SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 1/46 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR. 1. S.B. CIVIL MISC. APPEAL NO.891/2008 The New India Assurance Co. Ltd. Versus Smt. Bidami and ors. 2. S.B. Civil Misc. Appeal No.30/2006 Smt. Bidami Devi and ors. Versus Bhimsen and ors. 3. S.B. Civil Misc. Appeal No.29/2006 Gopi Ram versus Bhim Sen and ors. PRESENT HON'BLE Dr.JUSTICE VINEET KOTHARI Mr.D.S. Nimla, for the appellant- Insurance company Mr.Anil Bhandari, } Mr.B.L. Tiwari } for the respondents-claimants. Mr.Sanjeev Johari } for the owner and driver DATE OF JUDGMENT : 3rd August, 2009. REPORTABLE JUDGMENT SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 2/46 APPEAL NO.981/2008 1. This appeal has been filed by the appellant – Insurance Company under Section 30 of the Workmen Compensation Act, 1923 aggrieved by the award of the Workmen Compensation Commissioner, Jodhpur dtd.31.3.2008 in claim Case No.11/2006. 2. The brief facts giving rise to this appeal are that the husband of the respondent No.1 Smt. Badami, namely, Pappu Ram while driving Truck No. RJ-19/1G-3189 coming from Mumbai to Jodhpur in the night between 29.7.2003 and 30.7.2003, collided with Trailer No. HR-55-0707 and in the said accident Pappu Ram lost his life. The wife of the said deceased Pappu Ram, namely, Smt. Bidami Bai and his children Mamta, Rekha and Munna initially filed claim case No.103/2005 on 16.5.2005 before the Motor Accident Claims Tribunal, Jodhpur and the said claim was awarded on 30.11.2005 and a sum of Rs.4,60,333/- was paid to the claimants for the said death, in January, 2006. Thereafter somewhere in June, 2006, it appears that the same claimants filed present claim before the Workmen Compensation Commissioner against the employer and owner of the Truck being driven on the date of accident by Pappu Ram, namely, Truck No.RJ19/1G-3189 impleading the owner Sh. Gopi Ram as SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 3/46 employer - respondent and the appellant New India Assurance Company as respondent. In MACT Case No.103/2005, these claimants had impleaded tortfeasor, namely owner Bhim sen, driver and insurer, the same Insurance Company, namely, the New India Assurance Company Limited of other offending vehicle, namely Trailer No. HR55-0707, in which they were awarded a compensation of Rs.4,61,333/-. 3. The Workmen Compensation Commissioner decided the claim No.11/2006 and awarded a sum of Rs.3,46,368/- and interest on the said compensation of Rs.1,93,866/- by the impugned award dtd.31.3.2008. The Workmen Compensation Commissioner in the award dtd.31.3.2008 noticed that there was delay in filing the claim petition of about 3 years, since the accident took place ion 29.7.2003 and the claim petition was filed in June, 2006, however the said delay deserves to be condoned as the employer respondent No.1 Gopi Ram had assured the claimant that let first MACT claim be decided and thereafter the claim under the Workmen Compensation Act as may be decided by the competent authority would be paid by him. The Workmen Compensation Commissioner also held that plea of limitation would not come in the way of the claimants and the claim should be decided on merits. The Workmen Compensation Commissioner also relying upon the decision of Gujarat High Court in the case of Nasim Banu V/s Ramji Bhai Bachchu Bhai Ahi SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 4/46 reported in MACD 2006 (1) Gujarat 108 held that notwithstanding the award of the claim under the provisions of Motor Vehicles Act against the tortfeasor, the claim against the employer under the Workmen Compensation Act, 1923 could be awarded in favour of the claimants. Being aggrieved by the said award, the Insurance Company has preferred this appeal before this Court. 4. Mr. D.S. Nimla, learned counsel appearing for the Insurance Company submitted that in view of bar under Section 167 of the Motor Vehicles Act, 1988 and also Section 3(5) of the Workmen Compensation Act, the claimants – legal representatives of deceased Pappu could not claim double benefit under both the enactments and therefore, the subsequent claim under the Workmen Compensation Act, 1923 was liable to be rejected and the appellant – insurance company cannot be made to pay said compensation. He also urged that claim itself was time barred having been filed after a delay of 3 years and also there was contributory negligence on the part of the driver Pappu Ram himself and thus, the claim under the MACT case having already been paid by the same insurance company, the award under the Workmen Compensation Act, 1923 deserves to be set aside. He relied upon the several decisions of the Hon'ble Supreme Court and various other High Courts and reference to which would be made hereinafter. SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 5/46 5. On the other hand, Mr. Anil Bhandari, Sunil Bhandari, the learned counsels appearing on behalf of the claimants vehemently submitted that doctrine of election provided for in Section 167 of the Motor Vehicles Act, 1988 does not apply where the claimants have right to proceed against the employer under the Workmen Compensation Act and against the tortfeasor; a different person under the provisions of Motor Vehicles Act. They submitted that bar is only against availing two remedies against the same employer under both the enactments, namely, Workmen Compensation Act, 1923 and Motor Vehicles Act, 1988. They also urged that the claim filed before the Workmen Compensation Commissioner was not delayed and the delay, if any, has already been condoned by the Workmen Compensation Commissioner and also there was no contributory negligence on the part of the said deceased Pappu Ram and obviously since the respondent parties in both the claim petitions were different, even though the Insurance Company was common, the Insurance Company cannot be absolved from its liability to pay compensation under two separate insurance contracts, one as insurer of the tortfeasor for vehicle No. HR-55-0707 and other as insurer of Truck No. RJ-19 1G-3189 as employer covering risk of the Workman under the Workmen Compensation Act. He also drew the attention of the Court towards proviso to Section 147 of the Motor Vehicles Act in which liability arising under the provisions of Workmen Compensation Act, 1923 in respect of death or bodily SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 6/46 injury to such employee engaged in driving of the vehicle could be covered under the insurance policy. Mr. Anil Bhandari also relied upon the several decisions of the Supreme Court and other High Courts including this Court, reference to which is being made hereinafter. SPECTRUM OF CASE LAWS 6. Let this Court deal with case laws cited at the bar on both sides in reverse order date wise, namely, the latest cases being discussed first. CASE LAWS RELIED UPON BY THE INSURANCE COMPANY I) Bhakra Beas Management Board V/s Kanta Aggarwal and ors. reported in 2008 ACJ 2372 decided on 7.7.2008 7. While dealing with the case of compensation under the provisions of Motor Vehicles Act, the Hon'ble Apex Court found that the widow of the deceased had been provided compassionate appointment by the same employer who was drawing almost same salary as the deceased was and in order to arrive at just and fair SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 7/46 compensation, the Hon'ble Apex Court reduced the amount of compensation arrived at by the MACT and upheld by the High Court of Rs.8,48,106/- to Rs.5,00,000/- in full and final settlement of claim. While discussing the principles relating to assessment of damages under the Fatal Accident Act, the Court observed that any benefit accruing to the dependents by reason of the relevant death must be taken into account and under those Acts the balance of loss and gain to a dependant by the death must be ascertained. Relying upon the earlier decision of the Supreme Court in the case of Gobald Motor Services Ltd. V/s R.M.K. Veluswami reported in 1958-65 ACJ 179 (SC) and Davies V/s Power Duffryn Associated Collieries Ltd. reported in (1942) AC 601 in para 7 of the judgment and judgment of the Supreme Court in the case of Helen C. Rebello V/s Maharashtra State Road Transport Corporation reported in 1999 ACJ 10 (SC) in para 9 of the judgment, the Hon'ble Apex Court held as under: “7. In United India Insurance Co. Ltd. V/s Patricia Jean Mahajan, 2002 ACJ 1441 (SC), it was inter alia, observed as follows: “(21) Mr. Soli J. Sorabjee submitted that while assessing the amount of compensation, the benefits which have accrued to the claimants by reason of death must also be taken into account. A SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 8/46 kind of balancing of losses and the gains or benefit by reason of death would be necessary. In support of the above contention, he has referred to the decision in Gobald Motor Services Ltd. v. R.M.K. Veluswami, 1958-65 ACJ 179 (SC). It is a decision by a three-Judges Bench of this Court and at page 184, the observations made by the House of Lords in Davies v. Powell Duffryn Associated Collieries Ltd., (1942) AC 601, has been quoted which reads as follows: “The general rule which has already prevailed in regard to the assessment of damages under the Fatal Accidents Acts is well settled, namely, that any benefit accruing to a dependant by reason of the relevant death must be taken into account. Under those Acts the balance of loss and gain to a dependant by the death must be ascertained, the position of each dependant being considered separatdely.” 9. In Helen C. Rebello v Maharashtra State Road Trans. Corpn. 1999 ACJ 10 (SC), it was held as follows: SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 9/46 “(34) So far as the general principle of estimating damages under the common law is concerned, it is settled that the pecuniary loss can be ascertained only by balancing on one hand, the loss to the claimant of the future pecuniary benefits that would have accrued to him but for the death with the 'pecuniary advantage' which from whatever source comes to him by reason of the death. In other words, it is the balancing of loss and gain of the claimant occasioned by the death. But this has to change its colour to the extent a statute intends to do. Thus, this has to be interpreted in the light of the provisions of the Motor Vehicles Act, 1939. It is very clear, to which there could be no doubt that this Act delivers compensation to the claimant only on account of accidental injury or death, not on account of any other death. Thus, the pecuniary advantage accruing under this Act has to be deciphered, correlating with the accidental death. The compensation payable under the Motor Vehicles Act is on account of pecuniary loss to the claimant by accident injury or death and not other forms of death. If there is natural death or death by suicide, serious illness, including even death by accident, through train, air flight not involving a motor vehicle, would not be covered under the Motor Vehicles Act. Thus, the SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 10/46 application of the general principle under the common law of loss and gain for the computation of compensation under this Act must correlate to this type of injury or death, viz. Accidental. If the words 'pecuniary advantage' from whatever source are to be interpreted to mean any form of death under this Act, it would dilute all possible benefits conferred on the claimant and would be contrary to to the spirit of the law. If the 'pecuniary advantage' resulting from death means pecuniary advantage coming under all forms of death then it will include all the assets movable, immovable, shares, bank accounts, cash and every amount receivable under any contract. In other words, all heritable assets including what is willed by the deceased, etc. This would obliterate both, all the possible conferment of economic security to the claimant by the deceased and the intentions of the legislature. By such an interpretation, the tortfeasor in spite of his wrongful act or negligence, which contributes to the death, would have in many cases no liability or meagre liability. In our considered opinion, the general principle of loss and gain takes colour of this statute viz. The gain has to be interpreted which is as a result of the accidental death and the loss on account of the accidental death. Thus, SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 11/46 under the present Act, whatever pecuniary advantage is received by the claimant, from whatever source, would only mean which comes to the claimant on account of the accidental death and not other form of death. The constitution of Motor Accidents Claims Tribunal itself under Section 110 is, as the section states: “... for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death of, or bodily injury to ...” (35) Thus, it would not include that which claimant receives on account of other forms of death, which he would have received even apart from accidental death. Thus, such pecuniary advantage would have no correlation to the accidental death for which compensation is computed. Any amount received or receivable not only on account of the accidental death but that would have come to the claimant even otherwise could not be construed to be the 'pecuniary advantage', liable for deduction. However, where the employer insures his employee, as against injury or death arising out of an accident, any amount received out of such insurance on the happening of such incidence may be an SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 12/46 amount liable for deduction. However, our legislature has taken note of such contingency, through the proviso of Section 95. Under it, the liability of the insurer is excluded in respect of injury or death, arising out of and in the course of employment of an employee. (36) This is based on the principle that the claimant for the happening of the same incidence may not gain twice from two sources. Thus, it is excluded either through the wisdom of the legislature or through the principle of loss and gain through deduction not to give gain to the claimant twice arising from the same transaction, viz. Same accident. It is significant to record here in both the sources viz. either under the Motor Vehicles Act or from the employer, the compensation receivable by the claimant is either statutory or through the security of the employer securing for his employee but in both cases, he receives the amount without his contribution. How thus an amount earned out of one's labour or contribution towards one's wealth, savings, etc. either for himself or for his family, which such person knows under the law, has to go to his heirs after his death either by succession or under a will could be said to be the 'pecuniary gain' only on account of one's accidental death. This of course, SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 13/46 is a pecuniary gain but how this is equitable or could be balanced out of the amount to be received as compensation under the Motor Vehicles Act. There is no correlation between the two amounts. Not even remotely. How can an amount of loss and gain of one contract could be made applicable to the loss and gain of another contract. Similarly, how an amount receivable under a statute has any correlation with an amount earned by an individual. Principle of loss and gain has to be on the same plane within the same sphere, of course, subject to the contract to the contrary or, any provision of law.” 8. The judgment in the case of Helen C. Rebello V/s Maharashtra State Road Transport Corporation decided by the Apex Court arose in the circumstances of question raised before the Court as to whether the compensation received from the Life Insurance Corporation on the death of the insured arising out of accident could be deducted/set off against the claim awarded under the provisions of Motor Vehicles Act. The Hon'ble Apex Court answered the question in negative and held that the compensation payable under the Motor Vehicles Act is statutory while the amount receivable under the Life Insurance Policy is contractual. The relevant portion has already been SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 14/46 quoted above and the conclusion drawn by the Apex Court in para 37 of the judgment is reproduced hereunder for ready reference: “37. Broadly we may examine the receipt of the provident fund which is a deferred payment out of the contribution made by an employee during the tenure of his service. Such employee or his heirs are entitled to receive this amount irrespective of the accidental death. This amount is secured, is certain to be received, while th amount under the Motor Vehicles Act is uncertain and is receivable only on the happening of the event, viz. Accident which may not take place at all. Similarly, family pension is also earned by an employee for the benefit of his family in the form of his contribution in the service in terms of the service conditions receivable by the heirs after his death. The heirs receive family pension even otherwise than the accidental death. No correlation between the two. Similarly, life insurance policy amount is received either by the insured or the heirs of the insured on account of the contract with the insurer, for which insured contributes in the form of premium. It is receivable even by the insured, if he lives till maturity after paying all the premiums, in the case of death insurer indemnifies to pay the sum to the heirs, SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 15/46 again in terms of the contract for the premium paid. Again, this amount is receivable by the claimant not on account of any accidental death, but otherwise on insured's death. Death is only a step or contingency in terms of the contract, to receive the amount. Similarly any cash, bank balance, shares, fixed deposits, etc. though are all a pecuniary advantage receivable by the heirs on account of one's death but all these have no correlation with the amount receivable under a statute occasioned only on account of accidental death. How could such an amount come within the periphery of the Motor Vehicles Act to be termed as 'pecuniary advantage' liable for deduction. When we seek the principle of loss and gain, it has to be on similar and same plane having nexus inter se between them and not to which, there is no semblance of any correlation. The insured (deceased) contributes his own money for which he receives the amount has no correlation to the compensation computed as against the tortfeasor for his negligence on account of the accident. As aforesaid, the amount receivable as compensation under the Act is on account of the injury or death without making any contribution towards it, then how can the fruits of an amount received through contributions of the insured be SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 16/46 deducted out of the amount receivable under the Motor Vehicles Act. The amount under this Act he receives without any contribution. As we have said the compensation payable under the Motor Vehicles Act is statutory while the amount receivable under the life insurance policy is contractual.” ii) National Insurance Co. Ltd. V/s Mastan and anr. - 2006 ACJ 528. 9. The question being decided in the said case was as to whether the insurer while defending the action initiated under the Workmen Compensation Act is precluded from raising any defence as envisaged under Sub-Section (2) of Section 149 of the Motor Vehicles Act, 1988. The Apex Court observed in para 22 and 23 about Section 167 and 168 of the Act and doctrine of election in the following manner: “22. Section 167 of the 1988 Act statutorily provides for an option to the claimant stating that where the death of or bodily injury to any person gives rise to a claim for compensation under the 1988 Act as also the 1923 Act, the person entitled to compensation may without prejudice to the provisions of Chapter X claim such compensation under either of those Acts but not under SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 17/46 both. Section 167 contains a non obstante clause providing for such an option notwithstanding anything contained in the 1923 Act. 23. The 'doctrine of election' is a branch of 'rule of estoppel', in terms whereof a person may be precluded by his actions or conduct or silence when it is his duty to speak, from asserting a right which he other would have had. The doctrine of election postulates that when two remedies are available for the same relief, the aggrieved party has the option to elect either of them but not both. Although there are certain exceptions to the same rule but the same has no application in the instant case.” 10. In the case of A. Trehan V/s M/s Associated Electrical Agencies reported in 1996 Supreme Court on Accident Claims 813, the Hon'ble Supreme Court held that bar under Section 53 of the Employees State Insurance Act, 1948 takes away the right of the workman who is insured person and an employee under the ESI Act to claim compensation under the Workman's Compensation Act, 1923. 11. In the case of Pawan Kumar V/s Commissioner, Workmen's Compensation reported in 1997 ACJ 397, the learned Single Judge of Punjab and Haryana High Court held that in view of Section 167 of SBCMA NO.891/2008– THE NEW INDIA ASSURANCE CO. LTD. V/S SMT. BIDAMI AND ORS. AND 2 OTHER CONNECT APPEALS . :JUDGMENT DTD.3.8.2009 18/46 the Motor Vehicles Act, the claimant – workman had option of forum and where the claimants filed the claim petition before the Commissioner under the Workmen Compensation Act and they also filed claim petition before the Motor Accident Claims Tribunal under the Motor Vehicles Act, 1993, the Court held that under both the Acts, the claimant could not claim benefit. 12. Similarly, Gauhati High Court in the case of Abul Khayer V/s Union of India reported in 2008 (4) TAC 981 (Gau.) held that claimants have no right to approach both the forums prescribed under MACT Act as well as Workmen Compensation Act and he can opt for forum and such option must be a conscious option and choice of the claimant must be out of free will and should be made before adjudication of his claim. 13. The Gujarat High Court in the case