JUDGMENT [ENTITY], J.
1. I have had the opportunity to go through the judgment prepared by my learned brother Hon'ble [ENTITY], J. and I agree that this appeal is liable to be dismissed. However, I would like to add few words.
2. The insurer appellant feels aggrieved by the award given in the proceedings under the [ACT], of an amount of Rs. 1,89,560 as compensation to the wife of the deceased [ENTITY] who met his untimely death during the course of his employment as a driver of motor vehicle (truck) bearing registration No. U. P. 15-J-5061 owned by respondent No. 1 which truck was being driven by the deceased. The aforesaid motor vehicle was insured and the certificate of insurance as contemplated under the provisions contained in [SECTION] of the [ACT], had been issued by the present appellant.
3. Learned counsel for the appellant has strenuously urged that the Workmen's Compensation Commissioner had no jurisdiction to saddle the insurer-appellant with any liability to pay the amount of compensation as no such jurisdiction is vested in him under the provisions of [ACT], specially when the present one was not a case envisaged under [SECTION] of the said Act where the employer had become an insolvent.
4. It may be noticed that under the [ACT], while the liability of the insurer as against third parties is statutory and the right of the third parties flows from the statute and is not contractual, yet so far as the insurer and the insured are concerned, the insurance is a personal contract of indemnity. The liability of the insurer is co-extensive with the liability incurred by the owner of the vehicle, the insured. If the insurer and the insured have entered into a mutual agreement, the remedy of the insurer, if any, may lie against the insured on the basis of their mutual agreement. The insurer, however, can always issue certificate of insurance policy covering risks which may not be covered by the requirements of the [ACT] but once the motor vehicle is insured, to cover all risks, thus, being comprehensively insured, the liability of the insurer has to be determined taking into consideration the terms and conditions subject to which the insurance policy has been issued so far as the contractual obligations are concerned. The provisions contained in [SECTION] of the [ACT] contain a non-obstante clause which provides that notwithstanding anything contained in law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of the person or those classes of persons. The Apex Court in its decision in the case of [PRECEDENT]. had clarified that policy of insurance must be a policy which insures the person against any liability which may be incurred by him in respect of 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. While explaining the words "against any liability which may be incurred by him", the Hon'ble Supreme Court had indicated that what was intended to be covered by the policy of insurance is the risk of a person who has incurred liability for the death or bodily injury or damage to the property of a third parly.
5. However, it should not be lost sight of that the insurer cannot be held liable where the insured himself stands exonerated of any such liability. In other words, the liability of the insurer depends upon the liability of the insured. The expression "liability" is meant to cover any liability arising out of the use of the motor vehicle.
6. The Hon'ble Supreme Court in its decision in the case of [PRECEDENT] (supra) had also indicated that when a liability is caused against any person insured by the policy then the insurer is required to pay to the person entitled to the benefit of the decree as if it were a judgment debtor.
7. Under the provisions of the [ACT], the primary liability of paying compensation is fastened on the employer and if the insurer is liable to indemnify the employer for the latter's liability to pay compensation, there exists no cogent reason to exonerate the insurer. Once the insurance company had agreed to indemnify the insured against his legal liability, it is clear that the insurance company steps into the shoes of the employer and has to discharge liability cast on the insured.
8. The composite reading of the provisions of the [ACT] and the [ACT] makes it clear that in all the motor accident cases it is the statutory duty of the insurance company to satisfy the award as the judgment debtor and it will not make any difference whether the award passed is under [ACT] or under the provisions of the [ACT]. However, it cannot be ignored that a contract of insurance is a contract of indemnity, against liabilities arising from the risk covered by the insurance policy, while the liability for penalty arises from violation of the provisions of the [ACT]. It is obvious that the liability in the context of [ACT], so far as the insurer is concerned, means only normal compensation. It does not include penalty. So far as the interest part is concerned, since it is compensatory in nature and is not a penalty, the liability towards payment of interest. If any, cast on the insured has to be discharged by the insurer. The [ACT] has used expressions "compensation" "interest" and "penalty" conveying different concepts. The amount of compensation or award of interest.
which is also compensatory in nature, cannot be taken to include within its ambit the penalty.
9. In the present case, the Workmen's Compensation Commissioner has cast a liability on the insurer to pay the compensation and interest only.
10. Taking into consideration the various provisions of the [ACT], specially [SECTION], [SECTION], [SECTION], [SECTION] and [SECTION] and the provisions of the [ACT] and specially the over-riding effect of the provisions of the [ACT], it is apparent that the impugned award of compensation by the Workmen's Compensation Commissioner in a proceeding under the [ACT], saddling the insurer with the liability to pay the compensation cannot be held to be without jurisdiction. It is not always necessary that the provision vesting the jurisdiction should be there in the same enactment as it is permissible to trace the source of authority in some other enactment. The contention urged in this regard is devoid of merit and is not at all acceptable.
11. It may further be noticed that the appellant has not taken any step to deposit the required amount as contemplated under [SECTION] of the [ACT]. The insurer-appellant, as has already been indicated hereinabove, steps into the shoes of the employer or the owner of the vehicle and in that view of the matter, for maintaining the appeal, it is bound to comply with the requirements envisaged under the aforesaid provisions. The failure in this regard rendered the appeal incompetent and liable to be dismissed.
12. Learned counsel for the appellant has tried to assail the findings recorded by the Workmen's Compensation Commissioner holding that the death was caused while the deceased was working in the course of employment and while the offending motor vehicle was in use and was being driven by him. This finding is based on evidence and material brought on the record. The appellant could not demonstrate that the said finding is in any manner vitiated in law and any substantial question of law is involved which may require a decision by this Court.
13. It has also been urged that there was a breach of the terms and conditions of the insurance policy as from the evidence of the claimant's witnesses, it had come to light that the driver had allowed three gratuitous passengers to travel in the truck.
14. The claimants had not come up with any such case in the pleadings indicating that the driver had taken on board three gratuitous passengers. In the written statement, however, the insurer had taken the stand that the driver of the motor vehicle was using the offending motor vehicle for carrying passengers on payment of fare. However, no evidence worth the name was led in support of such a plea. The plea in regard to breach of the terms of the policy as taken in the written statement could not be established by any evidence.
15. The impugned award is not liable to be disturbed on this ground as claimed.
16. The appeal consequently fails and is dismissed.
[ENTITY], J.
17. The present appeal has been filed by the insurance company for setting aside the judgment and award of the Tribunal and for dismissing the claim of the claimant-respondent against the appellant-insurance company.
18. The brief facts of the case is that the claim under [ACT] was filed against Shri [ENTITY] by Smt. [ENTITY] w/o late [ENTITY] and United India Insurance Company.
19. Allegation of Smt. [ENTITY] was that her husband late Sri [ENTITY] was driver of respondent No. 1 Sri [ENTITY] since one year before the accident by the Truck No. U. P. 15-J/5061 and he used to get salary of Rs. 3,000 per month.
20. On 31.5.1999, while her husband late [ENTITY] was coming from Hathras by the truck and reached to Hapur road near Hazi park, three unknown persons killed her husband [ENTITY] at 2.30 p.m. [ENTITY] was admitted in the Lajpat Rai Nursing Home, Meerut, by the conductor who died on 1.6.1999 at 7.30 a.m.
21. Report was lodged by the conductor [ENTITY] in the Police Station Kharkhanda district, Meerut. Age of her husband [ENTITY] was 40 years at the time of the incident.
22. It was also alleged that the vehicle was insured and insurance was valid from 5.12.1998 till 4.12.1999. Its cover note is 009274. hence respondent No. 2 is also liable for compensation.
23. Smt. [ENTITY] claimed Rs. 3 lacs along with 24% annual interest. As the respondent No. 1 was absent, hence the case proceeded ex parte against him.
24. After hearing parties, learned Workmen Compensation Commissioner held that late [ENTITY], husband of the claimant was an employee of the respondent No. 1 and he died on 1.6.1999 due to injury received on 31.5.1999 during the employment of the respondent No. 1.
It was also held that the alleged truck which was being driven by the husband of the claimant was insured by the respondent No. 2. It was also held that the age of late [ENTITY], husband of the claimant was 38 years at the time of the accident. It was also held that the pay of late [ENTITY] at the incident was Rs. 3,000 per month.
25. The learned Tribunal held that the claimant is entitled for a sum of Rs. 1,79,560. It was also held that as the truck was insured by the respondent No. 2, hence the respondent No. 2 is liable to pay the compensation to the claimant. The Tribunal directed the insurance company to pay the compensation of Rs. 1,79,560 within 30 days. The respondent No. 2 was also directed to pay 12% simple interest from the date of the death of [ENTITY] till the date of payment. It was also held that under [SECTION] of the Act, a notice be issued to the respondent No. 1 why 50% of trie compensation amount be not imposed on him as penalty.
26. Aggrieved by the said order dated 18,5.2002, appeal has been filed by the appellant.
The points raised by the appellant are as under :
(1) Whether the driver of the truck, in the course of his employment, was justified in allowing the total stranger to board the truck?
(2) Whether by not informing the company about the incident at all by the owner of the truck, the owner has committed breach of legal provisions as well as insurance contract?
(3) Whether the Tribunal is entitled to pass an award against the insurance company?
27. According to the proviso of [SECTION] of the [ACT], it is clear that, appeal shall lie only, if the substantial question of law is involved.
28. The question raised by the appellant as to whether the driver of the truck was justified in allowing the total stranger to board the truck in the course of his employment, is question of fact and not question of law.
29. The next question raised by the appellant is whether by not informing the company about the incident, at all by owner of the truck, the owner has committed a breach of legal provisions as well as insurance contract. This is also question of fact and not the question of law.
30. The next question raised by the appellant is whether the Workmen Compensation Commissioner is entitled to pass an award against the insurance company.
Now it is to be seen, whether this is the substantial question of law or not?
31. In the case of Sir Chunni Lal V. Mehta and Sons Ltd. v. Century Spinning and Manufacturing Com. Ltd., AIR 1[SECTION]2 SC 1314, Hon'ble Supreme Court has held that following test should, by a large or not one of them, be satisfied to find whether a substantial question of law is involved :
(i) Whether directly or indirectly it affects substantial right of the parties, or
(ii) question is of general public importance, or
(iii) whether it is an open question in the sense that the issue is not settled by pronouncement of the Supreme Court or Privy Council or Federal Court, or
(iv) the issue is not free from difficulty, or
(v) that it calls for a discussion for an alternative views.
32. Contention of the learned counsel for the appellant is that it affects the substantial right of parties, as such substantial question of law is involved.
33. In this connection, attention of the Court has been drawn by the learned counsel for the appellant towards [SECTION] of the [ACT] (hereinafter referred to as the 'Act') [SECTION] of the Act lays down as follows :
"If a personal injury is caused to a workman by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter :
Provided that the employer shall not be so liable : "
34. Argument of the learned counsel for the appellant is that, according to [SECTION] of the Act, employer is liable for the compensation if the injury caused to the workman by incident arising out of or in the course of his employment. There is no reference that the insurance company shall be liable.
35. Considering [SECTION] of the Act, it is debatable, whether the insurance company is liable or not in place of the employer even if the insurance company has insured the vehicle. It is a substantial question of law hence, the appeal can be filed under [SECTION] of the Act on this point.
36. The next question for determination is, whether the appeal is maintainable because the appellant has not deposited the awarded amount before filing the appeal.
37. In this connection, it is admitted by the appellant and an endorsement has been made by the appellant at the foot of the appeal, that since the appeal is not being filed by the employer, the deposit of the awarded amount is not required to be made as stated under [SECTION] of the Act.
38. Attention of the Court has been drawn by the learned counsel for the appellant towards IIIrd proviso of [SECTION] which lays down ; Provided further that no appeal by an employer under Clause-A will lie unless the memorandum of appeal is accompanied by a certificate by Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against.
39. Now the point for determination is whether the insurance company who has filed the appeal is liable to deposit the amount or not?
40. The learned counsel for the appellant has not cited any law on this point.
41. In this connection, the decision in the case of [PRECEDENT]. is relevant in which, reliance has been placed on the decision of the Division Bench in the case of [PRECEDENT], "that as the insurer steps into the shoes of the employer or owner of the vehicle, insurer must deposit the compensation before filing the appeal."
42. In view of the above mentioned decision, the appeal is not maintainable.
43. The next point for determination in this case is. whether the Tribunal is entitled to pass an award against the insurance company.
44. The learned counsel has not cited any ruling on this point also.
From the perusal of the evidence, it is clear that late [ENTITY] was driver, who died during the course of employment.
45. In this connection, [SECTION] of the [ACT], is material, which lays down as follows :
"Notwithstanding anything contained in the [ACT], where the death of, or bodily injury to, any person gives rise to a claim for compensation under this Act and also under [ACT], the person entitled to compensation may without prejudice to the provisions of [SECTION] claim such compensation under either of those Acts but not under both."
46. In view of [SECTION] of the [ACT], claimant may file the claim either under the [ACT] or under the [ACT].
47. Claimant, wife of late [ENTITY] has filed the claim under [ACT].
48. In this connection, [SECTION] of the old Act ([SECTION] of the New Act) of the [ACT], is material.
49. [SECTION] of new Act is material which lays down that the policy shall not be required to cover liability in respect of the death arising out of and in the course of his employment and the employment of a person injured by the policy or in respect of bodily injury sustained by such an employee arising out under the [ACT], out of and in the course of his employment other than the liability arising in respect of death of or bodily injury to any such employee.
50. It means that policy is required in respect of a death or bodily injury to such employee to cover the liability arising out of and in the course of his employment.
51. [SECTION] lays down as follows ;
"(5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons."
52. Proviso of para 2 of [SECTION] of the old Act ([SECTION] of the new Act) lays down as follows :
"No sum shall be payable by an insurer under Sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given, the insurer had notice through the Court or. as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal ; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely ;"
Para 7 of [SECTION] of the new Act lays down as follows :
"(7) No insurer to whom the notice referred to in Sub-section (2) or Sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in Sub-section (1) or in such judgment as is referred to in Sub-section (3) otherwise than in the manner provided for in Sub-section (2) or in the corresponding law of the reciprocating country, as the case may be."
In this case insurer is a party.
53. In this connection, a decision of the Division Bench of Madhya Pradesh High Court in the case of [PRECEDENT], is material, in which, it has been held that insurance company is a proper party to the proceedings and the provisions of [SECTION] of the [ACT] (old Act) are applicable to the [ACT]. The insurance company would take up only such defences as were laid down in [SECTION] of the old Act. It could be made a party in such proceeding after notice. Although appropriate liability is that of the employer, yet insurance company is also liable to discharge the claim as it was a judgment debtor.
54. In this connection, the decision in the case of [PRECEDENT]. (supra), is also material, in which, it has been held that, it is not disputed that [SECTION] of the Act of 1988 ([SECTION] of 1939 Act) makes obligatory for the insurer to cover the liability under the [ACT] in respect of death of or bodily injury of an employee arising out of and in the course of his employment. The liability of the insurer under this provision is, no doubt, with regard to the available compensation under the provisions of the Act. It has also been held that as the insurer who virtuaily steps into the shoes of the employer for the purpose of paying the compensation to the workman himself also be liable to pay the interest.
55. In this connection, decision in [PRECEDENT]. is also material in which it has been held that, "[SECTION] and [SECTION] of the [ACT], are applicable to claim under the [ACT], provided the accident arises out of the using of motor vehicles in public place and the employee concerned is covered by the limits laid down under [SECTION] of the Act."
56. It has also been held that the insurer has right to take only the statutory defences as provided under [SECTION] of the [ACT], unless by the terms of policy, the right to defend the action in the name of assured has been reserved.
57. In this connection, a Division Bench decision of the Orissa High Court in the case of [PRECEDENT], in which it has been held that [SECTION] of the [ACT], has spoken about the employer, it is, therefore, not enough to exonerate the insurer. Even as per [SECTION] of the [ACT], it is the duty of the insurer to satisfy the Judgment against the person insured.
58. In this connection, a decision in the case of [PRECEDENT], is material, in which, it has been held by the Delhi High Court that, "the liability of the insurance company can be limited either by the statute or by the contract of the insurance."
59. Considering the scheme and scope of the relevant provisions of two enactments, i.e., [ACT] and [ACT], it is evident that it is the normal compensation payable in the case of death or bodily injury to an employee.
60. In view of the divergent setting of the provisions under the said enactment, the word liability occurring in [SECTION] in the context of [ACT] is to be understood only as normal compensation
and the liability of the insurance company is only to pay the compensation.
61. In view of [SECTION], insurer has to pay the compensation as Judgment debtor in respect of the liability together with amount payable in respect of the costs and in respect of interest by virtue of any enactment.
62. In view of the decisions mentioned above and in view of the observations made earlier, the appeal is dismissed.
63. Parties shall bear their own costs.