Orissa High Court
Oriental Fire And General Insurance Co. ... vs Brajakishore Sahu And Ors. on 20 December, 1985
Equivalent citations: [1988]64COMPCAS557(ORISSA)
JUDGMENT S.C. Mohapatra, J.
1. This is an insurer's appeal under Section 110D of the Motor Vehicles Act, 1939 (for short " the Act"). The quantum of liability of the insurer is the subject-matter of this appeal.
2. The deceased, Sadhu Charan Behera, was employed as a helper in the truck, bearing registration No. OSC No. 5589, belonging to respondent No. 1. The helper is otherwise known as a cleaner. On March 17, 1979, the truck met with an accident resulting in the death of the helper, Sadhu Charan, who was one of the occupants in the truck.
3. On July 7, 1979, respondent No. 2, the widow of Sadhu Charan, filed an application before the Tribunal under Section 110A of the Act claiming Rs. 40,000 as compensation for herself and her three minor sons, who are admittedly dependants of the deceased under the Workmen's. Compensation Act, 1923. The owner and the insurer both contested the claim.
4. The Tribunal found the death of Sadhu Charan to be due to rash and negligent driving of the vehicle. While assessing the compensation payable to the dependants to be Rs. 66,333, it awarded Rs. 40,000 claimed by the dependants.
5. Mr. S.S. Basu, learned counsel for the insurer-appellants, submitted that the liability of the insurer is limited only to the extent of the sum payable under the Workmen's Compensation Act, 1923, in view of the statutory limitation to the liability fixed under Section 95 of the Act and not beyond.
6. Insurance is a contract under which on payment of a sum towards consideration of the contract known as premium, the insurer agrees to indemnify the insured taking the risk and liability of the insured. The terms of the agreement by the insurer are contained in a document called policy of insurance. Respondent No. 1, the insured in this case, produced the policy issued by the insurer which is on record. It is seen therefrom that wider legal liability in respect of driver, cleaner and four coolies has been agreed to be indemnified by the insurer on receipt of a premium of Rs. 48 from the insured. The wider liability has been included in endorsement No. IMT 16. The relevant portion thereof is extracted hereunder:
" Legal liability to persons employed in connection with the operation and/or maintenance and/or loading, and/or unloading of motor vehicles.-
In consideration of the payment of an additional premium it is hereby understood and agreed that notwithstanding anything contained herein to the contrary the company shall indemnify the insured against his legal liability under:
The Workmen's Compensation Act, 1923, and subsequent amendments of that Act prior to the date of this endorsement, the Fatal Accidents Act, 1855, or at common law in respect of personal injury to any paid driver (or cleaner or conductor or person employed in loading and/or unloading) whilst engaged in the service of the insured in such occupation in connection with the motor vehicle and will in addition be responsible for all costs and expenses incurred with its written consent..." (emphasis* supplied)
7. A bare reading of this clause in the insurance policy would make it clear that in consideration of the payment of an additional premium, the appellant has undertaken to indemnify the insured against his legal liability under the Workmen's Compensation Act, 1923, the Fatal Accidents Act, 1855, or at common law in respect of driver/cleaner and four coolies employed in the vehicle.
8. The wider coverage in the policy, as in this case, was the subject-matter of consideration in a decision of this court in Ram Chandra Sahu v. Sardar Kudatsingh (M.A. No. 150 of 1979, decided on October 4, 1982). Explaining the words " common law ", it was held :
" ...The liability of the owner on account of rash and negligent driving of the vehicle by the driver is a liability under the law of Torts. So the liability is one under common law. ... "
9. It was held that by payment of an additional premium, this liability was to be indemnified and there can be little doubt that the insurer shall bear the entire burden as determined by the Tribunal.
10. The same view has been taken by the Madras High Court in the decisions in General Assurance Society Ltd. v. Jayalakshmi Ammal, AIR 1975 Mad 198; [1975] ACJ 159 and C. Abdul Salam v. A.A. Jaleel [1979] 1 MLJ 330, by the Gujarat High Court in the decision in Punjabhai Prabhudas and Co. v. Sakinaben Mohamedbhai [1977] ACJ 44; AIR 1977 Guj 179 and by the Punjab and Haryana High Court in the decision in Indian Mercantile Insurance Co. Ltd. v. Smt. Chamla Devi [1980] 50 Comp Cas 50; [1980] ACJ 169.
11. Once it is found that the insurer is liable to indemnify the insured for the wider liability under the common law beyond the compensation under the Workmen's Compensation Act, 1923, it is also liable to pay the interest on the compensation and costs of the litigation.
12. The claimants in this case are a widow and her three minor sons. Minors are to get adequate protection from courts. Therefore, to consider how best their interests can be protected, I directed the Member-Secretary, Orissa Legal Aid and Advisory Board, constituted by the State Government in furtherance of Article 39A of the Constitution to make an on the spot enquiry about the economic condition of the widow and three minor claimants, as I found that one of the duties of the board is to render legal service to widows and minors. The report of the Member-Secretary discloses that the widow has kept Rs. 14,000 as fixed deposit out of Rs. 19,900 received by her from this court. Out of the balance including the bank interest received by her, she has paid Rs. 5,900 to her lawyer obviously towards fees and litigation expenses. The eldest minor son has left his studies after class VIII and is serving on a monthly remuneration of Rs. 25 only. The second minor son has also left his studies. The third one is continuing in class III at the primary stage. Although I directed learned counsel for respondents Nos. 2 to 5 to file an affidavit about the savings bank deposit and the fixed deposit, except stating that Rs. 14,000 is in fixed deposit, no further details were given. Respondent No. 2, the widow, has categorically stated to the Member-Secretary that she has no present need for the balance compensation if available to them and would utilise the same when the children become major. In these circumstances, I feel that the Member-Secretary should extend further help by rendering legal service to the claimants by getting the compensation payable to them converted into National Savings Certificates which would be a secured and profitable investment making the amount more than double within six years and encashable even after three years. The amount shall be invested equally in the names of the four claimants separately.
13. On a rough calculation, I find that the claimants are entitled to the balance compensation with interest calculated at the rate of interest awarded which comes to Rs. 35,000. The claimants have been deprived of the compensation for a long period. The interest payable is grossly inadequate.
14. In Oriental Fire and General Insurance Co. Ltd. v. Kamalkamini Das [1972] 38 CLT 135 ; [1972] ACJ 92, a Division Bench of this court held that the claimants are entitled to interest even though Section 110CC had not come in the statute by the time the claim petition was filed. It held:
" In this case, the claimants have been deprived of the compensation to which they were entitled from the date of the award. If the compensation amount would have been paid forthwith they could have deposited it in the bank and could have secured interest or could have utilised it much more usefully. Applying the principles of natural justice, there is, therefore, no reason why they should be deprived of interest. ... "
15. Following this decision, another Division Bench in a decision in Oriental Fire and General Insurance Co. Ltd. v. Vanita Kalyani [1972] 38 CLT 374; [1972] ACJ 261 allowed interest on the compensation awarded in spite of the fact that the cross-objection was only for enhancement of compensation and not interest which was also not pressed by the claimants. Even in the absence of a cross-objection, interest which was not granted by the Tribunal, was directed to be paid in the decision in Prabhudayal Agarwalla v. Smt. Saraswati Bai [1975] ACJ 335; ILR [1975] Cut 1131. The two Division Bench decisions were not considered in the decision in State of Orissa v. Indramoni Mohanty, ILR [1974] Cut 1389, where it was held that in the absence of cross-objections, interest is not payable on the compensation awarded. Taking into consideration the principle laid down in Oriental Fire and General Insurance Co. Ltd. v. Kamlakamini Das [1972] 38 CLT 135; [1972] ACJ 92, I can safely conclude that in case the entire amount awarded would have been paid within the time allowed by the Tribunal, the claimants could have better invested the same. They have been deprived of the benefit. By claiming a lower amount of compensation they have been deprived of compensation amounting to Rs. 26,333 which they were entitled to as calculated by the Tribunal. Therefore, the ends of justice would be best served in case the insurer pays a consolidated sum of Rs. 40,000 to the claimants which would also include the cost of this appeal by February 15, 1986. The payment should be made to the Member-Secretary, Orissa Legal Aid and Advisory Board on account of the claimants, in view of my direction given above.
16. On receipt of the sum of Rs. 40,000 from the insurer, the Member-Secretary, on behalf of the claimants, shall intimate the fact to the Tribunal who will record full satisfaction of the claim in its records.
17. Before parting, I may record my deep appreciation for the prompt and effective legal service rendered by the Member-Secretary of the Orissa Legal Aid and Advisory Board. The legal expenses as indicated by the Member-Secretary in his report come to more than ten per cent of the awarded compensation. The State Government and the State Legal Aid and Advisory Board shall be well advised in case a special cell is created in the Board for rendering legal service to the claimants more promptly and effectively, by which the claimants may not have to part with a sizeable amount towards litigation expenses.
18. In the result, the appeal is dismissed subject to the directions given above.