Karnataka High Court
New India Assurance Co Ltd vs Smt Susheelabai on 20 December, 2018
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IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 20TH DAY OF DECEMBER, 2018
BEFORE
THE HON'BLE MR. JUSTICE P.G.M.PATIL
MFA NO. 30759/2009 (WC)
C/W
MFA NO.32039/2010 (WC)
MFA NO.30759/2009
BETWEEN:
The India Assurance Company Ltd.,
Represented by Regional Manager,
Bangalore.
... Appellant
(By Sri R.V.Nadagouda, Advocate)
AND:
1. Smt. Susheelabai W/o Laxman Rathod,
Age:35 years, Occ: Household,
2. Sanjay S/o Late Laxman Rathod,
Age:20 years, Occ: Coolie,
3. Smt. Choodabai W/o Mahadev Rathod,
Age:60 years, Occ: Household work,
2
All R/o Nigadi Tanda, Tq. Jatt,
Dist. Sangli, now R/o Bijjargi,
Tq. & Dist. Bijapur.
4. Siddappa S/o Eshawarappa Birajdar
Since deceased through his LRs.
4(a) Jayashree D/o Siddappa Birajdar,
age:26 years, R/o Nandur,
4(b) Iswarya D/o Siddappa Birajdar,
age:7 years, R/o Utagi.
4(c) Rakshita D/o Siddappa Birajdar,
age:4 years, R/o Nandur.
4(d) Samarth S/o Siddappa Birajdar,
age:2 years, R/o Nandur.
4(e) Ishwarappa S/o Apparaya Birajdar,
age:65 years, Occ: Nil, R/o Nandur.
4(f) Saraswati W/o Ishwarappa Birajdar,
age:55 years, Occ: Coolie,
All are R/o Nandur, Tq. Jatta,
Dist. Miraj.
... Respondents
(Sri Babu H.Metagudda, Advocate for R1 to R3)
(Notice to R4(a),(e), (f) held sufficient V/o
Dt.18.04.2016) (R-4(b),(c) & (d) are minors.)
(R4(f) is served.)
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This MFA filed under Section 30 of the Workmen's
Compensation Act praying to allow the appeal and set
aside the impugned judgment and order dated
27.01.2009 passed by the Labour Officer and
Commissioner for Workmen's Compensation, Bijapur
Sub-Division II, Dist. Bijapur in WCA/SR.129/2007.
MFA NO.32039/2010
BETWEEN:
1. Smt. Sushilabai W/o Laxman Rathod,
Age:43 years, Occ: Household,
2. Sanjay S/o Late Laxman Rathod,
Age:25 years, Occ: Nil,
3. Chandubai W/o Mahadeva Rathod,
Age:73 years,
All are residing at Makanapur,
Tq. & Dist. Bijapur.
... Appellants
(By Sri Babu H.Metagudda, Advocate)
AND:
1. Siddappa S/o Ishawarappa Biradar,
Age:major, Occ: Business & owner of
Heavy Goods Truck No.MH-10-Z-929,
R/o Utagi Tqluk, Jath, Dist. Sangli
(Maharashtra)
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2. The Branch Manager,
The New India Assurance Co. Ltd.,
Policy issuing office Insurer Code-152302,
Address, ZELE Building, 7th Lane,
M.G.Road, Jayasingpur-416105
(Summons to be served through)
Presently represented by
The Branch Manager,
The New India Assurance Co. Ltd.,
Hanamashetty building,
Gurukul Road, Bijapur.
... Respondents
(Sri S.S.Aspalli, Advocate for R2)
(Notice to R1 dispensed with
v/o dated: 14.08.2015)
This MFA filed under Section 30 (1) of the
Workmen's Compensation Act praying to allow the
appeal and modify the order dated 27.01.2009 passed
by the Commissioner for Workmen's Compensation,
Bijapur Sub-Division II, Dist. Bijapur in
WCA/SR.129/2007 and enhance the compensation
from Rs.3,26,140/- with interest @ 12% to
Rs.8,00,000/- with 12% interest.
These appeals having been heard on 04.12.2018
and reserved for judgment and coming on for
pronouncement of judgment this day, the Court
delivered the following:
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JUDGMENT
Heard the learned counsel for both the parties.
2. MFA No.30759/2009 is filed by the insurer New India Assurance Company Limited challenging the order dated 27.01.2009 passed by the Commissioner for Workmen's Compensation, Bijapur in WCA No. 129/2007 under which the Commissioner has ordered the appellant-insurance company to pay the compensation and recover the same from the owner of the vehicle.
3. MFA No.32039/2010 is filed by the claimants for enhancement of the compensation and also to saddle the liability to pay the compensation on the insurer.
4. For the sake of convenience, the parties are referred with their ranks held by them before the Commissioner.
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5. The claimants filed claim petition before the Commissioner for Workmen's Compensation claiming compensation of Rs.8,00,000/- for the death of Laxman Rathod, husband of claimant No.1, father of claimant No.2 and son of claimant No.3. It is the case of the claimants that the deceased was employed by respondent No.1 as his driver in his lorry bearing registration No.MH-10-Z-929 on the salary of Rs.5,000/- per month and Bhatta of Rs.100/- per day. On 21.09.2007 the deceased was driving the said vehicle as per the instructions of respondent No.1 and when the said vehicle was proceeding on Hubnoor Sank road near Tikota, the deceased lost control over the vehicle due to which the vehicle fell into a ditch. He sustained fatal injuries and succumbed to the said injuries while under treatment in the hospital at Jath. He was aged about 45 years at the time of death. Tikota Police have registered a case in Cr.No.139/2007 in 7 respect of the said accident. The claimants are the dependants on the deceased, they have lost their dependency. Respondent No.1 is the owner of the vehicle, respondent No.2 is the insurer with whom the said vehicle was insured.
6. In pursuance of the notice, respondent No.1 appeared before the Commissioner and filed written statement in which he has admitted that the deceased was employed by him as a driver in his vehicle and he has also admitted the accident in question and death of the deceased due to injuries sustained in the accident. He has further stated that his vehicle was duly insured with respondent No.2. As such, respondent No.2 is liable to pay the compensation.
7. Respondent No.2 filed the written statement denying the averments made in the claim petition. He has further contended that 50-55 persons were travelling in the lorry in order to attend a marriage in 8 violation of the policy conditions and respondent No.1 has violated the policy conditions and as such respondent No.2 is not liable to indemnify the owner. He has also contended that the claim is exorbitant, imaginary and baseless. On these grounds, he prayed for dismissal of the claim petition.
8. The Commissioner on the basis of the pleadings framed the issues. Claimant No.2 was examined as PW.1 and they got marked documents at Ex.P.1 to P.8. Respondent No.2 also got examined his Administrative Officer as RW.1. The learned Commissioner after hearing both the parties passed the impugned judgment by which compensation of Rs.3,26,140/-/- together with interest at 12% p.a. from 26.02.2009 has been awarded to the claimants. Further the Commissioner has directed that the respondent No.1 has committed breach of policy conditions and as such, respondent No.2 was directed 9 to deposit the compensation and recover the same from respondent No.1.
9. The insurer being aggrieved by the impugned award has filed the appeal and has urged before this Court that the deceased driver was driving heavy goods vehicle and he had no driving licence to drive the same and that he was holding a driving licence to drive Light Motor Vehicle as per Ex.P.8. Therefore, the owner has committed fundamental breach of statutory provisions and as such the insurer is not liable to pay compensation. It is also urged that more than 55 passengers and 10 persons in the cabin were carried in the said lorry, which is a deliberate risk taken by the deceased driver.
10. The claimants have urged in their appeal that the compensation awarded by the Commissioner is very low and the interest awarded one month after the adjudication is illegal. The Commissioner has erred in 10 fixing the liability on the owner of the vehicle instead of insurance company.
11. In MFA No.30759/2009 this Court has raised the following substantial questions of law for consideration:
1. Whether the finding of the Commissioner for Workmen's Compensation on liability is just and proper?
2. Whether interest awarded at 12% per annum from one month after the award is just and proper?
3. To consider any other substantial question of law which may arise for consideration while hearing the appeal?
12. After having heard both the learned counsel for the parties, apart from the above substantial 11 questions of law, the following substantial question of law arises for consideration:
"Whether the Commissioner was justified in fixing the liability on the owner of the vehicle and directing the insurer to pay and recover the compensation?"
13. The learned counsel for the claimants submitted that by the impugned order directing the insurer to pay and recover the compensation from respondent No.1 is proper. He further submitted that the interest awarded after one month from the date of order is improper and that the interest ought to have been awarded after one month from the date of accident. In support of his submissions, the learned counsel for the claimants has relied on certain decisions.
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14. Per contra, the learned counsel for the insurer relying on certain decisions submitted that, admittedly, there is breach of policy conditions, as the driver had no valid and effective driving licence to drive the heavy goods vehicle viz., the lorry and that he was having driving licence to drive Light Motor Vehicle as per Ex.P.8. The learned counsel further submitted that as per the complaint Ex.P.1, 50-55 persons were travelling in the said lorry for attending a marriage, which is in violation of policy conditions by the owner of the lorry. On these grounds he submitted that the order passed by the learned Commissioner directing the insurer to pay compensation to the claimants and recover the same from owner is not permissible and that the insurer has to be exonerated from his liability to indemnify the owner.
15. The learned counsel for the claimants has relied on the decision of Hon'ble Supreme Court in the 13 case of Shamanna and another Vs. The Divisional Manager, Oriental Insurance Co. Ltd. and others reported in AIAR (Civil) 805 wherein the Hon'ble Apex Court has held in para-12 of the judgment as under;
" Since the reference to the larger bench in Parvathneni case has been disposed of by keeping the questions of law open to be decided in an appropriate case, presently the decision in Swaran Singh case followed in Laxmi Narain Dhut and other cases hold the field. The award passed by the Tribunal directing the insurance company to pay the compensation amount awarded to the claimants and thereafter, recover the same from the owner of the vehicle in question, is in accordance with the judgment passed by this Court in Swaran Singh and Laxmi Narain Dhut cases. While so, in our view, the High Court ought not to have interfered with the award passed by the Tribunal directing the first respondent to pay and recover from the owner of the vehicle. The impugned judgment of the High Court 14 exonerating the insurance company from its liability and directing the claimants to recover the compensation from the owner of the vehicle is set aside and the award passed by the Tribunal is restored."
16. In the above decision, the Hon'ble Apex Court has held that the judgment in Swaran Singh and Laxmi Narain Dhut hold the field so far as pay and recovery orders are concerned.
17. The learned counsel has also relied an unreported decision of the Hon'ble Supreme Court in the case of Singh Ram Vs. Nirmala and Ors Civil Appeal No.2103/2008 decided on 6.3.2018. In this case, the Hon'ble Apex Court has held that " Insurance Companies, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish "breach" on the part of the owner of the vehicle; the burden of proof wherefor would be on them." Therefore, the 15 burden is on the insurer to prove the breach of policy conditions by the owner of the vehicle.
18. The learned counsel for the claimants has also relied on the decision in the case of National Insurance Company Ltd. Vs. Savitri Devi & others reported in Supreme Court Motor Accident Judgments wherein the Hon'ble Apex Court held as under;
"On perusal of the award impugned before the learned Tribunal, it appears that a finding of fact has been arrived at, that the vehicle in question was driven by the first respondent without valid and effective licence as on the date of the accident. While answering issue No.3 that as to whether insurance company is not liable to make any payment of compensation on account of the preliminary objections taken by it in its written statement, the learned Tribunal observed that although the petitioner is liable to pay compensation to the claimant, it may recover the same from the owner of the offending vehicle."16
19. In the said decision, the order passed by the Tribunal directing the insurer to pay compensation and recover the same from the owner was affirmed.
20. The learned counsel for the appellant- insurer has relied on a decision of this Court in the case of Sri Appayachari Vs. K.Vadivel & Another reported in ILR 2014 Karnataka 2358 wherein this Court has considered all the previous judgments on the issue of pay and recover as observed by the Hon'ble Apex Court in the case of Shamanna & another Vs. The Divisional Manager, Oriental Insurance Co. Otd. & Others referred supra, the judgment in the case of National Insurance Company Ltd. Vs. Swaran Singh and others hold the field as to pay and recover. This Court has referred Swaran Singh case and also other cases on the aspect of passing order as to pay and recover. The defence available to the insurer to avoid his liability is discussed in this judgment by referring to 17 the case in Swaran Singh, it is observed that the direction to pay and recover should not be construed as precedent. The Hon'ble Apex Court in Swaran Singh's has held as follows:
" 100. Although, as noticed hereinbefore, there are certain special leave petitions wherein the persons having (sic.driving) the vehicles at the time when the accidents took place did not hold any licence at all, in the facts and circumstances of the case, we do not intend to set aside the said awards. Such awards may also be satisfied by the petitioners herein subject to their right to recover the same from the owners of the vehicles in the manner laid down therein. But this order may not be considered as a precedent."
21. It is further observed in para-45 of the judgment that " In the light of the law laid down by Hon'ble Apex Court in Swaran Singh's case that pay 18 and recovery ordered therein may not be considered as a precedent and law laid down by the Division Bench that when there is no liability on insurer, question of directing the insurer to pay and recover does not arise." Therefore, where the insurer is able to prove the breach of policy conditions or is proved by the documents produced by the claimants themselves, the insurer cannot be made liable to satisfy the award when the liability itself is not there and when the liability is void on one of the grounds mentioned in Section 149 (2) of M.V. Act, 1988, there is no liability to pay amount decreed or awarded. When there is no liability to pay or satisfy the award or decree, question of directing the insurer in those circumstances to pay and recover would not arise. Therefore, in the present case, the order passed by the Commissioner directing the insurer to pay the compensation and recover the same from the owner is not sustainable.
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22. The learned counsel for the insurer has relied on a decision in the case of National Insurance Company Ltd. Vs. Parvathneni & Another decided on 31.08.2009 wherein the Hon'ble Apex Court has held as under;
" If the insurance company has no liability to pay compensation at all, how can it be compelled to pay? It may take years for the insurance company to recover the amount from the owner of the vehicle, and it is also possible that for some reason the recovery may not be possible at all."
23. The Hon'ble Apex Court has further directed to place the case before the Hon'ble the Chief Justice of India for constituting a larger bench to decide the following questions:
(1) If an Insurance Company can prove that it does not have any liability to pay any amount in law to the claimants under the Motor Vehicles Act or any other enactment, can the 20 Court yet compel it to pay the amount in question giving it liberty to later on recover the same from the owner of the vehicle.
(2) Can such a direction be given under Article 142 of the Constitution, and what is the scope of Article 142? Does Article 142 permit the Court to create a liability where there is none?"
24. This case has been referred by the Hon'ble Apex Court in the case of Shamanna and Another Vs. The Divisional Manager, Oriental Insurance Company Ltd. & Others and held that Parvathneni & another has been disposed of by keeping the questions of law open to be decided in an appropriate case. Presently, the decision in Swaran Singh case followed in Laxmi Narain Dhut & others case hold the field. Therefore, the principles laid down in the case of 21 National Insurance Company Vs. Swaran Singh are applicable even as on this date.
25. The learned counsel for the insurer has also relied on the judgment of this Court in the case of The Oriental Insurance Co. Ltd. Vs. Annemma & others MFA No.201484 decided on 23.11.2017. In this case also, this Court has held that when the insurer is able to prove the breach of terms of the contract which is valid and a defence under Section 149 (1) of the Act, the insurer is under no liability to indemnify the insurer's risk to the third party. At the same time, there cannot be any order against insurance company to satisfy the third party claim and then recover the same from the owner.
26. The learned counsel for the insurer has further relied on the decision in the case of Oriental Insurance Company Limited Vs. Premlata Shukla 22 and others. In this case, the Hon'ble Apex Court has held as under;
" Contents of a document are not automatically proved only because the same is marked as an exhibit. However, the factum of an accident could also be proved from the FIR. IN the claim petition itself a reference was made to the lodging of the FIR. Therefore, once a part of the contents of a document viz., the FIR, is admitted in evidence, the party bringing the same on record cannot be permitted to turn round and contend that the other contents, contained in the rest part thereof, had not been proved.
Therefore, once a part of the FIR was relied upon by both the parties, the Tribunal could not be said to have committed any illegality in relying upon the other part of the same document, irrespective of whether the contents of the document have been proved or not. If the contents have been proved by admission, the question of reliance thereupon only upon a part thereof and not 23 upon the rest, on the technical ground that the same had not been proved in accordance with law, would not arise."
27. In the present case also Ex.P.1 complaint is produced by the claimants and they are relying on the said document. Therefore, the insurer can also rely on the said document and the contents of the said document have been proved by admission and this document can be very well considered by the Court.
28. In view of the principles laid down in the above referred cases, the evidence on record has to be appreciated. Ex.P.1 produced and got marked by the claimants goes to show that it is a complaint filed by one Raju S/o Shankar Pawar in respect the accident in question. In this complaint, it is clearly stated that, on the date of accident himself and about 50-55 persons who were his relatives of his village were travelling in lorry bearing No.MH-10-Z-929 from their Nigadi Thanda, Tq. Jath in order to attend the marriage. It is 24 further stated that when the said vehicle was proceeding near Hubnoor Thanda, it met with accident due to negligence of the driver. The deceased Laxman sustained severe injuries and subsequently succumbed to the said injuries is also stated. Therefore, as per the document produced by the claimants themselves, about 50-55 persons were travelling in a heavy goods vehicle lorry belonging to respondent No.1 which is clearly in violation of the conditions of the policy issued by the insurer. It is also admitted by the claimants themselves that the deceased Laxman had a driving licence to drive light motor vehicle only and the said original driving licence of the deceased is produced at Ex.P.8. This driving licence goes to show that the deceased was authorised to drive Light Motor Vehicle (non transport). Admittedly, at the time of accident, deceased was driving a heavy goods vehicle, a lorry and he had no driving licence to drive the said vehicle at the relevant time. Therefore, based on this admitted document, the 25 insurer is able to prove that the owner of the vehicle permitted the driver to drive the Heavy Goods Vehicle even though he was not holding a valid driving licence to drive the said vehicle. Therefore, there is a clear violation of the policy conditions by the owner of the vehicle. The learned Commissioner has also recorded a finding to this effect. It is stated in the judgment that the respondent No.1 owner has committed breach of policy conditions by allowing the deceased to drive the Heavy Goods Vehicle though he was not holding valid driving licence to drive the said vehicle. After having observed the same, the Commissioner has held that the insurer should pay the compensation amount and recover the same from the owner. When it is proved on the basis of the admitted documents that there is clear breach of policy conditions by the owner of the vehicle, liability cannot be saddled on the insurer with a direction to pay and recover the same from the owner. Therefore, the impugned judgment and order so far as 26 directing the respondent No.2 insurer to pay the compensation amount and thereafter recover the same from respondent No.1 owner of the vehicle is not sustainable in law. Consequently, the appeal filed by the insurer deserves to be allowed. It is needless to say that the respondent No.1 owner is liable to pay the compensation awarded to the claimants.
29. The contention of the claimants that the compensation awarded by the Commissioner is on lower side and that the same has to be enhanced is not justified before this Court. So also the contention of the claimants that liability to pay the compensation be saddled on the insurance company cannot be accepted for the above discussed reasons. However, the claimants are entitled for interest on the compensation @ 12% per annum after one month from the date of accident under the Workmen's Compensation Act. The learned Commissioner has awarded interest @ 12% p.a. 27 from 26.02.2009 viz., after one month of the adjudication of the claim petition and not from the date of one month after the accident. Admittedly, the accident occurred on 21.09.2007. Therefore, the claimants are entitled for interest @ 12% p.a. from 21.10.2007. Therefore, the award needs to be modified to this extent also. In view of the above, the questions of law are answered accordingly and I proceed to pass the following:
ORDER MFA No.30759/2009 preferred by the New India Assurance Company Ltd. is allowed. The Judgment and Order dated 27.01.2009 passed by the Labour Officer and Commissioner for Workmen's Compensation, Bijapur in WCA/SR.129/2007 is hereby set aside insofar as directing the appellant-insurer to pay the compensation with interest and recover the same from the owner of the vehicle is concerned.28
The compensation if any deposited by the insurer shall be refunded to him.
MFA No.32039/2010 preferred by the claimants is allowed in part. The Judgment and Order dated 27.01.2009 passed by the Labour Officer and Commissioner for Workmen's Compensation, Bijapur in WCA/SR.129/2007 is modified. The claimants are entitled for compensation determined by the Commissioner together with interest @ 12% p.a. from 21.10.2007 till final realisation from respondent No.1, the owner of the offending vehicle.
The order regarding deposit and disbursement is unaltered.
Sd/-
JUDGE NSP