Case: Ramchandra Vs. Regional Manager United India Insurance Company Ltd

the appellant/claimant filed a claim petition claiming compensation for the injuries sustained by him in a road traffic accident which took place on 10.9.1996 about 4.00 p.m. when the claimant was travelling in a Swaraj Mazda Matator bearing registration No. KA-01-2337 as a cleaner. According to the case of the claimant, the driver of the vehicle drove the same in a rash and negligent manner and when the said vehicle came near Doddabande Crossing, the vehicle dashed against the lorry bearing registration No. TN-28B-8397 which was parked on the road as a result of which the appellant who was travelling on the said vehicle as a cleaner sustained grievous injuries. The injured was, therefore, taken for the first aid treatment at Penukonda Government Hospital and was later shifted to Victoria Hospital, Bangalore as an inpatient. The 2nd respondent in this appeal was Mr. S. Sathyamurthy who admittedly is the owner of the vehicle Swaraj Mazda and the said vehicle was insured with the 1st respondent herein the United India Insurance Company Ltd. Hence, the claimant laid claim against both the respondents before the Motor Accident Claims Tribunal and Court of Small Causes at Bangalore wherein he urged that the respondents are liable to pay just and adequate compensation4. The respondent No.1- insurance company appeared and filed objections contending therein that the vehicle was being driven without a valid and effective driving license in contravention of the provisions of the Act due to which the insurance company was not required to pay any compensation. It was further contended by the insurance company that the vehicle in question is a passenger carrying vehicle and the policy of insurance issued was only an act coverage in which the claimant appellant was proceeding as a cleaner. Hence the policy of insurance issued by the respondent does not cover the risk of the cleaner as per Section 147 of the Motor Vehicles Act since the policy of insurance covering the accident vehicle being an act of coverage does not cover the risk of the cleaner; hence the respondent insurance company was not liable to pay compensation. The respondent -insurance company, therefore, sought dismissal of the claim petition5. The respondent No.2/the owner of the vehicle herein although was served with the notice, he failed to appear before the tribunal and hence the matter proceeded only against the respondent – insurance company6. The Motor Accident Claims Tribunal on a scrutiny and analysis of the evidence led by the contesting parties, was pleased to record a finding that the appellant/claimant was travelling in the Matadar van and the accident took place due to rash and negligent driving of the said van by its driver due to which the appellant herein sustained grievous injuries. On the basis of the evidence it was further recorded that the appellant sustained fracture of right shaft femur. He was an inpatient at Victoria Hospital for a period of one and a half month wherein his leg was operated and rod was fixed to the fractured bone, head injury was sutured and treated conservatively. After discharge, he also had to undergo follow up treatment by visiting the hospital for a period of one year once in 15 days a month as advised by the doctors. The tribunal on an assessment of the injury sustained by the claimant and the expenses incurred on the treatment was pleased to hold that the claimant was entitled to a sum of Rs.1,42,800/- towards compensation7. Since the quantum of compensation is not under challenge in this appeal, it is inessential to go into the details of the nature of injury and the amount awarded to the claimant. In addition, the plea of the insurance company that the driver was not holding a valid license had also been rejected by the tribunal which finding is not under challenge and hence it is equally inessential to deal with this aspect8. The principal ground of challenge at the instance of the respondent-insurance company was that the appellant was travelling in a matador van as a cleaner; hence his remedy was to claim compensation under the Workmens Compensation Act and the tribunal had no jurisdiction to entertain the claim filed by the cleaner9. However, the tribunal referred to the law laid down by the full Bench of the Karnataka High Court in the case of Karnataka State Road Transport Corporation and Ors. Vs. R. Maheshwari and Ors. reported in ILR 2003 Kar 3562, wherein it was held that the insurer shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover even in proceedings under the Motor Vehicles Act without such liability having been first determined or adjudged under the Workmens Compensation Act. In view of the ratio of this decision, the tribunal was pleased to hold that the respondent-insurance company being the insurer was liable to pay compensation. The claim petition consequently was allowed in part awarding compensation of Rs. 1,42,800/- together with costs and interest at 6 per cent per annum from the date of filing of claim petition till the date of payment against the respondent – insurance company and respondent-insured/owner of the vehicle jointly and severally. However, the respondent-insurance company being the insurer of the offending vehicle, it was ordered to pay the entire compensation awarded10. The respondent-insurance company assailed the judgment and order of the tribunal by filing a first appeal bearing MFA No.6711/2004 in the High Court of Karnataka at Bangalore wherein the learned single Judge recorded that the only grievance of the appellant-insurance company was that while allowing the claim petition, the first respondent/claimant had put the entire burden on the appellant to satisfy the amount of Rs. 1,42,800/- which was awarded to the claimant. The counsel representing the insurance company submitted before the High Court that it was not in dispute that the claimant was travelling as a cleaner in the matador van in question and, therefore, the liability of the appellant ought to have been restricted under the Workmens Compensation Act. As such, the order of the tribunal could not be sustained in law to the extent of liability over and above the liability under the Workmens Compensation Act11. The learned single Judge of the High Court almost summarily allowed the appeal as he was of the view that the claimant having been a cleaner in the matador van insured with the appellant herein, the liability could not have been over and above the liability under the Workmens Compensation Act. The learned single Judge in support of his view relied upon the judgment and order reported in the case of National Insurance Company Ltd. Vs. Lagamanna & Ors. reported in 2007 ACJ 50. The learned single Judge recorded that the Division Bench in the said decision had held that when no cover premium is paid to cover larger liability, the liability of the insurance company will be restricted to the one under the Workmens Compensation Act. It was, therefore, held that in the light of such settled position of law, the tribunal could not have put the entire liability on the appellant. The learned single Judge, therefore, directed that the liability of the insurance company was restricted to one under the Workmens Compensation Act which would be Rs.32,091/- and the balance will have to be shouldered by the insured/owner of the vehicle. It was further ordered that the rate of interest will be as per order of the Motor Accident Claims Tribunal. The appeal was allowed to this extent but a further direction was given that if excess amount had been deposited, the same will be refunded to the insurance company12. Since, the insured/owner of the vehicle had never appeared either before the tribunal or the High Court, the claimant-appellant felt aggrieved and has, therefore, come up in appeal before this court assailing the judgment and order of the High Court wherein the directions recorded hereinabove is under challenge

Court's reasoning:
A perusal of the aforesaid judgment and order of this Court thus indicate that this Court has clearly held that the liability to pay compensation in respect of death or bodily injury to an employee should not be restricted to that under the Workmens Compensation Act but should be more or unlimited. However, the determination would depend whether a policy has been taken by the vehicle owner by making payment of extra premium and whether the policy also contains a clause to that effect18. Thus in so far as the view of the High Court is concerned to the extent that the compensation would be restricted to be paid only to the extent which is payable under the Workmens Compensation Act by making a sweeping generalisation, the same is clearly contrary to the view taken by this Court even in the judgment and order on which reliance has been placed by the counsel for the respondent-insurance company as it is sufficiently clear and unambiguously laid down which is recorded hereinbefore that the compensation payable to the employee cannot be restricted merely under the Workmens Compensation Act and it can be expanded provided the contractual document which is the policy of insurance incorporates such clause regarding the premium to be paid taking into account the nature of the policy19. In the light of the aforesaid legal position, it is clear that the High Court was not correct in holding that the claimant/appellant was not entitled to any compensation over and above the liability under the Workmens Compensation Act and hence the direction issued by the High Court that the appellant/insurance company, respondent herein, will be liable to pay only Rs. 32091/- and the balance will have to be shouldered by the insured/owner of the vehicle is fit to be struck down as invalid as the High Court had failed to examine the nature and clauses of the policy which was not produced even before the TribunalIn the instant matter, we have noted that the High Court although had granted liberty to the insurance company to realise the amount from the owner of the vehicle, it failed to record expressly that the respondent insurance company shall pay the amount to the appellant/claimant determined by the Motor Accident Claims Tribunal although impliedly the High Court has not denied the amount to the claimant/appellant. But in absence of a categorical direction to the respondent/insurance company to pay the entire amount to the appellant as determined by the Motor Accident Claims Tribunal, the appellant is bound to confront impediments in realizing the amount. Hence, the direction of the High Court is clarified to the extent by recording that the respondent/insurance company shall pay the balance amount also beyond Rs.32,091/- along with interest to the Claimant expeditiously but not later than a period of six weeks from the date of receipt of this order27. We are , thus, pleased to hold that the judgment and order of the High Court which impliedly held that the employee/claimant is entitled to compensation only under the Workmens Compensation Act and not under the Motor Vehicles Act stands set aside and the liberty granted to the Respondent/Insurance Company to realise the amount from the owner without a corresponding direction to the Respondent/Insurance company to pay the amount to the Claimant/Appellant making the appellant liable to realise it from the owner of the vehicle stands modified as indicated hereinbefore.