Gujarat High Court
United India Insurance Company Ltd vs Sumitji Abhuji Thakor on 25 September, 2023
Author: Gita Gopi
Bench: Gita Gopi
NEUTRAL CITATION
C/FA/201/2021 JUDGMENT DATED: 25/09/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 201 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE GITA GOPI
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Whether Reporters of Local Papers may be
1 NO
allowed to see the judgment ?
2 To be referred to the Reporter or not ? NO
Whether their Lordships wish to see the fair copy
3 NO
of the judgment ?
Whether this case involves a substantial question
4 of law as to the interpretation of the Constitution NO
of India or any order made thereunder ?
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UNITED INDIA INSURANCE COMPANY LTD
Versus
SUMITJI ABHUJI THAKOR
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Appearance:
MR GC MAZMUDAR(1193) for the Appellant(s) No. 1
MR HG MAZMUDAR(1194) for the Appellant(s) No. 1
MR KK THAKKAR(2834) for the Defendant(s) No. 1,2,3,4,5
RULE SERVED for the Defendant(s) No. 6
UNSERVED EXPIRED (R) for the Defendant(s) No. 7
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NEUTRAL CITATION
C/FA/201/2021 JUDGMENT DATED: 25/09/2023
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CORAM:HONOURABLE MS. JUSTICE GITA GOPI
Date : 25/09/2023
ORAL JUDGMENT
1. Challenge in this appeal under Section 173 of the Motor Vehicles Act, 1988 (MV Act) at the instance of appellant - United India Insurance Co. Ltd. is to the judgment and award dated 25.09.2019 passed in Motor Accident Claim Petition No. 320 of 2015 (claim petition) by the learned Motor Accident Claims Tribunal (Main), Patan (Tribunal) on the grounds, inter alia, that the injured since was driving the vehicle, he cannot claim compensation from the insurance company and the risk of the deceased was not statutorily covered under the policy and the deceased cannot be considered as third party within the meaning of the provisions of the MV Act and accordingly, a prayer has been made to quash and set aside the impugned judgment and award.
2. The heirs of the deceased had moved the learned Tribunal by filing the above referred claim petition on the facts that on 19.10.2015 deceased Abhuji Thakor was going to Diyodar from Page 2 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023 NEUTRAL CITATION C/FA/201/2021 JUDGMENT DATED: 25/09/2023 undefined Siddhpur as a driver of the truck bearing registration No. GJ-08-W-
2144 and had collided with another truck, which was stated to be coming from the opposite direction. The deceased received fatal injuries and died during the treatment. It was the case of the claimants that the deceased was aged 37 years at the time of accident and was earning Rs.24,000/- per month by driving.
3. Issues were framed at exh. 19 and the learned Tribunal, on appreciating the oral as well as the documentary evidence, observing the fact that both the vehicles involved in the accident, were heavy vehicles and observing that the responsibility of both the drivers to take care while driving the vehicle, without entering into the detailed discussion, the Tribunal considered the case of contributory negligence and had held both the drivers negligent for the accident.
The other vehicle, alleged to have been involved in the accident, was not brought on record since it was against the unknown driver and the whereabouts of the truck and the truck driver was not known.
The learned Tribunal by observing the insurance policy found that that the premium of the paid driver was paid and thus, concluded Page 3 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023 NEUTRAL CITATION C/FA/201/2021 JUDGMENT DATED: 25/09/2023 undefined that no amount is required to be deducted for self-negligence of the deceased.
3.1 The said observation got supported by proposition of law as laid down in the decision in Valiben Laxmanbhai Thakore (Koli) Wd/o Late Laxmanbhai ramsingbhai Thakore (Koli) v. Kandla Dock Labour Board, 2021 (0) AIJEL-HC 243219, wherein, the Hon'ble Bench of this Court has observed as under:
"9. Before reverting to the submissions made by the learned counsel for the respective parties, it would be appropriate to refer to Sections 147 and 149 of the Act, which reads as under:
147. Requirement 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
(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 motor vehicle or damage to any property of a third party caused by or arising out of the use of the motor vehicle in a public place.Page 4 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023
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(ii) against the death of or bodily injury to any passenger of a transport vehicle, except gratuitous passengers of a goods vehicle, caused by or arising out of the use of the motor vehicle in a public place. Explanation.-For the removal of doubts, it is hereby clarified 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 a 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) Notwithstanding anything contained under any other law for the time being in force, for the purposes of third party insurance related to either death of a person or grievous hurt to a person, the Central Government shall prescribe a base premium and the liability of an insurer in relation to such premium for an insurance policy under subsection (1) in consultation with the Insurance Regulatory and Development Authority.
(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 prescribed 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) Notwithstanding anything contained in this Act, a policy of Insurance issued before the commencement of the Motor Vehicles (Amendment) Act, 2019 shall be continued on the existing terms under the contract and the provisions of this Act shall apply as if this Act had not been amended by the said Act.
Page 5 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023NEUTRAL CITATION C/FA/201/2021 JUDGMENT DATED: 25/09/2023 undefined (5) Where a cover note issued by the insurer under the provisions of this Chapter or the rules or regulations made thereunder is not followed by a policy of insurance within the specified 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 or to such other authority as the State Government may prescribe.
(6) Notwithstanding anything contained in any other 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.
Section 149 Settlement by insurance company and procedure therefor
149. (1) The insurance company shall, upon receiving information of the accident, either from claimant or through accident information report or otherwise, designate an officer to settle the claims relating to such accident.
(2) An officer designated by the insurance company for processing the settlement of claim of compensation may make an offer to the claimant for settlement before the Claims Tribunal giving such details, within thirty days and after following such procedure as may be prescribed by the Central Government.
(3) If, the claimant to whom the offer is made under sub- section (2),-
(a) accepts such offer-
(i) the Claims Tribunal shall make a record of such settlement, and such claim shall be deemed to be settled by consent; and Page 6 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023 NEUTRAL CITATION C/FA/201/2021 JUDGMENT DATED: 25/09/2023 undefined
(ii) the payment shall be made by the insurance company within a maximum period of thirty days from the date of receipt of such record of settlement;
(b) rejects such offer, a date of hearing shall be fixed by the Claims Tribunal to adjudicate such claim on merits.
10. Chapter XI of the Act covers the subject Insurance of Motor Vehicles Against Third Party Risks under section 146(1) of which no person shall use a motor vehicle in public unless there is a valid policy of insurance which complies with the requirements of the chapter. Section 147 provides for mandatory requirements of such insurance policy. It deserves to be noted that as per the provisions of Section 147 r/w 149 of the Act, the risks which are covered are statutorily provided, however, parties may enter into a contract by which the insurer agrees to cover additional risks by charging / payment of additional payment. It also deserves to be noted that the policy has a clause which defines the limits of liability in respect of death or bodily injury to any person caused by or arising out of the use of the motor vehicle under section 11(i) of the terms and conditions of the policy. In proviso (b) to section II (1), which reads as under:
"Except so far as is necessary to meet the requirements of the Motor Vehicles Act, the company shall not be liable in respect of death of or bodily injury to any person in the employment of the insured arising out of and in the course of such employment"
Thus, the insurance policy would cover only the person or classes of persons specified in the policy. Thus, when the Insurance Company accepts the additional premium for legal liability to paid Driver and / or Conductor and / or Cleaner, employed in connection with the operation of the insured vehicle, by accepting additional premium as per IMT 28, the Insurance Company shall entail liability of indemnifying and legal liability is created towards paid Driver and / or Conductor and/ or Cleaner. In case when such additional Page 7 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023 NEUTRAL CITATION C/FA/201/2021 JUDGMENT DATED: 25/09/2023 undefined premium is paid, the policy includes following clause:
In consideration of an additional premium of notwithstanding anything to the contrary contained in the policy it is hereby understood and agreed that the insurer shall indemnify the insured against the insured s legal liability under the Employees Compensation Act 1923 the Fatal Accidents Act, 1855 or at Common Law and subsequent amendments of these Acts prior to the date of this Endorsement in respect of personal injury to any paid driver and/or conductor and/or cleaner whilst engaged in the service of the insured in such occupation in connection with the vehicle insured herein and will in addition be responsible for all costs and expenses incurred with its written consent.
The aforesaid clause therefore, clearly prescribes that it covers the insured against the insured s legal liability under the Employee s Compensation Act, 1923, the Fatal Accidents Act, 1855 or at Common Law. It may be noted that statutory policy would cover liability under the Employee s Compensation Act, 1923 as far as Driver is concerned. By accepting additional premium as per the IMT 28, the same added liability under Common Law and Fatal Accidents Act. Motor accidents liability predates the imposition of this liability under any form of statute and such liability would be part of Common Law till the time it was made a statutory liability.
11. At this juncture, it would be appropriate to refer to judgment of the Hon ble Supreme Court in the case of Prembai Patel (supra) wherein the Hon ble Supreme Court has observed thus:
12. The heading of Chapter XI of the Act is Insurance of Motor Vehicles Against Third Party Risks and it contains Sec. 145 to 164. Section 146(1) of the Act provides that no person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person Page 8 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023 NEUTRAL CITATION C/FA/201/2021 JUDGMENT DATED: 25/09/2023 undefined or that other person, as the case may be, a policy of insurance complying with the requirements of Chapter XI. Cl. (b) of sub- Sec. (1) of Sec. 147 provides that a policy of insurance must be a policy which insures the person or classes of persons specified in the policy to the extent specified in sub-sec. (2) against any liability which may be incurred by him in respect of death of or bodily injury to any person or passenger or damage to any property of a third party caused by or arising out of the use of the vehicle in public place. SubCl. (i) and (ii) of Cl. (b) are comprehensive in the sense that they cover both any person' or 'passenger . An employee of owner of the vehicle like a driver or a conductor may also come within the purview of the words any person' occurring in sub-Cl. (i). However, the proviso (i) to Cl. (b) of sub-Sec. (1) of Sec. 147 says that a policy shall not be required to cover liability in respect of 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 Act if the employee is such as described in sub-Cl. (a) or (b) or (c). The effect of this proviso is that if an insurance policy covers the liability under the Workmen's Act in respect of death of or bodily injury to any such employee as is described in sub-Cl. (a) or (b) or (c) of proviso (i) to Sec. 147(1)(b), it will be a valid policy and would comply with the requirements of Chapter XI of the Act. Section 149 of the Act imposes a duty upon the insurer (insurance company) to satisfy judgments and awards against persons insured in respect of third party risks. The expression
- "such liability as 1s required to be covered by a policy under Cl. (b) of sub-Sec. (1) of Sec. 147 (being a liability covered by the terms of the policy)" - occurring in sub-sec. (1) of Sec. 149 is important. It clearly shows that any such liability, which is mandatorily required to be covered by a policy under Cl. (b) of Sec. 147(1), has to be satisfied by the insurance company. The effect of this provision is that an insurance policy, which covers only the liability arising under the Workmen's Act in respect of death of or bodily injury to any such employee as Page 9 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023 NEUTRAL CITATION C/FA/201/2021 JUDGMENT DATED: 25/09/2023 undefined described in sub-Cl. (a) or (b) or (c) to proviso (i) to Sec. 147(1)(b) of the Act is perfectly valid and permissible under the Act. Therefore, where any such policy has been taken by the owner of the vehicle, the liability of the insurance company will be confined to that arising under the Workmen's Act.
13. The insurance policy being in the nature of a contract, it is permissible for an owner to take such a policy whereunder the entire liability in respect of the death of or bodily injury to any such employee as is described in sub-Cl. (a) or (b) or (c) of proviso (i) to Sec. 147(1)(b) may be fastened upon the insurance company and insurance company may become liable to satisfy the entire award. However, for this purpose the owner must take a policy of that particular kind for which he may be required to pay additional premium and the policy must clearly show that the liability of the insurance company in case of death of or bodily injury to the aforesaid kind of employees is not restricted to that provided under the Workmen's Act and is either more or unlimited depending upon the quantum of premium paid and the terms of the policy.
14. The aforesaid interpretation of the relevant provisions applicable to the case in hand is in consonance with the view expressed by a Constitution Bench in New India Assurance Co. Ltd. V/s. CM. Jaya and others, 2002 2 SCC 278 where, while interpreting the provisions of Sec. 95(2) of Motor Vehicles Act, 1939, the Court held as under: - The liability could be statutory or contractual. A statutory liability cannot be more than what is required under the statute itself. However, there is nothing in Sec. 95 of the Act prohibiting the parties from contracting to create unlimited or higher liability to cover wider risk. In such an event, the insurer is bound by the terms of the contract as specified in the policy in regard to unlimited or higher liability as the case may be. In the absence of such a term or clause in the policy, pursuant to the contract of insurance, a limited statutory liability cannot be Page 10 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023 NEUTRAL CITATION C/FA/201/2021 JUDGMENT DATED: 25/09/2023 undefined expanded to make it unlimited or higher. If it is so done, it amounts to rewriting the statute or the contract of insurance which is not permissible." The Bench also referred to earlier decisions rendered in New India Assurance Co. Ltd. V/s. Shanti Bai, 1995 2 SCC 539 and Amrit Lal Sood V/s. Kaushalya Devi Thapar, 1998 3 SCC 744 and observed that in case of an insurance policy not taking any higher liability by accepting a higher premium, the liability of the insurance company is neither unlimited nor higher than the statutory liability fixed u/s. 95(2) of the Motor Vehicles Act, 1939. It was further observed that it is open to the insured to make payment of additional higher premium and get higher risk covered in respect of third party also. But in the absence of any such clause in the insurance policy, the liability of the 15. Though the aforesaid decision has been rendered on Sec. 95(2) of the Motor Vehicles Act, 1939 but the principle underlying therein will be fully applicable here also. It is thus clear that in case the owner of the vehicle wants the liability of the insurance company in respect of death of or bodily injury to any such employee as is described in Cl. (a) or (b) or
(c) of proviso (i) to Sec. 147(1)(b) should not be restricted to that under the Workmen's Act but should be more or unlimited, he must take such a policy by making payment of extra premium and the policy should also contain a clause to that effect. However, where the policy mentions "a policy for Act Liability" or "Act Liability", the liability of the insurance company qua the employees as aforesaid would not be unlimited but would be limited to that arising under the Workmen's Act.
16. The High Court, in the impugned judgment, has held that if the legal representatives of the deceased employee approach the Motor Accident Claims Tribunal for payment of compensation to them by moving a petition u/s. 166 of the Act, the liability of the insurance company is not limited to the extent provided under the Workmen's Act and on its basis directed the appellant insurance company to pay the entire amount of compensation to the claimants. As shown above, the Page 11 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023 NEUTRAL CITATION C/FA/201/2021 JUDGMENT DATED: 25/09/2023 undefined insurance policy taken by the owner contained a clause that it was a policy for "Act Liability" only. This being the nature of policy the liability of the appellant would be restricted to that arising under the Workmen's Act. The Judgement of the High Court, therefore, needs to be modified accordingly.
11.1. It would be appropriate to refer to the judgment of the Hon ble Supreme Court in the case of C.M. Jaya and Ors (supra) wherein the Constitutional Bench of the Hon ble Supreme Court while interpreting Section 95(2) of the Old Act has held that the liability of the insurer is limited as indicated in Section 95 of the Act but it is open to the insured to make payment of additional higher premium and get higher risk covered in respect of third party also. Thus, if additional premium is paid by the owner of the vehicle and additional premium is paid for paid Driver and / or Conductor and / or Cleaner, Insurance Company by accepting such higher premium would cover higher risks i.e. risk of paid Driver and / or Conductor and / or Cleaner.
12. The Division Bench of this Court in the case of Saberabibi Hisammiya Umarvmiya (supra) has observed thus:
21. Then comes the question of liability of the United India Insurance Co., so far as truck driver is concerned. It was submitted by the learned counsel for the Insurance Co. that the dependents of deceased truck driver cannot get compensation from the Insurance Co. in view of the finding of the tribunal that the driver was 100% negligent. It was submitted by Mr. Nanavati that in view of the above finding recorded by the tribunal and affirmed by this Court, neither the owner nor the Insurance Co. can be directed to make payment of compensation towards the claim of the death of Riyajuddin. Mr. Nanavati submitted that recording of finding of negligence is a sine qua non for getting compensation in any motor accident case. Heavy reliance was placed by Mr. Nanavati in this connection on the decision of the Hon ble Supreme Court in the case of Minu B. Mehta vs. Balkrishna Page 12 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023 NEUTRAL CITATION C/FA/201/2021 JUDGMENT DATED: 25/09/2023 undefined Ramchandra Nayan, reported in AIR 1977 SC 1248. In that case, the Hon ble Supreme Court held that a person is not liable unless he contravenes any of the duties imposed on him by common law or by a statute. In a motor accident, the owner is only liable for negligence. If there was no negligence on the part of the owner, the Insurance Company cannot be held liable for the payment of compensation in a motor accident claim case. Mr. Nanavati submitted that since the driver himself was negligent, he cannot claim any compensation from the owner and the Insurance Co. can be held liable only if the owner is liable in law and, hence, the Insurance Co.
must be exonerated.
22. Mr. Shah, on the other hand, submitted that in the instant case, as per the policy Exh. 282, additional premium of Rs.16/- as per I.M.T. 16 has been paid covering the risk of driver and cleaner subject to I.M.T. 16. Mr. Shah, therefore, submitted that the claim is based on policy and since as per the terms and conditions of the policy, a driver is covered, the Insurance Company is liable and the tribunal ought to have held the company liable
23. Looking to the provisions of Section 95 of the Act and the policy, Exh. 288, it is clear that the policy covers the risk of driver and cleaner and additional payment of Rs.16/- was paid. In view of payment of additional premium of Rs.16/-, the Insurance Co. is liable as per the terms of policy and the ratio laid down in Minu Mehta s case (supra) cannot be attracted and pressed in service by the Insurance Co. because of payment of additional premium, the Insurance Company has extended the coverage for the risk of driver and cleaner. In our opinion, therefore, the Insurance Co. cannot be absolved from liability by contending that the claimants were not entitled to compensation since there was 100% negligence on the part of the driver. The claimants are entitled to get compensation from the Insurance Co. for the death of driver on the ground that the case is covered under the terms of policy irrespective of negligence on his part.
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24. Mr. Nanavati then submitted that in that case, the provisions of Section 95 (1) of the Act would apply, and the claimants will be entitled to get compensation in respect of death or bodily injury arising out of and in the course of employment as payable under the provisions of the Workmen s Compensation Act of Harivadan Maneklal Modi & Anr. Vs. Chandrasinh Chhatrasinh Parmar & Ors., reported in 28 (2) GLR 1274, Mr. Nanavati submitted that the compensation can be claimed either under the Motor Vehicles Act or under the Workmen s Compensation Act, but not under both. He submitted that, in the instance case, since the driver was 100% negligent, he could not have claimed compensation under the Motor Vehicles Act. At the most, therefore, an application could have been filed under the Workmen s Compensation Act before the Commissioner for Workmen s Compensation. Since it is not done, the claim is liable to be dismissed. In our opinion, the contention has no merit. Reliance placed on Harivadan s case (Supra) is also ill- founded. What the Division Bench in Harivadan s case (Supra) held was that a person cannot file a petition in both the forums, namely, by invoking provisions of the Motor Vehicles Act as well as the Workmen s Compensation Act. At the sametime, however, if the driver could have made claim under the Motor Vehicles Act and is otherwise entitled to get compensation under that Act, such application cannot be rejected on the ground that the application could have been made before the Commissioner for Workmen s Compensation. In our opinion, when the policy has covered the risk of driver, a petition under the Motor Vehicles Act is maintainable. Sub- Section (1) of Section 95 merely provides the extent of liability. It clearly lays down that if the case falls under Sub- Section (1) of Section 95, the extent of liability would be to the extent to which it would arise under the provisions of the Workmen s Compensation Act. From that it cannot be said that such a person will have to approach the Commissioner for Workmen s Compensation and file an application only before that forum. Since the additional coverage is given in policy Exh.282, the liability of the Insurance Co. arises. In our Page 14 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023 NEUTRAL CITATION C/FA/201/2021 JUDGMENT DATED: 25/09/2023 undefined opinion, if the application is made before the Commissioner for Workmen s Compensation as also before the Motor Accident Claims Tribunal, the person is not entitled to get benefit from both the forums. In the instant case, no such application was filed before the Commissioner for Workmen s Compensation under the Workmen s Compensation Act, and hence, the claimants are entitled to claim compensation under the Motor Vehicles Act. In our view, the claim petition requires to be allowed and the Insurance Co. must be held liable to pay compensation to the claimants for the death of driver Riyajuddin.
25. First Appeal Nos. 1013 of 1984 and 1383 of 1994 are also required to be allowed. Admittedly, the deceased were traveling in the truck. True it is that the accident took place because of the sole negligence on the part of the truck driver. The tribunal for that reason, relying upon the decision of the Full bench in Nathiben s case (supra) held that all the conditions laid down by the Full Bench having been satisfied by the Insurance Co., the Insurance Co. could successfully disclaim the liability to pay compensation to the claimants. But Mr. Shah drew our attention to a recent decision of the Full bench in the case of New India Assurance Co. vs. Kamlaben widow of Sumantrai, and others, reported in 34(1) GLR 779, wherein after considering a number of decisions including the decision in Nathiben s case (supra) laid down that in order to successfully disclaim the liability, the Insurance Co. has to satisfy the following conditions:
(i) that on the date of the contract of insurance, the insured vehicle was expressly or implicitly not covered by a permit to carry any passenger for hire or reward,
(ii) that there was a specified condition in the policy which excluded the use of the insured vehicle for the carriage of any passenger for hire or reward,
(iii) that the vehicle was, in fact, used in breach of such Page 15 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023 NEUTRAL CITATION C/FA/201/2021 JUDGMENT DATED: 25/09/2023 undefined specified condition on the occasion giving rise to the claim by reason of the carriage of the passenger therein for hire or reward, and
(iv) that the vehicle was used by the insured or at his instance in breach of specific conditions including a condition that in the goods vehicle passengers for hire or reward were not to be carried. If it is done without knowledge of the insured by the driver s acts or omission, the insurer would be liable to indemnify the insured.
The said observation is the basis of this Reference. The provisions of the Act prescribes statutory liability as provided under Sections 147 and 149 of the Act. The same stands modified to the extent of Common Law Liability by adding certain beneficial features for claimants. Under Common Law, a person could recover compensation only in case of proof of negligence on the part of the alleged tortfeasor. The Act under Section 140 and 163-A provides for No Fault Liability and no such equivalent provision is found in Common Law. Thus, under the Act certain burdens are imposed on the insurer which would not be there if the liability had been determined under Common Law. Section 149 of the Act also postulates that the insurer to first pay to the third party and then only recover from the owner of the vehicle in case of a breach of the policy. However, such principle would not be applicable if the liability had been determined under Common Law. Thus, when the owner of a vehicle pays additional premium to cover the Legal Liability of the paid Driver, the legal heirs of Driver have option either to file Claim application under the Employees Compensation Act, 1923 which no fault liability or under the Act as provided under Section 167 of the Act. Thus, the Act provides that option is left to the person entitled to compensation to choose a particular remedy. In the case of Prembai Patel (supra), the Hon ble Supreme Court has clearly held that when the Policy is Act Only and additional premium for Legal Liability for paid Driver and Conductor is not paid then the appropriate Page 16 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023 NEUTRAL CITATION C/FA/201/2021 JUDGMENT DATED: 25/09/2023 undefined remedy would be under the Employees Compensation Act for Compensation. However, when additional premium for legal liability of the paid Driver or Conductor is paid by the Owner, the insurance company on accepting additional liability for payment of compensation for such class of person, a claim petition under the Act would be available and the claimants have right to chose appropriate forum as per Section 167 of the Act.
13. Thus, when the owner of a vehicle pay additional premium and same is accepted by the Insurance Company, liability of the Insurance Company gets extended under the Motor Vehicles Act. Section 147 of the Act clearly prescribes for statutory liability to cover risk of paid Driver and Conductor under the Insurance Policy, which is a matter of contract. On payment of such additional premium by the owner, the liability of the owner shifts upon the Insurance Company. Thus, the risk of paid Driver and Conductor would be covered under the Insurance Policy. Only when the additional premium is not paid, liability would be as per the Employees Compensation Act, 1923 and in such cases, compensation would be computed as prescribed under the Act which is limited to the extent provided under provisions of the Act. However, when owner pays additional premium to cover the legal liability of his paid driver and conductor to the Insurance Company, as such, the Insurance Company is enlarging the scope for unlimited liability for payment of compensation, when additional premium is accepted. The liability of the Insurance Company gets extended and it has no right to raise issue of self negligence or otherwise of the such class of the driver of the Insured vehicle. By accepting additional premium as per the IMT 28, the Insurance Company expressed its willingness to extend its liability under the Clause of Legal Liability to the Paid driver and conductor as envisaged under Section 147 of the Act. Thus, in our opinion, Insurance Company has no legal right to avoid its legal liability under the indemnity clause arising from the contract of insurance towards the insured owner of such classes of vehicles."
Page 17 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023NEUTRAL CITATION C/FA/201/2021 JUDGMENT DATED: 25/09/2023 undefined 3.2 In view of the above proposition of law, the present appeal, at the instance of the insurance company, does not stand merits and not legally maintainable in view of the fact that when the insurance company has accepted additional premium, then the liability gets extended and it has no right to raise issue of self-negligence or otherwise of the such class of driver of the insured vehicle.
3.3 Further, there is a general contention raised by the insurance company that the case has not been appreciated on merits and thus, requires consideration. It was submitted that the age of the deceased was 37 at the time of accident, the Tribunal, has considered the income as Rs.7,500/- per months observing that the deceased was semi skilled worker at the relevant time; 1/3rd amount was deducted towards personal expenses of the deceased; Rs.3,000/- prospective rise in income was given and total Rs.10,500/- per month was considered from which, deducting 1/3rd, the monthly dependency was calculated as Rs.7,000/-. Applying the multiplier of 15, the future dependency loss was considered as Rs.12,60,000/-, which is just and proper. The Filial consortium is also granted to the minor Page 18 of 19 Downloaded on : Tue Sep 26 20:44:59 IST 2023 NEUTRAL CITATION C/FA/201/2021 JUDGMENT DATED: 25/09/2023 undefined children - applicant Nos. 2 to 4 in the claim petition. The widow had died during the trial. Thus, under the conventional head, Rs.1 lakh has been granted, however, since there is no challenge to the same, this Court considers the compensation amount of Rs.13,60,000/- to the claimants as just and proper.
4. In view of the above, there appears no cause to entertain the appeal and accordingly, the same is dismissed. Notice of admission is discharged. R&P, if received, be transmitted back to the Tribunal concerned forthwith.
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