Jharkhand High Court
National Insurance Company Ltd vs Jayanti Devi & Ors on 14 October, 2009
Author: M. Y. Eqbal
Bench: M. Y. Eqbal, Jaya Roy
IN THE HIGH COURT OF JHARKHAND AT RANCHI
M. A. No. 368 of 2008
National Insurance Company Ltd., Dhanbad ... Appellant
Versus
1. Jayanti Devi
2. Minor Jai Prakash Mandal
3. Minor Guria Kumari
4. Minor Rekha Kumari
5. Tapan Kumar Mandal
... ... ... ... Respondents
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CORAM: THE HON'BLE MR. JUSTICE M. Y. EQBAL
THE HON'BLE MRS. JUSTICE JAYA ROY
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For the Appellant: Mr. G.C.Jha
For the Respondents: M/s. K. Sarkhel, R.S. Mazumdar,
Rajesh Kumar, Matinnuddin,
Khan, P.A.S Pati
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Reserved on: 29.7.2009 Pronounced on: 14th October, 2009
M. Y. Eqbal, J. This appeal by the Insurance Company is directed against the
judgment and award dated 30.8.2008 passed by The Motor Vehicle Accident Claims Tribunal, Dhanbad in Title (M.V.) Suit No.152 of 2003 whereby he has awarded a sum of Rs.2,94,720/- as compensation for the death of the deceased who died in a motor vehicle accident.
2. The short facts of the case are that the deceased, Ram Prasad Mandal, was working as labourer in the vehicle which is a tractor and trailor. The claimants' case is that on 23.4.2003 when the deceased was going on a tractor for loading the stone chips, the vehicle fell down on a ditch causing death of the deceased. F.I.R. was lodged to that effect and a criminal case was instituted being Topchanchi PS Case No.83 of 2003. According to the claimants, the deceased was aged 36 years and his monthly earning was Rs.2400/-.
3. The owner of the tractor appeared and filed written statement stating inter alia that the tractor and trailor was duly insured with the National Insurance Company Limited. The owner admitted that the deceased was working as daily waged labourer and on his death, a sum of Rs.10000/- was paid for meeting the funeral expenses.
4. The appellant-Insurance Company, however, contested the case by filing written statement. The stand taken by the Insurance Company is that the deceased was not covered under the policy, inasmuch as no premium was paid for covering the risk of labourer 2 employed by the owner of the vehicle. The Insurance Company also took a defence that the driver, who was driving the vehicle, was not holding a valid driving licence.
5. The Tribunal after hearing the parties and on consideration of the evidence adduced by the claimants, decided all the issues against the appellant-Insurance Company and awarded a sum of Rs.2,94,720/- as compensation.
6. Mr. G.C.Jha, learned counsel appearing for the appellant- Insurance Company, assailed the impugned award as being illegal and wholly without jurisdiction. Learned counsel firstly submitted that the owner of the vehicle obtained insurance policy for his tractor and trailor only. The said policy did not cover the risk of the workman engaged in the said vehicle as no premium was paid for that. Learned counsel further submitted that the driver of the tractor does not possess any valid driving licence at the time of accident and, therefore, the Insurance Company cannot have any liability for payment of compensation. According to the learned counsel, the driver was possessing a driving licence to drive light motor vehicles and there was no endorsement to drive vehicle in public place.
7. In the claim application, it has been categorically stated that the deceased was working as labourer in the tractor and trailor. The deceased was coming by the said vehicle after unloading sand from Nichitpur Village and going to load stone chips from another village. On the way, the vehicle fell down in a ditch as a result of which, the deceased sustained injuries. The respondent-owner of the vehicle admitted the death of the deceased while working as labourer in the said vehicle. The owner's case is that the vehicle was duly insured with the appellant-Insurance Company and, therefore, the compensation that may be awarded by the Tribunal, shall be paid by the Insurance Company. The case of the appellant, as noticed above, is that the vehicle was being driven by a person having no valid driving licence. Further, the vehicle was insured only in respect of the vehicle and no additional premium was paid for covering the risk of the labourer employed in the said vehicle. In these circumstances, the Insurance Company is not liable to pay compensation.
8. Section 147 of the Motor Vehicle Act reads as under:
"147. Requirements of policies and limits of liability.--(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which--
(a) is issued by a person who is an authorised insurer: and 3
(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section(2)--
(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person including owner of the goods or his authorised representative carried in the vehicles.] or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;
(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place;
Provided that a policy shall not be required--
(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, any such employee---
(a) engaged in driving the vehicle, or
(b) if it is a public service vehicle engaged as a conductor of the vehicle or in examining tickets on the vehicle, or
(c) if it is a goods carriage, being carried in the vehicle, or
(ii) to cover any contractual liability.
Explanation. --For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place. (2) Subject to the proviso to sub-section (1), a policy of insurance referred to in sub-section (1) shall cover any liability incurred in respect of any accident, up to the following limits, namely :--
(a) save as provided in clause (b), the amount of liability incurred;
(b) in respect of damage to any property of a third party, a limit of rupees six thousand;
Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.
(3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in-the prescribed form and containing the pre scribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases.
(4) Where a cover note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the 4 cover note relates has been registered or to such other authority as the State Government may prescribe. (5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section 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 in the case of that person or those classes of persons. "
9. From bare reading of the aforesaid provision, it is manifestly clear that the policy of insurance must comply the requirements of the aforementioned section as also the other provisions contained in the subsequent sections. The policy must cover the risk of the third party and also the passengers carrying in the said vehicle. The policy must also cover the liability of the driver, conductor and the employee covered under the Workmen Compensation Act. However, the proviso to Section 147 stipulates that such policy shall not be required to cover the liability in respect of death arising out of and in course of the employment of the employee by a person insured by the policy. It is, therefore, clear that in the mandatory provision of section 147 of the Act, the policy of insurance must cover the risk of the third party, passengers, driver and the conductor in respect of the liability arising out under the Workmen Compensation Act. For other employees employed by the insurer, separate premiums has to be paid covering the risk of the employee for the purpose of covering the liability of the insurance company in respect of death of or bodily injury arising out of and in course of employment.
10. In the instant case an insurance policy has been filed and was marked as Ext.A. From perusal of the policy, it transpires that for covering the risk of one employee, an additional premium of Rs.25/- was paid. The schedule of premium mentioned in the policy is reproduced herein below:
_____________________________________________________________ SCHEDULE OF PREMIUM (In Rs.) B: T.P. -BASIC 785.00 WC to employee 1 25.00 GROSS (B) : 810 GROSS OD & TP : 810 GROSS (A): Net Premium: 810 Service Tax 5% 41 Net Amount Payable (Rounded) 851.5
11. In the case of New India Assurance Co., Shimla Vs. Kamla and others [(2001) 4 S.C.C. 342], the question that came for consideration before the Supreme Curt was as to whether Insurance Company is liable to pay compensation in respect of a motor accident which occurred by a person holding a sham licence. In that case, the insured owner of the vehicle as well as the driver relied on a document purporting to be a driving licence issued by licensing authority namely S.D.M. of Sirmaur district in Himachal Pradesh. The document further shows that it was issued in favour of Lyakat Ali whose photo was affixed thereon. That licence is claimed to have been renewed by the Licensing Authority, Rohru (H.P.). According to the Insurance Company, the said document is a fabricated one as no such licence was granted by the licensing authority (S.D.M., Paonta). It was argued that when the original driving licence was forged, it will not become valid merely because of renewal of fake licence. The Supreme Court held that fake driving licence unwittingly renewed by a licensing authority does not acquire legal validity thereby. No licensing authority has the power to renew a fake licence and, therefore, a renewal, if at all made, cannot transform a fake licence as genuine.
12. In the case of Nagashetty Vs. United India Insurance Co. Ltd [(2001) 8 S.C.C. 56], the case was based on a tractor having a trailer attached to it which was filled with stones. While it was being driven on road it met with an accident resulting in death of a person. The driver of the tractor had a permanent licence to drive a tractor. In the insurance policy issued for a tractor, additional premium had been taken for a trailer. The Insurance Company took a defence that the driver had a valid driving licence to drive tractor only, but since the trance which had a trailer attached to it was used for carriage of goods, it became a transport vehicle and that a driver had no licence to drive such vehicle. Negavating the contention, the Supreme Court held: -
"Though under Section 10, a licence is granted to drive specific categories of motor vehicles but a person having a valid driving licence to drive a particular category of vehicle does not become disabled to drive that vehicle merely because a trailer is added to that vehicle. Merely because a trailer was attached to the tractor and the tractor was used for carrying goods, the licence to drive a tractor does not become ineffective; otherwise every time an owner of a private car, who has a licence to drive a light motor vehicle, attaches a roof carrier to his car or a trailer to his 6 car and carries goods thereon, the light motor vehicle would become a transport vehicle and the owner would be deemed to have no licence to drive that vehicle. It would lead to absurd results. Merely because a trailer is added either to a tractor or to a motor vehicle by itself does not make that tractor or motor vehicle a transport vehicle. The tractor or motor vehicle remains a tractor or motor vehicle. If a person has a valid driving licence to drive a tractor or a motor vehicle, he continues to have a valid licence to drive that tractor or motor vehicle even if a trailer is attached to it and some goods are carried in it.
13. As noticed above, it is mandatory requirement of law that policy of insurance must cover the risk of third party passengers, driver and conductor in respect of liability arising out of Workmen's Compensation Act. If the owner insured gives a proposal for covering liability of other employees, then separate premium has to be paid in order to make Insurance Company liable in respect of death or bodily injury arising out of and in course of employment and additional premium has to be paid. In the instant case, from perusal of schedule of premium paid by the owner, relevant portion of which has been quoted herein before, it is evidently clear that for covering risk of one employee under Workmen's Compensation Act, a premium of Rs.25/- was paid. The contention of the learned counsel appearing for the Insurance Company that separate premium of Rs.25/- was paid for covering risk of driver, cannot be accepted for the reason that no additional premium is to be paid for covering risk of driver of the vehicle. It is only for the employees engaged by the insured, a separate premium has to be paid so that in case of death or bodily injury arising out of and in course of employment, Insurance Company will pay the compensation amount.
14. Having regard to the entire facts and circumstances of the case and the law discussed herein above, the Tribunal has rightly held that the appellant-Insurance Company is liable for payment of compensation amount. The impugned award, therefore, needs no interference by this Court. Hence, this appeal is dismissed.
(M. Y. Eqbal, J) Jaya Roy, J.
(Jaya Roy, J) Pandey/Raman/A.F.R.