FA/1115/1987 1/6 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 1115 of 1987 With CIVIL APPLICATION No. 900 of 2008 In FIRST APPEAL No. 1115 of 1987 For Approval and Signature: HONOURABLE MR.JUSTICE D.H.WAGHELA ====================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ====================================== NEW INDIA ASSURANCE CO.LTD. Versus ARVINDBHAI MOTIBHAI PAGI AND OTHERS ====================================== Appearance : MR VP NANAVATI with MR PV NANAVATI for Appellant. (MR.MOHIT S SHAH) for Respondent No.1. None for Respondent Nos.2 - 3. ====================================== CORAM : HONOURABLE MR.JUSTICE D.H.WAGHELA Date : 11/02/2008 ORAL JUDGMENT 1. The appeal under the erstwhile provisions of Section 110 D FA/1115/1987 2/6 JUDGMENT of the Motor Vehicles Act, 1939 seeks to challenge liability of the insurance company only on the ground that the injured claimant, a victim of motor accident, was a labourer and the appellant insurance company had not undertaken to indemnify the insured against legal liability arising out of injury to labourers employed by the insured. The judgment and award under challenge is dated 25th September 1986 of MACT (Main) Vadodara in MACP No.173 of 1984, and the accident has happened on 13-3-1982 when the claimant, travelling with the tractor of the insured as a labourer, had sustained crush injuries on his leg, practically disabling him from working as a labourer. 2. Learned counsel, Mr.V.P.Nanavati appearing for the appellant vehemently reiterated the contention that even as additional premium was paid with endorsement as per IMT 16, 23 and 37, the liability in respect of injury to the labourer was not covered by the policy and, therefore, the appellant could be held responsible only to the extent of liability arising under the provisions of Workmen's Compensation Act, 1923 as a part of compulsory insurance. That contention was also raised before the tribunal and was dealt with as under in the impugned award: “23. The contention raised by Shri Mehta is that the insurer would not be liable because the risk of a labourer is not covered. His second contention is that the liability would not exceed than the liability under the Workmen's Compensation Act, 1923. But as rightly pointed out by the learned Advocate for the applicant, there has been the endorsement Nos.16 and 23. These endorsement-clauses have been annexed to the insurance policy. The Amendment No.IMT-16 which is attached to the policy and which forms part of the policy runs as under:- FA/1115/1987 3/6 JUDGMENT “In consideration of the payment of an additional premium it is hereby understood and agreed that notwithstanding anything contained herein to the contrary the Company shall indemnify the Insured against his legal liability under:- The Workmen's Compensation Act, 1923 and subsequent amendments of that Act, prior to the date of this Endorsement, the Fatal Accident Act, 1855 or at Common Law in respect of personal injury to any paid driver (or cleaner or conductor or person employed in loading and/or unloading) whilst engaged in the service of the Insured in such occupation in connection with then ..... and will in addition be responsible for all costs and expenses incurred with its written consent.” “24. A bare perusal of the abovesaid clause would go to show that the liability of the cleaner or the conductor or person employed in the loading and/or unloading while engaged in the service of the insured is also covered. “25. It requires to be appreciated that the case of Arvindbhai Pagi that he was employed on the tractor and the trailer in the capacity of the labourer and that they were going to fetch the fertilizer. He was to work for the loading and the unloading of the fertilizers in the trailer. In view of this position, it becomes clear that the insurer would be liable to satisfy the award. Moreover, the liability would not be limited to the extent of the liability under the Workmen's Compensation Act, 1923, because extra premium has been charged and there is a specific clause as stated above. It, FA/1115/1987 4/6 JUDGMENT therefore, would mean that the opponent No.3 would also be liable to satisfy the award. In other words, the opponent Nos.1, 2 and 3 shall be jointly and severally liable to satisfy the award which may be pronounced in the claim petition.” 3. Learned counsel, Mr.Nanavati referred to the policy, Exh.26, produced a true copy thereof and pointed out that particular endorsement no.IMT 16 also included one more paragraph below the aforementioned paragraphs quoted in the impugned award: “The premium having been calculated at the rate of Rs.8/- per driver (and/or cleaner or conductor and or person employed in loading and/or unloading) the Insured shall certify at the expiry of each period of Insurance the maximum number of drivers and/or cleaners and/or conductors and/or persons employed in loading and/or unloading employed at any one time during such period in connection with the ............ belonging to him and the premium shall be adjusted accordingly. Provided always that; ....................” 4. It was also pointed out that additional premium charged from the insured was only Rs.8/- which clearly signify that only the driver was insured by the policy as far as the liability of the insurance company was concerned. On that basis, he submitted that liability of the appellant had to be restricted to the liability under the Workmen's Compensation Act, 1923 and, hence, the appellant was required to be exonerated of payment of any other or further amount. Learned counsel relied upon judgment of the Supreme Court in National Insurance Co. Ltd. v. Prembai Patel and Others [AIR 2005 SC 2337] and emphasized FA/1115/1987 5/6 JUDGMENT the ratio as under contained in para 15 of the judgment: “15. Though the aforesaid decision has been rendered on Section 95 (2) of the Motor Vehicles Act, 1939 but the principle underlying therein will be fully applicable here also. It is thus clear that in case the owner of the vehicle wants the liability of the insurance company in respect of death of or bodily injury to any such employee as is described in clauses (a) or (b) or (c) of proviso (i) to Section 147(1)(b) should not be restricted to that under the Workmen's Act but should be more or unlimited, he must take such a policy by making payment of extra premium and the policy should also contain a clause to that effect. However, where the policy mentions "a policy for Act Liability" or "Act Liability", the liability of the insurance company qua the employees as aforesaid would not be unlimited but would be limited to that arising under the Workmen's Act.” 5. Admittedly, the policy in question in the facts of the present case is not an “Act only policy” or “a policy for Act Liability only”. Instead it clearly and expressly mentions “endorsement nos.16, 23, 37” as annexed and the annexure, inter alia, contains above clauses. Therefore, the insurance company has undertaken additional liability by charging additional premium and such liability would depend upon application and interpretation of the conditions of policy. The aforesaid clause, endorsement no. IMT 16, attaching to and forming part of the policy for covering legal liability of the insured in connection with operation and/or maintenance and/or unloading of motor vehicle is in a printed form which is not fully filled up but duly signed by the FA/1115/1987 6/6 JUDGMENT constituted attorney of the appellant. Reading of relevant three paragraphs of the annexure as reproduced hereinabove, leaves no room for doubting that the endorsement was intended to indemnify the insured against his legal liability under the Workmen's Compensation Act, 1923 as well as at common law in respect of personal injury to any person employed in loading or unloading while in service of the insured. The third paragraph on which maximum emphasis was laid by learned counsel only clarifies the necessity of certifying, at the expiry of the period of insurance, the maximum number of drivers, cleaners, conductors or persons employed in loading, at any one time during the period in connection with which the insurance was effective. Therefore, it cannot derogate from the previous two paragraphs by which the insurer had undertaken to indemnify the insured against his legal liability. In view of these special and specific conditions of the policy, the aforesaid judgment of the Supreme Court in National Insurance Co. Ltd. v. Prembai Patel and Others (supra) has no application in the facts of the case. 6. In above view of the particular condition of policy contained in endorsement no. IMT 16, the sole contention of the appellant that its liability was restricted to the amount due under the provisions of the Workmen's Compensation Act, 1923 cannot be accepted. Therefore, the appeal fails and it is dismissed accordingly. Civil Application No.900 of 2008 does not survive in view of this judgment and accordingly it is disposed as rejected. (D.H.Waghela, J.) /malek