Zoona and Others vs Gh. Hassan Khanday and Others

Gh. Hasnain Masoodi, J.—Sh. Shabir Ahmad Khanday-son of petitioner No. 1 and brother of petitioner Nos. 2 to 5, driving loaded truck

No. JK-03/8373 owned by the respondent No. 1 met a fatal accident on 9th of July, 2007 at Cafeteria More, Ramban. The truck due to

mechanical defect rolled down deep into River Chenab resulting in death of its driver-Shabir Ahmad Khanday as also conductor of the truck-Sh.

Ashfaq Ahmad. The petitioners on 01.12.2007 approached Commissioner under Workman's Compensation Act (Assistant Labour

Commissioner, Sringar), with an application u/s 22 of the Workman's Compensation Act claiming therein that the deceased-Shabir Ahmad

Khanday was an employee of the respondent No. 1 and that his death arose out of his employment and that the petitioners were entitled to receive

compensation from the respondent No. 2 Insurance Company, who had indemnified the respondent No. 1 against any third party claim in the

event of any accident to the insured vehicle. The petitioners asked for an amount of Rs. 60,00,000/- as compensation with interest at the prevalent

bank rates from the date of accident to the date of payment. The petitioners also prayed for adequate compensation on account of mental agony,

suffering and funeral expenses.

The respondent No. 1 in his reply/written statement admitted the deceased-Shabir Ahmad Khanday to have been his employee and did not

dispute petitioners claim as regards monthly salary paid by respondent No. 1 to the deceased. The respondent No. 1, however, insisted that the

Insurance Company with which the vehicle was insured was to be saddled with the liability to pay the compensation amount. The respondent No.

2-Insurance Company did not contest the application before the Commission under the Workman's Compensation Act. The Commissioner under

Workmen's Compensation Act after recording the evidence and going through the application, reply of respondent No. 1 and the evidence brought

on file dismissed the application with costs assessed at Rs. 3000/-

The application for granting compensation did not find favour with the Commissioner under Workmen's Compensation Act for the reasons that

the deceased at the time of the accident was not having a valid driving license. The Commissioner found that the driving license of the deceased

was issued by Licensing Authority, MVD (Motor Vehicles Department), Rajouri, Poonch on 18th of October, 1999 and was renewed only up to

17th of October, 2002. It was. found that the deceased driver had not got the driving license renewed on or after 17th of October, 2002 and thus

had no valid driving license on 9th of July, 2007 when the fatal accident took place. What shocked the Commissioner was that the petitioners had

connived to get the license renewed with effect from 01.11.2007 little realizing that the deceased had breathed his last on 09.07.2007. In the

opinion of the Commissioner, the petitioners had in connivance with each other committed a fraud and got driving license renewed in favour of a

dead person. The Commission on this ground alone found the application for compensation without any merit and held the dependents of the

deceased driver not entitled to any compensation under the Workman's Compensation Act.

The order of Commissioner under Workman's Compensation Act dated 31st of March, 2009 is assailed herein on the grounds that the

Commissioner after having found the deceased to be a workman within the meaning of the Workman's Compensation Act, under employment of

the respondent No. 1 and the accident to have arisen out of the employment had no power or authority to reject the application for compensation.

It is insisted that the application for compensation has been dismissed on irrelevant and erroneous grounds and the Commissioner has fallen in error

by throwing out the application on the ground of the deceased having no valid driving license on the date of the accident. The Commissioner is said

to have been influenced by irrelevant considerations and not to have followed the law laid down on the subject. The petitioners have reiterated that

the driving license was not a requirement for award of compensation under the Workman's Compensation Act and that all the essential

requirements of the Act having been fulfilled the Commissioner ought to have accepted the application and awarded the compensation.

Heard and considered. It needs to be pointed out at the outset that the appeal at the request of the parties is being taken up for final disposal at

the admission stage.

The counsel for the appellants elaborating on the grounds urged in the memorandum of appeal insists that all the requirements contemplated

under the Workmen's Compensation Act for grant of compensation having been fulfilled, the Commissioner under the Act was left with no option

but to award compensation in favour of the dependents of the deceased workman. It is insisted that requirement of valid driving license on the date

of accident was foreign to the Act and thus could not be pressed into service to disallow a claim which was otherwise well based and genuine. It is

argued that the Commissioner under the Act has based the order impugned in the appeal on irrelevant and erroneous considerations and

introduced a requirement for award of compensation not visualized under the Act. To reinforce his argument, learned Counsel for the appellants

seeks to draw support from law laid down in Oriental Insurance Co. Ltd. Vs. Hazira Begum and Others, . Reliance is also placed on Sr. Div.

Manager, United India Insurance Co. Vs. Mst. Noora and Others, .

In Oriental Insurance Co. Ltd. v. Hazira Begum, it has been held that ""where the death of the workman driver was due to an accident, arising

out of and in the course of employment, the Insurance Company cannot raise a plea that the deceased workman had no valid license and avoid its

liability as the genesis of claim under the Act was the existence of employee employer relationship."" The court further observed that ""the award

made is not to the 'driver' of the vehicle but to the worker of the employer as defined u/s 2(1)(n) of the Act. That a part, all that the relevant clause

in the insurance policy requires is that the person driving the vehicle should have a valid driving licence.

The High Court of Jammu & Kashmir had an occasion to deal with an identical matter in the above referred case. The workman/driver had

fallen victim to a vehicular accident the claim for compensation put forth by dependents of workman driver was resisted by the Insurance Company

on the ground that the deceased workman was not having a valid driving license at the time of accident. In the case before the High Court, the

Commissioner under the Act was of the view that validity of the driving license could not be a ground for avoiding liability for payment of

compensation. The Court after referring to law laid down in Hazira Begum case observed that ""the provisions of Workmen's Compensation Act

nowhere prescribe that if a driver is employed he should possess valid licence as is required in terms of the it mandate of Motor Vehicles Act,

1939.

In my opinion two separate questions; one relating to liability of an employer to pay compensation to the deceased/injured workman and second

relating to liability of Insurance Company as an indemnifier to indemnify the employer; warranting attention independent of each other were mixed

up and mingled both in Hazira Begum case (supra) and Mst. Noora's case (supra). The courts, it is respectfully stated, placed exclusive focus on

Workman's Compensation Act, dilated on pre-requisites under the Act for a claim for compensation to succeed and held that once the envisioned

requirements were fulfilled the compensation was to be paid. The courts held validity of driving license alien to the requirements of Workman's

Compensation Act. The courts after tracing out the background in which the Workman's Compensation Act was enacted, highlighting its aims and

objects as a welfare legislation, opined that only three requirements of; (i) workman; (ii) personal injury/death and (iii) arising out and in the course

of employment, were to be filled to sustain a claim for compensation under the Act. There can be no denial of the fact that Workman's

Compensation Act was conceived and enacted with laudable aims and objects and that having regard to the purpose of the Act even stretched

view may be taken in interpreting the Act. There can be also no dispute with the legal proposition that the dependents of the deceased Workman

to hold the employer responsible for payment of compensation have only to prove that the deceased workman was under employment of the

employer; that death occurred due to an injury/accident arising out of and in the course of employment. However, the said proposition cannot be

extended to include that an individual/company having an independent contract with the employer whereunder the individual/company binds down

himself/itself to indemnify the employer in the event of an accident resulting in death/injury, is to be governed by the legal proposition and not the

terms and conditions of the contract governing the relationship between the indemnifier and indemnified. In other words, the dependents of a

deceased workman on proving that the deceased was a workman and that his death was caused due to injury/accident arising out of and in the

course of employment may prove their case against the employer but to fasten a third party like Insurance Company with responsibility to

indemnify the employer and pay the compensation, the dependents have to further prove that the third party or the Insurance Company in terms of

the agreement between such third party/Insurance Company and the employer is obligated to pay the compensation to the dependents. The

second limb of the duty cast on the dependents does not fall within the realm of the Workman's Compensation Act and the third party/Insurance

Company can prove and establish that because of defence available to it, it was not under any real obligation to pay the compensation amount.

Viewed thus, though the validity of driving license may not be a requirement under Workman's Compensation Act but all the same, it may be a

requirement under the agreement between the insurance company and the employer. The view that validity of driving license is not a requirement in

such matter, therefore, is not a sound proposition of law. If in a case it is found that the deceased workman had not a valid driving license the

Insurance Company may successfully Wriggle-out of its obligation to pay compensation to the dependents of the deceased workman. In such a

situation the employer nonetheless shall continue to be under legal obligation to pay compensation to the dependents of the deceased workman.

It has been held in 2004 (3) SCC 279 that ""under the Motor Vehicles Act holding of valid driving licence is one of the conditions of contract of

insurance and that the insurer in terms of Section 149 of the Motor Vehicles Act can plead that the offending vehicle was being driven at the time

of accident by a person who did not have duly granted licence, as a defence labeling it as breach of a condition of the insurance policy on the part

of the insured or the owner of the offending vehicle. The Supreme Court drawing distinction between the expressions ""effective licence"" and ""duly

licenced"", in Sections 3 and 149 of the Act, held that where the driving licence has expired but an application for renewal of licence has been made

within prescribed period in terms of Section 14 and 15 of the Act, the person is to be taken as ""duly licenced"" for the reason that the person could

during the prescribed period obtain the renewal automatically without undergoing any further tests or without having been declared unqualified

therefore. The, presumption of person being duly licenced, however, in terms of the judgment is restricted to the period of 30 days laid down in

proviso Section 14. It has been further held that the Insurance Company to avoid its liability towards the insured has to prove the breach on the

principle; ""who alleges breach must prove the same"". The Insurance Company to escape its responsibility has to prove that the insured was guilty

of negligence and failed to exercise the reasonable care in the matter of fulfilling the condition of the policy regarding use of the vehicle by a duly

licenced driver.

In the recent judicial pronouncements on the subject there is a visible departure as regard liability of insurer in case the offending vehicle is

found to have been driven at the time of accident by a driver not ""duly licenced"".

In State rep. by Inspector of Police, Tiruchy Vs. Rettaimandaiyan @ Murugan, , it has been held that where driving license of the driver of the

offending vehicle is not in force on the date of accident, the Insurance Company is exonerated from its liability.

In the aforementioned case, the driver of the offending vehicle had drivers licence valid from 15.12.1997 to 14.12.2000. The driver's licence

was extended from 29.12.2000 to 14.12.2003 and thereafter from 16.05.2005 to 1 5.05.2008. The driver's licence was thus not renewed from

15.12.2003 to 1 5.05.2005. It was during this interregnum period that the accident took place. The driver of the offending vehicle thus had no

licence on the date of accident i.e. 11.06.2004 as the driver had failed to renew the driving licence after its expiry on 14.12.2003 up to

16.05.2005. The tribunal accepted the claim petition and made the award in favour of the claimants. The Insurance Company preferred an appeal

insisting that its claim for exoneration on the ground of violation of policy condition viz; that the driving licence of the driver of the offending vehicle

was not in force on the date of the accident was erroneously rejected by the Tribunal. Learned Single Judge of the High Court dismissed the

appeal preferred against the said award. The Supreme Court after making a comprehensive survey of law laid down in National Insurance Co.

Ltd. Vs. Swaran Singh and Others, , National Insurance Co. Ltd. v. Kusum Rai and Ors. (2006) 4 SCC 25 and Oriental Insurance Co. Ltd. v.

Nanjappan and Ors. (2004) 13 SCC 224 and Ishwar Chandra and Others Vs. The Oriental Insurance Co. Ltd. and Others, , allowed the appeal,

set-aside the order of the High Court and held that the Insurance Company was exonerated from its liability in the event driving licence of the

driver of the offending vehicle was not in force on the date of accident. Earlier the Supreme Court in Ishwar Chandra and Ors. v. Oriental

Insurance Co. Ltd. and Ors., where licence held by the driver expired on 27.08.1994 the accident took place on 28.04.1995 and on the date of

accident the renewal had not been filed by the driver and the driver had no valid driving licence on the date the vehicle met with the accident, it was

held that the insurer is not liable to indemnify owner of the vehicle.

In the present case, as pointed out earlier, the driving license of deceased workman had expired much before the accident took place and the

deceased workman had not taken any steps to get it renewed.

The deceased workman had thus no driving license on the date of accident. The dependents of the deceased workman made the matter much

worse by managing renewal of the driving license of the deceased workman a few months after his unfortunate demise i.e. with effect from

01.11.2007 four months after his death.

This apart some important facts of this case warrant attention. The insured or the owner of the vehicle is father of the deceased driver and has

been admittedly employed by the insured to drive the vehicle. The insured thus must have been aware of the fact that the driving licence of his son

asked to drive the offending vehicle had expired way back on 17th October, 2002 and had not been renewed thereafter. The expired driving

licence of the deceased driver was placed before the Commissioner under Workmen's Compensation Act by the claimants and the insured did not

in his reply pleaded that the driving licence had been renewed. The accident took place five years after the driving licence of the deceased driver

had expired by efflux of time. In the circumstances there was nothing more to prove as regard the deceased driver having not been duly licenced in

terms Section 149 of the Act on the date of the accident. So viewed, even if the Insurance Company was not before the Commissioner under

Workmen's Compensation Act, yet the material placed by the claimants and the respondent No. 1 who happens to be husband of the claimant

No. 1 and father of other claimants convincingly proved that the deceased driver was not duly licenced on the date of accident to the knowledge of

the claimants as well as the insured and that the insurer could not be fastened with liability to indemnify the insured.

In the circumstances, the Commissioner under the Act was right in holding that the Insurance Company was not under an obligation to pay

compensation to the dependents. However, this should not have prompted the Commissioner under the Act to dismiss the application against the

respondent No. 1 the employer of the deceased workman. It is to be kept in mind that the respondent No. 1 in his reply/written statement to the

application not only admitted that deceased workman was his employee but insisted that the deceased workman was holding a valid driving license

on the date of accident and that the death was result of an act that had occurred during the course of employment. So viewed, the application was

bound to succeed as against respondent-the employer.

For the reasons discussed above, the appeal fails as against the respondents 2 and 3 and is dismissed. However, the appeal succeeds as

against respondent No. 1 and the appeal to the extent of respondent No. 1 is accepted. The respondent No. 1 as employer of the deceased

workman is held liable under the Workman's Compensation Act to pay compensation to the dependents of the deceased workman. However, it is

for the Commissioner under the Act to work out, in accordance with Section 4 read with Schedule IV of the Act, the exact amount of

compensation to which the dependents of the deceased workman/applicants in the application under the Act are entitled to. The matter is thus

remanded to the Commissioner under the Act with the direction to work out the amount of compensation recoverable from respondent No. 1 and

pass award preferably within two weeks from the date of receipt of this order. Disposed of along with all connected CMPs,