Karnataka High Court
Divisional Manager vs Smt. Basamma W/O Late Chagappa on 17 July, 2023
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NC: 2023:KHC-D:7287
MFA No. 20984 of 2011
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 17TH DAY OF JULY, 2023
BEFORE
THE HON'BLE MRS. JUSTICE M.G.UMA
MISCELLANEOUS FIRST APPEAL NO.20984/2011 (WC)
BETWEEN:
DIVISIONAL MANAGER,
UNITED INDIA INSURANCE CO. LTD.,
DIVISIONAL OFFICE, OPP: RADHIKA TALKIES,
RAGHAVACHARI ROAD, BELLARY.
...APPELLANT
(BY SRI C. V. ANGADI, ADVOCATE)
AND:
1. SMT. BASAMMA W/O. LATE CHAGAPPA,
AGE: 53 YEARS, OCC: HOUSEHOLD,
R/O: CHITAGINAHAL, TQ and DIST: BELLARY.
2. SRI K. SANNA ERANNA S/O. BHIMANAGOUDA,
AGE: MAJOR, OCC: OWNER OF TRACTOR AND TRAILOR
BEARING NO. KA-34/T-1524 AND 1525,
R/O: H.VEERAPUR VILLAGE,
Digitally TQ AND DIST: BELLARY.
signed by ...RESPONDENTS
VINAYAKA (BY SRI K. ANANDKUMAR, ADVOCATE FOR C/R1;
BV
SRI B. CHIDANANDA, ADVOCATE FOR R2)
THIS MFA IS FILED UNDER SECTION 30(1) OF THE
WORKMEN'S COMPENSATION ACT, PRAYING TO MODIFY THE
IMPUGNED JUDGMENT AND ORDER DATED 29.10.2010 PASSED BY
THE LABOUR OFFICER AND COMMISSIONER FOR WORKMEN'S
COMPENSATION, BELLARY SUB-DIVISION-2, BELLARY, IN W.C.A
NO.214/2009 AND PASS SUCH OTHER SUITABLE ORDER/S, AS THIS
HON'BLE COURT DEEMS FIT AND APPROPRIATE IN THE
CIRCUMSTANCES AND FACTS OF THE CASE INCLUDING COSTS IN
THE INTEREST OF EQUITY AND JUSTICE.
THIS MFA, COMING ON FOR FURTHER HEARING, THIS DAY,
THE COURT DELIVERED THE FOLLOWING:
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NC: 2023:KHC-D:7287
MFA No. 20984 of 2011
JUDGMENT
Respondent No.2-insurer in WC No.214/2009 on the file of Commissioner for Workmen's Compensation, Bellary Sub- Division-2, Bellary (hereinafter referred to as the Commissioner), is impugning the order dated 29.10.2010, allowing the claim petition filed by the claimant and awarding compensation of Rs.3,39,570/- with interest at 12% per annum, directing it pay the compensation.
Parties are referred as per their ranking before the trial Court.
2. Brief facts of the case are that the claimant filed the claim petition before the Commissioner for Workmen's Compensation in WC No.214/2009 against respondent No.1-the owner of the tractor trailer bearing registration No. KA-34-T-1524 and 1525 and respondent No.2-the insurer of the said vehicle. It is contended that she is the mother of deceased Basava, who was traveling in the tractor trailer referred to above as a loader on 19.03.2005. The driver of the tractor trailer driven the same in a rash and negligent manner. As a result, it turtled. The deceased sustained fatal injuries and died at the spot. -3-
NC: 2023:KHC-D:7287 MFA No. 20984 of 2011 Therefore, claimant claimed compensation from respondent Nos.1 and 2.
Respondent No.1 filed the objection admitting the contentions taken by the claimant and also contending that since the tractor trailer was insured with respondent No.2, it is respondent No.2 who is liable to pay the compensation.
Respondent No.2 filed objection contending that the claimant is not entitled for any compensation as there was violation of terms and conditions of the policy.
3. On the basis of these pleadings, the following issues were framed:-
1. CfðzÁgÀ¼ÀÄ vÀ£Àß ¨ÉÃrPÉ CfðAiÀÄ£ÀÄß ¸À°è¸ÀĪÀ°è DVgÀĪÀ «¼ÀA§PÉÌ «¼ÀA§ ªÀÄ£Áß PÉÆÃj ¸À°è¹gÀĪÀ CfðUÉ ¸ÀPÁgÀtUÀ¼ÀÄAlÄ JAzÀÄ gÀÄdĪÁvÀÄ ¥Àr¸ÀÄgÀĪÀgÉÃ?
2. CfðzÁgÀ¼ÄÀ vÀªÀÄä CfðAiÀÄ°è w½¹zÀAvÉ ªÀÄÈvÀ£ÀÄ 1£Éà ¥ÀæwªÁ¢UÀ¼À ªÁºÀ£Àz° À è ¢£ÁAPÀ 19.03.2005 gÀAzÀÄ ¯ÉÆÃqÀgÀ DV PÉ®¸À ªÀiÁqÀÄwÛzÁÝUÀ C¥ÀWÁvÀQÌÃqÁV ªÀÄÈvÀ ¥ÀnÖgÀÄvÁÛ£ÉAzÀÄ gÀÄdĪÁvÀÄ ¥Àr¸ÀÄgÀĪÀgÉÃ?
3. ªÀÄÈvÀ£ÄÀ C¥ÀWÁvÀzÀ ¸ÀªÀÄAiÀÄzÀ°è 1£Éà ¥ÀæwªÁ¢¬ÄAzÀ ªÀiÁ¹PÀ JµÀÄÖ ªÉÃvÀ£ÀªÀ£ÀÄß ¥ÀqÉAiÀÄÄwÛzÀÝ£ÉAzÀÄ ºÁUÀÆ C¥ÀWÁvÀzÀ ¸ÀªÄÀ AiÀÄzÀ°è ªÀÄÈvÀ¤UÉ JµÀÄÖ ªÀµÀð ªÀAiÀĸÁìVvÉÛAzÀÄ CfðzÁgÀ¼ÄÀ gÀÄdĪÁvÀÄ ¥Àr¸ÀÄgÀĪÀgÉÃ?
4. CfðzÁgÀ¼ÀÄ ªÀÄÈvÀ£À ªÁgÀ¸ÀÄzÁgÀgÀÄ ºÁUÀÆ CªÀ®A©vÀgÀÄ JA§ÄzÀ£ÄÀ ß gÀÄdĪÁvÀÄ ¥Àr¹gÀĪÀgÉÃ? ºÁVzÀÝ°è CfðzÁgÀ¼ÄÀ AiÀiÁªÀ ¥ÀjºÁgÀPÉÌ CºÀðgÀÄ?
5. G¨sÀAiÀÄ ¥ÀæwªÁ¢UÀ¼À°è CfðzÁgÀ¼ÀÄ AiÀiÁªÀ ¥ÀæwªÁ¢¬ÄAzÀ ¥ÀjºÁgÀ ºÁUÀÆ §rØAiÀÄ£ÀÄß ¥ÀqÉAiÀÄ®Ä CºÀðgÁVgÀÄvÁÛgÉ?
6. F §UÉÎ AiÀiÁªÀ DzÉñÀ?-4-
NC: 2023:KHC-D:7287 MFA No. 20984 of 2011 Claimant-respondent No.1 examined himself as PW-1 and got marked Exs.R.1 to R.8. Respondent No.2 got marked copy of insurance policy as Ex/R1. The Commissioner after taking into consideration all these materials on record, came to the conclusion that the claimant is entitled for compensation to be paid by respondent Nos.1 and 2 jointly and severally and accordingly claim petition was allowed, directing respondent No.2 to pay the compensation. Being aggrieved by the same, the insurer is before this Court.
4. Heard learned counsel Sri.C.V. Angadi, Sri K.Anandkumar for respondent no.1-claimant and Sri B.Chidananda, learned counsel respondent No.2-owner of the offending tractor and trailer.
5. Learned counsel for the appellant contended that the insurer is challenging it's liability to pay compensation. The vehicle involved in the case is the tractor and trailer, which was meant for agricultural purposes. It was a package policy where the risk of the passengers are not covered. Ex.P1 and P2 are FIR and the first information filed by the brother of the deceased, wherein he has categorically stated that about 35-40 -5- NC: 2023:KHC-D:7287 MFA No. 20984 of 2011 passengers were traveling in the tractor for visiting a temple. Therefore, it is a clear case of deceased traveling as an unauthorized passenger in the goods vehicle. Since there is clear violation of terms and conditions of the policy, the claimant is not entitled for compensation. The Commissioner ignored this fact and awarded compensation, without any basis. Hence, prayed for allowing the appeal by setting aside the impugned judgment and award in the interest of justice.
6. Per contra, leaned counsel for respondent No.1-claimant submits that the mother of the deceased was the claimant before the commissioner. The deceased was working as a coolie and in the incident, he died. Since, the risk of the employee is covered under Ex.R1, the insurer is liable to pay the compensation. The Commissioner has rightly awarded the compensation and there is no reason to interfere with the impugned order. He also submitted that the insurer has not led any evidence disowning its liability. Therefore, prays for dismissal of the appeal in the interest of justice.
7. Learned counsel for respondent No.2-insured, i.e., owner of the offending vehicle, submitted that respondent No.2 before -6- NC: 2023:KHC-D:7287 MFA No. 20984 of 2011 the Tribunal filed the objection statement and also examined RW1. It is admitted that the deceased was traveling as a coolie. As per the policy of insurance, the risk of the Coolie is covered and therefore, insurer is liable to pay the compensation and hence, prays for dismissal of the appeal.
8. Perused the material on record including the trial Court records.
9. In view of the contentions raised by the parties, the point that arises for consideration is:
"Whether the judgment and award passed by the Labour Officer & Commissioner for Workmen's compensation calls for interference by this Court?"
10. My answer to the above point is 'in the affirmative' for the following:
REASONS
11. The claimant being the mother of the deceased filed the claim petition for the death of her son. As per Ex.P1 and P2 i.e., FIR and the charge sheet, the deceased was traveling as a traveler along with 35 to 40 persons, who have proceeded to a temple and were returning when the mishap had occurred. The -7- NC: 2023:KHC-D:7287 MFA No. 20984 of 2011 contention of the claimant and respondent No.1 that the deceased was a coolie do not get support from any of the documents.
12. Learned counsel for respondent No.1-claimant contends that appellant herein-respondent No.2 is liable to pay compensation to the claimant and will be at liberty to recover the same from the respondent No.1 herein. The same is disputed by the learned counsel for the appellant on the ground that it is a clear case of violation of terms and conditions of the policy by the insured. The deceased was not a 3rd party and under the circumstances, the principles of 'pay and recover' will not be applicable to the facts of the case.
13. Learned counsel for the claimant placed reliance on the decision of the Full Bench of this Court in New India Assurance Co. Ltd., Bijapur Vs. Yallavva and Another1. The Bench has considered the questions referred to it for decision which reads as under:
I) If it is shown the insurance policy is not 'Act' policy in terms of Sections 145 and 147 of the Motor Vehicles 1 (2020) 2 KCCR 1405 (FB) -8- NC: 2023:KHC-D:7287 MFA No. 20984 of 2011 Act, but a contractual policy issued collecting extra premium indicating insurance company has enlarged its liability, will not the insurance company be liable to pay and recover even if there is any breach by the insurer? II) In such cases, is not the rule to 'pay and recover' applicable in view of the mandate in Section 149, M.V. Act that upon issuance of policy, the insurer is bound to discharge the award as if it were a judgment debtor?
14. After discussing at length about the position of law and referring to various decisions in the light of the provisions of law under M.V. Act, the questions referred to is answered in paragraph no. 57 of the judgment as under:
"57. In the result, the questions referred to in this appeal are answered as under:
i) Having regard to Section 149(1) read with Section 149(7) whenever a case falls under Section 149(2)(a) and the same is successfully established or proved by the Insurance Company, as per the twin tests laid by the Hon'ble Supreme Court in Swaran Singh, nevertheless, the insurer or Insurance Company is liable to satisfy the award vis-à-vis a third party and is entitled to recover from the insured. This is irrespective of, the policy being an Act policy in terms of Section 147 pertaining to compulsory coverage of risks of third parties and other classes of persons stated therein or a policy covering other risks by specific contract being entered into in that regard and where additional premium is paid by the insured i.e., a contractual policy.
ii) Thus, the rule of pay and recover is applicable in view of the mandate in Section 149(4) of the Act and even if there is a breach of the terms of the insurance policy, the insurer is bound to satisfy the judgment and award as if it were a judgment debtor, even if it satisfies the twin tests enunciated -9- NC: 2023:KHC-D:7287 MFA No. 20984 of 2011 by the Hon'ble Supreme Court under Section 149(4)(a) of the Act.
iii) If the Insurance Company makes out a case under Section 149(2)(b) of the Act, then also the Insurance Company has to satisfy the award, as it is the duty of the Insurance Company to indemnify the insured on the basis of the policy of the insurance and even when the contract of insurance itself is void, nevertheless the liability to indemnify the insured would arise and insurer is entitled to recover from the insured.
iv) Thus, in a case where Section 149(2)(b) applies and the Insurance Company successfully establishes that the policy is void, in such a case also, the insurer is not absolved of its liability to satisfy the judgment or award as rights or obligations would flow even from a policy which is void vis-à-
vis third party. In such a case, the insurer is not completely absolved of its liability, the insured would have to satisfy the award vis-à-vis the third party and recover from the insured the amount paid to the third party and may also have a right to seek damages from the insured.
v) The judgment of the Division Bench of this Court in Subramanyam, holding that a pay and recovery order cannot be made as there is no liability to pay or satisfy the award or decree in respect of a case falling under Section 149(2) is not correct. Hence, that portion of the judgment in Subramanyam, which states that if the case falls within the scope of Section 149(2) of the Act and the insurer is successful in establishing any of the defences as stated therein, it would be completely absolved of its liability to satisfy the award is also not correct and to that extent, it is held to be bad in law.
vi) Article 142 of the Constitution of India being a power granted under the Constitution only to the Supreme Court can be exercised in appropriate cases only by the Apex Court. Exercise of power under Article 142 by the Hon'ble Supreme Court in a particular case cannot be a precedent for other Courts and Tribunals to exercise such a power unless the same is indicated to be a precedent by the Apex Court."
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NC: 2023:KHC-D:7287 MFA No. 20984 of 2011
15. The Apex Court in National Insurance Co. Ltd., Vs. Bommithi Subbhayamma and Others2 referred to the celebrated decision in New India Assurance co. Ltd., V. Asha Rani3 wherein the earlier decision in New India Assurance Co. V. Satpal Singh4 was over-ruled and held that the Insurance Company will not be liable for payment of any compensation for the death of the gratuitous passenger traveling in a goods vehicle. It also observed that the decision in Asha Rani (supra), was followed in Oriental Insurance Co. Ltd. V. Devireddy Konda Reddy5, National Insurance Co. Ltd. V. Ajit Kumar6 and again the Three Judges Bench of the Apex Court in National Insurance Co. Ltd. V. Baljit Kaur7.
16. The Apex Court held that the amendment brought to Sec. 147 of the M.V. Act by the amendment in the year 1994 categorically held that the words "including the owner of the goods or his authorized representative carried in the vehicle"
would not cover all persons who are traveling in a goods carriage in any capacity whatsoever. The Bench highlighted 2 (2005) 12 SCC 243 3 (2003) 2 SCC 223 4 (2000) 1 SCC 237 5 (2003) 2 SCC 339 6 (2003) 9 SCC 668 7 (2004) 2 SCC 1
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NC: 2023:KHC-D:7287 MFA No. 20984 of 2011 that if that was the intention, there was no necessity for the Parliament to carry out amendment in as much as the expression "any person" contained in Sub clause (i) of Clause
(b) of sub Section (1) of Section 147 of the Act as it would have included the owner of the goods or his authorized representative besides the passengers, who are gratuitous or otherwise. Therefore, it is held that the meaning of the word "any person" is attributable having regard to the context in which they have been used, i.e., "a third party". It is categorically held that keeping in view the provisions of 1988 Act, it does not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger in a goods vehicle. Therefore the insurer would not be liable to cover the risk of such passengers.
17. The Bench highlighted the position of law that inspite of the amendment of 1994, the effect of the provisions contained in Sec. 147 of the Act with respect to persons other than the owner of goods or his authorized representative remains the same. Although the owner of the goods and his authorized representative would now be covered by the policy of insurance in respect of a goods vehicle, it was not the intention of the
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NC: 2023:KHC-D:7287 MFA No. 20984 of 2011 Legislature to provide for the liability of the insurer with respect to passengers, especially gratuitous passengers who were neither contemplated at the time when the contract of insurance was entered into, nor any premium was paid to the extent of the benefit of insurance to such category of people.
18. The Bench has also referred to its decisions in National Insurance Co. Ltd. V. Challa Bharathamma 8, Pramod Kumar Agarwal v. Mushtari Begum9, and in National Insurance Co. Ltd. Vs. V.Chinnamma 10, to record a categorical finding that in case of gratuitous passengers traveling in the goods vehicle, the risk is to be borne by the owner of the vehicle and not by the insurer.
19. In view of the settled proposition of law on the subject, I do not find any merit in the contention taken by the learned counsel for claimant-respondent No.1 to order pay and recover the compensation against the insurer.
21. In view of the discussion held above, I answer the above point 'in the affirmative' and proceed to pass the following: 8
(2004) 8 SCC 517 9 (2004) 8 SCC 667 10 (2004) 8 SCC 697
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NC: 2023:KHC-D:7287 MFA No. 20984 of 2011 ORDER The appeal is allowed with costs.
Consequently, the judgment award and passed in WC No.214/2009 by the Commissioner for Workmen's Compensation, Bellary Sub-Division-2, Bellary, dated 29.10.2010 is modified to the extent that the claim against the insurer is dismissed. It is held that the respondent no.2 herein who is the respondent no.1 before the Commissioner is liable to pay the compensation.
Amount in deposit, if any, shall be refunded to the Authorized Officer of the appellant on due identification.
Office is directed to draw the decree accordingly. Send back the trial Court records and the copy of the judgment and decree, forthwith.
SD/-
JUDGE Hmb/ bvv List No.: 1 Sl No.: 12