Allowed

Divisional Manager v. H.E.Basavaraju

Karnataka HC13 Feb 2023MFA/8707/2013

Case brief

AI extract

What is this about?

The High Court of Karnataka allowed an appeal against a workmen's compensation award. It held that under an 'act only' insurance policy, where no specific premium was paid for occupants, the insurer is not liable for injuries to passengers inside the insured vehicle, reversing the Commissioner's order.

What did the court decide?

The appeal is allowed; impugned award set aside; liability fastened on owner-insured to pay compensation with interest; deposit refunded to insurer.

Divisional Manager Vs H.E.Basavaraju — Contract and Commercial Disputes | Karnataka HC (2023)

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MFA No. 8707 of 2013

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 13^TH DAY OF FEBRUARY, 2023

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BEFORE

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THE HON'BLE MR JUSTICE H.P.SANDESH

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MISCELLANEOUS FIRST APPEAL NO. 8707 OF 2013 (WC)

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BETWEEN:

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DIVISIONAL MANAGER UNITED INDIA INSURANCE CO. LTD., DIVISIONAL OFFICE, CRESCENT COURT, K.M ROAD, CHIKMAGALUR-577 101.

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…APPELLANT

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(BY SRI. A.N.KRISHNA SWAMY, ADVOCATE)

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AND:

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Digitally signed by SHARANYA T Location: HIGH COURT OF KARNATAKA

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H.E.BASAVARAJU S/O ERAIAH, MAJOR, HARJIHALLI POST, AVATHI HOBLI, CHIKMAGALUR TALUK & DISTICT-577 101.

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H.S. KALACHARI S/O SHESHACHARI, MAJOR, OWNER OF JEEP & TROLLEY, HARJIHALLI POST, AVATHI HOBLI, CHIKMAGALUR TALUK & DISTRICT-577 101.

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…RESPONDENTS

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(BY SMT. P.V.KALPANA., ADVOCATE FOR R1; SRI B.S. GAUTHAM, ADVOCATE FOR R2)

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MFA No. 8707 of 2013

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THIS MFA IS FILED U/S. 30(1) OF W.C. ACT AGAINST THE JUDGMENT DATED 25.07.2013 PASSED IN WCA (F)10/2013 ON THE FILE OF THE LABOUR OFFICER AND COMMISSIONER FOR WORKMEN COMPENSATION, SUB DIVISION-02, CHICKMAGALUR, AWARDING A COMPENSATION OF RS.2,03,840/- WITH INTEREST @ 12% WITHIN 30 DAYS FROM THE DATE OF ORDER TILL THE DATE OF DEPOSIT THROUGH DD.

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THIS APPEAL COMING ON FOR HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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Heard the learned counsel for the appellant and learned counsel for the respondents.

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This appeal is filed challenging the judgment and award dated 25.07.2013 passed in WCA (F)-10/2003 on the file of the Commissioner for Workmen’s Compensation, Sub Division-02, Chikmagalur (‘the Commissioner’ for short).

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The parties are referred to as per their original rankings before the Commissioner to avoid confusion and for the convenience of the Court.

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The factual matrix of the case of the claimant before the Commissioner is that, on 02.10.2002, as per the directions of the respondent No.2 in this appeal, he himself and his wife were working as employees in the garden land of the

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MFA No. 8707 of 2013

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respondent N.2 and they were being transported from place of residence in jeep and trolley bearing No.MYC-7941 and KA18/M-191. When they were proceeding, an accident occurred owing to rash and negligent driving of the driver of jeep and trolley which resulted in injuries to Gowramma and she succumbed to the injuries. The Commissioner had passed an order dated 27.02.2004 awarding compensation of Rs.3,36,000/- fastening the liability on the Insurance Company. Being aggrieved by the judgment and award of the Commissioner, M.F.A.No.5380/2004 was filed and this Court, by judgment dated 25.10.2007 was pleased to set aside the order passed by the Commissioner dated 27.02.2004 and remitted the matter to Commissioner for fresh disposal after giving opportunity to both the parties to lead further evidence. While remanding the matter, this Court held that crucial incident which would go to the root of the matter is whether the insurer would be liable to pay to the coolies, who were traveling in trailer and whether the insurer is liable only to pay to the coolies for the owner of the vehicle, if she were to travel in his private vehicle i.e., jeep in question.

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MFA No. 8707 of 2013

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The appellant also contended that the policy is only

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an act policy in respect of the jeep and risk of the employees being carried in the said vehicle is not required to be covered. The commissioner, after considering the material on record, again allowed the claim petition and passed an order directing the Insurance Company to pay the compensation. Hence, the present appeal is filed before this Court.

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The learned counsel for the appellant would contend that the substantial question of law which arises for consideration in this appeal are whether the risk of employees being carried in a private car covered with an act policy of insurance is required to be covered under Section 147 of the M.V. Act, whether the risk of the employees working in a garden land of the insured is required to be indemnified by an insurer, who has issued the motor policy of insurance in favour of the owner of jeep and whether the employees could be termed as third parties in respect of policy of insurance issued by the insurer under Section 147 of the M.V. Act.

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The counsel, in support of his contention, relied upon the judgment of the Apex Court in ORIENTAL

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MFA No. 8707 of 2013

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INSURANCE CO. LTD. VS. SUDHAKARAN K.V. & OTHERS

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reported in 2008 ACJ 2045 SC and also relied upon the judgment of the Apex Court in NEW INDIA ASSURANCE CO.

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LTD. VS. C.M. JAYA & OTHERS reported in 2002 ACJ 271 SC . The counsel, during the argument also, brought to notice of this Court the judgment of the Apex Court in NATIONAL INSURANCE COMPANY LTD. VS. BALAKRISHNAN AND ANOTHER reported in 2012 (3) G.L.H. 748 and also judgment of this Court in M.F.A.NO.2628/2010 C/W. M.F.A.NO.2629/2010 , wherein this Court considered the

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judgment of SUDHAKARAN’S case and BALAKRISHNAN’S

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case and observation is made that, unless specific or additional premium is paid to cover the risk of the occupants, the insurer is not liable. The statutory insurance does not cover injuries suffered by occupants of the vehicle, who are not carried for hire or reward and the insurer cannot be held liable under the Act. This Court comes to the conclusion that, when there is no any explicit contract between the owner and the insurer to cover the risk, the question of fastening the liability in respect of covering the risk of the occupant in a private vehicle does not arise.

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MFA No. 8707 of 2013

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Per contra, learned counsel appearing for the respondent/claimant would vehemently contend that the Court has to see the premium paid in terms of Ex.R1-policy. The counsel brought to notice of this Court that an amount of Rs.589/- is collected towards liability to public, Rs.50/- for increased third party property damage risk, Section II-I(ii) Endorsement 70 Unlimited Amount, Rs.20/- towards premium on trailer (Endorsement 20) and Rs.15/- towards paid driver as per Endorsement 19. The counsel would vehemently contend that the Madras High Court, in a similar circumstance, wherein

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the coolie was carried and died, in the judgment in C.M.A. NO.1929 OF 2004 dated 17.12.2013, in the case of NEW INDIA ASSURANCE CO. LTD., VELLORE VS. RAMAN AND

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OTHERS, while extracting with regard to copy of policy certificate i.e., liability to public - legal liability to driver coolies/other employees in connection with the operation and/ or maintaining and/or unloading of motor vehicle, endorsement. The Madras High Court, even taken note of increased third party property, damage risks, Section 11-I(ii) Endorsement 70 Unlimited amount and confirmed the judgment of the Tribunal fastening the liability on the Insurance

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MFA No. 8707 of 2013

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Company. In the case on hand also, when an extra additional amount of Rs.50/- and Rs.20/- are collected towards increased third party property damage risks and premium on trailer respectively, the Insurance Company is liable to pay the compensation.

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Having heard the respective counsel and also on

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perusal of the material available on record, the points that would arise for consideration of this Court are:

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(1) Whether the claimant is entitled for compensation invoking Section 147 of M.V. Act?

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(2) Whether the Commissioner has committed an error in fastening the liability on the Insurance Company, when the policy does not cover the risk of the occupant of the jeep in which the trailer was attached?

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(3) What order?

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Point Nos.(1) and (2)

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Having heard the respective counsel and also on perusal of the material available on record, this Court has to take note of the pleadings of the parties. The claimant before

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MFA No. 8707 of 2013

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the Commissioner, who is the husband of the deceased contend that on 02.10.2022, the deceased was carried in the vehicle belonging to the respondent No.1 before the Commissioner and there were labourers in the trailer with jeep bearing No.MYC7941 and KA-18-M-191 and behind Mahendra Gowda’s house of Baigur Harjihalli Road, vehicle met with an accident and deceased Gowramma sustained grievous injuries and she succumbed to the injuries.

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The contention of the Insurance Company in the written statement is that the policy which was issued is an act policy and third party risk is covered by collecting an amount of Rs.589/- and in respect of an occupant of the jeep, no premium is collected and no risk is covered. The counsel would contend that the Commissioner also, on perusal of the evidence available on record, comes to the conclusion that the deceased was not on the trailer and she was proceeding inside the jeep and point No.2 was answered that, she was traveling in the jeep and not in the trailer and definite finding was given by the Commissioner that she was proceeding sitting inside the jeep. However, the Commissioner fastened the liability on the Insurance Company to pay the compensation amount to the

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MFA No. 8707 of 2013

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tune of Rs.2,03,840/- with interest at 12% after 30 days of the accident.

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It is important to note that, though the claimant contend that the deceased was traveling in the trailer at the time of the accident, definite finding was given by the Commissioner that she was proceeding sitting inside the jeep. Now, the question that arises before this Court is whether this Court can invoke Section 147 of M.V. Act. No doubt, under Section 147 of M.V. Act, coolies are also covered, but, in the case on hand, on perusal of the policy, it is seen that the policy which was taken by the owner is an act policy and a premium of Rs.589/- is collected towards liability to public, Rs.50/- for increased third party property damage risk, Section II-I(ii) Endorsement 70 Unlimited Amount, Rs.20/- towards premium on trailer (Endorsement 20) and Rs.15/- towards paid driver as per Endorsement 19. When the policy is an act policy and liability is only in terms of the premium which they have collected, in respect of the inmates of the jeep, no premium is collected and the Apex Court in the judgment of SUDHAKARAN’S case in the year 2008 and

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BALAKRISHNAN’S case in the year 2012, categorically held

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MFA No. 8707 of 2013

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that, if the policy is not a package policy and is only an act policy, the occupant/inmate/passenger in a car is not a third party.

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In the case on hand, the claimant is the husband of the deceased, who was sitting inside the jeep and occupant in a private jeep and on perusal of the policy at Ex.R1, it is seen that no premium is paid to cover the risk of the occupant of the car and premium is paid only to cover the risk of the paid driver and liability to public and the same amounts to third party and not in respect of the occupant of the jeep. When such principle is laid down by the Apex Court in a case of act policy and premium is paid to cover the particular risk involved and not in respect of inmate of the jeep, the very contention of the learned counsel appearing for the respondent-claimant cannot be accepted. No doubt, the counsel relied upon the judgment of the Madras High Court, in Para No.9, the Madras High Court, taking note of the fact that the deceased was traveling by the tractor, even though, he was sitting in the mudguard, for the personal injuries received by him, the Insurance Company has to be held liable. Further, it is observed that, to support this view of this Court, takes aid of the oral account of R.W.1, who

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MFA No. 8707 of 2013

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is also a Junior Assistant in the Insurance Company, who says in his cross-examination that the policy issued for the first respondent is a package policy, that if the trailer is attached to the tractor, the policy will cover coolie also and if any coolie travels in the tractor sustains injuries, then the policy would cover them also. Hence, the irresistible conclusion would be that the Insurance Company has to be held liable to pay compensation to the claimant. The Madras High Court also, while considering the liability to public add with regard to legal liability to driver coolies/other employees in connection with the operation and/or maintaining and/or unloading of motor vehicle, endorsement and increased third party property, damage risks, observed that the above said entries incorporated in the policy would make abundantly clear that there was contract between the owner of the vehicle and the Insurance Company. Hence, the Insurance Company has to be anchored with the liability to pay the compensation.

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But, in the case on hand, premium is collected only for public liability i.e., third party risk and no premium is paid in respect of an occupant of the private vehicle i.e., jeep and premium of Rs.15/- is collected towards legal liability to paid

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MFA No. 8707 of 2013

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driver, Rs.50/- is collected for increased third party property damage risk and Rs.20/- is collected towards premium on trailer and not in respect of an occupant of the jeep. The liability is in respect of a third party and not in respect of the occupant of the jeep. Hence, the judgment of the Madras High Court will not come to the aid of the claimant and in view of the principles laid down in the judgment of the Apex Court in SUDHAKARAN’S case as well as BALAKRISHNAN’S case, it is very clear that, if the policy is a package policy, the risk of inmates of private vehicle will be covered and if it is an act only policy, the same does not cover the risk of inmates of private vehicle. In the case on hand, the nature of the vehicle involved in the accident is a jeep and policy is not covered in respect of the occupant of the jeep. Hence, I do not find any force in the contention of the learned counsel appearing for the respondentclaimant and there is a force in the contention of the learned counsel appearing for the Insurance Company that when the policy is an act only policy and risk of the inmate of the jeep is not covered, the question of paying compensation under Section 147 of M.V. Act does not arise.

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MFA No. 8707 of 2013

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It is the contention of the learned counsel for the appellant-Insurance Company that, admittedly, the material also discloses that the deceased was traveling sitting inside the jeep and no doubt, the claimant contended in the petition that the deceased was traveling in the trailer, the material discloses that she was not traveling in the trailer and the witnesses, who have been examined categorically deposed that the deceased was traveling sitting inside the jeep. Under the circumstances, I answer point No.(1) as ‘negative’ and point No.(2) as ‘affirmative’ and owner is liable to pay the compensation.

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Point No.(3)

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In view of the discussions made above, I pass the

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following:

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ORDER

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(i) The appeal is allowed.

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(ii) The impugned judgment and award passed by the Commissioner dated 25.07.2013 in WCA (F)-10/2003 is set aside.

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(iii) The liability is fastened on the owner-insured to pay the compensation amount in terms of the award of the Commissioner within six weeks from today with interest at 12% per

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