IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE J.B.KOSHY & THE HONOURABLE MR. JUSTICE THOMS P. JOSEPH THURSDAY, THE 4TH SEPTEMBER 2008 / 13TH BHADRA 1930 MFA.No. 53 of 2005() -------------------- WCC.70/2001 of W.C.C. & CONTRACT L.BOARD,TVM. .................... APPELLANT/ 2ND OPPO.PARTY. ----------------------------- THE DIVISIONAL MANAGER, ORIENTAL INSURANCE CO.LTD., BRANCH OFFICE, JYOTHI SUPER BAZAR, THODUPUZHA 685 581, IDUKKI REP. BY THE AUTHORISED SIGNATORY, RGIONAL OFFICE, NORTH RAILWAY STATION ROAD, COCHIN 18. BY ADV. SRI.M.JACOB MURICKAN RESPONDENT(S): APPELLANTS & IST OPPO,.PARTY. -------------------------------------------- 1. PAULINA FERNANDEZ, POULINA HOUSE, KULAMATTOM P.O. MANGODE VIA, VARKALA, THIRUVANANTHAPURAM DISTRICT. 2. BENNY FERNANDEZ, POULINA HOUSE, KULAMATTOM PO, MANGODE VIA, VARKALA, THIRUVANANTHAPURAM. 3. MERY TESSY FERNANDEZ, POULINA HOUSE, KULAMATTOM PO, MANGODE VIA, VARKALA, THIRUVANANTHAPURAM DISTRICT. 4. ALFRED FERNANDEZ, DAFFODIL, PUTHUKURICHI PO. THIRUVANANTHAPURAM. ADV. SRI.S.M.PREM FOR R4 SMT.K.P.SANTHI FOR R4 SMT.ANALAKHUSI BHASKAR FOR R4 SRI.G.P.SHINOD FOR R1 & R3 SRI.RAM MOHAN.G. FOR R1 & R3 SRI.MANU V. FOR R1 & R3 THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 04/09/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J.B. KOSHY & THOMAS P. JOSEPH,JJ. ------------------------------------------- M.F.A.(W.C.Act)NO.53 OF 2005 ------------------------------------------ Dated this the 4th day of September, 2008. JUDGMENT Koshy, J: The dependents of a driver of a pick-up van, who sustained fatal injuries in an accident on 1.8.2001, applied for compensation before the Commissioner for Workmen's Compensation. Since the accident occurred during the course of employment, the Commissioner of Workmen's Compensation has awarded compensation. Compensation was calculated as provided under the provisions of the Workmen's Compensation Act. This appeal is filed by the insurance company of the pick- up van. It is contended that there was violation of the policy condition as the pick-up van was carrying passengers. Being a goods vehicle, it cannot carry passengers. For denying the liability, it should be proved by the insurance company that there is fundamental breach of the policy conditions. The vehicle was insured as pick-up van and it was carrying fish. MFA(WC.ACT)53/05 . 2 It is not proved by the insurance company that four persons were carried in the pick-up van and that was with the knowledge of the owner, the insured and that was the reason for the accident. In this connection we refer to the observations of the Supreme Court in National Insurance Co. Ltd.v. Swaran Singh (AIR 2004 SC 1531). At paragraph 105 (iii) it was held that to avoid liability towards insurered, the insurer has to prove the guilty of negligence. Here, the vehicle was duly entrusted to the licensed driver. At sub para (iv),(v) and (vi) it was held as follows: (iv). The insurance companies are, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish 'breach' on the part of the owner of the vehicle: the burden of proof wherefore would be on them. (v). The court cannot lay down any criteria as to how said burden would be discharged, in as much as the same would depend upon the facts and circumstances of each case. (vi). Even where the insurer is able to prove breach on the part of the insured MFA(WC.ACT)53/05 . 3 concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply "the rule of main purpose" and the concept of "fundamental breach" to allow defences available to the insured under Section 149(2) of the Act." Here, no such evidence was adduced. If the driver allowed without the knowledge of the owner four persons to travel, it may be at the maximum contributory negligence on the part of the driver. That is not a defence under the Workmen's Compensation Act. The driver was duly covered under the Workmen's Compensation Act and on that count, the insurer cannot evade liability. However, we notice that the Commissioner has also proposed to state that if the amount is not paid within the time frame, penalty will be recovered. In any event, the insurance company cannot be made liable to pay penalty on payment and in this case deposit was also made. Therefore, penalty cannot be imposed and that part of MFA(WC.ACT)53/05 . 4 the order is set aside. The amount of calculation of compensation is strictly as per the provisions of the Act. Hence, there is no merit in the appeal and in the main contention raised. The appeal is disposed of accordingly. J.B. KOSHY, JUDGE. THOMAS P. JOSEPH, JUDGE. cl MFA(WC.ACT)53/05 . 5