1. By way of this appeal under Section 173 of the Motor Vehicles Act, 1939, the appellant - insurance company has challenged the award dated 29.06.2000 passed by the Motor Accident Claims Tribunal (Aux), Bhavnagar in M.A.C.P Nos. 458 of 1997 whereby the Tribunal directed the original opponents to jointly pay compensation of Rs. 10 lakhs with interest and proportionate costs.
2. The aforesaid claim petition arose out of an accident which occurred on 06.02.1997 when one Prabhudas Gondalia was travelling on a motorcycle as a pillion rider being driven by the original opponent no. 1 in a rash and negligent manner as a result of which the original opponent no. 1 lost control of the vehicle and Shri Prabhudas sustained injuries to which he succumbed. The original applicants filed claim petition seeking compensation. The Tribunal after hearing the parties passed the aforesaid award.
3. Ms.
Viraj Fozdar, learned advocate appearing for Ms. Jani for the appellant has contended that the present appellant ought to have been held not liable to pay the compensation amount as there is a specific condition in the policy that the insurance company shall not be liable in respect of death arising out of employment of a person in the employment of the insured. She submitted that it is an admitted position that the deceased was no duty of the insured when the accident took place.
3.1 Ms Fozdar has placed reliance on the decisions of the Apex Court in order to substantiate his contentions. She has relied upon the decision in the case of New India Assurance Co. Ltd v Asharani reported in 2003(2) SCC 223 and in the case of Oriental Insurance Co. Ltd. vs. Meena Variyal and others reported 2007(5) SCC 428 and also in the case of Ramashray Singh vs. New India Assurance Co. Ltd. and Others reported in 2003(10) SCC 664. She submitted that the Tribunal has relied upon a decision of the Apex Court in the case of New India Assurance Company vs. Satpal Singh reported in AIR 2000 SC 235 which is now over ruled by way of New India Assurance Co. Ltd. vs. Asharani (supra).
4. Learned advocates appearing for the respondents supported the award passed by the Tribunal and submitted that no interference is called for. Ms. Shah, ld AGP however could not controvert the position of the deceased being an employee of the insured and the policy not covering the same.
5. Heard learned counsel for the parties. I have gone through the averments made in the appeals and documents placed on record including the award of the Tribunal. From the perusal of the award, it is clear that the present appellant had strongly contended before the Tribunal that it is absolved from the liability of paying compensation as per the terms and conditions of the insurance policy more particularly condition no. 3 of the general policy which states that the company shall not be liable in respect of death arising out of employment of a person in the employment of the insured.
6. Section 147 of the Motor Vehicles Act reads as under:
"Section 147: Requirements of policies and limits of liability- (1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which, -
(a) is issued by a person who is an authorised insurer; or
(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 vehicle](brought in by amendment through Act No. 54 of 1994) or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;
(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place;
Provided that a policy shall no be required
(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employees 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 Workmens Compensation Act, 1923 (8 of 1923) in respect of the death of, or bodily injury to, any such employee
(a) engaged in driving the vehicle, or
(b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods carriage, being carried in the vehicle]; or
(ii) to cover any contractual liability."
6.1 A perusal of the decision relied on by the learned counsel for the appellant is relevant at this stage. In the case of New India Assurance Co. Ltd (supra), keeping in view the provisions of the 1988 Act, the Apex Court has overruled the decision in the case of Satpal Singh (supra). In the case of Ramashray Singh (supra), the Apex Court has held as under:
"10.
The appellant's first submission was that Shashi Bhushan Singh was a passenger. The appellant's submission that the phrases 'any person' and "any passenger" in Clauses (i) and (ii) of Sub-section
(b) to Section 147(1) are of wide amplitude, is correct. [See: New India Assurance Company v. Satpal Singh and Ors. ]. However, the proviso to the sub-section carves out an exception in respect of one class of persons and passengers, namely, employees of the insured, in other words, if the "person" or "passenger" is an employee, then the insurer is required under the statute to cover only certain employees. As sated earlier, this would still allow the insured to enter into an agreement to cover other employees, but under the proviso to Section 147(1)(b), it is clear that for the purposes of Section 146(1), a policy shall not be required to cover liability in respect of the death arising out of and in the course of any employment of the person insured arises under the Workmen's Compensation Act, 1923 and second: if the employee is engaged in driving the vehicle and if it is a public service vehicle, is engaged as conductor of the vehicle or in examining tickets on the vehicle. If the concerned employee is neither a driver nor conductor nor examiner of tickets, the insured cannot claim that the employee would come under the description of "any person" or "passenger". If this were permissible, then there would be no need to make special provisions for employees of the insured. The mere mention of the word "cleaner" while describing the seating capacity of the vehicle does not mean that the cleaner was therefore a passenger. Besides the claim of the deceased employee was adjudicated upon by the Workmen's Compensation Court which could have assumed jurisdiction and passed an order directing compensation only on the basis that the deceased was an employee. This order cannot now be enforced on the basis that the deceased was a passenger.
13. The appellant's next submission was that the concerned employee was a 'conductor'. It is doubtful whether a 'khalasi' and a conductor are the same. But assuming this were so, there is nothing to show that the appellant had paid any additional premium to cover the risk of injury to a conductor. On the contrary, the policy shows that premium was paid for 13 passengers and 1 driver. There is no payment of premium for a conductor.
14. The appellant's final submission was that as the policy was a comprehensive one, it would cover all risks including the death of the khalasi. The submission is unacceptable. An insurance policy only covers the person or classes of persons specified in the policy. A comprehensive policy merely means that the loss sustained by such person/persons will be payable upto the insured amount irrespective of the actual loss suffered."
6.2 In the case of Oriental Insurance Co. Ltd. (supra), the Apex Court has held as under:
"12.
Chapter XI of the Act bears a heading, "Insurance of Motor Vehicles against third party risks". The definition of "third party" is an inclusive one since Section 145(g) only indicates that "third party" includes the Government. It is Section 146 that makes it obligatory for an insurance to be taken out before a motor vehicle could be used on the road. The heading of that Section itself is "Necessity for insurance against third party risk". No doubt, the marginal heading may not be conclusive. It is Section 147 that sets out the requirement of policies and limits of liability. It is provided therein that in order to comply with the requirements of Chapter XI of the Act, a policy of insurance must be a policy which is issued by an authorised insurer; or which insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) against any liability which may be incurred by the owner in respect of the death of or bodily injury or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place. With effect from 14.11.1994, injury to the owner of goods or his authorised representative carried in the vehicle was also added. The policy had to cover death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place. Then, as per the proviso, the policy shall not be required to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment, other than a liability arising under the Workmen's Compensation Act, 1923 in respect of the death of, or bodily injury to, an employee engaged in driving the vehicle, or who is a conductor, if it is a public service vehicle or an employee being carried in a goods vehicle or to cover any contractual liability. Sub-section (2) only sets down the limits of the policy.
13. As we understand Section 147 (1) of the Act, an insurance policy thereunder need not cover the liability in respect of death or injury arising out of and in the course of the employment of an employee of the person insured by the policy, unless it be a liability arising under the Workmen's Compensation Act, 1923 in respect of a driver, also the conductor, in the case of a public service vehicle, and the one carried in the vehicle as owner of the goods or his representative, if it is a goods vehicle. It is provided that the policy also shall not be required to cover any contractual liability. Uninfluenced by authorities, we find no difficulty in understanding this provision as one providing that the policy must insure an owner against any liability to a third party caused by or arising out of the use of the vehicle in a public place, and against death or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of vehicle in a public place. The proviso clarifies that the policy shall not be required to cover an employee of the insured in respect of bodily injury or death arising out of and in the course of his employment. Then, an exception is provided to the last forgoing to the effect that the policy must cover a liability arising under the Workmen's Compensation Act, 1923 in respect of the death or bodily injury to an employee who is engaged in driving the vehicle or who serves as a conductor in a public service vehicle or an employee who travels in the vehicle of the employer carrying goods if it is a goods carriage. Section 149(1), which casts an obligation on an insurer to satisfy an award, also speaks only of award in respect of such liability as is required to be covered by a policy under clause (h) of sub-section (1) of Section 147, (being a liability covered by the terms of the policy). This provision cannot therefore be used to enlarge the liability if it does not exist in terms of Section 147 of the Act.
14. The object of the insistence on insurance under Chapter XI of the Act thus seems to be to compulsorily cover the liability relating to their person or properties of third parties and in respect of employees of the insured employer, the liability that may arise under the Workmen's Compensation Act, 1923 in respect of the driver, the conductor and the one carried in a goods vehicle carrying goods. On this plain understanding of Section 147, we find it difficulty to hold that the insurance company, in the case on hand, was liable to indemnify the owner, the employer Company, the insured, in respect of the death of one of its employees, who according to the claim, was not the driver. Be it noted that the liability is not one arising under the Workmen's Compensation Act, 1923 and it is doubtful, on the case put forward by the claimant, whether the deceased could be understood as a workman coming within the Workmen's Compensation Act, 1923. Therefore, on a plain reading of Section 147 of the Act, it appears to be clear that the insurance company is not liable to indemnify the insured in the case on hand. "
7. As a result of hearing and perusal of records and in view of the decision of the Apex Court, I am of the opinion that the contentions raised by the appellant is required to be accepted. The fact that the deceased was an employee of the insured and the policy did not cover the insurance qua employee cannot be disputed and therefore the appellant cannot be held liable to undertake third party risk. In that view of the matter, the award of the Tribunal is required to be modified by not holding the present appellant liable for the compensation payable to the original claimants.
8. In the premises aforesaid, the appeal is allowed. The award of the Tribunal is quashed and set aside qua liability of the insurance company-present appellant. The amount deposited by the insurance company shall be refunded. However, if the amount is withdrawn by the original claimants, the same shall not be recovered. It will be open for the insurance company to recover the same from the owner- State in the present case and if the amount is not paid to the claimant it will be open for the claimants to recover the same from the owner-State Government. The award of the Tribunal impugned in the appeal is modified accordingly. No order as to costs.
(K.S.
JHAVERI, J.) Divya// Top