1. A question of some Importance arises for consideration in this appeal filed by the State Insurance Department, the 2nd defendant in O. S. No. 156 of 1971, a suit for damages on the file of the Sub Court, Kottayam. The question is whether a person who accompanies the goods of his employer carried in a goods vehicle will be a person carried by the goods vehicle 'by reason of or in pursuance of a contract of employment' and whether the liability in respect of his death or bodily injury caused by or arising out of the use of the vehicle in a public place will be covered by the insurance of the vehicle against third party risks.
2. On 18-12-1970 the Peroor Co-operative Society engaged the lorry, K.L.Q. 2516, owned and operated by the 1st defendant A. V. George, for transporting provisions from the Food Corporation Sub Depot, Athirampuzha to Peroor. Mani the husband of the 1st plaintiff and the father of plaintiffs 2 to 6, an employee of the society, was put in charge of the transport of the goods from the Sub Depot to the Society's ration shop. On its way to Peroor with the provisions, the lorry capsized on the Ettumannur-Peroor public road. Mani was thrown out. Though he was rushed to the hospital, he died immediately as a result of the injuries sustained in the accident. The plaintiffs filed the suit against the 1st defendant, the owner of the lorry, impleading the State Insurance Department as the 2nd defendant alleging that the accident was the result of the rash and negligent driving of the vehicle by the 1st defendant. The plaintiffs claimed Rs. 15,000/- as compensation. The 1st defendant filed a written statement denying liability and contending that the suit is not maintainable in law or on facts. The 2nd defendant the appellant before us, also filed a written statement denying liability and contending that the insurance coverage excludes the risks of passengers of a goods vehicle.
3. Before the trial court, P. Ws. 1 to 4 were examined on the plaintiffs' side while Exts. B-1 and B-2 were produced and D. Ws. 1 and 2 were examined on the defendants' side. Exts. X-1 to X-3 were marked as court exhibits. On a consideration of the oral and documentary evidence, the trial court came to the conclusion that Mani died as a result of the accident on 18-12-1970. The trial court also found that the lorry in question had a valid third party insurance at the time of the accident, the deceased Mani was travelling in the lorry for and on behalf of the owner of the goods and hence he is entitled to the coverage. So, the trial court made the 2nd defendant also liable for the claim. The trial court fixed the compensation at Rs. 6,000/- and made defendants 1 and 2 equally liable for the same. The 2nd defendant challenges the judgment and decree of the trial court in this appeal.
4. Learned Government Pleader appearing for the appellant contended that the insurance being one in respect of a goods vehicle will only cover the driver and cleaner and not anybody else who is carried in the vehicle. It was also contended that the trial court went wrong in holding that the deceased was authorised to transport the provisions of the Society.
5. We will first consider the second contention of the learned Government Pleader. The evidence in the case is that the deceased Mani was travelling in the vehicle for and on behalf of the Society, the owner of the goods. Ext. X-1 produced by the Society clearly shows that the Society by its resolution had authorised Mani to transport the goods from the Food Corporation Depot to their ration shop at Peroor. Mani was travelling in the goods vehicle from Athirampuzha to Peroor with the goods when the accident took place. So, there is no merit in the contention that the deceased Mani was travelling in the goods vehicle without any authorisation from his employer, the Society.
6. We will now consider the other contention that the liability under the insurance of the vehicle against third party risks will not cover persons carried by the vehicle other than its driver and cleaner. Section 95 of the Motor Vehicles Act IV of 1939 which deals with the requirements of policies and limits of liability reads :
'95. (1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which--
(a) xx xx xx xx
(b) insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2)--
(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;
(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place :
Provided that a policy shall not be required--
(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, any such employee--
(a) engaged in driving the vehicle; or
(b) if it is a public service vehicle, engaged as a conductor of the vehicle or In examining tickets on the vehicle; or
(c) if it is a goods vehicle, being carried in the vehicle; or
(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises,
(Provisions which are not relevant are left out).
Section 95 occurs in Chapter VIII of the Motor Vehicles Act which provides for the insurance of motor vehicles against third party risks. Section 94 insists that without taking a policy of insurance as required by Chap. VIII no person shall use or cause or allow any other person to use a motor vehicle in a public place except as a passenger, while Section 95 provides for the requirements of policies and limits of liability. As per Section 95 (1), the policy of insurance must be a policy which insures the classes of persons specified therein against the liabilities mentioned in Sub-clauses (1) and (ii) of clause (b). The liability is the liability arising out of the death of or bodily injury to any person or damage to any property of a third party caused by the vehicle. In the case of a public service vehicle the liability is in respect of the death or bodily injury to any passenger of that vehicle. But the insistence for insurance by Sub-section (1) is subject to the proviso to that Sub-section. The proviso consists of three parts and as per the proviso, in the case of three kinds of liabilities mentioned therein there need not be any insurance coverage. The proviso itself is an exception to the general rule regarding insurance coverage and the second part of the proviso provides for exceptions to the exception made by the proviso itself by insisting that the policy should cover the liability of persons carried where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment. The first part of the proviso deals with the employees of the insured. So the mention in the second part need not be about those employees. The only other kind of employees who can be expected to be carried by a goods vehicle is the employees of the owner of the goods carried by it. They accompany the goods in pursuance of a contract of employment because they are asked to do that by their employer to safeguard the goods. So, as per the exception contained in part (ii) of the proviso to the exceptions provided for by the proviso an employee of the owner of the goods who accompanies the goods in the vehicle gets insurance coverage under Section 95 of the Act. Admittedly the deceased Mani was being carried by the vehicle when the accident took place. Then the only question is in what capacity was Mani travelling in the vehicle. It was in pursuance of a contract of employment, but the contract of employment was not with the insured. It was with the Society, the owner of the goods. But even then, he gets insurance coverage because of the exception contained in the second part of the proviso. The policy in question which is drawn up in accordance with the section also covers a person like Mani carried in the vehicle.
7. In coming to the above conclusion we find support in the following decisions cited at the bar. In Izzard v. Universal Insurance Co. Ltd. (1937 A. C. 773) the House of Lords had occasion to construe Section 36 of the Road Traffic Act, 1930, a provision similar to Section 95 of the Motor Vehicles Act, 1939. The facts of the above case as summarised in O. F. & G. Insurance Co. v. G. Kaur (AIR 1967 Punj 486 (FB)) read:
'In Izzard v. Universal Insurance Co. Ltd., 1937 AC 773, an insured lorry of one William Druce had been hired and engaged by certain builders to do haulage work for them and it was also put at their disposal for conveyance of workmen between certain places. Izzard was one of the workmen who were being carried on the lorry which was a commercial vehicle insured for haulage purposes when he met with an accident. The provisions of Section 36 of the Road Traffic Act, 1930, are parallel to those of Section 95 of Act 4 of 1939. The argument urged before the House of Lords was that while Izzard was in the employment of the builders, he was not in the employment of the insured and could not, therefore, be said to have been a passenger in the lorry 'by reason of or in pursuance of a contract of employment'.'
In Izzard's case Lord Wright delivering the judgment of the House of Lords said :
'I cannot accept the respondent's contention that 'contract of employment' should be construed in the Act as subject to the implied limitation 'with the person insured by the policy.' Such a departure from the clear language used cannot. I think, be justified. I think the Act is dealing with persons who are on the insured vehicle for sufficient practical or business reasons, and has taken a contract of employment in pursuance of which they are on the vehicle as the adequate criterion of such persons. ... ... ... ... ... The most probable case is where the man killed or injured was on the vehicle in pursuance of a contract not with the owner of the vehicle but with some one else, for instance, with the person whose goods were being carried on the vehicle: thus a commercial vehicle carrying a contractor's or merchant's goods would frequently and perhaps even normally have on it an employee of the goods owner to see to loading or unloading or delivering the goods or caring for them in transit. For these purposes such a man may be carried as a passenger.
The insured person may come under third party liability to such a man who may be described as being in the position of an invitee in the legal sense, visa-vis the insured person. A further illustration which comes under the same category is that of an employee or employees of the owner of the goods which are being carried, who go out on the lorry with the goods and return home in the lorry after the goods are delivered. Such employees may properly be regarded as passengers carried in pursuance of a contract with some one other than the insured person.'
In O. F. & G. Insurance Co. v. G. Kaur (AIR 1967 Punj 486) a Full Bench of the Punjab High Court said :
'The normal and the ordinary meaning and scope of the expression 'a contract of employment' points to a person being employed to do something or to carry out something for another person. It has the element of rendition of service in one shape or another for the employer.'
In that case, the Full Bench further said that the owners of the goods who hired the truck and travelled with the goods in the truck were not on the truck 'by reason of or in pursuance of a contract of employment' because they were not employed by anybody to go on the truck but were on it as owners of the goods carried in it. In Venguard Insurance Co., Ltd. v. Chinnammal, (AIR 1970 Mad 236) Alagiriswami J. (as he then was) has said :
'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, any injury caused to him would also be covered by the section.'
In Common Wealth Assurance Co. v. V. P. Rahim (AIR 1971 Mad 415) Ganesan J., rejected a claim made by the legal representatives of one Shamsirkhan who was killed in an accident while he was transporting mangoes as a commission agent in a lorry hired by him holding that he was not there in the lorry by reason of or in pursuance of a contract of employment. In C. Narayanan v. M. S. P. G. Sammelan (AIR 1974 Mad 281) also it was held that a person carried by a lorry is not covered by the insurance policy unless he is proved to be a passenger travelling by reason of or in pursuance of a contract of employment.
8. So, there is no reason why we should interfere with the finding of the trial court that the deceased Mani was covered by the policy of insurance of the lorry K.L.Q. 2516 against third party risks.
9. In the result, the judgment and decree of the trial court are confirmed and the appeal is dismissed with costs.