THE HON’BLE SRI JUSTICE G.V.SEETHAPATHY CIVIL MISCELLANEOUS APPEAL No.224 OF 2010 DATED: 24-08-2010 JUDGMENT: This appeal is directed against the order, dated 25-09-2009, in W.C.No.35 of 2006 on the file of the learned Commissioner for Workmen’s Compensation and Assistant Commissioner of Labour, Anantapur, wherein the claim of the respondents 1 to 6 herein was allowed in part awarding compensation of Rs.4,15,236/- on account of the death of the deceased-P.Govinda Naik, who died in a motor vehicle accident that occurred on 20-10-2005. 2. Heard learned counsel for the appellant and the learned counsel for the respondents. Perused the record. 3. Respondents 1 to 6 herein are the applicants before the Tribunal. Respondents 1 and 3 are the wives of the deceased; respondents 2 and 4 are the children and respondents 5 and 6 are the parents of the deceased. According to them, the deceased was working as driver of the 7th respondent herein and he was quite hale and healthy and was earning a monthly salary of Rs.1000/- and Rs.200/- per day as batta and he is aged 30 years by the date of the accident. It is further pleaded that on 20-10-2005 when the deceased was proceeding in the vehicle bearing No.AP-02-U-3985, during the course of his employment as second driver from Srikakulam to Visakhapatnam on NH5, the driver of the vehicle by name G.Radhakrishna drove the vehicle in rash and negligent manner as a result of which the lorry dashed against a trailor bearing No.NL-05-A-5749 coming in the opposite direction. It is also pleaded that at that time, the deceased was taking rest and both the drivers died on the spot. A case in Cr.No.55 of 2005 was registered by the Laveru police. The 7th respondent herein, owner of the lorry, remained ex parte before the learned Commissioner. Appellant herein-insurer filed a counter opposing the claim and denying their liability to pay the compensation and further contending that the risk in respect of the deceased, who was stated to be the second driver, is not covered by the policy. 4. During enquiry, A.Ws.1 and 2 were examined and Exs.A1 to A9 were marked on behalf of the applicants and R.W.1 was examined and Exs.B1 to B5 were marked on behalf of the appellant herein. 5. On a consideration of the evidence available on record, the learned Commissioner, Workmen’s Compensation, held that the deceased was an employee of the 7th respondent herein (Opposite Party No.1) being the driver of the lorry bearing No.AP-02-U-3985 and he died in the accident, which occurred in the course of such employment. The learned Commissioner also held that the claimants are entitled for a total compensation of Rs.4,15,336/-. The income of the deceased was taken at the minimum wages prescribed by G.O.Ms.No.30 LET & F (Lab-II) Department, dated 27-07-2000, a sum of Rs.3994/- and applying the suitable multiplying factor of ‘207.98’ the loss of dependency was worked out in a sum of Rs.4,15,336/-. Accordingly, an award was passed for the said amount with interest @ 12% p.a. from the date of the accident till the date of realization. Aggrieved by the said award, the insurer filed the present appeal. 6. The finding, regarding the occurrence of the accident; the death of the deceased in the said accident and the quantum of compensation arrived at by the learned Commissioner, was not seriously disputed. The only contention raised by the learned counsel for the appellant is that the deceased was admittedly employed as a second driver and at the time of the accident he was taking rest and the vehicle was being driven by the other driver-G.Radhakrishna, who also died in the accident and the policy-Ex.B1 covers the risk only in respect of one driver by paying a premium of Rs.25/- and no additional premium is paid for the second driver or any other employee to cover his risk. The learned Commissioner observed that when the second driver is on duty it is also to be considered that even though the second driver is not actually driving the vehicle at the time of the accident on 20-10-2005, he was waiting for his duty turn and therefore the applicants cannot be deprived of the claim for the reason that the premium is paid only for one driver, and no where in the policy it is mentioned that the second driver is not liable for compensation. The learned Commissioner, therefore, held that the appellant-insurer is also liable to pay the compensation. 7. A perusal of the policy-Ex.B1 would go to show that the premium is paid only in respect of one driver in a sum of Rs.25/-. No additional premium is paid covering the risk of a second driver or any other employee like the cleaner or labourer etc., Admittedly, the deceased was employed only as a second driver and he was not driving the vehicle at the time of the accident. 8. Learned counsel for the appellant would submit that the claim in respect of the driver-G.Radhakrishna, who was actually driving the vehicle and who died in the accident and whose risk is covered by the policy-Ex.B1, is already settled by the appellant-insurer and so the question of paying any compensation in respect of the deceased, who even according to the applicant is only a second driver and who was admittedly not driving the vehicle at the time of the accident but only taking rest, does not arise. 9. It was well settled that the liability of the insurer to pay the compensation arises within a contractual obligation between the insured and the insurer. When the contract, namely the policy, itself does not contemplate meeting any such liability in view of the fact that no premium is paid at all covering the risk of the deceased, no liability can be said to arise from the said contract as against the insurer. Hence, no liability for payment of compensation can be fastened on the appellant-insurer in respect of the deceased whose risk is not covered by the policy. It is not a case of violation or breach of the terms and conditions of the policy where the insurer can be directed to pay the amount initially and recover the same from the owner of the vehicle. It is a case where the risk in respect of the deceased is not covered at all and therefore no contractual obligation on the part of the insurer arises to meet the liability for payment of compensation. 10. I n RAMASHRAY SINGH v. NEW INDIA ASSURANCE COMPANY LIMITED[1], the apex Court held as follows: “The appellant's next submission was that the concerned employee was a 'conductor'. It is doubtful whether a 'khalasi' and a conductor are the same. But assuming this were so, there is nothing to show that the appellant had paid any additional premium to cover the risk of injury to a conductor. On the contrary, the policy shows that premium was paid for 13 passengers and 1 driver. There is no payment of premium for a conductor. The appellant's final submission was that as the policy was a comprehensive one, it would cover all risks including the death of the khalasi. The submission is unacceptable. An insurance policy only covers the person or classes of persons specified in the policy. A comprehensive policy merely means that the loss sustained by such person/persons will be payable upto the insured amount irrespective of the actual loss suffered. [See: New India Insurance Co. Ltd. v. J.M. Jaya; Collinvaux's: Law of Insurance (7^th Edition) p. 93-94]. Consequently, although the appellant's claim under the insurance policy arose under the Workmen's Compensation Act, since the concerned employee was not engaged in the capacity of driver in respect of whom alone premium was paid apart from the passengers, his claim is unsustainable.” 11. I n ‘DUDEKULA SALABEE v. R. SIVASANKAR REDDY [2], this Court held as follows: “The first part i.e., Sub-section (1) of Section 147 of the Act, deals with the requirements of policies. In other words, different kinds of policies can be taken covering different contingencies, different persons, different vehicles and different risks. Further, it appears from Sub-section (1) of Section 147 of the Act that the owner has a discretion to take a policy or policies covering person or persons, in which case, basing on the nature and the terms and conditions of the policy, the premium has to be paid. It implies that unless and until premium is paid, depending upon the nature of the policy or the terms and conditions of the policy, the insurer is not under obligation to pay the compensation beyond the scope of agreement under the policy. In other words, it is not mandatory for the insured to take policy or policies covering all types of persons or all types of vehicles or risks. Though under Sub- clause (c) of Clause (i) of Proviso to Sub-section (1) of Section 147 of the Act, it is mentioned that "if it is a goods carrier being carried in a vehicle..." the policy need not be taken, I am of the view that it does not mean that the insurer is automatically liable. By necessary implication, when there is no requirement to take policy and consequently, when no policy is taken, no risk can be covered by any policy. Therefore, the language employed in Sub-clause (c) cannot be relied on nor it is useful in any manner to the claimant. In this context, it is to be seen that Clause (b) of Sub-section (1) of Section 147 of the Act refers to Sub-section (2) of Section 147. Sub-section (2) of Section 147 of the Act is in the nature of exception to Clause (b) of Sub-section (1) of Section 147 of the Act. A bare perusal of Sub-section (2) of Section 147 of the Act makes it obvious that the coverage of policy is limited to the extent mentioned in Clauses (a) and (b) of Sub-section (2) of Section 147 of the Act only. Therefore, it further implies that a policy has to be necessarily taken if the insured wants coverage of a class or classes of persons. In any event, there must be a contractual obligation in the shape of insurance policy and there must be a specific condition under the policy covering a person or persons like the deceased in the present case. It presupposes and as decided by the apex Court, in various judgments, a separate premium has to be paid for such a person or classes of persons and then only, the obligation of indemnification by the insurer does arise”. 12. In NEW INDIA ASSURANCE COMPANY LIMITED v. SURAYA BEE[3]’, this court held as follows: “Section 147 of the Act contains mandate requirements to be complied with when policy is obtained/issued under Chapter XI of the act. As per the proviso (i) to section 147(1) of the Act, policy issued under Chapter XI is not required to cover liability of death arising out of and in course of his employment of employee of a person insured other than the driver and conductor of vehicle. Therefore, cleaner of first lorry is not required to be covered under policy. Section 147(2) of the Act lays down that the policy of insurance referred to in Section 147(1) of the Act shall cover any liability incurred in respect of any accident up to the limits mentioned therein. Therefore, if an extra premium is paid for cleaner, insurer is required to indemnify owner of vehicle against any third party risks. Thus unless and until extra premium is paid under contract of insurance, cleaner is not covered under policy.” 13. The decision of the Apex Court in Ramashsray Singh’s case (first supra) was also referred and followed in the above decision. 14. I n GANGALA ARAJU & OTHERS v. RAYAVARAPU APPARAO [4], this Court held as follows: “A perusal of the policy shows that premium has been paid only for driver of the tractor. As the premium does not cover the labourers, insurance company is not liable to pay the compensation for the death of the deceased, who was, allegedly, a labourer travelling in the trailer’. 15. In the circumstances, it is held that the impugned order passed by the learned Commissioner, fastening the joint liability on the appellant-insurer, is not sustainable insofar as the appellant-insurer is concerned and the liability fastened on the appellant-insurer in the impugned award is accordingly set aside. It is, however, open to the applicants to recover the amount from the owner of the vehicle. 16. In the result, the Civil Miscellaneous Appeal is allowed to the extent stated above. There shall be no order as to costs. _______________________ G.V.SEETHAPATHY, J 24th August, 2010 Tsy [1] (2003) 10 SCC 664 [2] 2008(1) ALD P.161 [3] 2009(2) An WR P.335 [4] 2010(4) ALT P.9