Allahabad High Court
The United India Insurance Company ... vs Smt. Suraj Kala And Ors. on 8 August, 2023
Author: Jaspreet Singh
Bench: Jaspreet Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Neutral Citation No. - 2023:AHC-LKO:52200 AFR Reserved Court No. - 19 Case :- FIRST APPEAL FROM ORDER No. - 551 of 2019 Appellant :- The United India Insurance Company Ltd.Throu.Branch Manager Respondent :- Smt. Suraj Kala And Ors. Counsel for Appellant :- Anil Kumar Srivastava Counsel for Respondent :- Ravindra Pratap Singh Hon'ble Jaspreet Singh,J.
1. The instant appeal has been preferred by the Insurance company assailing the award dated 10.07.2019 passed in C.P. No.646 of 2013 whereby in a death case, the Tribunal has awarded a sum of Rs.3,36,000/- along with 7% interest in favour of the claimants-respondents.
2. Shri Anil Kumar Srivastava, learned counsel for the appellant submits that the Tribunal has erred in fastening the liability on the insurance company for the reason that in terms of Section 147 of the Motor Vehicles Act, 1988, the deceased was not covered as the policy in question was merely an 'Act Policy' and in terms whereof only third party claims could have been indemnified. Since in the instant case, the driver was not covered and he caused the accident by his own negligence, therefore, not being a third party, the insurance company was not liable for the award. It is only the owner of the vehicle who could be made responsible and this aspect has not been appropriately considered by the Tribunal who has fixed the liability on the insurance Company.
3. It has further been urged that the Tribunal has misconstrued the decision of the Apex Court in the case of National Insurance Co. Ltd. vs. Prembai Patel and others AIR 2005 SC 2337 and without considering the contention of the insurance company that under the 'Act Policy', it was only a third party claim which could be covered and not the claim of the driver, hence, the award is bad.
4. Further elaborating his submissions, it is also urged that in the policy it was clearly mentioned that no premium had been taken for the driver. Accordingly, the liability of the insurance company was limited and it could not be extended to cover such risks which were not covered by the policy and ignoring this aspect, the award has been delivered, fastening the liability on the appellant-company, which is not in consonance with law, accordingly, the award deserves to be set aside.
5. The learned counsel for the appellant in support of his submissions has relied upon the decision of the Apex Court in Oriental Insurance Co. Ltd. vs. Meena Variyal and others (2007) 5 SCC 428 and National Insurance Co. Ltd. vs. Balakrishnan and another (2013) 1 SCC 731.
6. Per contra, Shri Ravindra Pratap Singh, learned counsel for the claimants-respondents while defending the award submits that in the instant case, the claim petition was filed under Section 163-A of the Motor Vehicles Act, 1988.
7. It is further urged that Section 167 of the Motor Vehicles Act permits a person to opt for the forum to file a claim petition either under the Workmen's Compensation Act, 1923 or under the Motor Vehicles Act, 1988, but not both.
8. It is further submitted that in the instant case, the claimants chose to file the claim petition under the Motor Vehicles Act and since, the deceased was the driver of the owner of the vehicle and he sustained injuries which led to his death and being a petition under Section 163-A of the Motor Vehicles Act, it was not incumbent on the claimants to establish the negligence and once, it was proved that the accident occurred on account of use of a motor vehicle, then in terms of Section 163-A of the Act of 1988, the claimants were entitled to the compensation.
9. It is further urged by the counsel for the claimants-respondents that in terms of Section 147 of the Act, the insurance company is liable under the 'Act Policy' to cover the driver and in the instant case, it is not disputed that the deceased was a driver, therefore, the claimants were entitled to compensation and the insurance company was duty bound to indemnify the award in terms of Section 149 of the Motor Vehicles Act.
10. It is further pointed out that this aspect of the matter was considered by the Apex Court in Prembai Patel (supra) and the same has rightly been relied by the Tribunal and as such it cannot be said that the award passed by the Tribunal is erroneous.
11. It is also submitted that the decisions which have been cited by the learned counsel for the appellant in Meena Variyal (supra) and Balakrishanan (supra), they were considered by the Apex court in various other decisions including the full Bench decision of the Gujarat High Court in Valiben Laxmanbhai Thakore (Koli) and others vs. Kandla Dock Labour Board and others 2021 ACJ 2262 and the aforesaid decision also clearly establishes that it is the liability of the insurance company to satisfy the award. It is thus urged that the issue No.6 was correctly decided by the Tribunal and the award is liable to be indemnified by the insurance company. Accordingly, the appeal lacks merit and deserves to be dismissed.
12. The Court has heard the learned counsel for the parties and also perused the material on record.
13. Before adverting to the respective submissions of the counsel for the parties, it will be appropriate to take a glance at the events giving rise to the instant appeal.
14. The claimants-respondents No.1 and 2 instituted a claim petition under Section 163-A of the Motor Vehicles Act, 1988 before M.A.C.T./A.D.J., Court No.6, Barabanki registered as C.P. No. 646 of 2013.
15. It was pleaded that the deceased- Luv Kush Kumar was working as a driver with the respondent No.3. On the fateful day i.e. 28.11.2013, he was driving a mini truck belonging to the respondent No.3 bearing No. U.P. 41 T 9561 and around 11.30 AM, when he had reached the cold storage, Pratapganj under P.S.- Safdarganj, District- Barabanki, a truck which was moving ahead of the mini truck being driven by Luv Kush suddenly slammed its brakes and as a result, the mini truck being driven by Luv Kush dashed and its front portion was badly damaged and on account of the said accident, the deceased sustained injuries and later succumbed to his injuries.
16. It is in respect of the aforesaid accident that the claim petition was filed which was contested both by the owner as well as the insurance company. The owner while filing his written statement admitted that the vehicle in question was a new vehicle which was duly insured with the United India Insurance Company Ltd. It was also admitted that the truck in question had all valid documents and its driver Luv Kush also possessed the valid driving license with the endorsement to drive a transport vehicle. The mini truck in question had the requisite permit, fitness certificate and as such in case, if any liability is assessed, it was to be indemnified by the insurance company.
17. The insurance company while contesting the claim petition raised the plea that the policy in question was merely an 'Act Policy'. Since the driver was not covered and no extra premium was paid for the aforesaid purpose, hence, only third party claims could be covered. Since, the driver cannot be treated as a third party and he was responsible for the accident himself, accordingly, the insurance company was not liable.
18. The Tribunal considering the respective contentions framed seven issues and after permitting the parties to lead oral as well as documentary evidence, it recorded its finding and concluded that Luv Kush died on account of an accident while driving the truck bearing No. U.P. 41 T 9561. It also concluded that the driver had a valid and subsisting license and the truck was duly insured with the insurance company. While dealing with the issue regarding liability of the insurance company, it considered Section 147 of the Motor Vehicles Act and relying upon the decisions of the Apex Court in case of Prembai Patel (supra), it computed the compensation of Rs.3,36,000/- and awarded the same along with 7% interest per annum by means of its award dated 10.07.2019.
19. This award is under challenge on the ground raised by the insurance company and as already noticed hereinabove.
20. In order to appreciate the contentions of the respective parties, it will be first relevant to notice the statutory provisions with the aid of relevant cases of the Apex Court on the aforesaid subject.
21. Section 145 which is contained in Chapter 11 of the Motor Vehicles Act, 1988 relates to definitions and certain relevant words/terms which have been defined are being noticed hereinafter:-
Chapter XI Insurance of Motor Vehicles against third party risks "145. Definitions.--In this Chapter,--
(a) ...............
(b) "certificate of insurance" means a certificate issued by an authorised insurer in pursuance of sub-section (3) of section 147 and includes a cover note complying with such requirements as may be prescribed, and where more than one certificate has been issued in connection with a policy, or where a copy of a certificate has been issued, all those certificates or that copy, as the case may be;
(c) "liability", wherever used in relation to the death of or bodily injury to any person, includes liability in respect thereof under section 140;
(d) "policy of insurance" includes "certificate of insurance";
(e) ...............
(f) ...............
(g) "third party" includes the Government."
22. Section 146 of the Act, 1988 clearly prohibits any person to 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 or that other person, as the case may be, a policy of insurance complying with the requirements of this chapter. This clearly indicates that the effort is to ensure that no vehicle is plied on the road without an effective insurance policy.
23. The requirements of a policy and the limits of liability is contained in Section 147 of the Act of 1988, which is relevant for the adjudication of the instant controversy and as such is being reproduced hereinafter:-
"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 authorized 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 27 [injury to any person, including owner of the goods or his authorised representative carried in the vehicle] 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 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 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) 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 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) 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 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."
(Note:- The underlining in the aforesaid provision has been done by this Court to emphasize certain aspects which shall be dealt with in the body of this judgment.)
24. Section 149 casts a duty on the insurer to satisfy the judgment and award against persons insured in respect of third party risks. From the perusal of the aforesaid Sections, it would indicate that it is mandatory for every vehicle owner to get his vehicle insured before plying it on the road.
25. Section 147 clearly provides the minimum requirements of an insurance policy. The policy which is issued by an authorized insurer must comply with the minimum standards which is called an 'Act Policy'. However, since a contract of insurance is like any other contract, the parties are free to pay a higher premium and get the limits enhanced. It is in the aforesaid backdrop, it is always open for a party to pay higher premium and get various other risks covered. Generally, when various other risks are covered and the liability is unlimited of the insurance company, such policies are termed as 'comprehensive' or 'package policies'.
26. In the aforesaid backdrop, the controversy which emerges in the instant case is whether the 'Act Policy' would cover the driver or not? It is in this context that Section 147 of the Act assumes significance and in order to understand the said provision better, the Court has underlined the proviso and the explanation which has been appended to the said section.
27. At this stage, it will also be relevant to notice the decisions of the Apex Court and in Meena Variyal (supra), a claim petition was preferred under Section 166 of the Act of 1988 and the deceased in question had died in a car accident and was an occupant of the said car. The car was being driven by its driver Mahmood Hasan. The car was being used for the benefit of its employee. The stand of the insurance company was that since the deceased himself was driving the vehicle, he was not entitled to any claim on account of his own negligence. The Tribunal had awarded a sum of Rs.7,20,000/- and held that since the vehicle was being driven by the deceased himself and was an employee of the owner of the car and the insurance did not cover such an employee, thus, he was made to pay the amount. The claimants have preferred an appeal before the High Court where the High Court directed the insurance company to pay the amount as awarded by the Tribunal and leaving it open for the insurance company to recover the aforesaid amount from the owner. This matter went up to the Apex Court wherein the Apex Court considering the decisions found that there was no finding that Mahmood Hasan, another employee of the owner was driving the vehicle. It further held that the victim was the regional manager of the company that owned the car and since he was using the car given for his own use by the company, hence, the insurance policy in question which did not cover any special risk including to satisfy the award under the Workmen's Compensation Act, hence, the insurance company was not held liable. Relevant paragraphs of the aforesaid decision are being reproduced hereinafter for ready reference:-
"13. As we understand Section 147(1) of the Act, an insurance policy thereunder need not cover the liability in respect of death or injury arising out of and in the course of the employment of an employee of the person insured by the policy, unless it be a liability arising under the Workmen's Compensation Act, 1923 in respect of a driver, also the conductor, in the case of a public service vehicle, and the one carried in the vehicle as owner of the goods or his representative, if it is a goods vehicle. It is provided that the policy also shall not be required to cover any contractual liability. Uninfluenced by authorities, we find no difficulty in understanding this provision as one providing that the policy must insure an owner against any liability to a third party caused by or arising out of the use of the vehicle in a public place, and against death or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of vehicle in a public place. The proviso clarifies that the policy shall not be required to cover an employee of the insured in respect of bodily injury or death arising out of and in the course of his employment. Then, an exception is provided to the last foregoing to the effect that the policy must cover a liability arising under the Workmen's Compensation Act, 1923 in respect of the death or bodily injury to an employee who is engaged in driving the vehicle or who serves as a conductor in a public service vehicle or an employee who travels in the vehicle of the employer carrying goods if it is a goods carriage. Section 149(1), which casts an obligation on an insurer to satisfy an award, also speaks only of award in respect of such liability as is required to be covered by a policy under clause (b) of sub-section (1) of Section 147 (being a liability covered by the terms of the policy). This provision cannot therefore be used to enlarge the liability if it does not exist in terms of Section 147 of the Act.
14. The object of the insistence on insurance under Chapter XI of the Act thus seems to be to compulsorily cover the liability relating to their person or properties of third parties and in respect of employees of the insured employer, the liability that may arise under the Workmen's Compensation Act, 1923 in respect of the driver, the conductor and the one carried in a goods vehicle carrying goods. On this plain understanding of Section 147, we find it difficult to hold that the Insurance Company, in the case on hand, was liable to indemnify the owner, the employer Company, the insured, in respect of the death of one of its employees, who according to the claim, was not the driver. Be it noted that the liability is not one arising under the Workmen's Compensation Act, 1923 and it is doubtful, on the case put forward by the claimant, whether the deceased could be understood as a workman coming within the Workmen's Compensation Act, 1923. Therefore, on a plain reading of Section 147 of the Act, it appears to be clear that the Insurance Company is not liable to indemnify the insured in the case on hand.
15. The argument that the proviso does not keep out employees from coverage though the claims under the Workmen's Compensation Act are specified, cannot be accepted on the plain language of the proviso. The proviso enacts an exemption and carves out an exception to that exemption. The suggested interpretation would result in ignoring the effect of the language employed by the proviso, exempting the owner from covering his employees under insurance except in cases where the liability in respect of them is, one arising under the Workmen's Compensation Act, obviously, as determined by that Tribunal.
23. We are thus satisfied that based on the ratio in National Insurance Co. Ltd. v. Swaran Singh and others [(2004) 3 SCC 297 : 2004 SCC (Cri) 733] the Insurance Company cannot be made liable in the case on hand to pay the compensation first and to recover it from the insured, the owner of the vehicle. The deceased being an employee not covered by the Workmen's Compensation Act, of the insured, the owner of the vehicle, has not to be covered compulsorily under the Act and only by entering into a special contract by the insured with the insurer could such a person be brought under coverage. There is no case that there is any special contract in that behalf in this case.
24. It was argued by learned counsel for the appellant that since on the finding that the deceased was himself driving the vehicle at the time of the accident, the accident arose due to the negligence of the deceased himself and hence the insurer is not liable for the compensation. Even if the case of the claimant that the car was driven by Mahmood Hasan was true, then also, the claimant had to establish the negligence of the driver before the insured (sic insurer) could be asked to indemnify the insured. The decision in Minu B. Mehta v. Balkrishna Ramchandra Nayan [(1977) 2 SCC 441 : (1977) 2 SCR 886] of a three-Judge Bench of this Court was relied on in support.
25. In that decision, this Court considered the question whether in a claim for compensation under the Motor Vehicles Act, 1939, proof of negligence was essential to support a claim for compensation. On the facts in that case, their Lordships found that the appeal was liable to be dismissed subject to certain directions issued therein. But their Lordships, in the light of the fact that the High Court had discussed the law on the question and it was of some importance, felt that it was necessary to state the position in law. Noticing that the liability of the owner of the car to compensate the victim in a car accident due to negligent driving of his servant is based on the law of tort, the Court discussed the scheme of the Act of 1939 and the law on the question. Regarding the view of the High Court that it was not necessary to prove negligence, the Court held : (Minu B. Mehta case [(1977) 2 SCC 441 : (1977) 2 SCR 886] , SCC pp. 455-56, para 33) "33. The reasoning of the two learned Judges is unacceptable as it is opposed to basic principles of the owner's liability for negligence of his servant and is based on a complete misreading of the provisions of Chapter VIII of the Act. The High Court's zeal for what it considered to be protection of public good has misled it into adopting a course which is nothing short of legislation."
Their Lordships also noticed that proof of negligence remained the lynchpin to recover compensation. Their Lordships concluded by saying : (Minu B. Mehta case [(1977) 2 SCC 441 : (1977) 2 SCR 886] , SCC pp. 456-57, para 37) "37. We conclude by stating that the view of the learned Judges of the High Court has no support in law and hold that proof of negligence is necessary before the owner or the insurance company could be held to be liable for the payment of compensation in a motor accident claim case."
29. On the facts of this case, there is no finding that Mahmood Hasan, another employee of the owner was driving the vehicle. Even if he was, there is no finding of his negligence. The victim was the Regional Manager of the Company that owned the car. He was using the car given to him by the Company for use. Whether he is treated as the owner of the vehicle or as an employee, he is not covered by the insurance policy taken in terms of the Act--without any special contract--since there is no award under the Workmen's Compensation Act that is required to be satisfied by the insurer. In these circumstances, we hold that the appellant Insurance Company is not liable to indemnify the insured and is also not obliged to satisfy the award of the Tribunal/Court and then have recourse to the insured, the owner of the vehicle. The High Court was in error in modifying the award of the Tribunal in that regard."
28. The learned counsel for the appellant has also relied upon the decision of BalaKrishanan (supra) wherein the issue of an 'Act Policy' and the requirements in terms of Section 147 has been considered including the earlier decision of Meena Variyal (supra). The Apex Court after noticing the various earlier decisions of the Apex Court on the aforesaid point including certain tariff circulars held as under:-
"26. In view of the aforesaid factual position, there is no scintilla of doubt that a "comprehensive/package policy" would cover the liability of the insurer for payment of compensation for the occupant in a car. There is no cavil that an "Act policy" stands on a different footing from a "comprehensive/package policy". As the circulars have made the position very clear and IRDA, which is presently the statutory authority, has commanded the insurance companies stating that a "comprehensive/package policy" covers the liability, there cannot be any dispute in that regard. We may hasten to clarify that the earlier pronouncements were rendered in respect of the "Act policy" which admittedly cannot cover a third-party risk of an occupant in a car. But, if the policy is a "comprehensive/package policy", the liability would be covered. These aspects were not noticed in Bhagyalakshmi [(2009) 7 SCC 148 : (2009) 3 SCC (Civ) 87 : (2009) 3 SCC (Cri) 321] and, therefore, the matter was referred to a larger Bench. We are disposed to think that there is no necessity to refer the present matter to a larger Bench as IRDA, which is presently the statutory authority, has clarified the position by issuing circulars which have been reproduced in the judgment by the Delhi High Court and we have also reproduced the same."
Since the issue whether the policy in question was an 'Act Policy' or a comprehensive policy was not considered by the Tribunal and the High Court, the Apex Court further remanded the matter as shall be evident from para 27 and 28 of the aforesaid decision which reads as under:-
"27. In view of the aforesaid legal position, the question that emerges for consideration is: whether in the case at hand, the policy is an "Act policy" or "comprehensive/package policy"? There has been no discussion either by the Tribunal or the High Court in this regard. True it is, before us, Annexure P-1 has been filed which is a policy issued by the insurer. It only mentions the policy to be a "comprehensive policy" but we are inclined to think that there has to be a scanning of the terms of the entire policy to arrive at the conclusion whether it is really a "package policy" to cover the liability of an occupant in a car.
28. In view of the aforesaid analysis, we think it apposite to set aside the finding of the High Court and the Tribunal as regards the liability of the insurer and remit the matter to the Tribunal to scrutinise the policy in a proper perspective and, if necessary, by taking additional evidence and if the conclusion is arrived at that the policy in question is a "comprehensive/package policy", the liability would be fastened on the insurer. As far as other findings recorded by the Tribunal and affirmed by the High Court are concerned, they remain undisturbed."
29. The Tribunal as well as the counsel for the claimants-respondents has placed reliance upon the decision of the Apex Court in Prembai Patel (supra), wherein a truck was being driven by one Sundar Singh. This truck was insured with the National Insurance Company and since the truck had overturned which resulted in the death of its driver, a claim petition came to be filed. The same was contested mainly on the ground that the accident took place on account of the fault of the driver, hence, the liability was denied. The Claims Tribunal considering the evidence, awarded a sum of Rs.2,10,000/- along with 12% interest directing the insurance company to satisfy the award. The High Court also affirmed the judgment of the Tribunal. The judgment of the High Court was assailed before the Apex Court only on the ground that since the insurance policy was restricted one, therefore, the entire liability could not be satisfied by the insurance company but its liability was restricted only to cover the liability under the Workmen's Compensation Act. The issue before the Apex Court was crystallized in paragraph 8 and thereafter considering the provisions of Section 147, the effect of the proviso has been noticed in the subsequent paragraphs and noticing the difference in the liability relating to an 'Act Policy' and to what extent the insurance company would be liable has been dealt with in the subsequent paragraphs which have been reproduced hereinafter:
"8. The main question which requires consideration in this appeal is, whether the appellant Insurance Company is liable to pay the entire amount of compensation awarded to the claimants or its liability is restricted to that which is prescribed under the Workmen's Act. In this connection learned counsel for the appellant has drawn our attention to the insurance policy, which had been taken by the owner for the vehicle concerned, and, especially to the following endorsements made therein:
1. Policy No. 320801/31/--92-93/21/01753 a policy for act liability
2. Premium (Act Liability) Rs.1245/-
3. Limitation as to use For Act only cover At the end of the policy the following is written:
"IMPORTANT NOTICE The insured is not indemnified if the vehicle is used or driven otherwise than in accordance with this Schedule. Any payment made by the Company by reason of wider terms appearing in the certificate in order to comply with the Motor Vehicles Act, 1988 is recoverable from the insured. See the clause headed AVOIDANCE OF CERTAIN TERMS AND RIGHT OF RECOVERY in the policy.
NOTE :-- This Schedule, the attached policy and the endorsements mentioned here above shall be read together and any word or expression to which a specific meaning has been attached in any part of this policy or the Schedule shall bear the same meaning wherever it may appear."
9. The learned counsel for the appellant has submitted that the owner of the truck had got his vehicle insured by paying only that much amount of premium which, so far as his employees were concerned, covered the liability to the extent it is provided under the Workmen's Act. It has been submitted that the words "a policy for Act Liability" or "Act Liability" clearly indicate that the liability of the Insurance Company was not an unlimited one but that which was mandatorily required under the Act so as to cover the liability under the Workmen's Act and no further. Learned counsel has further submitted that in order to cover unlimited liability the owner has to pay higher amount of premium and in such a case the words "a policy for Act Liability" or "Act Liability" are not written. The insurance policy being in the nature of a contract, the parties are bound by it and, therefore, the appellant cannot be saddled with any extra liability to pay the entire amount of compensation, which has been awarded to the claimants.
11. The contentions raised turn on the interpretation of sub-section (1) of Sections 147 and 149 of the Act and the same are being reproduced below:-
"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
(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 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.--*** (omitted as not relevant)
149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third-party risks.--(1) If, after a certificate of insurance has been issued under sub-section (3) of Section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (1) of Section 147 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment-debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments."
12. The heading of Chapter XI of the Act is Insurance of Motor Vehicles Against Third Party Risks and it contains Sections 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 or that other person, as the case may be, a policy of insurance complying with the requirements of Chapter XI. Clause (b) of sub-section (1) of Section 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-section (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. Sub-clauses (i) and (ii) of clause (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-clause (i). However, the proviso (i) to clause (b) of sub-section (1) of Section 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-clauses (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-clauses (a) or (b) or (c) of proviso (i) to Section 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 is required to be covered by a policy under clause (b) of sub-section (1) of Section 147 being a liability covered by the terms of the policy" -- occurring in sub-section (1) of Section 149 is important. It clearly shows that any such liability, which is mandatorily required to be covered by a policy under clause (b) of Section 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 described in sub-clauses (a) or (b) or (c) to proviso (i) to Section 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-clauses (a) or (b) or (c) of proviso (i) to Section 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. C.M. Jaya [(2002) 2 SCC 278 : 2002 SCC (Cri) 325] where, while interpreting the provisions of Section 95(2) of the Motor Vehicles Act, 1939, the Court held as under in para 10 of the Report :- (SCC p. 285) ".....................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 Section 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 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. Shanti Bai [(1995) 2 SCC 539] and Amrit Lal Sood v. 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 under Section 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 insurer cannot be unlimited in respect of third party and it is limited only to the statutory liability.
15. Though the aforesaid decision has been rendered on Section 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 sub-clauses (a) or (b) or (c) of proviso (i) to Section 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 Accidents Claims Tribunal for payment of compensation to them by moving a petition under Section 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 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 judgment of the High Court, therefore, needs to be modified accordingly.
17. The judgment of the High Court insofar as it relates to quantum of compensation and interest, which is to be paid to the claimants (Respondents 3 to 6 herein) is affirmed. The liability of the appellant Insurance Company to satisfy the award would be restricted to that arising under the Workmen's Act. Respondents 1 and 2 (owners of the vehicle) would be liable to satisfy the remaining portion of the award.
18. The record shows that no stay order was passed in favour of the appellant. In case the appellant Insurance Company has deposited the entire amount awarded by the High Court with the Motor Accidents Claims Tribunal or has paid the said amount to the claimants, it will be open to it to recover the amount, which exceeds its liability under the Workmen's Act, from the owner of the vehicle in accordance with law."
30. It will be relevant to notice that it is relying upon the aforesaid decision of Prembai Patel (supra) has the Tribunal awarded the sum in context with the liability arising under the Workmen's Compensation Act and has fastened the same on the insurance company.
31. Before proceeding further, it will also be relevant to notice another decision of the Apex Court which throw light on the aforesaid subject and is Sanjeev Kumar Samrat vs. National Insurance Company Ltd. (2014) 14 SCC 243, wherein the scope of Sections 146, 147 and its proviso has been considered by the Apex Court. The facts involved in the said case indicated that a truck was hired by one Shri Durga Singh, who was traveling along with his two labourers. The said truck met with an accident, as a consequence, the labourers sustained injuries and died. The issue that cropped up was whether the insurer is obliged under law to indemnify the owner of the goods, when the employees engaged by the hirer of the vehicle, driver with the owner of the goods on the foundation that they should be treated as employees covered under the policy issued in accordance with the provisions contained under Section 147 of the Motor Vehicles Act. The Apex Court noticing the provisions of Section 147 and earlier decisions on the aforesaid point in paragraph 11, 13, 15, 16, 17, 18, 19, 21 and 23 held that in terms of Section 147 (1) (b) proviso (I), it refers to the employees which are being carried in the vehicle covered by the policy. It was further explained that the legislature had intended to cover the injury to any person including the owner of the goods or his authorized representative carried in the vehicle and an employee who has carried in the said vehicle. It also held that a policy is not required to cover the liability of the employee except an employee covered under the Act of 1923 and that too in respect of employee carried in a vehicle. It clarified that on a contextual reading and the scheme of the Act the statutory policy i.e. 'Act Policy' covers the employees of the insured either employee or engaged by him in a goods carriage. The relevant paragraphs are reproduced hereinafter:-
"11. Be it noted, before Section 147(1)(b)(i) came into existence in the present incarnation, it stipulated that a policy of insurance must be a policy which insured the person or classes of persons to the extent specified in sub-section (2) against the liability incurred by him in respect of the death of or bodily injury to any person or damage to any property or third party caused by or arising out of the use of the vehicle in public place.
13. The correctness of the said decision in Satpal Singh case [(2000) 1 SCC 237 : 2000 SCC (Cri) 130] came up for consideration before a three-Judge Bench in New India Assurance Co. Ltd. v. Asha Rani [New India Assurance Co. Ltd. v. Asha Rani, (2003) 2 SCC 223 : 2003 SCC (Cri) 493] . The learned Chief Justice, speaking for himself and H.K. Sema, J. took note of Section 147(1) prior to the amendment and the amended provision and the objects and reasons behind the said provision and came to hold as follows: (Asha Rani case [New India Assurance Co. Ltd. v. Asha Rani, (2003) 2 SCC 223 : 2003 SCC (Cri) 493] , SCC p. 232, para 9) "9. ... The objects and reasons of clause 46 also state that it seeks to amend Section 147 to include owner of the goods or his authorised representative carried in the vehicle for the purposes of liability under the insurance policy. It is no doubt true that sometimes the legislature amends the law by way of amplification and clarification of an inherent position which is there in the statute, but a plain meaning being given to the words used in the statute, as it stood prior to its amendment of 1994, and as it stands subsequent to its amendment in 1994 and bearing in mind the objects and reasons engrafted in the amended provisions referred to earlier, it is difficult for us to construe that the expression 'including owner of the goods or his authorised representative carried in the vehicle' which was added to the pre-existing expression 'injury to any person' is either clarificatory or amplification of the pre-existing statute. On the other hand it clearly demonstrates that the legislature wanted to bring within the sweep of Section 147 and making it compulsory for the insurer to insure even in case of a goods vehicle, the owner of the goods or his authorised representative being carried in a goods vehicle when that vehicle met with an accident and the owner of the goods or his representative either dies or suffers bodily injury." (emphasis supplied) S.B. Sinha, J., in his concurring opinion, stated thus: (Asha Rani case [New India Assurance Co. Ltd. v. Asha Rani, (2003) 2 SCC 223 : 2003 SCC (Cri) 493] , SCC p. 235, paras 27-28) "27. Furthermore, sub-clause (i) of clause (b) of sub-section (1) of Section 147 speaks of liability which may be incurred by the owner of a vehicle in respect of death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place, whereas sub-clause (ii) thereof deals with liability which may be incurred by the owner of a vehicle 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.
28. An owner of a passenger-carrying vehicle must pay premium for covering the risks of the passengers. If a liability other than the limited liability provided for under the Act is to be enhanced under an insurance policy, additional premium is required to be paid. But if the ratio of this Court's decision in New India Assurance Co. v. Satpal Singh [(2000) 1 SCC 237 : 2000 SCC (Cri) 130] is taken to its logical conclusion, although for such passengers, the owner of a goods carriage need not take out an insurance policy, they would be deemed to have been covered under the policy wherefor even no premium is required to be paid." (emphasis supplied) Being of the aforesaid view, the three-Judge Bench [New India Assurance Co. Ltd. v. Asha Rani, (2003) 2 SCC 223 : 2003 SCC (Cri) 493] overruled the decision in Satpal Singh [(2000) 1 SCC 237 : 2000 SCC (Cri) 130] .
15. In New India Assurance Co. Ltd. v. Vedwati [(2007) 9 SCC 486] , (SCC p. 490, para 6), after referring to the scheme of the Act and the earlier pronouncements, it has been held that the provisions of the Act do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger travelling in a goods carrier and the insurer would have no liability therefor.
16. In National Insurance Co. Ltd. v. Cholleti Bharatamma [(2008) 1 SCC 423 : (2008) 1 SCC (Cri) 224 : (2008) 1 SCC (Civ) 280] the Court laid down that the provisions engrafted under Section 147 of the Act do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger travelling in a goods vehicle and hence, any injury to any person in Section 147(1)(b) would only mean a third party and not a passenger travelling in a goods carriage, whether gratuitous or otherwise.
17. At this juncture, we may refer with profit to the decision of a three-Judge Bench in National Insurance Co. Ltd. v. Prembai Patel [(2005) 6 SCC 172 : 2005 SCC (L&S) 819] wherein the legal representatives of the driver of the truck had succeeded before the High Court and were granted compensation of Rs 2,10,000 repelling the contention of the insurer that the liability was restricted as provided under the Workmen's Compensation Act, 1923 (for short "the 1923 Act"). After discussing the schematic postulates of the provision, the Court ruled that where a policy is taken by the owner of the goods vehicle, the liability of the insurance company would be confined to that arising under the 1923 Act in case of an employer. It further observed that 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 clauses (a), (b) or (c) of proviso (i) to Section 147(1)(b) of the Act may be fastened upon the insurance company and the insurer may become liable to satisfy the entire award. But for the said purpose, he may be required to pay additional premium and the policy must clearly show that the liability of the insurance company is unlimited.
18. Keeping in view the aforesaid enunciation of law, it is to be seen how the term "employee" used in Section 147 of the Act is required to be understood. Prior to that, it is necessary to state that as per Section 147(1)(b)(i), the policy is required to cover a person including the owner of the goods or his authorised representative carried in the vehicle. As has been interpreted by this Court, an owner of the goods or his authorised agent is covered under the policy. That is the statutory requirement. It does not cover any passenger. We are absolutely conscious that the authorities to which we have referred to hereinbefore lay down the principle regarding non-coverage of passengers. The other principle that has been stated is that the insurer's liability as regards the employee is restricted to the compensation payable under the 1923 Act. In this context, the question that has been posed in the beginning to the effect whether the employees of the owner of goods would come within the ambit and sweep of the term "employee" as used in Section 147(1), is to be answered. In this context, the proviso to Section 147(1)(b) gains significance. The categories of employees which have been enumerated in clauses (a), (b) and (c) of proviso (i) to Section 147(1) are the driver of a vehicle, or the conductor of the vehicle if it is a public service vehicle or in examining tickets on the vehicle, if it is a goods carriage, being carried in the vehicle. It is submitted by the learned counsel for the appellant that clause (c) of proviso (i) is of wide import as it covers employees in a goods carriage being carried in a vehicle. The learned counsel for the insurer would submit that it should be read in the context of the entire proviso, regard being had to the schematic concept of the 1923 Act and the restricted liability of the insurer. It is further urged that contextually read, the meaning becomes absolutely plain and clear that employee which is statutorily mandated to be taken by the insured only covers the employees employed or engaged by the employer as per the policy.
19. It is the settled principle of law that the liability of an insurer for payment of compensation either could be statutory or contractual. On a reading of the proviso to sub-section (1) of Section 147 of the Act, it is demonstrable that the insurer is required to cover the risk of certain categories of employees of the insured stated therein. The insurance company is not under statutory obligation to cover all kinds of employees of the insurer as the statute does not show command. That apart, the liability of the insurer in respect of the said covered category of employees is limited to the extent of the liability that arises under the 1923 Act. There is also a stipulation in Section 147 that the owner of the vehicle is free to secure a policy of insurance providing wider coverage. In that event, needless to say, the liability would travel beyond the requirement of Section 147 of the Act, regard being had to its contractual nature. But, a pregnant one, the amount of premium would be different.
21. Coming to the scheme of the 1923 Act, it is worth noticing that under Section 3 of the said Act, the employer is liable to pay compensation to the workman in respect of personal injury or death caused by an accident arising out of or in the course of his employment. Section 4 provides the procedure how the amount of compensation is to be determined. In this context, we may usefully quote a passage from Oriental Insurance Co. Ltd. v. Devireddy Konda Reddy [(2003) 2 SCC 339 : 2003 SCC (Cri) 540] : (SCC pp. 342-43, para 9) "9. ... Section 147 of the Act mandates compulsory coverage against death of or bodily injury to any passenger of 'public service vehicle'. The proviso makes it further clear that compulsory coverage in respect of drivers and conductors of public service vehicle and employees carried in goods vehicle would be limited to liability under the Workmen's Compensation Act, 1923 (in short 'the WC Act'). There is no reference to any passenger in 'goods carriage'." (emphasis supplied)
23. It is worthy to note that Section 147(1)(b) proviso (i)(c) refers to an employee who is being carried in the vehicle covered by the policy. Such vehicle being a goods carriage, an employee has to be covered by the statutory policy. On an apposite reading of Sections 147 and 167 the intendment of the legislature, as it appears to us, is to cover the injury to any person including the owner of the goods or his authorised representative carried in a vehicle and an employee who is carried in the said vehicle. It is apt to state here that the proviso commences in a different way. A policy is not required to cover the liability of the employee except an employee covered under the 1923 Act and that too in respect of an employee carried in a vehicle. To put it differently, it does not cover all kinds of employees. Thus, on a contextual reading of the provision, schematic analysis of the Act and the 1923 Act, it is quite limpid that the statutory policy only covers the employees of the insured, either employed or engaged by him in a goods carriage. It does not cover any other kind of employee and therefore, someone who travels not being an authorised agent in place of the owner of goods, and claims to be an employee of the owner of goods, cannot be covered by the statutory policy and to hold otherwise would tantamount to causing violence to the language employed in the statute. Therefore, we conclude that the insurer would not be liable to indemnify the insured."
32. In the full Bench decision of the Gujarat High Court in Valiben Laxmanbhai Thakore (supra), the issue which was referred to the full Bench was, whether in view of the insured paying additional premium for liability of a paid driver, the insurance company is liable to pay compensation under the Motor Vehicles Act computed upon the death or injury caused to the driver out of the negligence which arises solely on account of driver's own negligence. After considering the respective submissions, provisions of the Act including the decisions of the Apex Court in Meena Variyal (supra), Prembai Patel (supra) amongst others, it concluded that where the policy is only an 'Act Policy' and additional premium is not paid then, the liability would be limited only to the extent as covered under the Employees' Compensation Act of 1923, however, the insurance company once it accepts the additional premium then its liability gets unlimited. The relevant paras are reproduced hereinafter:-
...................
"13. Thus, when the owner of a vehicle pays additional premium and is accepted by the insurance company, liability of the insurance company gets extended under the Motor Vehicles Act. Section 147 of the same 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 Employee's 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 such class of the driver of the insured vehicle. By accepting additional premium as per 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."
33. Having taken note of the aforesaid decisions and the statutory provisions, what can be culled out is that in terms of Section 147 (1), the proviso appended thereto is being once again reproduced hereinafter for clarity:-
"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 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."
and this has been clearly noticed by the Apex Court in Prembai Patel (supra) as well as in Sanjeev Kumar Samrat (supra) and also by the full Bench of the Gujarat High Court in Valiben Laxmanbhai Thakore (supra). From the reading of the aforesaid decisions and the crux which has been explained and reproduced hereinabove in the preceding paragraphs, it leaves no manner of doubt that the true import of Section 147 and the proviso appended thereto is that the Act Policy would cover third party risks, but it would also cover the liability arising out of death or bodily injury in respect of such persons which have been indicated in the proviso as (a), (b), (c) and that too, to a limited extent as determined in terms of the Employees Compensation Act, 1923. Therefore, any liability relating to such specified individuals as mentioned and described in the proviso on account of death or bodily injury, their claims can be limited only to the extent which is determined in terms of the Compensation Act of 1923, but the moment any additional premium is paid towards such category of persons then, the liability can be enhanced and would be made unlimited.
34. Now, applying the aforesaid dictum and the ratio culled out to the facts of the instant case, it would be found that the policy in question is an Act Policy. It is also clear that Luv Kush was an employee of the owner Sultan. The said employee was not as if, he was a casual employee but was a regular driver and therefore, he would be covered in terms of Section 147 (1) proviso (a) as mentioned in the Act. In terms of Section 167 of the Act option is available for a party to either file the claim petition before the Claims Commissioner under the Act of 1923 or before the M.A.C.T. However, the difference would be that if a party chooses to file his claim before the Motor Accident Claims Tribunal and the Tribunal awards an amount which is higher than the amount which is computed under the Compensation Act of 1923, then the liability of the insurance company would only be to the extent of the amount which is payable in terms of the Act of 1923 and the excess amount would be payable by the owner. However, if an additional sum or premium is paid to cover or enhance the liability, then the entire award would be payable by the insurance company. In the instant case, since it was an Act policy and the Tribunal has also awarded the amount computing it in context with the Compensation Act of 1923 as shall be evident from the award itself. Accordingly, this liability of Rs.3,36,000/- is liable to be indemnified by the insurance company.
35. In view of the aforesaid, this Court has no hesitation to hold that the decision rendered by the Tribunal does not suffer from an error to persuade this Court to arrive at any other finding. No other issue was raised before this Court, accordingly, the award dated 10.07.2019 passed in C.P. No. 646 of 2013 is affirmed and the appeal being devoid of merits is dismissed. In the facts and circumstances, there shall be no order as to costs. Record of the Tribunal be sent to the Court concerned.
Order Date :- 08.08.2023 Gurpreet Singh