1. The short point that arises in this Civil Miscellaneous Appeal involves an interpretation of Section 95 of the Motor Vehicles Act.
2. The facts giving rise to this appeal are briefly as follows : The Hindustan Ideal Insurance Company Ltd., Hyderabad, the 2nd respondent in the lower Court, is the appellant herein. The predecessor-in-title of the petitioners in the lower Court was involved in an accident on 24-2-1969 in the lorry APK 5105 belonging to the first respondent in the lower Court who is now impleaded as the 6th respondent herein. The petitioners alleged that on account of the vehicle, it ended in an accident causing the death of Sivaramaiah, the predecessor-in-title of the petitioners.
3. In the lower Court the Insurance Company contested the petition raising the pleas that there was no negligence on the part of the driver and also raising the following plea in paragraph 6 :
'This respondent submits that in view of the agreed conditions regarding limitations as to use of the vehicle viz., that the vehicle should be used only under a Public Carrier Permit within the meaning of the Motor Vehicles Act, 1939 and that the policy does not cover the use of the vehicle for the conveyance of passengers for hire or reward, this respondent is not liable to pay any compensation to the petitioners claimants inasmuch as the deceased was a passenger in the vehicle at the time of the accident.'
4. In the lower Court it was found that there was negligence on the part of the driver and the petitioners were entitled to a compensation of Rs. 9500/-. Since the vehicle was insured with the 2nd respondent the appellant herein, the lower Court made the Company liable for the said sum and directed the Insurance Company to pay the said amount with an interest at the rate of 4 per cent annum from the date of the petition viz, 18-6-1969 till date of payment, together with proportionate costs.
5. In this appeal by the Insurance Company, we are not concerned with the question as to the negligence of the driver or the quantum of compensation fixed by the lower Court. The only point urged by the insurance Company is that as a result of the violations of the terms of the Policy and in view of the provisions of Section 95 of the Motor Vehicles Act, 1939 (hereinafter called the Act), they are not liable to pay any amount to the claimants.
6. The lower Court has dealt with their plea about their non-liability on the above grounds, in paragraph 11. It was contended by the Insurance Company before the lower Court that the lorry was intended to carry merchandise goods and not to carry any persons much less the owner or the agent of the owner of the goods and therefore the heirs of the deceased are not entitled to claim any compensation.
7. The claimants in the lower Court relied upon a decision of Alagiriswami, J. (as he then was) in Vanguard Insurance Co. v. Chinnammal, AIR 1970 Mad 236. That was a case in which a servant of the owner of the goods who was carried in the lorry died on account of the accident to the lorry. The contention raised before the learned Judge was that the contract of employment contemplated by Section 95 of the Act, should be only a contract of employment with the insured but not with the owner of the goods. The said contention was repelled by the learned Judge in the following terms :
'Though, on superficial view, of the section it might appear that the words 'contract of employment' found in Section 95 of the Motor Vehicles Act would cover only a contract of employment with the owner of the insured vehicles, there is a preponderance of authority in favour of the other view that it would cover not only such persons but also persons who are on the vehicle in pursuance of a contract of employment with the owner of the goods carried in it. What is necessary is that for sufficient practical or business 'reasons, the person must be on the vehicle in pursuance of a contract of employment. If he is such a person, and injury caused to him would also be covered by the section.'
Though that case applied to the servant of the owner of the goods, the lower Court applied the principle of that case to the owner also and held that the plea of the Insurance Company based upon substance. It is this finding of the lower Court that is now challenged by the Insurance Company before me.
8. Sri R. Kondiah the learned Counsel appearing for the appellant has relied upon the following decisions. In Oriental Fire & General Insurance Co. Ltd., v. Gurdey Kaur, (FB) : Oriental Fire & General Insurance Co. Ltd. v. Kasturi Lal, 1968 Acc CJ 227 (Punj and Har). The commonwealth Assurance Co. Ltd., v. U. P. Rahim Khan Sahib, : AIR1971Mad415 and South India Insurance Co. Ltd. v. P. Subramanium, : AIR1972Mad49 and contended that the provisions of Section 95 of the Act do not include owner within the purview of 'contract of employment' and therefore in the case of an injury or death to the owner in the course of such an accident, the legal representatives of the deceased as the claimant in this case cannot claim any compensation.
9. The Full Bench of the Punjab High Court in the decision in 1967 Acc CJ 158 = (AIR 1967 Punj 436 (FB) ) (supra) dealt with the case of an owner of goods carried in a truck. It was held that the Insurance Company was not liable to satisfy the award because in terms of Section 96 (1) of the Act an Insurance Company was liable to satisfy only such awards which were in respect of a liability required to be covered by a policy under clause (b) of sub-sec (1) of Section 95 of the Act. Apparently, if the liability was not covered by the said provision, the Insurance Company could not be made liable by any judgment of a Tribunal or Court. It was also held that the risk in respect of the deceased who was the owner of the goods was not covered nor was it required to be covered under Section 95 (1) (b) of the Act because he was not travelling in the goods vehicle by reason of or in pursuance of any contract of employment.
10. The learned Judges upheld the correctness of an earlier Bench decision of the same High Court reported in Parkashvati v. Delhi Dayal Bagh Dairy Ltd., 1967 Acc CJ 82 (Punj). That was a case relating to a commission agent who was accompanying a goods vehicle for supplying the same to the owner of the vehicle on commission basis and it was held that the insurance company was not liable for the risk as he was not shown to have been on the vehicle by reason of or in pursuance of any contract of employment as the deceased could not be deemed to be under a contract of employment with himself.
11. The next decision relied upon by the learned counsel for the appellant is the one in 1968 Acc CJ 227 (Punj). That was a case in which the owner of the vehicle who was being carried on in the vehicle, died, on account of an accident. The claim for compensation was rejected in view of the specific terms of Section 95 of the Act in that case. The learned Judges followed the earlier Full Bench decision in (FB) ).
12. In the third decision reported in : AIR1971Mad415 Ganesan, J., dealt with a case of an owner of the goods who was accompanying the goods in the truck and held that the Insurance Company was not liable to pay any damages to the legal representatives of the deceased. The aforesaid two decisions were followed in the said decision. The learned Judge cited another decision of the Madhya Pradesh High Court in South India Insurance Co. Ltd., v. Heerabai, 1967 Acc CJ 65 (Madh Pra) which also related to the owner of the goods carrying the load in the vehicle and who was met with a fatal accident. It was held by the Madhya Pradesh High Court, the Insurance company was not liable to pay any compensation.
13. In : AIR1972Mad49 Justice Ramanujam of the Madras High Court dealt with a case of owner of a goods vehicle who died in an accident and it was held that the insurance company was not liable to pay the compensation. The learned Judge followed the above four decisions and also relied upon the decision in K. N. P. Kasar, 1966 Acc CJ 284 (Bom). He also distinguished the case of Alagiriswami, J. (as he then was) in the Vanguard Insurance Company Ltd v. Chinnammal, 1969 Acc CJ 226 (Mad) which is the same case relied upon by the lower Court in : AIR1970Mad236 and held that an owner could not in any event take advantage of the said decision because there was no question of employment of an owner in such a case.
14. All the above four decisions are directly in point and conclude the question in this case. The principle behind all these decisions is that under proviso to Section 95 (1) (b) of the Act, the insurance company is liable to meet the liability in respect of death or bodily injury of a passenger only if he has been carried for hire or reward or by reason of or in pursuance of a contract of employment. If both these things are absent, then the Insurance Company escapes the liability.
15. Now by virtue of the policy in this case marked as Exhibit B-1, the limitations as to use mention only under Public Carrier Permit under the Motor Vehicles Act, 1939 and mention that the policy does not cover amongst other things use for the conveyance of passengers for hire or reward. Therefore the carrying of a passenger in the goods vehicle was specifically excluded under the terms of the policy, whether it was for hire or for reward. It is no doubt not a case of either party that the owner was being carried either for hire or for reward.
16. The next question that arises is whether it comes under the purview of the expression 'by reason of or in pursuance of contract of employment.' The expression the 'contract of employment' implies, an employer or an employee and a contract therefor. If the owner is also taken to be covered by the contract of employment, the question is who is employer in respect of such contract of employment. It is not the case of either party that the contract of employment of the deceased who was the owner of the goods was with the owner of the vehicles. It is not also their case that he was both the employer and the employee. Such a situation cannot arise because it required two parties to make a contract of employment. Following the principle in the above decisions and in view of the above reasoning, I am satisfied that an owner who travels in a goods vehicle is not entitled to claim compensation for any accident which causes him injury or death.
17. Sri G. Vedantha Rao, the learned counsel appearing for the claimants strenuously argued before me that the owner of the goods should be deemed to be under contract of employment with the owner of a vehicle. He further urged that if there is such contract of employment, the Insurance Company is liable to pay compensation. According to him, the lower Court did not consider that aspect of the case and he had no opportunity to let in evidence in regard to that aspect. But from a perusal of the petition it is clear that the petition was originally filed only against the first respondent and no allegations were made with regard to the liability of the insurance company, in the body of the petition. It appears from the cause title of the petition that the insurance company was shown later on as the 2nd respondent. In any event, I do not find any allegations to the effect that the owner of the vehicle. Even after the insurance company had filed its counter, the petition was not further amended. I do not find, a similar argument being advanced before the lower Court when it considered this aspect of the case, in para, 11 of its judgment. On the other hand, the claimants were content by citing the decision of the Madras High Court in which the servant of the owner was held to have come within the purview of Section 95 of the Act by virtue of the decision in Vanguard Insurance Company v. Chinnammal, : AIR1970Mad236 . I do not think that there is any justification for the submission made by the learned counsel for the respondents.
18. In the result, the claim against the insurance company is dismissed.
19. The next question that arises for consideration is whether there should not be a decree against the first respondent before the lower Court (R. 6 herein). The decree that was passed against the 2nd respondent was by virtue of the policy marked as Exhibit B-1, which the second should satisfy under the terms of the policy. When the second respondent escapes liability on account of any technical plea like this, the liability of the 1st respondent the owner of the vehicle subsists and has to be decree. The first respondent who has been impleaded as the 6th respondent in this appeal, has been served in this appeal wherein grounds have been taken by the insurance company for exonerating them from liability. He had not cared to appear in this Court to contest that there should be no decree as such as against the 1st respondent in the lower Court by the exercise of the powers of the appellate Court, I direct that the decree granted by the lower Court should be only as against the first respondent and the 2nd respondent should be exonerated.
20. The Civil Miscellaneous Appeal is allowed and the decree in O. P. 104/1969 will be modified as a decree against the 1st respondent in this appeal for Rs. 9500/- together with interest at 4 per cent per annum from the date of the petition i.e. 18-6-1969 till realisation with proportionate costs in favour of the claimants. There will be no order as to costs in this appeal.
21. Order accordingly.