PRAVEENBHAI S. KHAMBHAYATA versus UNITED INDIA INSURANCE COMPANY LTD. & ORS.
[2015] 2 S.C.R. 436, Supreme Court of India, 2015
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
A 
B 
c 
[2015) 2 S.C.R. 436 
PRAVEENBHAI S. KHAMBHAYATA 
v. 
UNITED INDIA INSURANCE COMPANY LTD. & ORS. 
(Civil Appeal No. 1970 of 2015) 
FEBRUARY 17, 2015 
[V. GOPALA GOWDA AND R. BANUMATHl,JJ.) 
Workmen's Compensation Act, 1923 - s. 147 - Death 
of workman in the course of employment -
Insurance 
company to indemnify the owner of the vehicle for death 
of a person who was employed by him in another vehicle 
0 - Liability of -
Deceased employed as cleaner of one 
vehicle and while filling water in the radiator of another 
dumper, met with an accident resulting in fatal injuries -
Labour court holding that the owners of the vehicle, jointly 
and severally liable to pay compensation along with 10% 
E penalty and 6 % interest p.a. and insurance company not 
liable - High Court upheld the order - On appeal, held: 
Cleaner filled water in the radiator of vehicle only on the 
direction of the employer and thus, was working in the 
course of employment - The owner produced the insurance 
F policy which covered the vehicle involved in the accident 
- Both the vehicles were parked in the same space, both 
were insured with the insurance company and the owner 
was one and the same and since the deceased being the 
cleaner and the claimants hailing from the lowest strata of 
G society, insurance company directed to indemnify the owner 
for the death of deceased - Statutory rate of penalty is 
awarded at the rate of 15% and interest is awarded at the 
rate of 12% p.a. - s. 4-A (3)(a)
and (b) - Constitution of 
H 
436
PRAVEENBHAI S. KHAMBHAYATA v. UNITED INDIA 437 
INSURANCE COMPANY LTD. 
India, 1950 -Art. 142. 
A 
Allowing the appeal, the Court 
HELD: 1.1 The insurance policy of a public 
service vehicle is deemed to cover an employee 8 
engaged in the said vehicle and the liability of the 
insurance company to pay compensation for the death 
or injuries sustained by the workman. Payment of 
compensation for the death of workman or injuries 
sustained by the workman is limited to the liability C 
arising in the Employees Compensation Act, 1923. 
[Para 9] [442-E-F] 
1.2 Considering the facts of the case, both the 
vehicles were parked in the same space and it can be D 
safely stated that the deceased cleaner was filling the 
water in the radiator of vehicle no.GJ-3U-5391 only on 
the direction of the employer and thus, the cleaner was 
working in the course of employment. The High Court E 
rejected the claim of the appellant on the ground that 
the insurance policy of vehicle No. GJ-3V-7785 was not 
produced but now since the appellant has produced 
the insurance policy which covers the vehicle involved 
in the accident which provides to indemnify the owner F 
of the vehicle in case of any accident caused to the 
workman limited to the extent of liability under 
Workmen's Compensation Act. [Para 11] (443-E-H] 
1.3 Both the vehicles were insured with the first G 
respondent-insurance company and the owner being 
.one and the same and since the deceased being the 
cleaner and the claimants
hailing from the lowest strata 
of society, in exercise of our extra-ordinary jurisdiction H

438 
SUPREME COURT REPORTS 
[2015] 2 S.C.R. 
A under Article 142 of the Constitution of India, it is 
appropriate to direct the first respondent-insurance 
company to indemnify the appellant for the death of 
deceased. [Para 12] [444-A-B] 
B 
1.4 Having regard to the passage of time and in 
the interest of justice, statutory rate of penalty i.e. 
15% is to be ordered in addition to the statutory 
interest payable at the rate of 12% per annum. The 
1st respondent-insurance company shall pay the 
C amount of Rs. 3,25,365/- to the appellant which it 
has already deposited towards compensation. The 
impugned judgment of the High Court is set aside. 
[Paras 15 and 16] [446-C; 447-A-B] 
D Ved Prakash Garg vs. Premi Devi & Ors. (1997) 8 SCC 1: 
1997 (4) Suppl. SCR 250; Oriental Insurance Company 
Ltd. vs. Brij Mohan And Ors. (2007) 7 SCC 56: 2007 (6) 
SCR 843; Deddappa & Ors. vs. National Insurance 
Company Ltd. (2008) 2 SCC 595: 
2007 (13) SCR 287 
E - referred to. 
Case Law Reference 
1997 (4) Suppl. SCR 250 
F 
2007 (6 ) SCR 843 
2007 (13) SCR 287 
referred to. Para 6 
referred to. Para 13 
referred to. Para 14 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 
G 1970 of 2015 
' 
From the Judgment and Order dated 16.04.2014 of 
the High Court of Gujarat at Ahmedabad in First Appeal 
No. 282 of 2014. 
H 
Jayant Mohan, Karan Mathur for the Appellant.
PRAVEENBHAI S. KHAMBHAYATA v. UNITED INDIA 439 
INSURANCE COMPANY LTD. 
Maibam N. Singh, Himanshu Singh, Pramod Dayal for A 
the Respondents. 
The Judgment of the Court was delivered by 
R. BANUMATHI, J. 1. Leave granted. 
2. This appeal is preferred against the judgment dated 
16. 04.2014 passed by the High Court of Gujarat at 
Ahmedabad dismissing the appellant's First Appeal No.282 
B 
of 2014 observing that the Insurance Company was not 
liable to indemnify him, thereby confirming the order dated C 
11.11.2013 passed by the Commissioner for Workmen's 
Compensation/Labour Court, Rajkot. 
3. The brief facts which led to the filing of this appeal 
are as follows:- Proforma respondents 2-4/claimants, D 
namely, Lalmani Yadav-father, Dashmiya Lalmani yadav-
mother and Janaki alias Babli Ramesh Yadav-wife of the 
deceased, Ramesh Lalmani Yadav filed a claim petition 
before Commissioner for Workmen's Compensation/Labour 
Court, Rajkot, claiming compensation for the death of E 
deceased Ramesh Lalmani Yadav on 20.05.2002 in the 
course of his employment. On the fateful day of 20.05.2002, 
deceased Ramesh Lalmani Yadav was working as a cleaner 
in the vehicle bearing No.GJ-3V-7785, in the employment F 
of the appellant and respondent No.5. In the afternoon at 
about 12.30 p.m., deceased was filling water in the radiator 
of the vehicle when suddenly the bonnet of the vehicle fell 
down on the head of the deceased, as a result of which 
he fell down and died. Stating that Ramesh
Lalmani Yadav G 
died in the course of his employment, respondents No.2 to 
4 filed the claim petition claiming compensation of 
Rs.4, 15,093/- and that appellant and respondent No.5-
lnsurance Company are liable to pay the compensation of 
H
440 
SUPREME COURT REPORTS 
[2015] 2 S.C.R. 
A Rs.4, 15,093/-. 
4. Before the Commissioner, both the parties adduced 
oral and documentary evidence. 
Upon consideration of 
the records, the Commissioner held that FIR dated 
B 20.05.2002 was lodged by the driver of the vehicle bearing 
No. GJ-3V-7785 in which it- was mentioned that on the 
fateful day while reversing the said vehicle he saw 
deceased putting water in the radiator of another vehicle 
bearing no. GJ-3U-5391 and that he slipped on the bonnet 
C of vehicle, fell on his head and deceased Ramesh Lalmani 
Yadav sustained injuries and died. 
The Labour Court/ 
Commissioner held that the insurance policy produced 
before him was in respect of the vehicle GJ-3V-7785 which 
was not involved in the vehicular accident and therefore 
D Insurance Company-first respondent is not liable to pay 
the compensation. However, the learned Commissioner 
held that the appellant and respondent No.5 being the 
owner of the vehicle, were jointly and severally liable to 
pay the compensation of Rs.3,25,365/- along with 10% 
E penalty and annual interest at the rate of 6%. 
5. Being aggrieved, the appellant-owner of the vehicle 
preferred the first appeal in the High Court of Gujarat. 
Vide order dated 16.04.2014, the High Court dismissed 
F the appeal filed by the appellant observing that since vehicle 
No.GJ-3V-7785 was not involved in the accident and that 
only vehicle No.GJ-3U-5391 was involved and since the 
deceased was employed as
a cleaner was only in vehicle 
No. GJ-3V-7785, the insurance company is not liable to 
G indemnify the appellant for the accident caused by the 
vehicle bearing No.GJ-3U-5391. In this appeal, the 
appellant seeks to assail the said judgment. 
6. Learned counsel for the appellant contended that 
H both the vehicles, namely, GJ-3V-7785 and GJ-3U-5391
PRAVEENBHAI S. KHAMBHAYATA v. UNITED INDIA 441 
INSURANCE COMPANY LTD. [R. BANUMATHI, J.] 
were duly owned by the appellant and both the vehicles A 
were insured with the same insurance company viz. the 
first respondent-United India Insurance company and while 
so, the courts below are not justified in holding that the 
first respondent-insurance company is not liable to 
indemnify the appellant. It was submitted that the deceased 
B 
was an employee of the appellant in vehicle No.GJ-3V-
7785 and died during the course of the employment and 
as such, the fact that he was employed in another vehicle 
cannot exonerate the insurance company from indemnifying 
the appellant. It was further submitted that under Section C 
14 7 of the Motor Vehicles Act 1988, being a beneficial 
legislation and both the vehicles being insured with the 
first respondent, the courts below erred in observing that 
the insurance company is not responsible for any liability D 
even though under Section 147 of the Act. The insurance 
company is bound to indemnify the appellant for the loss 
occurring on account of the death of workman in the course 
of his employment. In support of his contention, reliance 
was placed upon Ved Prakash Garg vs. Premi Devi & E 
Ors. 1 
7. Learned counsel for the first respondent-insurance 
company submitted that the deceased-Ramesh Lalmani 
Yadav was employed as a cleaner only in the vehicle GJ-
F 
3V-7785 and since only GJ-3U-5391 was involved in the 
accident,
insurance company does not have any 
responsibility to pay any compensation and to indemnify 
the insurer and the courts below rightly exonerated the 
insurance company from indemnifying the insurer. 
G 
8. It is an admitted fact that the deceased was 
employed as a cleaner in vehicle No. GJ-3V-7785 and on 
1 (1997) s sec 1 
H
442 
SUPREME COURT REPORTS 
[2015] 2 S.C.R. 
A perusal of the statement of Ramlallu D. Patel, the driver of 
the above-said vehicle, it emerged that the deceased was 
actually filling water in the radiator of the another dumper 
bearing No. GJ-3U-5391 and met with an accident and 
died due to the injuries sustained by him. 
The same is 
B substantiated by the panchnama of the scene of the 
accident. From the written statement filed by fifth 
respondent - Viraj Krishna Techtonics Pvt. Ltd. Vijayrath, 
it is apparent that the employer has admitted that the death 
of Ramesh Lalmani Yadav was caused while he was filling 
C water in the radiator of the vehicle bearing No. GJ-3U-
5391 owned by him. Taking into consideration the facts of 
the case, it is evident that vehicle GJ-3V-7785 was not 
involved in the accident. 
D 
9. Vehicle No. GJ-3V-7785 was insured with the first 
respondent-insurance company under Section 147 of the 
Act. The insurance policy of a public service vehicle is 
deemed to cover an employee engaged in the said vehicle 
and the liability of the insurance company to pay 
E compensation for the death or injuries sustained by the 
workman. 
Payment of compensation for the death of 
workman or injuries sustained by the workman is limited to 
the liability arising in the Employers Compensation Act, 
F 1923. Since vehicle No.GJ-3V-7785 was not involved in 
the accident, insurance company was not liable to indemnify 
the owner of the vehicle towards the
compensation payable 
to his employee - deceased-cleaner Ramesh Lalmani Yadav 
under Workmen's Compensation Act, 1923. 
G 
10. As noticed earlier, only the dumper bearing No.GJ-
3U-5391 was involved in the accident. 
The insurance 
policy of the vehicle No.GJ-3U-5391 was not produced 
either before the Commissioner or before the High Court. 
H Insurance policy of the said vehicle No.GJ-3U-5391 for the
PRAVEENBHAI S. KHAMBHAYATA v. UNITED INDIA 443 
INSURANCE COMPANY LTD. [R. BANUMATHI, J.] 
period from 13.09.2001to12.09.2002 was produced before A 
this Court. The accident was on 20.05.2002 during which 
period the vehicle No. GJ-3U-5391 had a valid insurance 
policy. 
11. The point falling for consideration is that even if B 
the vehicle No. GJ-3U-5391 had a valid insurance policy, 
whether the first respondent-insurance company is liable 
to indemnify the owner of the vehicle for death of a person 
who was employed by him in another vehicle. Insofar as 
vehicle dumper 
No.GJ-3U-5391, admittedly deceased-
C 
Ramesh Lalmani Yadav was not an employee and he was 
only a third party. Onbehalf of the appellant, an argument 
was advanced that since both the vehicles were insured 
with the same insurance company viz., United India 
Insurance Company and since Section 147 of the Motor D 
Vehicles Act is a beneficial legislation, the insurance 
company ought to have been held liable to indemnify the 
insured. As contended by the appellant, both the vehicles 
were insured with the respondent-insurance company and 
both the vehicles are one and the same. Considering the E 
facts of the case, bo~h the vehicles were parked in the 
same space and it can be safely stated that the deceased · 
cleaner was filling the water in the radiator of vehicle no.GJ-
3U-5391 only on the direction of the employer and thus 
F 
the 
cleaner was working in the course of employment. 
The High Court
rejected the claim of the appellant or1 the 
ground that the insurance policy of vehicle No. GJ-3V-
7785 was not produced but now since the appellant has 
produced the insurance policy which covers the vehicle G 
involved in the accident which provides to indemnify the 
owner of the vehicle in case of any accident caused to the 
workman limited to the extent of liability under Workmen's 
Compensation Act. 
H
444 
SUPREME COURT REPORTS 
[2015] 2 S.C.R. 
A 
12. Both the vehicles were insured with the first 
respondent-insurance company and the owner being one 
and the same and since the deceased being the cleaner 
and the claimants hailing from the lowest strata of society, 
in our considered view, in exercise of our extra-ordinary 
B jurisdiction under Article 142 of the Constitution of India, it 
is appropriate to direct the first respondent-insurance 
company to indemnify the appellant for the death of 
deceased. 
C 
13. In a situation of this nature for doing complete 
D 
E 
F 
G 
justice between the parties, this Court has always exercised 
the jurisdiction under Article 142 of the Constitution of India. 
In Oriental Insurance Company Ltd. vs. Brij Mohan And 
Ors. 2, this Court has held as under:-
"13. However, Respondent 1 is a poor labourer. 
He had suffered grievous injuries. He had become 
disabled to a great extent. The amount of 
compensation awarded in his favour appears to 
be on a lower side. In the aforementioned situation, 
although we reject the other contentions of Ms 
lndu Malhotra, we are inclined to exercise our 
extraordinary jurisdiction under Article 142 of the 
Constitution of India so as to direct that the award 
may be satisfied by the appellant but it would be 
entitled to realise the same from the owner of the 
tractor and the trolley wherefor it would not be 
necessary for it to initiate any separate proceedings 
for recovery of the amount as provided
for under 
the Motor Vehicles Act. 
14. It is well settled that in a situation of this nature 
H 
2 (2007) 7 sec 56
PRAVEENBHAI S. KHAMBHAYATA v. UNITED INDIA 445 
INSURANCE COMPANY LTD. [R. BANUMATHI, J.] 
this Court in exercise of its jurisdiction under Article 
A 
142 of the Constitution of India read with Article 
136 thereof can issue suit directions for doing 
complete justice to the parties". 
14. In Deddappa & Ors. vs. National Insurance B 
Company Ltd. 3, it was observed as under:-
"26. However, as the appellant hails from the lowest 
strata of society, we are of the opinion that in a 
case of this nature, we should, in exercise of our 
c 
extraordinary jurisdiction under Article 142 of the 
Constitution of India, direct Respondent 1 to pay 
the amount of claim to the appellants herein and 
recover the same from the owner of the vehicle viz. 
Respondent 2, particularly in view of the fact that 
D 
no appeal was preferred by him. We direct 
accordingly". 
15. Labour Court awarded compensation of 
Rs.6,42,921/- along with 10% penalty and 6% interest E 
per annum. 
As per Section 4-A (3)(a) of the 
Workmen's Compensation Act, where any employer 
commits default in paying the compensation due 
under the Act within one month from the date it fell 
due, the Commissioner shall direct the employer to F 
pay simple interest thereon at the rate of 12% per 
annum or at such higher rate not exceeding maximum 
of the lending rates of any scheduled bank as may 
be specified by the Central Government. 
As per 
Section 4-A (3)(b), 
in addition to the amount of G 
arrears and the interest
thereon, the Commissioner 
shall direct the employer to pay further sum not 
exceeding 50% of such amount by way of penalty. 
3 c2ooai 2 sec 595 
H
446 
SUPREME COURT REPORTS 
[2015] 2 S.C.R. 
A The legal representatives of the deceased employee 
are thus entitled to the statutory interest at the rate of 
12% and penalty not exceeding 50% of the amount of 
compensation. 
The Commissioner for Workmen's 
Compensation has awarded only 6% interest and 10% 
8 
penalty as against the statutory entitlement of the 
dependents of the ueceased employee in terms of 
Section 
4-A(3) of the Act. 
Having regard to the 
passage of time and in the interest of justice, in our 
c considered view, statutory rate of penalty i.e. 15% is 
to be ordered in addition to the statutory interest 
payable at the rate of 12% per annum. 
16. The appellant has deposited Rs.3,25,365/- i.e. 
0 
the 
principal amount with the 
Labour Court/ 
Commissioner for Workmen's Compensation, Rajkot • 
on 18.2.2014. The matter was listed before the Supreme 
Court Lok Adalat on 6.12.2014 wherein the appellant 
was directed to deposit the balance amount. The 1st 
E respondent-insurance company shall deposit the balance 
compensation being 15% penalty and the interest at 
the rate of 12% after one month from the date when 
the compensation amount fell due and also 15% penalty 
with the Labour Court/Commissioner for Workmen's 
F Compensation within a period of six weeks from today. 
On such deposit, the same shall be disbursed to 
respondents No.2 to 4. The amount of Rs.3,25,365/-
already deposited by the appellant with the Commissioner 
G for Workmen's Compensation
shall also be disbursed 
to respondents No. 2 to 4 if not already disbursed. 
After disbursing the amount to the dependents No.2 to 
4, the Commissioner for Workmen's Compensation, 
Rajkot shall submit a report to this Court regarding 
H

PRAVEENBHAI S. KHAMBHAYATA v. UNITED INDIA 447 
INSURANCE COMPANY LTD. [R. BANUMATHI, J.] 
compliance at an early date preferably not exceeding A 
four months from today. The 1st respondent-insurance 
company shall pay the amount of Rs.3,25,365/- to 
the appellant which it has already deposited towards 
compensation within a period of six weeks. The 
impugned judgment of the High Court is set aside B 
and the appeal is allowed in terms of the above 
directions. 
In the facts and circumstances of the 
case, 
we make no order as to costs. 
Nidhi Jain 
Appeal allowed. C