Gujarat High Court
Valiben Laxmanbhai Thakore (Koli) Wd/O ... vs Kandla Dock Labour Board on 27 August, 2021
Author: R.M.Chhaya
Bench: Vikram Nath, R.M.Chhaya, B.N. Karia
C/FA/3907/2017 ORDER DATED: 27/08/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 3907 of 2017
With
R/FIRST APPEAL NO. 3079 of 2017
With
R/FIRST APPEAL NO. 3191 of 2017
With
R/FIRST APPEAL NO. 842 of 2016
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2017
In
R/FIRST APPEAL NO. 3079 of 2017
=============================================
VALIBEN LAXMANBHAI THAKORE (KOLI) WD/O LATE LAXMANBHAI
RAMSINGBHAI THAKORE (KOLI) & 3 other(s)
Versus
KANDLA DOCK LABOUR BOARD & 1 other(s)
=============================================
Appearance:
First Appeal No. 3907 of 2017
MR. HEMAL SHAH(6960) for the Appellant(s) No. 1,2,3,4
MR MAULIK J SHELAT(2500) for the Defendant(s) No. 2
MR YOGI K GADHIA(5913) for the Defendant(s) No. 1
First Appeal No.3079 of 2017
Mr. Vibhuti Nanavati for the Appellant
Mr. Hemal Shah for the respondent
First Appeal No.3191 of 2017
Mr. Makbul I Mansuri & Mr. Imtiyaz Mansuri, for the appellants
Mr. Dakshesh Mehta for the respondent no.4
Mr. Abhiraj Trivedi for the respondent no.3
Mr. Maulik J Shelta for the respondent no.5
=============================================
CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE
VIKRAM NATH
and
HONOURABLE MR. JUSTICE R.M.CHHAYA
and
HONOURABLE MR. JUSTICE B.N. KARIA
Date : 27/08/2021
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE R.M.CHHAYA)
1. Identical issues are raised in all the appeals and referred by the Division Bench, hence all the appeals were heard together and are dealt with by this common judgment Page 1 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 and order.
2. The facts as stated in First Appeal No.3907 of 2017 are made basis of this judgment and order.
2.1. The present appeal under Section 173 of the Motor Vehicles Act, 1988 (hereinafter referred to as the "Act" for sake of brevity) arises out of judgment and award dated 28.07.2017 whereby learned Tribunal was pleased to dismiss the claim petition of the appellants. The present appeal is filed by the legal heirs of deceased Laxmanbhai Thakore who succumbed to injuries in motor accident which took place on 24.03.2003. As per the record, deceased Laxmanbhai Thakore was driving the Ambulance bearing registration no. GJ-12-T-1920 from Gandhidham to Ahmedabad, during the course of employment, with Kandla Dock Labour Board. As per the facts which can be culled out from the record, there were three other occupants i.e. one second driver also an employee of the Kandla Dock Labour Board, one patient and one person accompanying along with the patient, out of them, three succumbed to the said injuries. Appellants
- original claimants filed Claim Petition under Section 163 A of the Act which was numbered as MACP No.300 of 2003, which came to be converted into Claim Petition under Section 166 of the Act.
2.2. It was the case of the appellants - original claimants before the Tribunal that vide policy at Exh. 66, additional premium of Rs.30/-, vide Indian Motor Tariff Endorsement No.19 was paid by the insured to the insurer towards the legal liability for paid Drivers / Workman No.2. It was therefore, case of the appellant that liability of the Page 2 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 Insurer was extended being contractual liability and not restricted to statutory liability or act only liability. It was thus contended by the appellants that irrespective of negligence of the deceased, the Insurer would be liable to pay the entire compensation to the appellants - original claimants as payable under Section 166 of the Act. By the impugned judgment and award dated 28.07.2017, the Tribunal dismissed the said claim petition mainly relying upon the ratio laid down by this Court in Gulam Rasool Rahman Malek vs. GSRTC reported in 2015 ACJ 20. The Tribunal came to the conclusion that deceased driver of the Ambulance was found to be solely negligent and therefore, appellants are held not entitled to any compensation under the Act. The said judgment and award is subject matter of challenge in the present appeal under Section 173 of the Act.
2.3. The Division Bench of this Court, vide order dated 27.06.2018, has referred this matter to the Larger Bench and has framed the following question to be examined and answered by this Bench, which reads as under:
Whether the Division Bench of this Court in the case of Saberabibi Hisammiya Umarvmiya and Anr (supra_ laid down correct law by holding that in view of insured paying additional premium for the liability of the 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 an accident which arises solely on account of driver's own negligence?
3. Heard Mr. M.T.M. Hakim, learned counsel along with Mr. Hemal Shah, learned counsel for the original claimants-
appellants, Mr. Maulik Shelat, Mr. Vibhuti Nanavati and Page 3 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 Dr. Rushang Mehta, learned counsels for the insurance Companies and Mr. Yogi Gadhiya, learned counsel appearing for the Kandla Dock Labour Board in all these appeals.
4. Mr. Hakim, learned counsel for the appellants has taken this Court to the factual matrix arising in the appeals and has also relied upon the relevant evidence on record and has contended as under:
4.1. It was submitted by Mr. Hakim, learned counsel for the appellants that the ratio laid down by the Division Bench of this Court in the case of Saberabibi Hisammiya Umarvmiya & Anr. v. Yakubkhan Abdulkhan Kherwaji & Ors. dated 15th October 1993 rendered in First Appeal Nos. 124, 125, 1013 and 1383 of 1984 is the correct law.
Mr. Hakim contended that the said judgment is on identically similar facts arising in the present appeals. Mr. Hakim elaborately relied upon the said judgment and further contended that the same contentions which are now raised by the respondent Insurance Company in these appeals were considered by the Division Bench. Referring to the judgment of the Calcutta High Court in the case of National Insurance Company Limited vs. Mahadeb Kar & Ors reported in 1986 ACJ 362, it was contended by Mr. Hakim that IMT-19 has been correctly interpreted by the Calcutta High Court wherein it is held that on payment of additional premium, the liability of Insurer would be to pay the full amount payable under the Act on the principles embodied in the Workman Compensation Act. Mr. Hakim also contended that said ratio has been followed by this Court in Saberabibi Page 4 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 Hisammiya Umarvmiya (supra), and thereafter, it has been also considered and relied upon by the Division Bench in the case of Maniben S Pandya vs. Shashikant P Shrigalor reported in 2004(3) GLR 1878. Mr. Hakim also further contended that the said proposition is thereafter followed many a times by this Court and contended that the Reference be answered accordingly. Mr. Hakim also relied upon the judgment of the Madras High Court in the case of National Insurance Co. Ltd vs. R Mohan and R.Murthy reported in 1995(II) ACC 484.
4.2. Mr. Hakim also heavily relied upon the judgments of the Hon'ble Supreme Court in the case of New India Assurance Co. Ltd vs. C.M.Jaya and Ors reported in (2002) 2 SCC 278 as well as in the case of National Insurance Co. Ltd vs. Prembai Patel and Ors reported in (2005) 6 SCC 172 and contended that issue involved in these appeals is squarely covered by the ratio laid down by the Hon'ble Supreme Court in both these cases.
4.3. Accordingly Mr. Hakim contended that once the additional premium is paid and accepted, the liability of the insured is on the principles embodied under the Workman Compensation Act irrespective of negligence. It was contended that when insurer accepts additional premium and covers the liability under the Common Law or the Motor Vehicles Act, the Insurer is bound to pay compensation more than what is payable statutorily under the Workman Compensation Act and necessarily irrespective of negligence. It was therefore, contended that the appellants would be entitled to total compensation under the Act. Mr. Hakim also referred to Page 5 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 provisions of Sections 147 and 149 of the Act and contended that on conjoint reading of the said provisions of the Act, it is clear that same are beneficial in nature to protect the rights of victims of the accident and their entitlement of compensation, the term to indemnify has to be read, understood and interpreted to effectuate the purpose of the Act and in favour of the victims of the accident. It was therefore, contended that once a policy of Insurance is issued under Section 147(3), the Insurer shall be liable to indemnify the persons 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. Mr. Hakim, therefore, contended that once certificate of insurance is issued under Section 147(3), as per Section 149(1), the Insurer is liable to satisfy the judgment and award against the persons insured save and except the defences available to the Insurer under Section 149(2).
4.4. It was contended by Mr. Hakim that judgments cited and relied upon by the Insurance Company would not be applicable to the present case as the facts arising in these appeals are different and distinct and in none of the judgments, the issue of additional premium and IMT- 19 endorsement arose and said vital aspect is not considered in the judgments which are relied by the respondent- Insurance Company.
4.5. It was contended by Mr. Hakim that as such the provisions of the Act, Section 147(1)(b)(i) sub clauses (a) or (b) or (c) and the IMT-19 endorsements is clear and unambiguous and is held so by the Hon'ble Supreme Page 6 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 Court in PremBai (supra) and as Division Bench of this Court in Sabera Bibi (supra) and other decisions. 4.6. It was further contended by Mr. Haikim that as per the settled principles of interpretation of the provisions of the Act and the contract of insurance, it is settled law that the same are to be read with a benevolent eye without considering the Insurer's profitability and the victims of accidents entitlement of compensation for the loss sustained has to be the prime consideration. It was further contended by Mr. Hakim that the pirnciple of contra proferentum is also applied to the contract of insurance in case of ambiguity in the terms of the contract of insurance. It was also contended that considering both the said propositions, as held by a catena of decisions of the Hon'ble Supreme Court viz. (I) Skandia Insurance (1987) 2 SCC 654, (ii) Sushilabai (2020 SCC Online SC 367 or Civil Appeal No.2235 of 2020), the IMT Endorsements being part of the contract of Insurance is required to be interpreted and applied to alleviate the hardships and agonies of victims of accident rather than benefit the Insurer in its profits.
4.7. Mr. Hakim further contended that the liability of Insurer in the present case is required to be held beyond the statutory liability that is covered under and upto the extent of the Workman Compensation Act particularly, on account of payment of additional premium as per IMT-19. It was further contended that the consistent view of this Court and Calcutta High Court on the issues are required to be upheld and the reference be answered accordingly.
Page 7 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021C/FA/3907/2017 ORDER DATED: 27/08/2021 5.0. Mr. Hemal Shah, learned counsel for the appellants in their First Appeals has also adopted the arguments made by Mr. Hakim, learned counsel for the appellants of First Appeal No.3907 of 2017.
6.0. Per contra, Mr. Maulik Shelat, learned counsel for the Insurance Company has contended as under:
6.1. Mr. Shelat, contended that it is not in dispute that any claim petition filed by claimant under Section 166 of MV Act than claimant carrying burden to prove negligence of driver to get compensation under MV Act as it is based upon principle of fault liability. Mr. Shelat contended that once, it is established that driver of vehicle is negligent for causing accident which resulted into injury or death to third party than being principal tort-feasor, driver is liable to pay compensation. It was also contended that owner of vehicle is vicariously liable for such tortious act of his driver qua third party to pay compensation. It was contended by Mr, Shelat that the insurance company having issued policy under chapter XI of MV Act is required to indemnify owner of vehicle for his vicarious liability as per Sec. 147 of MV Act subject to terms of policy. Mr. Shelat further contended that thus, it is now well settled principle of law that insurer of motor vehicle will indemnify insured-owner of vehicle against his vicarious liability which arise under MV Act for tortious act of his driver subject to terms and conditions and provisions of MV Act.
6.2. Mr. Shelat contended that there is no cavil that motor accident insurance policy is an Indemnity Policy. It was contended by Mr. Shelat that the liability of insurance Page 8 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 company is to the extent of indemnification of insured against injured third person or deceased's being third party or in respect of third party property damaged as per terms of policy. If the insured cannot be fastened with any liability under the provisions of MV Act, the question of insurer being liable to indemnify insured, does not arise.
6.3. Relying upon the judgment of the Hon'ble Supreme Court in the case of Tamil Nadu State Transportation Corporation vs. Natarajan reported in 2003 (6) SCC 137, Mr. Sheltat contended that corporation as an employer cannot be held to be vicariously liable for the negligence of claimant himself being driver of corporation bus. It was further contended that thus, observation made by Hon'ble Calcutta High Court in National Insurance Company Ltd. V/s Mahdeb Kar & Ors. Reported in 1986 ACJ 362 (para-13) is impliedly overruled by said dictum of Hon'ble Apex Court. Mr. Shelat further contended that a person cannot seek compensation under Section 166 for his own fault. It was further contended that the Hon'ble Division Bench in a case of United India Ins. Co. vs. Jagatsinh Valsinh reported 1986 (2) GLR 1423 has lucidly discussed such issue in great detail. It has been observed that if the claimant is held to be a tort-feasor then it is beyond comprehension as to how a tort-feasor can be awarded compensation for tortious act committed by him. It has been further observed that if the claimant was negligent, he cannot come forward and say, " pay me compensation for my own negligence". It has been further observed that the insurance policy taken out by Page 9 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 owner of vehicle is a contract of indemnity and liability of Insurance Company if any is to indemnify the owner of vehicle to the extent he is made liable to pay damages or compensation. It was further contented that therefore unless the owner is made liable, the insurance company cannot be held liable. Mr. Shelat also contended that thus, a driver when found to be solely negligent for causing accident cannot maintain a claim against his employer owner of vehicle under Section 166 of MV Act which is based upon principle of Tort - Fault liability principle.
6.4. Mr. Shelat further contended that as per submission of claimants, owner of said ambulance has paid additional premium as per Indian Motor Tariff, IMT-19 covering legal liability to paid driver then insurance company would be per se liable to pay compensation under Section 166 of MV Act. It was contended by Mr. Shelat that such submission is fallacious as IMT-19 does not cover risk of driver but it covers legal liability of owner of vehicle (insured) qua paid driver arises under different Acts. It was further contended that there is a difference between covering someone's risk vis-a-vis someone's liability under motor vehicle policy. It was further contended that to appreciate submission of insurer, Hon'ble court needs to interpret terms of policy (IMT-19). The relevant part of such condition (IMT 19 now IMT-28) reads as under:
"In consideration of payment of an additional premium, it is hereby understood and agreed that notwithstanding anything contained herein to the contrary, the company shall indemnify the insured against his legal liability, under the workman compensation 1923 and subsequent of Page 10 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 amendment of the act prior to the date of this endorsement, the Fatal Accident Act, 1885 or at common law in respect of personal injury to paid driver while engaged in service of the insured in such occupation in connection with motor vehicle".
Mr. Shelat further contended that reading of IMT-19 makes it very much clear that insurance company will indemnify the insured against his legal liability arising under the said Acts for the personal injury caused to his paid driver. It was contended that if no legal liability of insured arises under the said Acts, then insurance company cannot be held liable to pay compensation under IMT-19. It is now well settled and in view of said judgments, owner of vehicle cannot be held liable to pay compensation for personal injury or death of his paid driver due to sole negligence of paid driver (claimant or deceased paid driver respectively) in the claim petition filed by driver-claimant or his legal heirs under Section 166 of MV Act. Mr. Shelat also contended that thus, in view of above stated principle of law, condition of IMT-19 and considering principle of indemnity viz-a-viz policy of motor vehicle, when owner of the vehicle cannot be held liable to pay compensation to paid driver or his legal heirs' then insurance company cannot be saddled with liability.
6.5. Mr. Shelat further contended that claimants- appellants have placed heavy reliance upon decision of this Hon'ble Court in the case of Saberabibi Hisamia Umaravmia (supra) followed in Maniben S Pandya vs. Shashikant P Sharigalor reported in 2004 (3) GLR 1878 by contending Page 11 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 that once an additional premium covering the risk of driver is paid then insurance company is liable to pay compensation in a claim petition filled u/s 166 MV Act irrespective of sole negligence of paid driver. It was contended that in said decisions neither earlier decision in the case of Jagatsinh Valsinh (supra) was brought to the notice/referred nor IMT-16 (now IMT19) which was referred in said decisions was interpreted in context of contractual liability of insurance company. It was further contended that as per said decision, IMT-16 covers risk of driver under policy and based on such premise, it holds that insurance company is liable to pay compensation to legal heirs of deceased driver irrespective of his (driver's) negligence. Mr. Shelat also contended that the said decision has neither taken into account insurance cover given under IMT-16 nor interpreted its terms resulted into such finding which is contrary to principles of indemnity. It is reiterated that under IMT-16 or 19 or 28 legal liability of insured is covered which may arise under different Acts in respect of personal injury caused to insured's paid driver. It was further contended that insurer by getting an additional premium does not per se cover risk of paid driver but it covers legal liability of insured that arise under Act qua paid driver. The principle of indemnity which is sine qua non in a motor insurance policy is lost sight in said decisions resulting into fixing the liability of insurance company without holding owner liable to pay compensation which is contrary to settled legal position of law. Thus, decisions which are pressed into service by claimants are not laying down correct law and contrary to basic principle of indemnity of Motor Insurance Policy as Page 12 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 well as overlooking and not properly appreciating terms of contract of insurance.
6.6. Mr. Shelat further contended that it is settled law that contract of insurance is like any other ordinary contract and its terms are binding to parties to the contract. It was contended that the Court cannot add, alter, modify or change its terms of the contract and requires to interpret terms of insurance contract as it is understood between the parties as per its terms. Relying upon the judgments in the case of General Assurance Society Ltd vs. Chandumull Jain reported in AIR 1966 SC 1644 and in the case of United India Insurance Company Ltd. V/s Harchand Rai Chandan Lal reported in 2004 (8) SCC 644, Mr. Shelat contended that it is not for Court to make a new contract, however reasonable, if the parties have not made it themselves. The clause of IMT-19 which is replaced by IMT-28 w.e.f. 30-06-2002 is unambiguous and clear. It was further contended that there is no ambiguity in IMT which is sought to be canvassed by learned counsel for the claimant. Mr. Shelat further contended that it is engrafted and based upon principle of indemnity unlike a personal accident policy than in absence of any liability of insured (owner of vehicle) arise in a claim petition filed under Section 166 of MV Act where driver himself is found negligent then insurance company can not be saddled with liability to pay compensation as per IMT-16/IMT-19/IMT-28. 6.7. Mr. Shelat also contended that unless court finds insured liable to pay compensation to his paid driver under Section 166 claim petition where no fault can be found Page 13 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 out of paid driver than insurer would be liable to indemnify its insured as per IMT-16 or IMT-19 or IMT-28 as case may be otherwise not. It was further contended that the Apex Court in a case of National Insurance Co. Ltd. V/s Prembai Patel & Ors. Reported in AIR 2005 SC 2337 : 2005 (6) SCC 172 found owner of vehicle solely negligent and not paid driver who was victim of accident awarded compensation to be paid by insurer as per terms of policy & owner of vehicle respectively.
6.8. Mr. Shelat further contended that additional premium paid by insured as per IMT-19 or IMT-28 is for own safety and protection against his liability which may arise under Workman Compensation Act, Fatal Accident Act or under Common Law in connection with an injury cause to driver under his employment. There is no absolute insurance cover given by charging an additional premium, thereby irrespective of liability of insured arise or not qua his paid driver, insurance company would be liable to pay compensation to insured's driver for his own negligence as well. It was contended that the insurance cover given under said IMT is subject to certain condition which is based upon principle of indemnity unlike any Personal Accident cover wherein on happening of event and sustained injuries resulted into permanent disablement/loss of limb/death then fixed amount will be paid as per cover given under such additional PA cover given under policy (IMT-6 in Tariff dated 01-08-1989 & IMT-17 in Tariff w.e.f. 30-06-2002).
6.9. Mr. Shelat contended that there is fallacy on part of Page 14 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 claimant to contend that once an additional premium is paid to cover risk of paid driver under IMT-19 then as per Section 147 (5) of the Act, irrespective of driver's own negligence, insurer is required to pay compensation under Section 166 of the Act. It was contended by Mr. Shelat that Section 147 (5) of the Act does not override provisions contained in Act itself but Non-Obstante Clause of sub-section (5) of Section 147 only overrides other law than MV Act. The said provision does not whisper about no negligence to be seen when claim filed under Section 166 of the Act, otherwise irrespective of status of claimant or victim including Third Party whose risk covered under Section 147 (1) (b) of the Act, no one is required to prove negligence to get compensation. It was contended that this is not the intention of Parliament to bring Section 147 (5) under the Act and submission of claimant is just contrary to principles enunciated by Hon'ble Apex Court in said decisions in relation to claim petition filed under Section 166 of the Act. Mr. Shelat contended that upon conjoint reading of Section 147 (1)
(b) & (5) of the Act makes it very clear that insurer is required to indemnify person or classes of persons specified in policy in respect of any liability which policy purports to cover. Thus, Section 147 (5S) of the Act also speaks about indemnity of insured person or classes of person given under policy subject to any liability of person or classes of persons arises. Mr. Shelat contended that in absence of such liability arising of such persons or classes of person under the Act to pay compensation then insurer can not be held liable to pay compensation.
Page 15 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021C/FA/3907/2017 ORDER DATED: 27/08/2021 6.10. Mr. Shelat contended that on comparison of Section 147 (5) & Section 163-A of the Act which is produced herein below, clearly supports submission of appellant in relation to not giving overriding effect of other provisions of the Act as tried to canvassed by claimant.
"Section 147 (5) - Notwithstanding anything contained in an law or 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 163-A Special provisions as to payment of compensation on structured formula basis.-- ({1) Notwithstanding anything contained in this Act or in an other law or the time being in force or instrument having the force of law, the owner of the motor vehicle or the authorised insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be."
Mr. Shelat further contended that thus, Section 147 (5) of the Act does not even override requirement of Section 166 of the Act i.e. proof of negligence which is sine qua non to get compensation from driver/owner/insurer as case may be.
6.11. Mr. Shelat further contended that claimant is again wrong in contending that word 'indemnity' in plain English means to pay. The word indemnity is defined under Black Law Dictionary, which means "To promise to reimburse another for such loss / To give another security against such a loss." It was further contened that the word Page 16 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 indemnity itself suggests discharging someone's liability arising under law qua third party. Mr. Shelat contended that thus, it is incorrect to contend that indemnity is nothing but only a payment by selectively ignoring its context and purport in respect of Motor Insurance Policy.
6.12. Mr. Shelat further contended that keeping in mind principle of indemnity and plain reading of IMT-19 or IMT- 28 makes it very clear that when there is no liability of insured arising under a claim petition filed under Section 166 of the Act by his driver wherein driver himself is found solely negligent for causing accidental injury or death then insurance company cannot be saddled with liability to pay compensation merely because an additional premium has been paid by insured. Mr. Shelat contended that reference be answered accordingly.
6.13.Mr. Shelat, learned counsel for the Insurance Company has relied upon the following decisions.
1. Oriental Insurance Company Limited vs Meena Variyal & ors reported in (2007) 5 SCC 428.
2. Oriental Insurance Company Limited vs. Jhuma Saha & Ors reported in AIR 2007 SC 1054
3. Tamilnadu State Transport Corporation vs. Natrajan & Ors reported in (2003) 6 SCC 137.
4. United India Insurance Company vs. Jagatsinh Valsinh reported in 1986(2) GLR 1423.
5. National Insurance Company Ltd vs. R Mohan & R. Murthy reported in 1995(II) ACC 484 (Madras).
6. Gulamrasul Rehman Malek vs. GSRTC reported in 2014(II) ACC 95.
Page 17 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021C/FA/3907/2017 ORDER DATED: 27/08/2021
7. United Indian Insurance Company Limited vs. Mukeshbhai Bhikhabhai Prajapati & Ors rendered in First Appeal No. 2208 of 2007.
8. United India Insurance Company Limited vs. M/s.
Harchand Rai Chandan Lal reported in (2004) 8 SCC 644.
7. Mr. Vibhuti Nanavati and Dr. Rushang Mehta, learned counsels for the insurance Companies and Mr. Yogi Gadhiya, learned counsel appearing for the Kandla Dock Labour Board have also adopted the arguments made by Mr.Shelat, learned counsel for the Insurance Company.
8. No other and further submissions, contentions and grounds have been raised by the learned counsel for the respective parties.
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 18 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021
(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 sub-section (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.
(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 Page 19 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 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
(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, Page 20 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 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 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 Page 21 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 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 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.
Page 22 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021C/FA/3907/2017 ORDER DATED: 27/08/2021 (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 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 Page 23 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 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 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, Page 24 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 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 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 Page 25 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 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 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.Page 26 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021
C/FA/3907/2017 ORDER DATED: 27/08/2021 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.
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 Page 27 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 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 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 Page 28 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 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 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 Page 29 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 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 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 Page 30 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 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.
14. The judgments relied upon by the learned counsel for the Insurance Company would not be applicable in the instant case and therefore, it is not necessary to be dealt Page 31 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021 C/FA/3907/2017 ORDER DATED: 27/08/2021 with. The other judgments which are cited by the learned counsels for the respective parties, deal with different facts & situations and are not relevant to the question referred to this Bench and hence they are not dealt with individually.
15. In our opinion, by accepting additional premium, the Insurance Company indemnifies the owners for paid Driver and / or Conductor and risk of Driver / Conductor is covered under it. Upon death or injury caused to the paid Driver and / or Conductor, the Insurance Company would be liable to satisfy such claim irrespective of the self negligence. Thus, the observations made by the Division Bench in the case of Saberabibi Hisammiya Umarvmiya & Anr (supra) lays down the correct law. Reference is thus, answered accordingly.
The respective appeals be placed before the Division Bench taking up such appeals for its final disposal in view of the observations made by us.
(VIKRAM NATH, CJ) (R.M.CHHAYA, J) (B.N. KARIA, J) KAUSHIK J. RATHOD Page 32 of 32 Downloaded on : Sun Aug 29 01:32:21 IST 2021