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New India Assurance Co. Ltd. Vs. Darshani Devi and ors. - Court Judgment

LegalCrystal Citation
SubjectMotor Vehicles
CourtAllahabad High Court
Decided On
Case NumberF.A.F.O. No. 641 of 1979
Judge
Reported in[1986]59CompCas871(All); [1984(48)FLR290]
ActsWorkmen's Compensation Act, 1923 - Sections 3, 14 and 19; Motor Vehicles Act, 1939 - Sections 95 and 95(1)
AppellantNew India Assurance Co. Ltd.
RespondentDarshani Devi and ors.
Appellant AdvocateM.P. Singh, Adv.
Respondent AdvocateS.N. Doral, Adv.
DispositionAppeal dismissed
Excerpt:
.....vehicles act had been devised and are aimed at protecting the public by making a provision for insurance behind every driver of a motor vehicle. this position is further clarified by the provisions contained in section 96 of the act according to which where a certificate of insurance had been issued under section 95 in favour of the insurer, any judgment in respect of the liability incurred by him and covered by the policy in view of section 95 of the act and a judgment obtained thereupon are liable to be satisfied by the insurer in the same manner as if it were the judgment-debtor itself. the position of the insurer, therefore, in such cases is no better than that of the person liable himself and it is bound to satisfy any liability incurred by the insured within the limits of the..........j.1. this is an appeal by the insurance company challenging the order of the commissioner for workmen's compensation directing that the compensation payable by the employer be paid by the insurance company. the mother of an employee, who was a cleaner of a bus, owned by dayal singh and chandan singh, met with an accident on account of one of the rear wheels of the bus going off and the bus falling in the khud. the mother filed a claim petition under the provisions of workmen's compensation act, 1923, impleading therein the two employers and the insurance company as opposite parties. since the insurance company did not contest the claim in spite of time being repeatedly granted, an ex parte order against it was passed and the liability fixed on the employer was made payable by the.....
Judgment:

H.N. Mithal, J.

1. This is an appeal by the insurance company challenging the order of the Commissioner for Workmen's Compensation directing that the compensation payable by the employer be paid by the insurance company. The mother of an employee, who was a cleaner of a bus, owned by Dayal Singh and Chandan Singh, met with an accident on account of one of the rear wheels of the bus going off and the bus falling in the khud. The mother filed a claim petition under the provisions of Workmen's Compensation Act, 1923, impleading therein the two employers and the insurance company as opposite parties. Since the insurance company did not contest the claim in spite of time being repeatedly granted, an ex parte order against it was passed and the liability fixed on the employer was made payable by the company. Aggrieved, in the present appeal, Sri M. P. Singh, learned counsel appearing for the insurance company, has urged that in proceedings under the Workmen's Compensation Act, no direction can be given to the insurance company to indemnify the employers, because, primarily it is a liability of the employer alone to pay the compensation under Section 3 of the said Act. According to him, the provisions of Sections 95 and 96 of the Motor Vehicles Act, 1939, cannot be pressed into service for making the insurance company liable for indemnifying the employers.

2. It is not disputed that the deceased was employed as a cleaner of motor vehicle No. UPS 8609 which stood insured by the appellant under Section 95 of the Motor Vehicles Act. According to Section 3 of the Workmen's Compensation Act, subject to the exceptions mentioned therein, an employer is liable to pay compensation to a workman who suffers personal injury by accident arising out of and in the course of his employment. Section 12, however, provides that a principal liable to pay compensation under the Act shall be entitled to be indemnified by the contractor or any other person from whom the workman could, have recovered compensation and all questions as to the right to and the amount of any such indemnity shall be settled by the Commissioner. Similarly, under Section 14 of the Act, the insurer steps into the shoes of the employer if there was a contract by the insurer in respect of any liability arising under the Act. From the various provisions contained in the Workmen's Compensation Act, therefore, it would appear that the liability that arises in favour of a workman against his employer may be indemnified by the insurer.

3. The argument of Sri Singh was that the liability which is incurred by the employer under the provisions of the Act cannot be fastened on the insurance company merely because there exists a contract of insurance between the employer and the company under the provisions of a different Act, i.e., the Motor Vehicles Act. The liability which the insurance company undertakes under the provisions of the Motor Vehicles Act cannot be extended to any liability which the employer may incur under the provision of the Workmen's Compensation Act.

4. Having heard the learned counsel at length, I do not find there is any force in this contention. Before the employer of the victim could put his vehicle on the road, it was necessary that there must be in force in relation to the vehicle a policy of insurance as required by other provisions of the Act. Before the introduction of Chapter VIII in the Motor Vehicles Act with effect from October 29, 1956, there was no provision for compulsory insurance as regards third parties. With the introduction of this Chapter in the Act, necessary provisions have been made requiring every owner of a vehicle to have it insured in order to comply with the statutory requirements. Section 95(1) requires that the policy of insurance must cover liability incurred by him in respect of death of, or bodily injury to, any person or to a passenger subject to certain exceptions. However, any liability arising under the Workmen's Compensation Act, 1923, is excluded from the exceptions and is thus necessarily included in the statutory liability which is required to be covered under the policy of insurance. It is not denied that the insurance policy in this case covers the liability of the employer, i.e., the owner of the vehicle, as regards any liability arising under the Workmen's Compensation Act as regards death of, or bodily injury to, any employee whether engaged for driving the vehicle or as a conductor or for examining the tickets, etc. Once it is conceded that the policy of insurance in this case did cover the liability of the employer under the Workmen's Compensation Act, it is difficult to see how the liability can be shirked by saying that it is merely a liability under the Motor Vehicles Act and cannot extend to the liability of the employer for the purposes of the Workmen's Compensation Act. This is particularly so in view of the further provision contained in Section 95(5) which may be extracted as below:

' Notwithstanding anything elsewhere contained in any law, a person issuing a policy of insurance under this section shall be liable to indemnify the person or classes of person specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of person. '

5. This is a non obstante clause drawn on the same lines as in the English law. The effect of this clause is that it will override any other provision and all laws shall stand amended in the light of the provisions contained herein. The direct effect of this clause, therefore, would be that the insurer would be liable to indemnify everyone when they have contracted to indemnify under the policy of insurance. As is well known, the provisions of Chapter VIII in the Motor Vehicles Act had been devised and are aimed at protecting the public by making a provision for insurance behind every driver of a motor vehicle. This liability that has been undertaken by the insurer cannot be limited in any manner merely because this liability initially arose under the provisions of the Motor Vehicles Act, if it undertook to cover the liability also under the Workmen's Compensation Act. This position is further clarified by the provisions contained in Section 96 of the Act according to which where a certificate of insurance had been issued under Section 95 in favour of the insurer, any judgment in respect of the liability incurred by him and covered by the policy in view of Section 95 of the Act and a judgment obtained thereupon are liable to be satisfied by the insurer in the same manner as if it were the judgment-debtor itself. The position of the insurer, therefore, in such cases is no better than that of the person liable himself and it is bound to satisfy any liability incurred by the insured within the limits of the contracted liability of the insurer. If, according to the policy of insurance, the insurer has undertaken to cover the liability of the insured, as respects its liability under the Workmen's Compensation Act, it cannot escape it for the reasons which are being urged before me.

6. Learned counsel for the appellant has, in this connection, referred to a decision of a learned single judge of this court in Oriental Fire and General Insurance Co. Ltd. v. Govind Singh [1972] ACJ 137. In that case, the Commissioner for Workmen's Compensation had decreed the claim against the insurance company alone. In appeal, it was held that under Section 3 of the Workmen's Compensation Act, the Compensation Commissioner has no jurisdiction to pass a decree against the insurer of a motor vehicle and that the decree must always be passed against the employer. The facts of that case, however, were quite different inasmuch as by the time the appeal was heard, the money had already been deposited by the insurance company and had been paid over to the claimants and in these circumstances it was held that since the money had already been paid, the matter was only of an academic interest and, as such, the aforesaid observation was made. This view of the learned single judge did not find favour with a Division Bench of the Gujarat High Court in Northern India Motor Owners Insurance Co. Ltd, v. Magan Shanaji Solanki [1974] ACJ 55. Recently in Sital Prasad v. Afsari Begum [1977] Lab IC 1553; [1977] ACJ 486 (All), another learned single judge of this court had occasion to consider this matter and had this to say

' The use of the words ' any person ' in Section 19 of the Workmen's Compensation Act demonstrates that the Commissioner's jurisdiction to determine the liability of paying compensation is not confined to the liability of an employer. This liability may be of any person. Therefore, even persons who may have to pay indemnity or who may be placed on par with the employer as a result of legislative fiction come within the ambit of Section 19 and, therefore, their liability has to be determined by the Commissioner, The proviso to Section 95(1) of the Motor Vehicles Act, 1939, as it stands after the 1956 amendment, requires that a policy shall cover liability arising under the Workmen's Compensation Act, 1923, in respect of death of, or bodily injury to, certain employees such as the driver of the vehicle, a conductor of the vehicle or a person engaged in examining the tickets of the passengers, etc. Thus, a compulsory statutory insurance even in respect of an employee's risk has now been statutorily covered by the statutory insurance scheme embodied in Chapter VIII in the Motor Vehicles Act. Section 19 has advisedly used such wide language as to embrace the determination of various kinds of liabilities and not merely the liability of an employer arising purely under the Workmen's Compensation Act. The entire gamut of liabilities is covered by the jurisdiction of the Commissioner under section 19. The forum for the adjudication is the Commissioner and it is immaterial that the provisions such as those contained in Chapter VIII of the Motor Vehicles Act have not been incorporated in the Act itself. '

7. As I have said above, the decision in Oriental Fire and General Insurance Co, Ltd. v. Govind Singh [ 1972] ACJ 137 (All) is not a well-discussed decision at all and it appears that in the special circumstances of that case, the real issue involved was not gone into. The latter view, which I have quoted above, and the view taken by the Division Bench of the Gujarat High Court appear to be more near the point involved and are to be preferred. The fact that the provisions of Section 95 make it statutorily compulsory for the owner of a vehicle to take out an insurance of his vehicle to cover certain necessary liabilities which are likely to be incurred by it including the liability arising under the provisions of the Workmen's Compensation Act necessarily make the insurer liable for indemnifying the employer in respect of those liabilities. I am, therefore, clear in my mind that the insurance company is liable for the payment of the amount in this case.

8. In the result, I find no force in this appeal which is accordingly dismissed with costs.


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