Kerala High Court
New India Assurance Co. Ltd. vs Pathu And Ors. on 10 January, 1991
Equivalent citations: 1992ACJ877, AIR1992KER145, AIR 1992 KERALA 145, ILR(KER) 1991 (3) KER 227, (1991) 1 KER LJ 272, (1992) 2 TAC 118, (1992) 2 ACJ 877
JUDGMENT Jagannadha Raju, J.
1. This is an appeal by the Insurance Company, which was the second respondent in O.P. No. 274 of 1982 on the file of the Motor Accidents Claims Tribunal, Ernakulam. Along with the appeal, C.M.P. No. 126 of 1991 is filed to accept the copy of the insurance policy as additional evidence.
2. In this appeal, one Mohammed, who was working as a cleaner on daily wages in Lorry No. KLE 2904, died in a motor accident that took place at 9.30 a.m. on 7-1-1982 near Alwaye. The Tribunal came to the conclusion that the accident took place as a result of rash and negligent driving by the driver, the third respondent, and as a result of it, the lorry toppled and the cleaner Mohammed fell under the lorry and was crushed to death. The legal representatives and dependents of the deceased filed the Claim Petition on the basis that the deceased was earning Rs. 1,000/- per month and that he was aged 43 years at the time of his death. The Tribunal came to the conclusion that the deceased was earning only Rs. 450/- per month as his daily wages were proved to be Rs. 15/- per day, and adopting the multiplier of 17, the Tribunal determined the total loss of dependency at Rs. 91,800/-, and out of this deducted 25% towards personal consumption, and out of the balance deducted one-third towards vagaries of life, unforeseen contingencies and advantages of lump sum payment, and awarded a compensation of Rs. 45,900/-. In addition to that it also awarded a compensation of Rs. 500/- towards funeral expenses, and Rs. 500/- towards cost of transport and treatment for the short time he was alive. In the award, the Tribunal directed that the second respondent, Insurance Company, shall pay the amount within two months and that the claimants shall share the amount equally. It also awarded 12% interest per annum from the date of the petition 30-3-1982.
3. In this appeal, Shri Mathews Jacob, learned counsel for the appellant, raised three arguments. The policy is an Act policy. Under Section 95(1) and Clause (i) of the proviso to Section 95(1) the liability of the Insurance Company is limited to the liability arising under the Workmen's Compensation Act. The Tribunal committed a mistake in awarding compensation in excess of the same, and making the Insurance Company liable to pay the entire amount. He contends that, according to the Workmen's Compensation Act, on the basis of daily wages of Rs. 15/- per day, the compensation payable is only Rs. 2l,000/-. Excess compensation, if any, has necessarily to be paid by the present fifth respondent, the owner of the lorry, and the present sixth respondent, the driver who was responsible for the accident. In support of his arguments, he places reliance upon Clause (i) of the proviso to Sub-section (1) of Section 95, and Section 110AA. He contends that the award passed by the Tribunal is against the law enunciated in Ayisha Beevi v. Kalidasan, (1987) I Ker LT 509. If there is any liability in excess of the compensation payable under the Workmen's Compensation Act, respondents 5 and 6 alone can be made liable and the Insurance Company cannot be made liable to pay anything more than Rs. 21,000/-.
4. On behalf of the claimants, who are now respondents 1 to 4, and on behalf of the owner, now 5th respondent, and the driver, the present sixth respondent, it is contended that the decision of a Division Bench of this Court dated 3-8-90 in M.F.A. No. 349 of 1984 clearly indicates that the liability of the insurer is not limited and that no limitation can be placed on the liability of the insurer by the Tribunal.
5. The point that arises for consideration in this appeal is whether the liability of the insurer is limited to the compensation that is payable under the Workmen's Compensation Act, and if so, who is liable to pay the amount of compensation awarded in excess of the compensation payable under the Workmen's Compensation Act.
6. The Point: In this appeal, there is absolutely no controversy regarding the quantum of compensation awarded to the claimants, the dependents of the deceased cleaner, Mohammed. The Tribunal rejected the claim of the claimants that the deceased was earning Rs. 1,000/- per month, and proceeded on the footing that his earning is Rs. 15/- per day and on that basis his monthly earnings come to Rs. 450/ - per month. Under Schedule IV of the Workmen's Compensation Act, which was in force at the time of the accident, for a person in the monthly wage group of Rs. 400 to Rs. 500/- the compensation payable is Rs.21,000/- in the case of death. The owner, and driver, respondents 5 and 6 in this appeal, have not filed any appeal questioning the award, but in the appeal filed by the Insurance Company, they resisted the claim of the appellant and claimed that the Insurance Company is certainly liable to pay what all compensation is payable by the owner and driver.
7. CM.P. No. 126 of 1991 is for receiving as additional evidence the copy of the policy. The policy shows that it is an Act policy, and that it was in force for the period from 31-1-1981 to 30-1-1982, and this accident took place during the currency of the policy on 7-1-1982. Though the Insurance Company was at fault in not producing the copy of the policy at the time of filing Written Statement before the Tribunal, we are inclined to allow this Petition, particularly because the owner of the lorry, who had the original policy, and who has a bounden duty to produce it, failed to produce it. Hence we allow C.M.P. No. 126 of 1991 and accept the copy of the policy as additional evidence, and mark it as Ext. B2.
8. Section 95, which deals with requirements of policies and limits of liability stipulates under Clause (a) of Sub-section (1) that it should be a policy issued by an authorised insurer. Clause (b) stipulates that the policy should insure the person or classes of persons specified in the policy to the extent specified in Sub-section (2), in respect of the death of or bodily injury to any person or damage to any property of a third party against the death of or bodily injury to any passenger of a public service vehicle. The proviso to Sub-section (1) is very significant. The proviso reads as follows :
"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 liabilty 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 vehicle, being carried in the vehicle;.
(ii) & (iii)............,..................."
Clause (i) of the proviso clearly stipulates that the policy shall not be required to cover liability in respect of death of the employee of a person insured by the policy other than a liability arising under the Workmen's Compensation Act, 1923 (Act 8 of 1923). Under Sub-section (2) of Section 95, where the vehicle is a goods vehicle the liability arising under the Workmen's Compensation Act is limited to persons not exceeding six in number being carried in the vehicle. Dealing with the limits of the liability under the policy, a Division Bench of this Court in Ayisha Beevi v. Kalidasan, (1987) 1 Ker LT 509 laid down the law as follows in paragraphs 5 and 6 :
"5. ..... We do not find anything in Section 95(1) or any other provision in the Act which imposes, by express terms or by necessary implication, any limitation on the extent of general damages which can be claimed by such an employee........ We are, therefore, not in a position to accept the first submission that the amount of compensation awardable in the case of death or bodily injury of an employee covered by the Workmen's Compensation Act must be limited to the one payable there under.
6. It is equally evident that unless it is otherwise shown, the limit of liability for payment of compensation in relation to the death or bodily injury of an employee being carried in a goods vehicle is limited to the amount of compensation payable under the Workmen's Compensation Act. Admittedly, no attempt was made by the insured-appellant in this case to urge or prove before the Tribunal that the insurer was obliged to pay compensation in excess of the liability imposed by Section 95 of the Act...... "
9. In that decision the Court held that the Tribunal was justified in awarding compensation of Rs. 31,500/ - and that the Tribunal was also justified in limiting the liability of the Insurance Company to Rs.21,000/- and directing the owner to pay the balance amount of Rs. 10500/-. This decision applies to the facts of our case. It is clear from the remarks in paragraph 6 of the decision that the Court was dealing with a case of an Act policy, and there was nothing either in the pleadings or in the evidence to show that the insurer was obliged to pay compensation in excess of the liability imposed by Section 95. In M.F.A. No. 349 of 1984, by judgment dated 3-8-1990, another Division Bench of this Court, struck a different note and the Court observed in paragraph 9 as follows :
"9....... When once a claim is under the Act, there is no justification for limiting the liability of the insurer with reference to the provisions contained in the Workmen's Compensation Act even if the injured is a driver. In fact, the insurer has no contention to that effect in his written statement. Before us, the learned counsel for the insurer has very fairly and according to us rightly submitted that the limitation placed on the liability of the insurer cannot be sustained. Accordingly we set aside the direction restricting the liability of the insurer to the extent of Rs. 6,052.50. We hold that the insurer is liable discharge the entire liability of the insured in this case without any limit."
A reading of paragraph 9 by itself may indicate that the Division Bench was of the view that there can be no limit for the liability of the Insurance Company. But we find that the Division Bench was dealing with a totally different set of circumstances. In that case, there was a comprehensive policy and extra-
premium was paid for covering the full extent of the liability of the owner. These facts are clearly mentioned in paragraph 4 of the judgment, and if we read paragraphs 4, 6 and 9 together it is crystal clear that the Division Bench was not dealing with a case of an Act policy, and it was dealing with a case of a comprehensive policy and a policy with unlimited liability for which extra premium was paid. Perhaps that is the reason why counsel for the insurer submitted that the limitation placed on the liability of the insurer cannot be sustained, as observed in paragraph 9. The decision in M.F. A. No. 349 of 1984 is not applicable to the facts of our case, where the policy is only an Act policy. That decision is clearly distinguishable as it applies only to cases where there is a comprehensive policy with unlimited liability.
10. As regards the quantum of compensation there is no dispute as already indicated (supra). Under the Workmen's Compensation Act the liability of the insurer is limited to Rs. 21,000/-, the compensation payable for the death of a cleaner who was in the income group of Rs. 400/- to Rs. 500/- per month. Hence this appeal has necessarily to be allowed, and the liability of the insurer has to be limited to the extent of Rs. 21,000/-.
11. In the result, the appeal is allowed in part. The award is modified as follows. The judgment-cum-award is passed in favour of the claimants allowing them to realise the compensation of Rs. 46,900/- with interest at the rate of 12% per annum from 30-3-1982 with proportionate costs. The liability of the Insurance Company, the second respondent in the O.P., and the appellant in this appeal, is limited to Rs. 21,000/-, the compensation payable as per the Workmen's Compensation Act, and the Insurance Company will also be liable to pay interest at 12% per annum on this amount. The balance of the award amount shall be recoverable from the fifth respondent, the owner, and the sixth respondent, the driver. In this appeal each party shall bear its own costs.