Case: Manager, National Insurance Co.Ltd Vs. Saju P.Paul

4. The above question arises in this way. Saju P. Paul, claimant (Respondent No. 1), was a heavy vehicle driver. He was employed with Respondent No. 2 as a driver in some other vehicle. On 16.10.1993, he was travelling in a goods vehicle bearing No. KL-2A/3411 in the cabin. The goods vehicle was being driven by one Jayakumar. In that vehicle, many other persons were also travelling. At Nilackal, due to rash and negligent driving of the driver Jayakumar, the goods vehicle capsized. As a result of which the claimant suffered fracture and injuries. The claimant remained under treatment for quite some time and the injuries that he sustained in the accident rendered him permanently disabled. In the claim petition filed by him before the Motor Accident Claims Tribunal, Pathanamthitta (for short, the Tribunal), he claimed compensation of Rs. 3,00,000/-. The owner and insurer were impleaded as respondent No. 2 and respondent No. 3 respectively in the claim petition.  5. The insurer filed its written statement and opposed the claimants claim insofar as it was concerned. The insurer set up the plea that the vehicle was a goods vehicle and the risk of the passengers travelling in the goods vehicle was not covered under the policy of insurance. It was stated in the written statement that nearly 50 unauthorised passengers were travelling at the time of accident; they were not travelling in the vehicle in pursuance of the contract of employment, such as loading and unloading nor they were travelling as the owner of the goods or the representative of the owner of the goods and hence the insurer could not be saddled with any liability.  6. The Tribunal, after recording the evidence and hearing the parties, on 23.7.2002, passed an award in favour of the claimant holding that he was entitled to a total compensation of Rs. 3,00,000/-. The liability of the insurer was made joint and several with the owner and driver.  7. Being not satisfied with the award of the Tribunal, the insurer filed an appeal before the Kerala High Court. The Division Bench of that Court by relying upon decisions of this Court in New India Assurance Co. Ltd. v. Asha Rani and Others, VII (2002) SLT 91=101 (2002) DLT 181 (SC)=III (2002) ACC 753 (SC)=(2003) 2 SCC 223 ; and National Insurance Co. Ltd. v. Cholleti Bharatamma and Others, I (2008) SLT 584=I (2008) ACC 225 (SC)=(2008) 1 SCC 423 , allowed the appeal of the insurer vide judgment and order dated 9.11.2010. The Division Bench held that insurer was not liable as gratuitous passengers travelling in a goods vehicle were not covered under the policy and the claimant shall be entitled to recover the awarded amount from the owner or driver of the vehicle.  8. The claimant sought review of the order dated 9.11.2010 and, as noted above, by the impugned order that review application has been allowed. While allowing the review application, the Division Bench held as under:It has already been noticed that the petitioner was admittedly a spare driver of the vehicle. It may be true that he was not driving the vehicle at the relevant point of time; but he was directed to go to the worksite by his employer as a spare driver in the vehicle. Therefore, by no stretch of imagination, it can be said that the petitioner was not travelling in the vehicle in the course of his employment and as directed by his employer. Section 147(1)(b)(i) takes within its fold any liability which may be incurred by the insurer in respect of the death or bodily injury to any person. Therefore, the argument of the insurance company that no goods were being carried in the vehicle at the time of accident and therefore, the petitioner was only a gratuitous passenger cannot be countenanced at all. Even otherwise, the first proviso to Section147(1) will cast a liability on the insurer to indemnify the owner in respect of the injury sustained by the employee of the insured arising out of and in the course of his employment.

Court's reasoning:
16. In the present case, Section 147 as originally existed in 1988 Act is applicable and, accordingly, the judgment of this Court in Asha Rani (supra) is fully attracted. The High Court was clearly in error in reviewing its judgment and order delivered on 9.11.2010 in review petition filed by the claimant by applying Section 147(1)(b)(i). The High Court committed grave error in holding that Section 147(1)(b)(i) takes within its fold any liability which may be incurred by the insurer in respect of the death or bodily injury to any person. The High Court also erred in holding that the claimant was travelling in the vehicle in the course of his employment since he was a spare driver in the vehicle although he was not driving the vehicle at the relevant time but he was directed to go to the worksite by his employer. The High Court erroneously assumed that the claimant died in the course of employment and overlooked the fact that the claimant was not in any manner engaged on the vehicle that met with an accident but he was employed as a driver in another vehicle owned by M/s. P.L. Construction Company. The insured (owner of the vehicle) got insurance cover in respect of the subject goods vehicle for driver and cleaner only and not for any other employee. There is no insurance cover for the spare driver in the policy. As a matter of law, the claimant did not cease to be a gratuitous passenger though he claimed that he was a spare driver. The insured had paid premium for one driver and one cleaner and, therefore, second driver or for that purpose spare driver was not covered under the policy17. The High Court misconstrued the proviso following Sub-section (1) of Section 147 of the 1988 Act. What is contemplated by proviso to Section 147(1) is that the policy shall not be required to cover liability in respect of death or bodily injury sustained by an employee arising out of and in the course of his employment other than a liability arising under the Workmens Compensation Act, 1923. The claimant was admittedly not driving the vehicle nor he was engaged in driving the said vehicle. Merely because he was travelling in a cabin would not make his case different from any other gratuitous passenger18. The impugned judgment is founded on misconstruction of Section 147. The High Court was wrong in holding that the insurance company shall be liable to indemnify the owner of the vehicle and pay the compensation to the claimant as directed in the award by the Tribunal25. The pendency of consideration of the above questions by a Larger Bench does not mean that the course that was followed in Baljit Kaur (supra) and Challa Bharathamma (supra) should not be followed, more so in a peculiar fact situation of this case. In the present case, the accident occurred in 1993. At that time, claimant was 28 years old. He is now about 48 years. The claimant was a driver on heavy vehicle and due to the accident he has been rendered permanently disabled. He has not been able to get compensation so far due to stay order passed by this Court. He cannot be compelled to struggle further for recovery of the amount. The insurance company has already deposited the entire awarded amount pursuant to the order of this Court passed on 1.8.2011 and the said amount has been invested in a fixed deposit account. Having regard to these peculiar facts of the case in hand, we are satisfied that the claimant (Respondent No. 1) may be allowed to withdraw the amount deposited by the insurance company before this Court along with accrued interest. The insurance company (appellant) thereafter may recover the amount so paid from the owner (Respondent No. 2 herein). The recovery of the amount by the insurance company from the owner shall be made by following the procedure as laid down by this Court in the case of Challa Bharathamma (supra).