Dismissed

M/s.New India Assurance Company Ltd. v. Mr.Ramavath Keshya

Telangana HC8 Mar 2022CMA/109/2011

Case brief

AI extract

What is this about?

The High Court disposed of six concurrent appeals filed by New India Assurance Company challenging compensation awards granted to labourers injured in a lorry accident. The Court held that while the insurer must pay into court as a matter of practice, they recover the amount from the vehicle owner in execution proceedings since no additional premium was paid for the labourers. The Court also award

What did the court decide?

Dismissed insurance appeals; ordered insurer to recover deposited amounts from vehicle owner via execution; awarded interest at 12% p.a. from accident date.

M/s.New India Assurance Company Ltd. Vs Mr.Ramavath Keshya — Telangana HC (2022) — LawSathi Research

¶1

HIGH COURT^{FOR THE STATE OF TELANGANA} AT HYDERABAD

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TUESDAY, THE EIGHTH^{DAY OF MARCH} TWO THOUSAND AND^TWENTYTWO

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PRESENT THE HONOURABLE^{SMT JUSTICEP.SREESUDHA}

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C.M.A. NO: 635^{0F 2005} C.M.iA.NO: i¹ 237^{0F 2005} C.M.A.N : 334 OF 2008 C.M,A.N o^{: 528 OF 2008} C.M.A.NO: 10I OF 201'1^{AND C .M.A.NO : 854 OF 201'l}

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CMA NO .635 0F^2005:

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AppealunderSection30ofWorkmen'sCompensationAct'againstthe Judgmenu decree^{in w.c.No.64of 2003 (NF) dated3010412004on the file of the} courl of the^{commissioner for workmen'scompensation andAssistant} Commissioner of^{Labour, Nalgonda.}

¶7

Between:

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TheNewlndiaAssuranceco.Ltd.,Divisionaloffice:Anasuryacomplex,opp: riolrty, Himayatnagar,^{Hyderabad, rep. tr:::^?;tEiifl.l.{738n%r,r=} pARry No.2

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AND

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' Sri iio Ramavath Nettit<allu Villag6^Bashya, of^{s/o sri} Peddavoora^seethaiah mandal'^labourer Nalgonda District'^{Rl/o Yerracheruvu Thanda} " .....DefendanUAPPlicant

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Sri [r/d. Jahangir,^{S/o Sri Azeem Ownerof} .lorry-^{No AAP9441} '^{R/o Quarter} - f.io. A-aS Viiay?puri South, Ivlacherla Mandal, Guntur District' ,..DEFENDANT/ OPPOSITE^{PARTY NO.1}

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For the Appellant^{: SRI T.RAMULU,Advocate}

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Forthe Respondents:^{NONE APPEARED}

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CMA NO .1237 OF²⁰⁰⁵ⁱ

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Appeal under Section^{30 of W.C.Act, against the JudgmenUdecreein} W.C.No.99oI2oo2(F)datedlTto6t2oo3onthefileoftheCourtofthe commissioner^{for workmen'scompensationand Assistant commissionerof Labour,} Nalgonda.

¶16

Between:

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The LibertY, New^{HimaYatnagar' lndiaAssuranceHYoe,:3; ol't b ?;'} h:lj} E?ll"J+il4;,:ff ;"trfi^:::

¶18

AND

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Smt^{RamavathAnasurya' W/o late Lakku'Occ: Household}

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Sri Ramavath^{Kalyan' >/o late Lakku'-aged.3 years} 3. Sri^{RamavathMaro' wlo'Sii Chiminiocc: Household}

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; ;; Fil;;";th^{chimini's/o sri Lakmaocc: Nil} (R2 is minor, rep^{by nis-n"at"u"ig"idi'"and mothersmtR Anasurya R1 )} irtl are Rlo^{ve'racnerl;'H;d;';jior'r"rrlrt'rru Villase of Peddavoora} ilanOat,^{Nalgonda District)}

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(RR 1, 4^{& 5 disd for default vide court order dated;ll;31-ra"nt"l} Applicants

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Sri Md.^{Jahangir, S/o Sri Azeem'FVo Ouarter No A-49' Viiayapuri South'} of lorry-hearino^{No AAP-944'1)}

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Macherla^{Mandal,ili'i5#i;i'to*n"t} .. " " "nespondenU-Opposite^{Party No'1}

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For the^{Appellant : SRI T'RAMULU' Advocate}

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For the^{ResPondents: NONEAPPEARED}

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CMA No.33^40F2008:

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Section^{30 of W C Act' against the Judgment/decreetn} APPeal^under W.C.No.17^{of 2003} (NF) dated^{3OlO4t2OO4on the file of the Court of the} rkmen's^{Compensation and Assistant Commissioner of Labour'} Commissioner^{for Wo} Nalgonda.

¶29

Between:

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The New^{lndiaAssurance Co Ltd} '^{Divisional O-ffice: AnasuryaComplex Opp:} Liberty,^{Himavatnagar,nvoLr.I6uo'''"bo'} i1?Hfilfl nl{?6fi%%.'tE^{PARrY No'2}

¶31

AND

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1 Sri Ramavath^{Balu'S/o Sri Bichiya' Occ: Labourer'R/o YerracheruruThanda'} il"lr'iriiillli,^{viiiaseof p"oluuoo.."Mandar'*''n":::.3:1:itianu} nppti"rnt

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2 Sri Md.Jahangir,^{S/o Sri Azeem' R/o'Quarter No'A-49' Viiayapuri South'} ii#:;;;^{M;;iatl o,ntur D:;i;i;i i;;;;::} By":::ll,tJi"';tl?;'Jil|^{-. ,'}

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For the^{Appellant : SRIT'RAMULU' Advocate}

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For the^{Respondent No'1 : SRI S'BHOOMA GOUD' Advocate}

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For the^{Respondent No'2 : NONEAPPEARED}

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CMA NO^{.528 0F2008:}

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APPeal under Section 30^{of W.C.Act'} against^the Judgment/^decreein on the^file of the^{Court of the} W.C.No.11^of 2003 (NF) dated^3010412004 Commissioner for Workmen's^{Compensation and Assistant Commissioner of Labour'} Nalgonda.

¶40

Between:

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The New lndia^{Assurance Co Ltd} '^{Divisional Office: Anasurya Complex'Opp:} iio".,ivlili,ii,v;il;;;;^{Hyd",,o"o,*b t,} i..^?Hlilflnl{i3B%%r,r,^pARry No.2

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AND

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t. SriRamavathBudda,S/o'SriChandiya,occ:Labourer,R/o.Yerracheruru ;il;,^{il;:Nuttiirttu'vittug"ot Feaoa'oor"*""0i.'..)3'3rtJ"T"3litlito,,""r,}

¶44

2 Sri Md.Jahangir,^{S/o.SriAzeem, FVo'Quarter No A-49' Vijayapuri South} Macherta^{Mandat, crntw o]Jiii"i. io**|. of lorry be.arino No.AAP-9441)} ''"'""""^"' .:......o"i"n4'nu"opposite Party No'1

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For the Appellant^{: SRI T'RAMULU' Advocate}

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For the^{Respondents: NONEAPPEARED}

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CMA^N .109 0^F2011:,

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of W.C.Act, against^the Judgment/^decreein Appeal^{under Section 30} W.C.No.62^of 2003^{(NF) dated} 3010412004 on the^file of the Court^{of the} Commissioner for Workmen's^{Compensation and Assistant Commissioner of Labour'} Nalgonda.

¶49

Between:

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The New^{lndiaAssuranceCo' Ltd} '^{Divisional Office: Anasurya Complex'Opp:} iiiZ'iv, iii'ii,vJtnuLii,^{HvoL'aoao,reb} ',:L?HEilflnlt73fl%%r,r=^{pARry No.2}

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AND

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1 Sri Ramavath^{Keshya, S/o Sri Hamu' Occ: Labourer' R/o'Yerrachruvu} Thanda,^{H/o.Nellikallu virrageof PeddavooraMandal'Nalgonda District'} ..DefendanU^APPlicant

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z Sri Md.Jahangir,^{S/o.SriAzeem'R/o Quarter No A-49' Vijayapuri South} Ivlacherla^{Mandal,crntu'o]Jtt"ilownqr of lorry bearing No'AAP-9441)}

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...... Defenda nUOppos ite Party No.1

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For the Appellant : SRI T.RAMULU, Advocate

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For the Respondents : NONE APPEARED

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cMA NO.854 0F 2011:

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Appeal under Section 30 of W.C.Act, against the Judgment/ decree in W.C.No.'16 of 2003 (F) dated 3010412004 on the file of the Court of the Commissioner for Workmen's Compensation and Assistant Commissioner of Labour, Nalgonda.

¶59

Between:

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The New lndia Assurance Co. Ltd., Divisional Office: Anasurya Complex, Opp: Liberty, Himayatnagar, Hyderabad, rep. by its Divisional Manager

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...APPELLANT/OPPOSITE PARTY NO.2

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AND

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Ramavath Bujji, W/o. Sakku, Occ: Household

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Ramavath Mangi, D/o.Sakku, aged 10 years

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Ramavath Ramji, D/o.Sakku, aged B years

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Ramavath Bichiya, S/o.Aliya

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Ramavath Miryali, W/o.Bichiya

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(All are Rl/o.Yerracheruvu Thanda, H/o.Nellikallu Village of Peddavoora Mandal, Nalgonda District)

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,.. Defendants/ Applicants

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Sri Md.Jahangir, S/o.Sri Azeem, Rl/o.Quarter No.A-49, Vijayapuri South Macherla Mandal, Guntur District. (owner of lorry bearing NoAAP-9441) (RR 2 & 3 minors, rep. by its guardian Rl )

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.....Defendants/ Opposite Party No.1

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For the Appellant : SRI T.RAMULU, Advocate

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For the Respondent Nos.1 to 3 : SRI S.BHOOMA GOUD, Advocate

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For the Respondent Nos.4 to 6 : NONE APPEARED

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The Court dellvered the following: JUDGMENT

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¶77

HON'BLE SMT.^{JUSTICEP,SREE SUDHA}

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c.M. A.No.63^{5 of 2OO5c.M,A,No.\237of 2OO5} C.M.A .No.334^{of 2008c.M.A,No'528of 2008} C. M.A.No.^{1O9 of 2O 11ANDC.M.A.No.854 ol 2OlL}

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COM MON o RDER

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i.C'M.A.No.635of2005ispreferredbytheNewIndia Assurance^{Company, againstthe order of the Commissioner for} Workmen's^{Compensationand Assistant Commissioner of Labour'} Nalgonda,^{in W C.No 64 of 2003 dated30'04'2004wherebythe} Commissioner^{awardedcompensationofRs'94'719/- tothe} applicant.

¶81

2,C.M.A.No.l23Tof2oo5ispreferredbytheNewIndia Assurance^{Company, againstthe order of the Commissioner for} Workmen's^{Compensation and Assistant Commissioner of Labour'} Nalgonda, in^{W.C.No 99 of 2002dated17.06.2003 wherebY the} of Rs.2,13,8641-^{to the} Commissioner^{awardedcompensatlon} applican^l-

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3.C.M.A.No.334of2003ispreferredbytheNewIndia Assurance^{Company, againstthe order of the Commissioner for} Workmen's^{Compensationand Assistant Commissioner of Labour'} Nalgonda,^{in W.C.No 17 of 2003 dated30'04'2004wherebythe}

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)

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Commissioner^{awardedcompensationof Rs 1 '42'0781-tt> th,c} applicant.

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4,C.M.A.No.52Sof2003ispreferredbytheNewIndia Assurance^{Company, againstthe order of the Commissionerfor} Workmen's^{Compensationand Assistant Commissionerof Labour'} Nalgonda,^{in W.C'No'11of 2003 dated 30'04 2004 wherebythe} Commissioner^{awarded compensatlonofRs.74,976l-tothe} apPlicant.

¶87

C.M.A.No'^{109 of2011 ispreferred by the New India} Assurance^{Company, againstthe order of the Commissionerfor} Workmen's^{Compensationand Assistant Commissionerof l'abour'} Nalgonda,^{in W.C.No'62of 2003 dated30'04'2004wherebythe} Commissioner^{a\MardedcompensationofRs 68'335/- tothe} applicant.

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6,C.M.A'No.854of20llispreferredbytheNewlndia Assurance^{Company, againstthe order of the Commissioner for} Workmen's^{Compensation and Assistant Commissionerof Labour'} Nalgonda,^{in W.C.No'16 of 2003 dated 30'04 2004 wherebythe} Commissioner^{awardedcompensationof Rs'2'13'864/-to the} applicant

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Though the Commissioner disposed of the cases individually, in view of the fact that the appeals arise out of the same crime, they are amenable for disposal by way of this common order.

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The applicants viz., Ramavath Bashya, Ramavath Anasurya, Ramavath Balu, Ramavath Budda, Ramavath Keshya and Ramavath Bujji and others respectively, were working as labourers lor loading and unloading purpose on the lorry bearing No.AAp944 1 belonging to the second respondent herein. The said lorry was covered under Policy Cover Note No.152908 valid from 23.12.2001 to 22.12.2002 issued by New India Assurance Company Limited. On 22.07.2002 while the applicants are on duty, the lorry met with an accident, due to which the applicants and other labourers received grievous injuries and three of them died on spot. The applicants filed the above cases seeking compensation under Workmen's Compensation Act, 1923.

¶92

The Commissioner in his order dated 30.04.2004 observed that 'in common parlance, other than the insured and insurer, euery other person tuho suffered injury or death by the use of the uehicle can be taken as third parties. Therefore, the diuer, cleaner and" Labourers also come under this category. The insurance companA fatled^{to bring} in^ony authoity to negate these categoies as third.

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parties. Therefore, I am conuinced that despite of breach of^policy if ang, the insurance companA is liable^{to pag compensationto the} insured.' The Commissioner also relied upon a^case in^ANIL CHANDRA SHARMA V/s. ALKA RANI^GHOSH1 holding^{to thc} effect that 'it is almost settled lau that utheneuer^{the commissioner} for^{Workmen's Compensationdeals uith cases of claimantsof motor} transport undertakings, the Insurance Policies are^{to be interpreted} on tte lines of the Motor Accidents Claims Tribunal under^lLte M.V.Act, 1998. Therefore, the objection of^{the leamed counsel} for Opposite Partg No.2 has no^place for consideration. As a^result, I hold both the Opposite parties are^jointly and seuerally liable Jor^tLte paAment of compensation to the dependants of the deceased arLd in case of anA breach of policg condition, the Opposite Partg No.2 ts at libertg,to intttate separate proceedings before the legal^authorttg for the recouery of such amounts paid toutards compensation' In^all the cases, the Commissioner heid that the insurer and^the owner of the vehicle are^jointly and severally liable and further directed to deposit the above said compensation amounts within thirty days from the date of receipt of the orders. But, in all these cases, tlie learned Commissioner failed to award interest on the compensation amount. Although in W.C.No. i6 ol 2003, n,hich dealt with a case of death, on a failure to deposit the 't999^{I LLJ 1356}

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compensation within the stipulated time, an interest of 9%o per annum would be imposed from the date of filing of the application.

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Learned counsel for the appellant in all these appeals would contended that the owner of the vehicle did not pay any additional premium lor the la bou rers / coolies and it amounts to violation of the conditions of the policy and thus, the insurance company is not liable to pay compensation and that the learned Commissioner erred in fixing the liability it. He would also contend that in case of breach of terms and conditions of the policy, the Company is not iiable to pay the compensation. He would also contend that pay and recovery also cannot be ordered under Workmen's Con-rponsation Act. He would also submit that the provisions of Motor Vehicles Act are not applicable to the Workmen,s Compensation Act. But in the case of RITA DEVI V/s. NEW INDIA ASSURANCE CO. LTD.2, it was held that "the object of both acts, i.e., the Motor Vehicles Act and the Workmen's Compensation Act is to prouide compensation to the uictims of a.coidents. TLrc only difference between the tu.to enactments is, Workmen compensation act is confined to uLorkmen as defined under the Act, and the relied under the Motor Vehicles Act is auailable to all the uictims of an accident inuoluing a motor uehicle. As per 5.167, of the M.V, Act, the

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'(2000)^s scc 113

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clc:imcrnts are at libertg to^{claim compensationeither under} Workmen's compensation^{Act or under the Motor Vehicles Act.Both} the enactments are beneficial^{enactmentsoperatingin the same} fietd."^{Therefore,the argumentof the learned counselfor the} appellant that the^provisions of^{Motor Vehir:k:s Act are nol} applicable to the victims^{under Workmen's CompensationAct} cannot be accepted. He would^{also contend lhat it was an Act} Policy and their liability^was limited^{and no extra premilrm\'as} paid for making the liability unlimited, to^{whichlearnedcounsel} for the applicants in all these case^{would rely upona judgment rlf} the Hon'ble Supreme Court in its^{decisionreported in JAMES} KUTTY JACOB v/s. UNITED INDIA^{INSURANCECoMPANY}

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LIMITED3.

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1 1. Heard the learned counsel^{on either side. Perusedthe record} including the case law cited by^them.

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Learned counsel for the applicants^{would rely upona Three-} Judge Bench Judgement of the^{Hon'b1e Apex Court in NATIONAL} INSURANCE CO. LTD. V/s. SWARAN^{SINGH4,u'hereinit} "r'as held that the person who alleges^{breach must. provethe same , The} insuranee company is therefore^{required to establishthc said} '3^{(2003) 7 SCC 131}

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'(2OO4<sup>3 SCC 297

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breach by cogent evidence. Moreover, a bare perusal of Section 149 of the Act leads to only one conclusion that the usual rule is that once the assured proves that the accident is covered by the compulsory insurance clause, it is for the insurer to prove that it comes within an exception. In the event the insurance company fails to prove that there has been breach of conditions of policy on the part of the insured, it cannot absolve its liability. It was also held in the case that, mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant time. Minor breaches of licence conditions, such as want of medical fitness certificate, requirement about age of the driver and the like not found to have been the direct cause of the accident, would be treated as minor breaches of inconsequential dcviation in the matter of use of vehicles. Such minor and inconsequential deviations with regard to iicensing conditions would not constitute sufficient grounds to deny the benefit of coverage of insurance to third party. He would also argue that the

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expression 'third party'is wide enough to cover any^person other than insured and the insurer. As the labourers^{who met} with^the accident are third parties to the contract of insurance, the insurance company is not exonerated from paying the compensation. At the best, the company can recover the same from the owner of the vehicle in case of breach of terms and conditions of the policy. He would also contend that the insurance company is liable to pay the compensation if there is no pleading or leading evidence by framing specific issue that the inmates are not covered by the act policy and no separate premium was paid for them. He also advocated that the Workmen's Compensation Act is a beneficial legislation and when two interpretations are possible, one in favour of victims is to be considered, as it is a beneficial legislation.

¶109

Learned counsel for the appellant n,ould rc11, upon a decision reported in UNITED INDIA INSURANCE COMPANY V/s. BALASWAMYS holding to the effect that policy covered the risk in respect of driver alone, for which a premium u,as paid, and no premium was paid covering the risk of labourers. In such circumstances, it was he1d, that the fastening of^joint and several iiability of insurer is unsustainable. He also relied upon the

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'^{2ot2 (4) ALD s39}

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judgement of rhis Court in NEW INDIA ASSURANCE COMPAI{Y V/s. GADDIMIDI PAPAIAH6, wherein it was held that, in a case of injuries sustained by workman travelling in tra er and tractor as iabourer, the insurance company is not liable to pay compensation since the act policy was issued permitting them to use the tractor only for agricultural purpose and no separate premium was paid for the labourers. No other person, other than the driver, was covered under the act policy. Thus, the insurance company would not be liable to pay the compensation. He also relied upon another .iudgement of rhis Courr in NEIV INDIA ASSURANCE COMPANY V/s KURVA NAGAMMAT, wherein it was held that, unress premium is paid in respect of persons or employees not covered by Section 747 of the Motor Vehicles Act, the insurance company is not liab{e to pay the compensation in respect of risk of such persons or employees in motor accidents wherein the policy is an act only policy.

¶113

From the above, it is for the owner of the vehicie to pay additional premium for covering the risk of the labourers when he engaged the labourers to work on his vehicle, but he did not do so in paying additional premium. In the absence of payment of additional premium, the insurance company is not liable to pay

¶114

o 2o rs (+) aLo t6+ '20^{ts (t)} aLt 6ot

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the compensation and the owner of the vehicle alone is liable to pay the compensation to the iabourers who sustained the injuries. However, the general practice in Workmen's Compensation Act, at the time of preferring the appeal is that the insurance company has to deposit the entire compensation amount and the ciaimants are permitted to withdraw 50% of the same while the appeal is being admitted.

¶117

Considering the nature of work of the claimants and lhc meagre amount of compensation granted to them and as the compensation amount was already deposited by the Insurance Company in all the above cases, this Court finds it reasonable to direct the insurance company to recover the same from the owncr in execution proceedings.

¶118

Further, the applicants in all these appeals are aiso entitled for interest at the rate of l2ok per annum from the date of accident to the date of realisation as per the dicta laid down by the Ilon'blc Supreme Court in SABERABIBI YAKUBBHAI SHAIKH V/s. NATIONAL INSURANCE COMPANYs.

¶119

In all these appeals, as the amount was already deposited, and as it is a beneficial iegislation, the claimants are entitled to

¶120

8 20l4 (2) scc 298

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withdraw the balance amount. They are also entitled for interest from the date of accident til1 the date of deposit of amount by the insurance company from the owner of the vehicle and the appellant is at liberty to recover the amount of compensation already deposited by it form the owner of the vehicle in execution proceedings.

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)4. With the above observation, the Civil Miscellaneous Appeals are disposed of. There sha1l be no order as to costs. Pending Miscellaneous Petitions, if any, in this appeal shall stand closed in the light of this final order.

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Sd/.K,SRINIVASA^RAO J OINT REGISTRAR

//TRUE COPYII

SE FFICER

one Fair Copv tb^{the Honourable Smt JusticeP'Sree Sudha} (For his LordshiPs kind Perusal) To

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1 . The Commissioner^{for Workmen's Compensation. andAssistant} ' Commlsiioner of Labour' Nalgonda (with-records)

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