IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. FAO (WCA) No. 363/2004 Reserved on:30.9.2008 Decided on: 22.10.2008 Ram Bhagati and others. …Appellant. Versus Continental Foundation and another. …Respondents Coram The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting ?1. No. For the Appellants : Mr. Vinod Gupta, Advocate. For the Respondents : Mr. Bimal Gupta, Advocate. Rajiv Sharma, J. This FAO (WCA) is directed against the order dated 9.8.2004 passed by the Commissioner under the Workmen’s Compensation Act, Nichar at Bhaba Nagar, District Kinnaur, Himachal Pradesh (hereinafter referred to as ‘the Commissioner’ for brevity sake) in case No. 6/2002. Brief facts necessary for the adjudication of this appeal are that the appellants (hereinafter referred to as ‘the claimants’ for convenience sake) have filed a claim petition before the Commissioner after the death of Sh. Prem Sagar. The claim petition was resisted by the respondents primarily 1 Whether the reporters of Local Papers may be allowed to see the judgment? No. 2 on the ground that deceased Prem Sagar was neither employed as a workman nor he died during the course of employment. The learned Commissioner on the basis of the evidence led by the parties dismissed the claim petition on 9.8.2004. The present appeal has been preferred against the order dated 9.8.2004. Mr. Vinod Gupta has strenuously argued that the order dated 9.8.2004 is not sustainable in the eyes of law. He also contended that the Commissioner has come to a wrong conclusion that deceased Prem Sagar was not employed with the respondent-company. Mr. Bimal Gupra has supported the award dated 9.8.2004 passed by the Commissioner. I have herd the learned counsel for the parties and perused the record carefully. It will be apt at this stage to refer to the efforts made by this Court to settle the matter amicably. The respondents had offered a sum of Rs. 25,000/- by way of full and final compensation, which was not accepted by the clients of Mr. Vinod Gupta, Advocate. Smt. Ram Bhagati has appeared as CW-1. She has deposed that her husband was working as a driver in the respondent-company and the vehicle belonged to her husband. She has further deposed that the vehicle in question was hired @ Rs. 1000/- per day and besides a sum of Rs. 3000/- was paid as salary. CW-2 Padam has deposed that the vehicle of Prem Sagar was hired by the company. CW-3 Sher Singh has also deposed that the vehicle in question was hired by the company and Prem Sagar died during the flood. CW-5 Arjun Singh has placed on record the details of hiring of the vehicle in question by the company. He has admitted in his cross-examination that the record of all the vehicles which 3 are hired by the company is maintained and as and when the vehicles are hired the drivers are hired by the owners. It will be pertinent at this stage to refer to Ex.PW-1/D whereby the vehicle of deceased Prem Sagar was hired, which reads as under: “Sub: HIRING TAXI – HP-02-8746 Dear Sir, We have engaged your vehicle No. HP-02-8746 w.e.f. 11.3.2000 in our Company. You will be paid Rs. 1000/- per day/for 200 KM running whichever is applicable. Rs. 3.25 N.P. will be given on every 1 KM running over and above 200 KM running. Please note that any time we can dispense the vehicle contract without assigning any reason. If terms and conditions are acceptable you may give your consent. Thanking you, For CONTINENTAL FOUNDATION JOINT VENTURE.” The manner in which the money was paid to deceased is evident from Ex.CW-5/B. Section 2 (1) (e) of the Workmen’s Compensation Act, 1923 defines the term employer as under: “(e) ‘Employer’ includes any body of persons whether incorporated or not and any managing agent of an employer and the legal representative of a deceased employer, and, when the services of a workman are temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship, means such other person while the workman is working for him.” In the present case it is not disputed by the parties that the vehicle bearing No.HP-02-8756 was hired by the company as per Ex.PW-1/D. He was paid Rs. 1000/- per day/or 200 KMs running whichever applicable. A sum of Rs. 3.25 N.P. was to be given on every 1 KM running over and 4 above 200 KM running. The vehicle bearing No.HP-02-8746 was driven by deceased on the fateful day i.e. 1.8.2000 in the premises of the company. While driving the taxi hired by the respondent-company, he for all intents and purposes was an employee of the respondent-company. The learned Commissioner has come to a wrong conclusion that the deceased was not a workman. The learned Commissioner has failed to take into consideration the definition of the employer in section 2 (1) (e) of the Workmen’s Compensation Act, 1923. The Motor Vehicles Act, 1988 and the Workmen’s Compensation Act, 1923 are beneficial legislations with a social objective and are required to be interpreted in favour of those in whose favour the legislation is made even if two views are possible. It will be apt at this stage to take note of definition of expression ‘owner’ as per the Motor Vehicles Act, 1988. Sub section (30) of section 2 defines the term ‘owner’, which reads thus: "owner" means a person in whose name a motor vehicle stands registered, and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase, agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement.” Their Lordships of the Hon’ble Supreme Court had occasion to explain/interpret the expression ‘owner’ in Rajasthan State Road Transport Corporation Versus Kailash Nath Kothari And Others Etc. 1997 (2) ACJ 1148. Their Lordships have held that the expression ‘owner’ must include a person who has the actual possession and control of the vehicle and under whose directions and commands the driver is obliged to operate the bus . Their Lordships have held as under: 5 “The definition of owner under Section 2(19) of the Act is not exhaustive. It has, therefore to be construed, in a wider sense, in the facts and circumstances of a given case. The expression owner must include, in a given case, the person who has the actual possession and control of the vehicle and under whose directions and commands the driver is obliged to operate the bus. To confine the meaning of 'owner' to the registered owner only would in a case where the vehicle is in the actual possession and control of the hirer, not be proper for the purpose of fastening of liability in case of an accident. The liability of the "owner" is vicarious for the tort committed by its employee during the course of his employment and it would be a question of fact in each case as to on whom can vicarious liability be fastened in the case of an accident. In this case, Shri Sanjay Kumar, the owner of the bus could not ply the bus on the particular route for which he had no permit and he in fact was not plying the bus on that route. The services of the driver were transferred along with complete 'control' to RSRTC, under whose directions, instructions and command the driver was to ply or not to ply the ill- fated bus on the fateful day. The passengers were being carried by RSRTC on receiving fare from them. Shri Sanjay Kumar was, therefore, not concerned with the passengers travelling in that bus on the particular route on payment of fare to RSRTC. Driver of the bus, even though an employee of the owner, was at the relevant time performing his duties under the order and command of the conductor of RSRTC for operation of the bus. So far as the passengers of the ill-fated bus are concerned, their privity of contract was only with the RSRTC to whom they had paid the fare for travelling in that bus and their safety, therefore, became the responsibility of the RSRTC while travelling in the bus. They had no privity of contract with Shri Sanjay Kumar, the owner of the bus at all. Had it been a case only of transfer of services of the driver and not of transfer of 6 control of the driver from the owner to RSRTC, the matter may have been somewhat different. But on facts in this case and in view of conditions 4 to 7 of the agreement (supra), the RSRTC must be held to be vicariously liable for the tort committed by the driver while plying the bus under contract of the RSRTC. The general proposition of law and the presumption arising therefrom that an employer, that is the person who has the right to hire and fire the employee, is generally responsible vicariously for the tort committed by the concerned employee during the course of his employment and within the scope of his authority, is a rebuttable presumption. If the original employer is able to establish that when the servant was lent, the effective control over him was also transferred to the hirer, the original owner can avoid his liability and the temporary employer or the hirer, as the case may be, must be held vicariously liable for the tort committed by the concerned employee in the course of his employment while under the command and control of the hirer notwithstanding the fact that the driver would continue to be on the pay roll of the original owner. The proposition based on the general principle as noticed above is adequately rebutted in this case not only on the basis of the evidence led by the parties but also on the basis of conditions 6 and 7 (supra), which go to show that the owner had not merely transferred the services of the driver to the RSRTC but actual control and the driver was to act under the instructions, control and command of the conductor and other officers of the RSRTC. Reliance placed by learned counsel for the appellant on condition No. 15 of the agreement (supra) in our view is misconceived. Apart from the fact that this clause in the agreement between the owner and the RSRTC, to the extent it shifts the liability for the accident, from the RSRTC to the owner, may be against the public policy as opined by the High Court, though 7 we are not inclined to test the correctness of that proposition of law because on facts, we find that RSRTC cannot escape its liability to pay compensation. The second part of condition No. 15 makes it abundantly clear that the RSRTC did not completely shift the liability to the owner of the bus because it provided for reimbursement to it in case it has to pay compensation arising out of an accident. The words "if the Corporation is required to make any payment or incur any expenses through some Court or under some mutual compromise, the Corporation shall be able to recover such amounts from the owner of the bus after deducting the same from the amounts payable to him." in the later part of condition No. 15 leave no ambiguity in that behalf and clearly go to show the intention of the parties. Thus, RSRTC cannot escape its liability under condition No. 15 of the agreement either. Thus, both on facts and in law the liability to pay compensation for the accident must fall on the RSRTC.” Their Lordships of the Hon’ble Supreme Court in Zila Sahakari Kendrya Bank Maryadit versus Shahjadi Begum and others, (2006) (11) SCC 692 have held that where the vehicle was requisitioned for election duty, the services of the driver for all intents and purposes were under the control of the requisitioning authority. Their Lordships have held as under: “The Act was enacted to provide for payment by certain classes of employers to their workmen of compensation for injury by accident. The term "employer" has been defined in Section 2(1)(e) of the Act in the following terms: "2. (l)(e) 'employer' includes any body of persons whether incorporated or not and any managing agent of an employer and the legal representative 8 of a deceased employer, and, when the services of a workman are temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship, means such other person while the workman is working for him;" However, the term "employee" has not been defined in the Act. The definition of employer, therefore, embraces within its fold not only a person who employs another either permanently or on temporary basis but also those who were in control of the workman temporarily lent or let on hire to them by the person with whom the workman has entered into a contract of service. It is, therefore, a broad definition. Indisputably, the owner of the jeep was bound to comply with the order of requisition of a vehicle when the same is required to be placed on election duty. If the deceased was under the control of the Bank herein and in effect and substance under the control of Respondent 2, the Commissioner of Workmen's Compensation committed jurisdictional error in directing the appellant to deposit the amount of compensation. The High Court, in that view of the matter, should have, in our considered view, taken a liberal view in the matter and condoned the delay in filing the appeal as also depositing the awarded amount in the court. If the order passed by the Commissioner of Workmen's Compensation was wholly without jurisdiction, the same was a nullity. It was a coram non judice. It has been found as of fact by the Commissioner of Workmen's Compensation that the deceased was under the complete control of the requisitioning authority. He would, therefore, be the employer. As the jeep was requisitioned under a statute, the Bank had no other option but to put the same under the services of the requisitioning authority. In terms of requisition, the services of the deceased, thus, were also placed. The 9 employer, thus, would be the requisitioning authority, namely, the State of M.P.” The learned Single Judge of the Andhra Pradesh High Court in K. Matura Bai and others versus A. Shiva Nageswar Rao and others, 2006 (II) ACJ 1341 has held that when the State Transport Corporation took the bus on hire along with the driver for plying on a route earmarked to the Corporation and the bus met with an accident resulting in death of a person, the Corporation was to be considered as owner of the vehicle having its physical control and possession, running on its route and under its control. The learned Single Judge has held as under: “Turning to the case on hand although the contract of the hire has not been produced before the Tribunal, in view of the judgment of the Apex Court, there can be no difficulty in holding that the Corporation, for the purpose of this case, shall have to be considered as the owner of the vehicle having been in physical control and possession of the vehicle and running the same on the route earmarked to it and under its control. The conductor of the bus being the employee of txhe Corporation, the fares from the passengers being collected by the corporation thereby creating a privity of contract in between them inter se, the Corporation cannot disown its liability in the event of an accident jeopardizing the safety of its passengers. Similar view has been taken by the two learned Single Judges of this court separately in General Manager, Andhra Pradesh State Road Trans. Corpn. v. Bodapati Kanka Ratnabai, 2001 ACJ 401 (AP) and in Andhra Pradesh State Road Trans. Corpn. v. K. Suseelamma, 2005 ACJ 559 (AP). For the above reasons, the Corporation is vicariously liable. As regards the liability of the insurer, as discussed hereinabove, the policy of insurance was in vogue at the relevant time regardless of the fact that the 10 owner of the vehicle is liable or the Corporation is liable and in view of the policy covering the offending vehicle, the insurer cannot escape its liability. The problem can be examined in another view also. The Apex Court in Rikhi Ram v. Sukhrania, 2003 ACJ 534 (SC), held that the liability of the insurer would not cease even if the owner or the purchaser did not give any intimation of transfer of the vehicle to the insurer. The above view was taken by Apex Court having regard to section 94 of the old Act according to which once the vehicle was insured, besides the owner other person could also use the vehicle with the consent of the owner and section 94 did not require that the other person who will use the vehicle should also insure the vehicle in respect of his separate use. Section 146 of the new Act is akin to section 94 of the old Act. In view of the above authoritative pronouncement of the Supreme Court, although the vehicle was insured with the insurer by the owner of the vehicle but the vehicle has been used with the consent of the owner by the Corporation, it does not require the vehicle to be insured once again by the Corporation and the original policy under which the vehicle has been covered which runs with the vehicle is still enforceable notwithstanding the fact that the insurer has not been informed of the same by the owner or the Corporation, as the case may be. In any view of the manner, the liability of the insurer will not cease in view of the transfer. But, here is a case where there has been no sale of the vehicle but it is only a contract of hire. For the above reasons, I am of the considered view that the Corporation is vicariously liable for the rash and negligent driving of the driver of the offending vehicle and the insurer is liable to indemnify the owner as per the terms of the policy under which the vehicle has been covered.” Their Lordships of the Hon’ble Supreme Court in National Insurance Company Limited versus Deepa Devi and others, 2008 ACJ 11 705 have held that owner does not exercise any control over the vehicle while the vehicle remains under requisition. Their Lordships have further held that though the driver may be employee of the owner but he has to driver as per the direction of the officer of the State. Their Lordships have held as under: “The 1988 Act was enacted to consolidate and amend the law relating to motor vehicles. It repeals and replaces the Motor Vehicles Act, 1939 (for short "the 1939 Act"). "Owner" has been defined in Section 2(19) of the 1939 Act to mean: "In this Act, unless the context otherwise requires, *** *** *** (19) "owner" means, where the person in possession of a motor vehicle is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a higher purchase agreement, the person in possession of the vehicle under that agreement;" However, the said definition underwent a change by reason of Section 2(30) of the 1988 Act providing: "In this Act, unless the context otherwise requires, *** *** *** (30) "owner" means a person in whose name a motor vehicle stands registered, and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase, agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement;" Parliament either under the 1939 Act or the 1988 Act did not take into consideration a situation of this nature. No doubt, Respondent Nos. 3 and 4 continued to be the registered owner of the vehicle despite the fact 12 that the same was requisitioned by the District Magistrate in exercise of its power conferred upon it under the Representation of People Act. A vehicle is requisitioned by a statutory authority, pursuant to the provisions contained in a statute. The owner of the vehicle cannot refuse to abide by the order of requisition of the vehicle by the Deputy Commissioner. While the vehicle remains under requisition, the owner does not exercise any control thereover. The driver may still be the employee of the owner of the vehicle but he has to drive it as per the direction of the officer of the State, who is put in-charge thereof. Save and except for legal ownership, for all intent and purport, the registered owner of the vehicle loses entire control thereover. He has no say as to whether the vehicle should be driven at a given point of time or not. He cannot ask the driver not to drive a vehicle on a bad road. He or the driver could not possibly say that the vehicle would not be driven in the night. The purpose of requisition is to use the vehicle. For the period the vehicle remains under the control of the State and/ or its officers, the owner is only entitled to payment of compensation therefor in terms of the Act but he cannot not exercise any control thereupon. In a situation of this nature, this Court must proceed on the presumption that the Parliament while enacting the 1988 Act did not envisage such a situation. If in a given situation, the statutory definitions contained in the 1988 Act cannot be given effect to in letter and spirit, the same should be understood from the common sense point of view. We, therefore, are of the opinion that the State shall be liable to pay the amount of compensation to the claimants and not the registered owner of the vehicle and consequently the appellant herein.” In the present case, the vehicle in question has been hired by the respondent-company and it remained under the control of the company. 13 The hirer i.e. respondent-company had become the owner of the vehicle in question. In view of Schedule-II, item (XXV), it is futile to contend that deceased was not a workman employed by the respondent-company. A person employed as a driver finds mention in Schedule-II. The combined reading of section 2 (1) (n) read in conjunction with schedule-II, item (XXV) makes it abundantly clear that the driver of vehicle comes under the category of workman under the Workmen’s Compensation Act, 1923. In the present case the respondent-company will be deemed to be the physical control and possession of the vehicle. The driver was at the command of the company. In view of the definitive law laid down by the Hon’ble Supreme Court and by the Andhra Pradesh high Court in the cases cited above, it is held that the deceased Prem Sagar was a workman and he died during the course of employment with the respondent-company. The learned Commissioner has come to a wrong conclusion that it was only the vehicle which was hired and not the driver. In the present case the vehicle was hired by the company and deceased Prem Sagar was driving the vehicle during the course of his employment. The mode of payment of wages/salary is not conclusive to prove the master-servant relationship. He was not required to be paid wages/salary per month in view of the specific terms and conditions agreed upon as per Ex.PW-1/D. Consequently, in view of the observations made hereinabove, the present appeal is allowed. The award dated 9.8.2004 is quashed and set aside. The matter is remanded back to the Commissioner under the Workmen’s Compensation Act, Nichar at Bhaba Nagar, District Kinnaur, Himachal Pradesh,