(b). Of course, it is open for the owner of the vehicle to cover the risk of any other categories of employees also on payment of additional premium.

The Apex Court in the case of Ramashray Singh v. New India Assurance Co. Ltd. and Ors. reported in ILR 2003 KAR.3525 has made this position of law clear by observing thus;

The Appellants'' first submission was that Shashi Bhushan Singh was a passenger. The Appellants'' submission that the phrases ''any person'' and "any passenger" in Clauses (i) and (ii) of Sub-section (b) to Section 147(1) are of wide amplitude, is correct (See New India Assurance Company v. Satpal Singh and Ors.). However, the proviso to the Sub-section carves out an exception in respect of one class of persons and passengers, namely, employees of the insured. In other words, if the "person" or "passenger" is an employee, then the insurer is required under the statute to cover only certain employees. As stated earlier, this would still allow the insured to enter into an agreement to cover other employees, but under proviso to Section 147(1)(b), it is clear that for the purposes of Section 146(1), a policy shall not be required to cover liability in respect of the death arising out of and in the course of any employment of the person insured unless; first; the liability of the insured arises under the Workmen''s Compensation Act, 1923 and second; If the employee is engaged in driving the vehicle and if it is a public service vehicle, is engaged as conductor of the vehicle or in examining tickets on the vehicle. If the concerned employee is neither a driver nor conductor nor examiner of tickets, the insured cannot claim that the employee would come under the description of "any person" or "passenger". If this were permissible, then there would be no need to make special provisions for employees of the insured. The mere mention of the word "cleaner" while describing the seating capacity of the vehicle does not mean that the cleaner was therefore a passenger. Besides the claim of the deceased employee was adjudicated upon by the Workmen''s Compensation Court which could have assumed jurisdiction and passed an order directing compensation only on the basis that the deceased was an employee. This order cannot now be enforced on the basis that the deceased was a passenger.

From the law laid down by the Apex Court in the aforesaid decision, it is clear that a cleaner carried in a public service vehicle is not statutorily required to be covered under the policy issued in terms of Sections 146 and 147 of the Motor Vehicles Act. A copy of the policy issued in this case has been produced before the Commissioner. Perusal of the copy of the policy clearly indicates that no additional premium has been paid to cover the risk of the cleaner. Therefore, the risk of the cleaner carried in the vehicle in question is not covered under the policy. His risk was not statutorily required to be covered under the policy. Therefore, the Commissioner was not justified in fastening the liability on the insurer-Appellant.

The learned Counsel for Respondent No. 1 sought to place reliance upon the decision of this Court in the case of The New India Assurance Company Ltd. Vs. Shri R. Thippeswamy Reddy, Shri Rudranna @ Maharudranna and Smt. Geetha, wherein the claimant has been considered as a third party though he was an employee of a public service vehicle.

The perusal of this decision indicates that it was a claim made u/s 166 of the M.V. Act in respect of a motor vehicle accident According to the facts of that case, the claimant therein was employed as a cleaner of the passenger bus. At the place of accident, the cleaner had got down from the bus and was regulating the movement of the people in front of the bus. At that time, the driver of the bus suddenly moved the bus resulting in running of the left front wheel of the bus over the right foot of the claimant Therefore he preferred the claim petition u/s 166 of the Motor Vehicles Act, 1988 claiming compensation, in opposition of the claim, the insurance company contended that since the claimant was admittedly an employee as cleaner in the public service vehicle and since the risk of the cleaner is not statutorily covered under the policy of insurance, the insurance company is not liable to indemnify the insured in that case. Overruling the said objection, the tribunal awarded compensation treating the claimant as a third party vis-a-vis the insurer. That award was questioned by the insurance company before this Court.

The learned Single Judge of this Court having regard to the facts and circumstances of the case held that if the insured had taken a policy covering only third party risk, even then the driver of the vehicle which is insured and if it is a public service vehicle the employee engaged as a conductor of the vehicle or employee employed in examining the tickets on the vehicle and if it is a goods carriage employee being carried in the vehicle are also entitled to compensation to the extent it is provided under the provisions of Workmens'' Compensation Act. However, the said benefit is not available to other categories of employees of the insured. But if other categories of employees, at the time of accident though in the course of employment are outside the vehicle, then they would become ''third party'' under the Act, notwithstanding the fact that such a person is also an employee of insured. Such an employee has the option of either claiming compensation under the provisions of Motor Vehicles Act as a third party or as an employee of the insured under the provisions of Workmens'' Compensation Act.

The facts of the said reported case are entirely different from the facts of this case on hand. In the present case, at the time of the accident, admittedly, the claimant-Respondent No. 1 was inside the vehicle. Therefore, he cannot be considered as a third party. In any case, if he claims as a third party, his claim would not lie before the Commissioner.

Looking from any angle, the Commissioner was not justified in directing payment of compensation amount by the insurance company. However having regard to the fact that Respondent No. 2 has not disputed the relationship between himself and the claimant, the claimant is entitled to seek enforcement of the order against his employer as the primary responsibility to pay the compensation is on the employer himself.

In view of the above discussion, the appeal deserves to be allowed and accordingly the appeal is allowed. The order dated 23.5.2003 passed by the Commissioner, Bellary in so Car as it relates to fastening the liability of compensation awarded on the Appellant insurance company is hereby set-aside.

The amount deposited by the Appellant-insurance company is directed to be refunded to it.