Allowed

M/s.New India Assurance Company Ltd. v. Mr.Zaheer Ahmed

Telangana HC18 Sept 2014CMA/221/2005

Case brief

AI extract

What is this about?

Insurance company appealed against workmen's compensation awards. Court held that since premium was paid only for driver and cleaner, the company was not liable for labourers. Appeals allowed; compensation to be recovered from vehicle owner.

What did the court decide?

Orders of the Commissioner set aside; Appeals allowed; Compensation to be recovered from owner; Interlocutory applications disposed of as infructuous.

M/s.New India Assurance Company Ltd. Vs Mr.Zaheer Ahmed — Insurance | Telangana HC (2014)

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*THE HON’BLE SRI JUSTICE C.V.NAGARJUNA REDDY +Civil Miscellaneous Appeal Nos.221, 208, 216, 223 of 2005 and 809 of 2014

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th +Dated 1 8 September, 2014

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# The Divisional Manager, New India Assurance Company Ltd., Nizamabad

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…Appellant

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(C.M.A.No.221 of 2005)

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$ Zaheer Ahmed and another

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…Respondents

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(C.M.A.No.221 of 2005)

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^ Counsel for the appellant: Sri T.Ramulu

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! Counsel for the respondents: ----

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< Gist:

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> Head note:

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? Cases referred:

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THE HON’BLE SRI JUSTICE C.V.NAGARJUNA REDDY Civil Miscellaneous Appeal Nos.221, 208, 216, 223 of 2005 and 809 of 2014

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Dated 1 8 th September, 2014

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Between:

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The Divisional Manager, New India Assurance Company Ltd., Nizamabad

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…Appellant (C.M.A.No.221 of 2005)

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And

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Zaheer Ahmed and another

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…Respondents (C.M.A.No.221 of 2005)

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Counsel for the appellant: Sri T.Ramulu

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Counsel for the respondents: ----

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The Court made the following:

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COMMON JUDGMENT:

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This batch of Civil Miscellaneous Appeals arises out of a common accident, albeit under different WC cases filed by different persons. Therefore, they are heard and being disposed of together.

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Respondent No.2 is the owner of lorry bearing No.ABT 1417. It appears, he has engaged respondent No.1 in each of these appeals as labourers (hereinafter referred to as ‘the claimants’) for loading and unloading of stone to be transported from Mamidipalli Stone Crushing Unit to Nizamabad and that on 11.07.2003, the lorry was loaded with stone at Mamidipalli Stone Crushing Unit and when it was travelling to Nizamabad, it has turned turtle and fallen in a ditch at a place near Chinnapur Gandi crossing when the driver of the lorry was trying to overtake a car, as a result of which the claimants, the driver and the cleaner have received fracture injuries. Each of the claimants has claimed Rs.5,00,000/- as compensation payable by respondent No.2 and the appellant (insurance company) jointly and severally.

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Both the appellant and respondent No.2 have filed separate counter affidavits. For the disposal of these cases, it is not necessary to advert to the contents of the counter affidavits filed by respondent No.2.

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In its counter affidavits, the appellant has denied its liability mainly on the ground that the owner of the lorry has paid premium only for two employees and that therefore, it is not liable to cover the risk of the claimants, who are labourers.

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In support of their case, the claimants have examined each one of them as PW.1 and examined one Dr.T.Narsing Rao as PW.2. They have also got marked Exs.A1 to A13 on their behalf. On behalf of the appellant, one Sri Padma Rao, Senior Assistant, was examined as RW.2 (wrongly shown as RW.1 in the Appendix of evidence prepared in the order of the Commissioner). Exs.B1 to B4 were marked on its behalf.

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On consideration of the oral and documentary evidence, the Commissioner has partly allowed the claims of the claimants and awarded Rs.81,900/- in W.C.No.543 of 2003 (NF) [C.M.A.No.221 of 2005]; Rs.95,632/- in W.C.No.541 of 2003 (NF) [C.M.A.No.208 of 2005]; Rs.93,380/- in W.C.No.539 of 2003 (NF) [C.M.A.No.216 of 2005]; Rs.1,07,586/- in W.C.No.540 of 2003 (NF) [C.M.A.No.223 of 2005] and Rs.95,018/- in W.C.No.546 of 2003 (NF) [C.M.A.No.809 of 2014].

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The Commissioner has directed that the liability for payment of compensation is joint and several against respondent No.2 and the appellant. Against these judgments, the appellant has filed these Civil Miscellaneous Appeals.

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In C.M.A.Nos.221, 208 and 223 of 2005, this Court while ordering notice has directed that in case notice is sent to the same address that was furnished by the claimants in the OP and if for any reason, it is not served, the Registry shall treat the same as served once proof of taking out notice is filed. Accordingly, memos are filed evidencing proof of taking out notices. In C.M.A.Nos.216 of 2005 and 809 of 2014, this Court has ordered publication of notice through substituted service and accordingly publication is carried out. In view of the same, notices are deemed to have been served. However, no one entered appearance for the claimants.

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Sri T.Ramulu, learned counsel for the appellant in all these cases, submitted that a perusal of Ex.B4, insurance policy, would show that the premium was pad only for two employees at the rate of

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Rs.25/- each, totalling Rs.50/-, and that being a goods carriage vehicle, the risk covers the driver and the cleaner as per sub-clauses (a) and (c) of Clause (i) to proviso to Section 147(1) of the Motor Vehicles Act, 1988 (for short ‘the Act’).

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In his evidence, RW.2 has specifically deposed that the policy being an Act policy, it covers the risk of only two employees and the claimants being labourers and in excess of two employees, who are not covered by the insurance policy, the insurance company is not liable for compensation.

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A perusal of the order of the Commissioner would show that he has referred to the deposition of Sri Padma Rao, Senior Assistant, examined as RW.2, wherein he has taken a specific stand that the risk of the labourers is not covered by the insurance policy as the premium was paid only for two employees at the rate of Rs.25/- each. Regrettably, neither an issue is framed on the liability of the appellant for payment of compensation nor any discussion is undertaken by the Commissioner on the deposition of RW.2.

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This Court by a detailed judgment, dated 17.09.2014, in C.M.A.No.199 of 2005 has discussed the legal position qua the liability of the insurance company arising under Section 147 of the Act. It is inter alia held as under:

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“ I n N e w India Assurance Company Limited v. Lodya Shankar and another (2 supra), this Court held that the contract of insurance is a contract of indemnity and that the insurer is liable only to the extent of the liability it undertakes. It was further held that when the owner of the vehicle chose to insure the risk of the driver and cleaner only, by paying Rs.30/- as premium, and when he did not pay any premium to cover the risk of coolies being carried in his lorry, the insurance company is not bound to indemnify the owner for the risk that occurred to his workers or coolies that were being carried in the lorry. The judgment in Dudekula Salabee v. R. Shiva Sankar Reddy (3 supra) is also to the similar effect.”

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In the light of the undisputed fact that respondent No.2 has paid

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premium only for two persons, the driver and the cleaner being the two employees covered by the policy underlying the provisions of Section 147 of the Act, the claimants are not covered by the insurance policy. Even the Act policy does not protect these claimants (labourers). The Commissioner has, therefore, completely failed to advert to this aspect and erroneously made the appellant liable for payment of compensation along with respondent No.2, the owner.

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On the analysis as above, the orders of the Commissioner assailed in these appeals are set aside. The claimants are, however, entitled to recover compensation awarded by the Commissioner from respondent No.2-owner.

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Sri T.Ramulu, learned counsel for the appellant, submitted that though his client has deposited the entire amount, as no order permitting the claimants to withdraw the compensation was passed by this Court, the entire compensation is lying with the Commissioner.

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The Commissioner is directed to verify this fact and if the compensation is lying with him, he shall permit the appellant to withdraw the same along with interest if any accrued thereon. It is, however, made clear that in case part of the compensation was permitted to be withdrawn by the claimants, to that extent, the appellant is not entitled to recover the same from them.

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The Civil Miscellaneous Appeals accordingly stand allowed.

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As a sequel to disposal of the civil miscellaneous appeals, all the pending interlocutory applications in these cases shall stand disposed of as infructuous.

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C.V.NAGARJUNA REDDY, J

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18^th September, 2014 Note: LR copies to be marked. (b/o) VGB

M/s.New India Assurance Company Ltd. v. Mr.Zaheer Ahmed

Case brief

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M/s.New India Assurance Company Ltd. v. Mr.Zaheer Ahmed

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