Dismissed

Icici Lombard General Insurance Company Limited, v. Smt. Ravada Pydi Raju

Telangana HC4 Oct 2017CMA/474/2010

Case brief

AI extract

What is this about?

This judgment dismissed three appeals filed by an insurance company challenging compensations awarded to dependants of deceased labourers who died in a lorry accident, upholding the Tribunal's order that the insurer is liable for all claims as the premium covered an unlimited number of employees.

What did the court decide?

The appeals are dismissed with costs; the orders of the lower Tribunal confirming the compensation awards are upheld.

Icici Lombard General Insurance Company… — Contract and Commercial Disputes | Telangana HC (2017)

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HONOURABLE SRI JUSTICE U.DURGA PRASAD RAO

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C.M.A.Nos.474 of 2010, 230 of 2011 and 562 of 2012

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COMMON JUDGMENT:

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Aggrieved by the order dated 28.12.2008 in W.C.Nos.43, 45, 44 of 2006 passed by the Assistant Commissioner of Labour, Circle-I, Visakhapatnam, the ICICI Lombard General Insurance Company Limited preferred CMA Nos.474 of 2010, 230 of 2011 and 562 of 2012 respectively.

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The factual matrix of the case is thus:

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a) The applicant in W.C.No.43 of 2006 is the wife of deceased— Narasinga Rao; applicant in W.C.No.45 of 2006 is the father of deceased—B.Laxmana and applicant in W.C.No.44 of 2006 is the wife of deceased—Yerraya.

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b) Their case in all the applications is that deceased were working as labourers in lorry bearing No.AP 31 X 2411 of Opposite Party No.1; while so, on 22.04.2006, the deceased along with others went to Srikakulam for loading the sand and after loading when the lorry was proceeding from Polipalli to Kapuluppadu and when the lorry reached outskirts of Kapuluppadu, the driver of the lorry drove the same at high speed and in a rash and negligent manner; due to which the lorry turned turtle on the paddy fields at Nagarapalem village and all the deceased died on the spot. Attributing fault to driver, it is averred that due to sudden demise of deceased, the claimants who are their dependants became destitutes. On these pleas, the applicants filed

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W.C.Nos.43, 45 and 44 of 2006 against Opposite Parties 1 and 2 who are owner and insurer of the offending lorry and claimed compensation of Rs.2,79,000/-, 2,89,000/and Rs.2,58,000/respectively with interest @ 24% per annum.

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c) In all the applications, AWs.1 and 2 were examined and Exs.A1 to A6 were marked on behalf of applicants and RWs.1 to 3 were examined and Exs.R1 to R3 were marked on behalf of opposite parties.

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d) The lower Tribunal on appreciation of both oral and documentary evidence observed that Opposite Parties failed to prove that the deceased are unauthorized passengers and there exists employee—employer relationship and accident occurred out of and during the course of employment and also observed that Opposite Parties 1 and 2 are jointly and severally liable to pay compensation and accordingly awarded Rs.2,73,909/- in W.C.No.43 of 2006; Rs.2,91,544/- in W.C.No.45 of 2006 and Rs.2,59,528/- in W.C.No.44 of 2006 towards compensation.

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Hence, CMA Nos.474 of 2010, 230 of 2011 and 562 of 2012 are filed by the Insurance Company against the orders in W.C.Nos.43, 45 and 44 of 2006 respectively.

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The parties in these appeals are referred as they stood before the Tribunal.

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4a) CMA No.474 of 2010: Heard arguments of Sri Kota Subba Rao, learned counsel for appellant/Insurance Company; Sri K.Someswara Kumar, learned counsel for R2/owner. R1 dismissed for default vide Court order dated 19.04.2016.

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b) CMA No.230 of 2011: Heard arguments of Sri Kota Subba Rao, learned counsel for appellant/Insurance Company; Sri K.Someswara Kumar, learned counsel for R2/owner. R1 dismissed for default vide Court order dated 13.07.2016.

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c) CMA No.562 of 2012: Heard arguments of Sri Kota Subba Rao, learned counsel for appellant/Insurance Company; Sri K.Someswara Kumar, learned counsel for R2/owner. Though notice served on R1, but none appeared on her behalf.

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5a) The main plank of argument of Sri Kota Subba Rao, learned counsel for appellant/Insurance Company is that the Tribunal committed grave error in holding that the policy covered the risk of deceased. He would submit all the deceased travelled in the ill-fated lorry only as gratuitous or unauthorized passengers and thereby their risk was not covered under the terms of the policy. Referring to the evidence of RW1—owner of the vehicle, learned counsel would submit that RW1 clearly deposed that the deceased were not his employees and he did not engage them as coolies at the time of accident. Thus, his evidence would clearly manifest the deceased were only gratuitous or unauthorized passengers in a goods vehicle. He further submitted that the Insurance Company has not collected any

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premium to give coverage to such gratuitous passengers and therefore the Tribunal ought to have exonerated the Insurance Company from its liability by fixing liability on owner alone.

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b) He would alternatively argue that even assuming that the deceased travelled in the capacity of coolies for loading and unloading of sand and engaged by RW1, still the Insurance Company cannot be fastened with liability of all the coolies. In expatiation, he would submit at the time of accident there were about 8 or 10 coolies in the lorry some of which died and some received injuries. Most of them laid claims. The liability of Insurance Company towards their claims is concerned, the premium of Rs.150/- collected by the Insurance Company to give coverage to the risk of coolies would meet only the claim of three coolies and nothing more. However, there are six claims i.e. three claims covered by present three appeals and three more claims covered by MACMA Nos. 1270, 1271 and 1272 of 2010. Hence, at best, the Insurance Company would be liable to pay compensation in respect of highest of the three orders among the six and the said amount has to be proportionately distributed to the claimants in six claims with a direction to them to recover the balance amount from the owner of the vehicle which is the trite law laid down

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by the Apex Court in National Insurance Company Limited vs. Anjana Shyam and others¹ . He thus, at the first instance, prayed to allow the appeal and exonerate the Insurance Company from its

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1 2007 ACJ 2129

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liability or alternatively to limit its liability only to the highest of the three claims.

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Per contra, opposing the appeals, learned counsel for R2/owner would argue that all the deceased travelled only as labourers but not as gratuitous or unauthorized passengers as they were engaged by the driver of the lorry on behalf of owner of the vehicle which was clearly admitted by RW1. Hence, their risk would be squarely covered under the terms of the policy. He would submit that though RW1 in his pleadings and evidence denied that the deceased were engaged by him as labourers, however, in Ex.A1—FIR it was clearly mentioned that deceased were working as labourers in the lorry bearing AP 31 X 2411. The FIR was registered within short time after the accident wherein it was mentioned that the deceased were travelling in the capacity of labourers working in the ill-fated lorry. Further, in Ex.A3—inquest report also the deceased and others were referred to as labourers engaged for loading and unloading the sand. Therefore, the employer and employee relationship was amply established despite RW1 denying the same. The lower Tribunal rightly held that the accident was occurred out of and during the course of employment. He would further argue that the Insurance Company collected premium of Rs.150/- to cover the risk of coolies engaged in the vehicle. However, the number of coolies was not restricted in the policy which would indicate the Insurance Company is liable for all the claims and this aspect was clearly discussed by the Tribunal.

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Hence, the Insurance Company cannot absolve its liability. He thus prayed to dismiss the appeal.

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7) The points for determination are:

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1. Whether the orders passed by the lower Tribunal fastening liability on the appellant/Insurance Company is factually and legally correct. If not, whether appellant/Insurance Company deserves to be exonerated from the liability?

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2. To what relief?

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POINT No.1 : I perused the record and gave anxious consideration to the respective arguments. The aspect, in which capacity the deceased and others travelled in the ill-fated lorry is concerned, no doubt, RW1 who is the owner of the vehicle has taken a plea that they were not engaged by him as labourers. However, a perusal of Ex.A1— FIR and Ex.A3—inquest report would show that deceased referred as labourers. Therefore, it is clear that deceased were engaged as labourers in the ill-fated lorry and accident occurred out of and during the course of employment under RW1. Now, a perusal of policy shows the appellant collected premium of Rs.50/- to give coverage to the legal liability to driver/conductor/cleaner. Apart from the same, a separate premium of Rs.150/- was collected to extend the legal liability to coolies (E & DT IMT 39). Therefore, this premium certainly covers the risk of coolies. As rightly argued by the counsel for respondents, premium is not restricted to certain number of coolies resulting thereby, the Insurance Company is liable to pay

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compensation in respect of all the claimants. The decision in Anjana Shyam (1 supra) cited by the learned counsel for appellant has no application in the present instance. In that case, a bus which had seating capacity of 42 passengers was insured for such number of passengers. However, the bus was overloaded carrying out 90 passengers at the time of accident. In such circumstances, while limiting the liability of Insurance Company to 42 passengers alone, it was directed that the Insurance Company should satisfy 42 awards in descending order starting from the highest of the awards. The Tribunal was directed to distribute the total amount deposited by the Insurance Company proportionately to all the claimants and leave all the claimants to recover the balance from the owner of the vehicle. In the instant case, as already discussed, while collecting Rs.150/- premium, the Insurance Company has not restricted the number of coolies. Hence, it has to bear the responsibility of all the claims. The lower Tribunal rightly fastened liability on the Insurance Company along with the owner.

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In the result, the appeals are dismissed by confirming the orders passed by the Tribunal with costs.

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As a sequel, miscellaneous applications pending, if any, shall stand closed.

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_________________________ U. DURGA PRASAD RAO, J

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Date: 04.10.2017 Murthy

Icici Lombard General Insurance Company Limited, v. Smt. Ravada Pydi Raju

Case brief

What is this about?

What did the court decide?

Icici Lombard General Insurance Company Limited, v. Smt. Ravada Pydi Raju

Case brief

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What did the court decide?

What the court decided

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