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The New India Assurance Co. Ltd. Vs. Ragdibai and 4 ors. - Court Judgment

LegalCrystal Citation
SubjectInsurance;Motor Vehicles
CourtMadhya Pradesh High Court
Decided On
Judge
Reported in2(1985)ACC136
AppellantThe New India Assurance Co. Ltd.
RespondentRagdibai and 4 ors.
Cases ReferredThe Oriental Fire and General Insurance Co. Ltd. v. G. Gopalakrishna Pillai and Anr.
Excerpt:
.....following an earlier decision of that court ilr 1976(1) karala 237, that under the scheme of the workmen's compensation act, the only circumstances under which the liability of the employer extends to the insurer also are those specified in sub-section (1) of section 14 and that except in cases where the conditions laid down in the sub-section are duly satisfied, the commissioner for workmen's compensation has no jurisdiction to issue any direction to the insurer to deposit into his court the amount of compensation payable by the employer to the dependent of the deceased employee. the award had to be against the insured with a declaration that the liability had to be satisfied by the insurance company. the commissioner is competent to decide and declare the liability of an insurer made..........appeal by the insurance company against the award dated 25-4-1978 passed by the commissioner for workmen's compensation. ratlam (hereinafter called 'the commissioner') in wc case no. 25 of 1977 whereby the learned commissioner has awarded rs. 18,000/-as compensation and cost of rs. 100/- to be paid by the insurance company to the claimants who are legal representatives of the deceased driver manaklal who died during the course of his employment by an accident while driving the tractor of the employer respondent no. 5 the insured.2. the claimants who are respondent nos. 1 to 4 filed an application for compensation before the commissioner against the appellant and respondent no. 5 on 16.7-1977, alleging that the deceased manaklal who was employed by respondent no. 5 as a driver, died in.....
Judgment:

R.K. Varma, J.

This is an appeal by the Insurance Company against the Award dated 25-4-1978 passed by the Commissioner for Workmen's Compensation. Ratlam (hereinafter called 'the Commissioner') in WC Case No. 25 of 1977 whereby the learned Commissioner has awarded Rs. 18,000/-as compensation and cost of Rs. 100/- to be paid by the Insurance Company to the claimants who are legal representatives of the deceased driver Manaklal who died during the course of his employment by an accident while driving the tractor of the employer respondent No. 5 the insured.

2. The claimants who are respondent Nos. 1 to 4 filed an application for compensation before the Commissioner against the appellant and respondent No. 5 on 16.7-1977, alleging that the deceased Manaklal who was employed by respondent No. 5 as a driver, died in the course of his employment due to the injuries sustained by him in an accident which occurred on 19-3-1977 while driving the tractor of the employer. The respondent nos. 1 to 4 therefore, claimed a sum of Rs. 18,000/- by way of compensation from the employer i.e. respondent No. 5 and the present applicant with whom the said tractor was insured.

3. The appellant Insurance Company resisted the claim on the ground inter alia, that the Commissioner has no jurisdiction to pass an award against the Insurance Company under the Workmen's Compensation Act and the Insurance Company could not be impleaded as a party non-applicant. The appellant Insurance Company alleged that the deceased driver did not hold a valid and proper licence at the time of the accident and that since the employer respondent No. 5, who was the owner insured in respect of the tractor had committed breach of the policy conditions and contention in that regard had been raised by the appellant insurer, the Commissioner was not competent to decide the question of breach of condition of the Insurance Policy in respect of the tractor.

4. The learned Commissioner after according evidence came to the conclusion that the deceased Manaklal held a valid driving licence at the time of the accident and that he died in the course of his employment of respondent no. S and that the application for compensation against the appellant Insurance Company was maintainable and that he was competent to decide the question of breach of the policy conditions. The learned Commissioner by the order under appeal awarded an amount of Rs. 18,100/- as compensation and cost aforesaid, against the employer respondent no. 5 and held the appellant insurer liable for payment of the compensation award to the claimant. On the event of the said compensation amount not paid by 25-5-1978 by the Insurance Company, interest has been awarded at the rate of Rs. 6/- per annum on the amount of compensation as payable from 26-5-1978 till full payment.

5. Learned Counsel for the appellant has challenged the award mainly on the ground that the Commissioner had no jurisdiction to pass an award against the Insurance Company under the Workmen's Compensation Act, because he has not been given power to decide the question of liability of the insurer as against the insured. It is the contention of the learned Counsel that in the instant case, the appellant insurance Company has pleaded a breach of the contract of Insurance which is a matter for the Civil Court to ascertain and determine and not the Commissioner who is not entitled to probe in the matter. The Commissioner under the Workmen's Compensation Act can only decide, the employer's liability for compensation and the Insurance Company need not be joined as a non-applicant except in a case of insolvency of the employer covered by Section 14 of the Workmen's Compensation Act, which is not the present case.

6. The contention of the learned Counsel appearing for the claimants, on the other hand, is that where the employer has entered into a contract with the Insurance Company in respect of any liability under the Workmen's Compensation Act to any workman, an award declaring liability of the Insurance Company can be made by the Commissioner.

7. The learned Counsel for the appellant Insurance Company cited in support of his contention a decision of Rajasthan High Court in R.B. Moondra and Co. v. Mat. Bhanwari and Anr. It has been observed in paragraph 18 of that decision as follows;

As for the second contention that Act as appears for its preamble was enacted to provide for the payment by certain classes of employers to their workmen of compensation for injury by accident. The term 'employer' has been defined in the Act and the insurance company does not come within the ambit of that definition. Therefore, the Commissioner appointed under the Act will have no jurisdiction to award compensation to a workman against the insurance company unless the case falls within Section 14 of the Act which deals with the liability of the insurers when the employer becomes insolvent, where he had entered into a contract with any insurer in respect of any liability under this Act. Obviously Section 14 has no application in this case. Learned Counsel however, relies upon the provisions of Sections 96(1) and (2) of the Motor Vehicles Act. Under Section 96(1) an insurer is deemed to be a judgment debtor when under certain circumstances a decree is passed against the insured, but it does not contemplate passing of a decree against the insurer himself.

8. Another decision cited by the learned Counsel for the appellant, in support of his contention, is a decision of Kerala High Court in United India Fire and General Insurance Co. Ltd. v. Joseph Mariam and Anr. 1979 ACJ 349. In this case it was held following an earlier decision of that Court ILR 1976(1) Karala 237, that under the scheme of the Workmen's Compensation Act, the only circumstances under which the liability of the employer extends to the insurer also are those specified in Sub-section (1) of Section 14 and that except in cases where the conditions laid down in the Sub-section are duly satisfied, the Commissioner for Workmen's Compensation has no jurisdiction to issue any direction to the insurer to deposit into his Court the amount of compensation payable by the employer to the dependent of the deceased employee.

9. The learned Counsel however also brought to my notice three decisions of this Court which are unfavourable to him, viz., The New India Assurance Co. Ltd. v. Dujiya Bai and Ors., 1983 ACJ 601, Northern India Insurance Company v. Commissioner for Workmen's Compensation, 1973 MPLJ 548 DB & 1973 ACJ 428 and The New India Assurance Company Ltd., Indore v. BismillaBiand Ors., (Civil Misc. Appeal No. 224 of 1977, decided on 2-2-1983). Another decision of this Court was however cited by learned Counsel for the respondents-claimants, viz., Chottelal v. Dhallomal Sindhi and Ors., 1984 ACJ 591.

10. In New India Insurance Co. Ltd's case (supra), it was held that Section 14 does not negative the liability of Insurance Company in cases where Section 14 of the Act is not attracted. It was a case of death of truck driver in an accident during the course of employment and the Workmen's Compensation Commissioner had determined compensation under the Workmen's Compensation Act and had held the Insurance Company which had insured the owner of the truck, liable to pay the compensation amount.

11. In the Division Bench decision in Northern India Insurance Company's case (supra), which was a case of a workman who suffered injury in a truck accident while working on duty, it was held that the Insurance Company could be made a party to the proceedings before the Workmen's Compensation Commissioner and that the provisions of Section 96 of the Motor Vehicles Act are applicable to proceedings under the Workmen's Compensation Act. Although the primary liability in that of the employer, yet the Insurance Company is also liable to discharge the claim as if it was a judgment debtor Under Section 96 aforesaid. It was held that the Insurance Company could take up only such defence was laid down in Section 96(2) of the Motor Vehicles Act.

12. In the case of New India Assurance Company Ltd Indore's case (supra), it was held that the Commissioner for Workmen's Compensation has the jurisdiction to consider the question regarding the liability of the Insurance Company alongwith that of the employer.

13. In the Division Bench decision of this Court in Chottela's case (supra), it was held, following the Division Bench decision in Northern India Insurance Company''s case (supra), that on a compensation application under Workmen's Compensation Act against the employer and the Insurance Company with which the truck was insured, the Commissioner can pass an award against the Insurance Company also.

14. The Division Bench decisions of this Court are binding on this Court and as such it has to be held that the Commissioner can pass an award against the Insurance Company also.

15. The learned Counsel for the appellant also cited a few decisions of other High Courts namely a decision of Gujarat High Court in The Northern India Motor Owners Insurance Co. Ltd. v. Magan Shanaji Solanki and Ors. 1974 ACJ 55, a decision of Orissa High Court in Bibhuti Bhusan Mukherjee v. Dinamani Dei and Ors. 1982 ACJ 338, and two decisions of Allahabad High Court viz., The Oriental Fire and General Insurance Co. Ltd. v. Govind Singh and Ors. 1972 ACJ 137 and Sital Prasad v. Afsari Begum 1977 ACJ 486 and a decision of Kerala High Court in The Oriental Fire and General Insurance Co. Ltd. v. G. Gopalakrishna Pillai and Anr. 1978 ACJ 473.

16. From a reading of the aforesaid decisions also, it is clear that in a proceeding under Workmen's Compensation Act, the primary liability rests on the employer and when his primary liability is established then it can be enforced against the insurer. The award had to be against the insured with a declaration that the liability had to be satisfied by the Insurance Company. The Commissioner is competent to decide and declare the liability of an insurer made a party to the proceedings before him under the Workmen's Compensation Act, 1923 in accordance with the provisions of Section 96 of the Motor Vehicles Act,1939.

17. There can be no doubt that in a case of personal injury or death of a workman in the course of his employment and arising as a result of motor accident, the provisions of Workmen's Compensation Act as well as the provisions of Sections 95 and 96 of Motor Vehicles Act shall be attracted if the owner of the Motor Vehicle is insured in respect of that vehicle. The liability arising under the Workmen's Compensation Act, 1923 is statutorily covered under the proviso to Section 95(l)(b) of the Motor Vehicles Act. The liability is accident liability covered by insurance being also a liability under the Workmen's Compensation Act which has therefore, to be determined only under the provisions of the Workmen's Compensation Act. Under the scheme of statutory insurance, the employee's remedy is not made to depend on the financial capacity of his employer, but the Insurance Company would have the duty Under Section 96(1) of the Motor Vehicles Act to satisfy such a judgment that is to say the adjudication by way of award made by the Commissioner under Workmen's Compensation Act.

18. The Insurance Company was entitled to be made a party to the proceedings of which notice had been given to it, and to defend the action on any of the grounds contained in Section 96(2) of the Motor Vehicles Act. In the instant case, the Insurance Company did take the defence on the ground that there was a breach of a condition of the policy inasmuch as the person driving the truck, namely the deceased Manaklal, was not holding a person driving licence. The Commissioner after framing issue no. 2 on the question and after considering the evidence adduced in the case on the question, found that the deceased Manaklal held a valid driving licence.

19. In the circumstances, the Insurance Company is not entitled to avoid its liability to indemnify the insured in respect of the liability arising on account of the deceased-employee dying as a result of motor accident. As has been noticed in the Division Bench decision of this Court cited above, the Commissioner has the jurisdiction to pass an award against the Insurance Company also.

20. Consequently, this appeal fails and is hereby dismissed. There shall, however, be no order as to the costs of this appeal.


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