1. The allegations found in the petition filed under Section 19(1) (a) of the Workmen Compensation Act 1923 are as follows:
1. (i) The petitioners are parents of one Senthil @ Senthilkumar, who was employed as an Auto Driver under one Sampath @ Sampathkumar. The first and second opposite parties are legal heirs of Sampath @ Sampathkumar. On 4.8.1998 at about 1.00 p.m. while the deceased Senthilkumar drove the Auto TN 33 J 1573 from Palani to Dharapuram Road, near Thulukkanoor, hit on the back of a Bullock Cart in an unavoidable circumstance and in the accident Senthil @ Senthilkumar died at the spot. The applicants are dependents of the income of the deceased. The deceased was aged about 22 years and was earning not less than Rs.3,000/-p.m. The vehicle owner Sampath also died in the accident, whose legal heirs are first and second respondents. Hence a compensation of Rs.5,00,000/- is claimed and both the opposite parties are jointly and severally liable to pay compensation.
2. The averments contained in the Counter filed by the Opposite Parties 1 & 2 are as follows:
These opposite parties do not admit the relationship between Senthil @ Senthilkumar with Sampath @ Sampathkumar. The particulars as regards the age of the deceased, manner of accident and wages of the deceased are denied.
3. In the objection filed by the third Opposite Party, following are found:
Senthil @ Senthilkumar did not come under the definition "workmen" and he is not entitled to get benefits under Workmen's Compensation Act and he was only a casual labourer and his employment with the second respondent was totally unconnected with the business of the vehicle owner. Therefore the claim of compensation by the legal heirs of the deceased Senthil @ Senthilkumar is not maintainable. There has been a clear infringement of policy conditions and the age of the deceased, earning power and income are not admitted. Hence the petition has to dismissed.
4. The authority below viz., The Deputy Commissioner of Labour, Salem, allowed the application by directing the Opposite Parties 1 and 2 to deposit a sum of Rs.2,21,370/- within thirty days, in default the same shall be recovered along with 12% interest from the date of death till the date of deposit. The Deputy Commissioner has arrived at the compensation by adopting the formula under mentioned:
2,000.00 x 50 x 221.37
---------------------- = Rs.2,21,370 100 Aggrieved by the same, the appellants/applicants preferred the present Civil Revision Petition to fix the liability as against the third respondent/Insurance Company by setting aside the order of the Deputy Commissioner of Labour, Salem.
5. Mr.N. Manoharan, learned counsel for the Appellants would submit that inasmuch as the Insurance Company could not be absolved from its liability to pay compensation to the claimants as per law, fastening liability on the first and second opposite parties alone is not at all sustainable. It is his further contention that in spite of allegations with respect to the violation of permit and policy conditions, the Insurance Company is in law bound to compensate the claimants.
6. Per contra, Mr.K.S. Narasimhan, learned counsel for third respondent would submit that there is no wrong in the findings of the rendered by the Commissioner in view of the violation of policy condition and there is no need to disturb the same.
7. The F.I.R. as to the accident was given by one of the inmates of the ill-fated auto. It is stated therein that on 4.8.98 at about 1.00 p.m. while Senthil was driving Auto, Sampath was sitting by his side in the front seat and 8 other persons were travelling by the auto, that the said Senthil @ Senthilkumar, drove the vehicle in a rash and negligent manner and dashed on the back side of a double bullock cart, which was proceeding in front of the auto, in which Senthil @ Senthilkumar breathed his last on the spot and Sampath @ Sampthkumar was critically injured and thereafter he died and that other persons were also injured.
8. From the contents in the F.I.R., it is seen that 10 persons in all were travelling by auto at the time of accident. R.W.2, Superintendent attached to R.T.O. Office, Erode, has stated before the Commissioner that Senthilkumar was possessing a licence to drive Light Motor Vehicles and the same was issued on 19.08.1996 which would be valid till 18.08.2016. As far as the permit for the auto is concerned, one driver and three passengers have been allowed. It is not debatable as regards the possession of valid licence by Senthilkumar. In so far as the permit is concerned, there is patent violation.
9. It is vehemently argued on behalf of the third respondent Insurance Company that the policy conditions have been violated and hence the Insurance Company is not liable to pay compensation. With regard to the coverage of Insurance, there is no dispute.
10. Mr.N. Manoharan, learned counsel for the appellants draws attention of this Court in AIR 1990 Madras 71 [National Insurance Company v. T. Elumalai] in which it is observed that though there was a breach of the terms of permit regarding the maximum number of passengers which could be carried, when the vehicle was not used for different purpose, the violation of the terms of the permit under Section 96(2)(c) of the Act, would not arise. The same proposition has been reiterated by a Division Bench of Karnataka in Madras Motors & General Insurance Company v. Nanjamma, 1977 Acc CJ 241 : AIR 1977 Kant 46.
11. Learned counsel for the appellants also garnered support from another decision of this Court in 2008 (3) MLJ 189 [N. Senthilkumar v. S. Ramesh and another] in which a decision of the Supreme Court has been referred to and followed which is pertinent to this subject. The principles laid down by the Apex Court as incorporated in the Judgment of this Court, is as follows:
12. In Ved Prakash Garg V. Premi Devi AIR 1997 SCC 3854 : (1197) 8 SCC 1 : (1998) 1 MLJ 17 : 1998-I-LLJ-363 : 1998 ACJ 1 (SC), the Supreme Court after detailed consideration of the provisions for compulsory insurance, the provisions under Section 147, the provisions of the liability of the insurance company under Section 149 and the provisions of
Section 4 of the Workmen's Compensation Act, it is necessary to refer to the provisions of Motor Vehicles Act as the workmen suffered personal or ;bodily injury while they were working on motor vehicles of their employers. If they had suffered from any personal injuries during the course of and arising out of the employment while working in the factory premises of the employers or while carrying on their service obligations as employees at any other place under the instruction of the employers, the question of interaction of the Workmen's Compensation Act and the Motor Vehicles Act would not arise and such claims for compensation would have dquarely been governed only by the Workmmen's Compensation Act."
"13. ... ... ... When premium has been paid so as to meet the requirements of Workmen's Compensation Act is it not open to the insurance co. to raise the defence, which are available to it under Motor Vehicles Act pleading exoneration of its liability on the ground of breach of policy conditions? As the driver suffered personal injuries during the course of and arising out of employment, while he was discharging his service obligations, the compensation payable would be squarely governed by the provisions of workmen's Compensation Act and the insurance company cannot be absolved of its liability. The learned Deputy Commissioner did not keep in view the statutory obligation of the insurance co. to indemnify the insurer in respect of compensation payable to the driver/workmen. The impugned order exonerating the insurance company from its liability suffers from perversity and vitiated by error of law and the same cannot be sustained."
12. Armed with the above said authority, the elarned counsel for the appellants would contend that having admitted that the insurance policy was in force and necessary premium was paid for the insurance coverage, unless the employer and employee relationship is disproved, the insurance company is always duty bound to compensate the employee of the insured under the provisions of the Workmen's Compensation Act. This court sees considerable force in his argument, in view of the decision of the Supreme Court aforementioned.
13. It is the contention of the appellants that Senthil was a casual labourer. But it is not the case that he did not drive the auto for a different purpose, but only for carrying the passengers. So long as employer and employee relationship continues between them, whatever be the liability of the insured has to be taken care of by the insurer under the Workmen's Compensation Act and the company could not seek any privilege to wriggle out from its responsibility. As per the principles laid down in the decision above stated, the Insurance company cannot take umbrage under the Motor vehicles Act exhausting the defences proposed to be availed by it. It has to independently seek remedy under the provisions of Workmen's Compensation Act before the forum constituted under the Act. In the decision of this Court above quoted, another decision of the Supreme Court in 2006 (1) CTC 222 [National Insurance Co. Ltd., v. Mastan] is followed wherein it is observed as follows:
"16. Under the 1988 Act, the driver of the vehicle is liable but he would not be liable in a case arising under the 1923 Act. If the driver of the vehicle has no licence, the insurer would not be liable to indemnity the insured. In a given situation, the Accident Claims Tribunal, having regard to its rights and liabilities vis-a-vis the third person may direct the insurance company to meet the liabilities of the insurer, permitting it to recover the same from the insured. The 1923 Act does not envisage such a situation. Role of Reference by incorporation has limited application. A limited right to defend a claim petition arising under a different statute unless there exists express provision therefor. Section 143 of the 1988 Act makes the provisions of the 1923 Act applicable only in a case arising out of no fault liability, as contained in Chapter X of the 1988 Act. The provisions of Section 143, therefore, cannot be said to have any application in relation to a claim petition filed under Chapter XI thereof. A fortiori in claim arising under Chapter XI, the provisions of the 1923 Act will have no application. A party to a lis, having regard to the different provisions of the two Acts cannot enforce liabilities of the insurer under both the Acts. He has to elect for one."
14. Following the dictum laid down by the Supreme Court it has to be held that since the accident arose during the course of and arising out of the employment while the deceased was discharging his service obligations towards his empoyer, the Insurance Company is responsible to compensate the claimants, despite violation of conditions in the policy. The liability has to be determined independent of the provisions contained in the Motor Vehicles Act but not the Workmen's Compensation Act. Even though if the accident is found to have happened due to negligence on the part of the driver, still the liability of his employer to pay compensation to him is alive and in view of the contract between the employer and the Insurance Company, the company has to pay compensation.
15. The learned counsel for the third respondent would garner support from a decision of the Supreme Court in 2007 (1) TN MAC 193 SC [National Insurance Co. Ltd., v. Anjana Shyam & Others]wherein it is observed as follows:
"15. In spite of the relevant provisions of the statute, Insurance still remains a contract between the owner and the Insurer and the parties are governed by the terms of their contract. The statute has made Insurance obligatory in public interest and by way of social security and it has also provided that the Insurer would be obliged to fulfill his obligations as imposed by the contract and as over by the statue notwithstanding any claim he may have against the other contracting party, the owner, and meed the claims of third parties subject to the exception provided in Section 149 (2) of the Act. It does not mean that an Insurer bound to pay amounts outside the contract of insurance itself or in respect of persons not covered by the contract at all. In other words, the insured is covered only to the extent of the passengers permitted to be insured or directed to be insured by the statute and actually covered by the contract. ... ... ... ...."
16. The third respondent cannot get benefit from the decision in Masthan's case (supra), since the insurance company is not required to pay compensation outside the contract of insurance or in respect of a person not covered by the Contract.
17. Whatever may be the number of passengers travelling in the vehicle, the claim for the loss of life of employee in the course of and out of employment from the employer is alive and in view of the fact that the vehicle was not for different use, it has to be inevitably held that the insurance company ought to pay compensation. In such view of this matter, it is decided that the first and second respondents on the one part and the Insurance Company is on the other are jointly and severally liable to compensate the claimants as quantified by the authority below. The liability portion of the award challenged is modified in the above said terms.
In fine the appeal is partly allowed with modifications. No costs.