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United India General Insurance Co. Ltd. Vs. Shantaben Jerambhai and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany;Motor Vehicles;Insurance
CourtGujarat High Court
Decided On
Case NumberFirst Appeal No. 851 of 1980
Judge
Reported inAIR1982Guj212; [1983]54CompCas418(Guj); (1982)1GLR513
ActsMotor Vehicles Act, 1939 - Sections 95(1)
AppellantUnited India General Insurance Co. Ltd.
RespondentShantaben Jerambhai and ors.
Appellant Advocate M.I. Patel, Adv.
Respondent Advocate V.H. Bhairavia,; C.B. Gadigujbar and; B.J. Shelat, A
Cases ReferredTrivandrum v. Sosamma Mani
Excerpt:
motor vehicles - liability - section 95 of motor vehicles act, 1939 - deceased carried in tempo in pursuance of contract of employment - rule 118 permits one person being carried in tempo - no breach of condition of policy or permit granted - vehicle met with accident - insurance company liable to make payment to heirs of deceased. - - from the evidence stated above we cannot come to the conclusion that the deceased was illegally travelling in the tempo like a trespasser. the fact that the expression 'any passenger' has been used in the policy without any qualifying words of the nature clearly shows that it includes within its ambit the gratuitous passengers as well. the limitative words hardly be satisfied in the case of passengers who have been given life l by way of special.....s.l. talatl, j.1. united india general insurance company, original opponent no. 2 of motor accident claims petition no. 152 of 1979 has preferred this appeal against the judgment and award rendered by the motor accident claims tribunal no, 1, at surat on 23-11-1979.2. the petition was filed by the widow of deceased jerambhai dahyabhai parmar and the children of the deceased. the undisputed acts were that deceased jerambhai was travelling in a tempo hearing registration no, g. t. t. 4075 on the date of the incident i.e. on 2-6-1978. in the tempo milk cans were carried. the milk cans were carried on behalf of jawahar dudh utapadak sahkari mandli ltd. to kunverda village. the milk cans were required to be delivered to pal dairy at surat. jerambhai was sitting in the rear portion of the.....
Judgment:

S.L. Talatl, J.

1. United India General Insurance Company, original opponent No. 2 of Motor Accident Claims Petition No. 152 of 1979 has preferred this appeal against the judgment and award rendered by the Motor Accident Claims Tribunal No, 1, at Surat on 23-11-1979.

2. The petition was filed by the widow of deceased Jerambhai Dahyabhai Parmar and the children of the deceased. The undisputed acts were that deceased Jerambhai was travelling in a Tempo hearing registration No, G. T. T. 4075 on the date of the incident i.e. on 2-6-1978. In the tempo milk cans were carried. The milk cans were carried on behalf of Jawahar Dudh Utapadak Sahkari Mandli Ltd. to Kunverda Village. The milk cans were required to be delivered to Pal Dairy at Surat. Jerambhai was sitting in the rear portion of the vehicle, The accident occurred at Kim four roads on National Highway road at about 7-30 A. M. Deceased Jeram fell down from the vehicle and ultimately he expired. The tempo in question belonged to one Daulatsinh Chandrasinh who was joined as opponent No. 1 and who is now respondent No. 8. Respondents Nos. 1 to 7. the widow and the children of the deceased claimed a sum of Rs. 1,09,999/-.

3. The claim petition was resisted by the appellant and ultimately a total sum of Rs. 40,560/- was awarded and it was ordered that that amount was to be recovered with 6% running interest and , proportionate costs from the appellant and respondent NO. 8 who were opponents Nos. I and 2.

4. Opponent No. 1 did not prefer any appeal. Opponent No. 2, the Insurance Company only had filed this appeal. Under the circumstances the question as to whether the driver of the tempo was rash and/or negligent is not required to be considered and no arguments on that question were advanced. The only question which was argued at great length was in regard to the liability of the Insurance company.

It may be stated here that if the Insurance -company is held liable it is not required to lie decided as to whether the amount of compensation which was awarded was proper or not. That question not being open to the Insurance Company no arguments were advarsed on that aspect of the matter. The claimants have also not preferred Cross objections or any appeal against the award with a contention that the amount awarded is less. Under the circumstances we are only required to decide as to whether the insurance Company is liable to indemnify opponent No. 2 in regard to the award which is passed.

5. Before we go to the legal arguments advanced by the learned advocate Shri M, I. Patel, we may state that the Insurance Company had filed written statement at Exh. 14 and the following contention was taken:-

'Moreover as stated above, the deceased was illegally sitting in the open luggage van at his own risk and as & gratuitous passenger. It was further stated that the Insurance Company had covered the risk of the driver and cleaner only ailed the insurance Company had not covered any risk for any other passenger and. therefore, the Insurance Company was not liable to indemnify opponent, No. I as per the insurance policy terms.

6. Now so far as the evidence is concerned, the widow of life deceased gave her evidence at Exh, 28. She stated that her husband -was collecting milk from various centers of the surrounding villages and thereafter was giving the same to Pal Dairy at Surat. According to her the deceased was doing that work every day and there were two trips of the van per day. She also stated that the deceased was Personally assessing the fat of the milk. One mistake in regard to the evidence had crept in and that mistake is that she state that her husband was personally diving the said tempo. That is not so stated in the petition and it is nobody's can that the deceased was personally driving the tempo. The case of the insurance company also is that the deceased was only travelling in the tempo. In cross-examination the widow of the deceased stated that there was a milk Society in village Kunverda and village people- used to collect milk and used to hand over the some to her husband who was bringing the same to the society. She further stated that her husband was working as an agent of the milk society of the village. According to her Pal Dairy was giving commission of the milk to her husband.

7. Sarpanch of the village is examined at exhibit 27. He stated that the deceased was doing the work of collecting milk and also assessing fat of the same in the co-operative society. According to him the deceased was not going to any other village for collecting milk. He stated that the deceased was getting commission of 5 paise Per litre from Jawahar Dudh Utpadak Sahakarl Mandali Limited. In cross-examination the witness stated that the co-operative society was maintaining account books regarding the collecting and selling of milk and the accounts were not brought by him. He stated that he was not doing vahivat of the co-operative society. He, however, produced one certificate given by the President of the Society and that certificate is exhibit 29. That certificate reads as under :-

'Jerambhai Dahyabhai Parmar Of Kumvarda. Taluka Mangrol, District Surat was collecting milk on contract and on agency from the Jawahar Dudh Utpadak Sahakari Mandali Ltd. Kunvarada at a rate of 0-5 paise per litre.' The certificate stated that on that calculation monthly income from that agency would come to about Rs. 400/to Rs. 500/-.

8. The third witness examined is one Vallabbhai Dahyabhai. He only stated as to how the incident Occurred and according to him the deceased was sitting in back portion of the tempo and one truck passed from near the tempo and at that time the back portion of the tempo got slanted and as a result the deceased fell down The witness was at a distance of about 20 or 25 feet and he raised a shout. According to him the tempo was being driven with excessive speed. The deceased after falling down from the tempo died on the spot.

9. Now from the evidence it appears that the ~deceased was collecting milk for and on behalf the Jawahar Dudh Utpadak Sahakari Mandali Ltd. Kunvarada and he was getting commission at the rate of 0-5 paise per litre. The milk was ultimately required to be delivered at Surat to Pal Dairy and it appears from the evidence that for the purpose of delivering the milk to Pal Dairy at Surat, the tempo used to make two trips per day and the deceased used to travel in that tempo in both the trips.

10. Now on the above evidence we are required to consider whether the Insurance Company would be liable or would not be liable to indemnify the insurer. From the evidence stated above we cannot come to the conclusion that the deceased was illegally travelling in the tempo like a trespasser. We also cannot come to the conclusion that he was traveling in the tempo for the purpose of going to Surat for his own work, purpose or pleasure. He was daily going in that tempo in both the trips with the milk cans which he had collected and he was required to make the fat assessment of the milk which was collected by him. That milk was required to be delivered to Pal Dairy at Surat. Under these circumstances he was traveling in the tempo daily and on the date of the incident also he was in that tempo for the purpose aforesaid.

11. The learned advocate Shri Patel submitted that S. 95 of the Motor Vehicles Act, 1939 would show that the liability in regard to such a person is not covered by the Insurance Company. So far as this case is concerned the whole section is not required to be read. S. 95 (1) is only required to be read and construed 'and that' section reads as under:-

'195, Requirements of policies and limits of liability. (1) In order to comply with the requirements of this Chapter, a Policy of insurance must be a policy which-

(a) is issued by a person who is an authorized insurer or by a co-operative society allowed under Section 108 to transact the business of a insurer: and

(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-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 ticket's 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 bodily injury to person being carried in or upon or entering or mounting or alighting from the vehicle at the time of occurrence of the event out of which a claim arises, or

(iii) to cover any contractual liability.'

It was submitted by_ the learned advocate Shri Patel that the deceased who was traveling in the tempo was not a third party and, therefore, his risk was not covered. Secondly it was submitted that he was a passenger who had not paid for travel and, therefore, he was a gratuitous passenger and, therefore, his risk was not covered. It was thirdly submitted that the words -contract of employment' occurring in Section 95 (1) proviso (ii) could not be attracted as the vehicle was a goods vehicle. It was lastly submitted that the insurance policy would not cover the risk of a public carrier if under the permit granted for the use of the vehicle, a breach is committed.

12. Before we discuss the rulings cited by the learned advocate Shri Patel we may say that the insurance policy is produced at exh. 31. The liability is limited to Rs. 50,000/- and the following conditions are prescribed for limitations as to use:-

'Use only under a Public Carrier's permit within the meaning of the Motor Vehicles Act, 1939:-

The policy does not cover:-

1. Use for organized racing or speed Testing.

2. Whilst drawing a trailer except the towing (other than for reward) of any one durable mechanically propelled vehicle.

3. Use for the conveyance of passengers for hire or reward.'

Now none of the three conditions mentioned in the limitations arises in this particular case. Therefore, the learned advocate Shri M. L Patel ultimately fell upon the first sentence which stated that 'a public Carrier would be used in accordance with 'the permit granted to it under the motor Vehicles Act, 1939. In that regard we have only to say that this contention is not taken in the written statement As such contention was not raised in the written statement no occasion arose for any party to produce permit under which the vehicle was being plied. R. 118 (1) of the Bombay Motor Vehicles Rules, 1959 provides as under.-

'118. Carriage of persons in' goods vehicles.-

(1) Subject to the provisions of this rule, no person shall be carried in a goods vehicle:-

Provided that the owner or the hirer or a bona fide employee of the owner or the hirer of the vehicle carried free of charge or a police officer in uniform traveling on duty may be carried in a goods vehicle. the total number of persons so carried (i) in light transport goods vehicle having registered laden weight less than 900 kilograms, not more than one: (ii) in any other light transport goods vehicle, not more than three; (iii) in any goods vehicle other than light transport vehicle, not more than seven,

Now this was a vehicle where the laden weight was 510 kilograms. Therefore, it was a light transport vehicle having registered laden weight less than 900 k9s. and as such not more -than one Person could be carried in this vehicle. That person could be the owner ox the hirer or a bona fide employee of the owner or the hirer of the vehicle carried free of charge. Now that, therefore, it is required to be presumed that a permit would be given in accordance with law which will include the Act and the Rules and, therefore, it was permissible that while using the vehicle one person could be carried and as such under a public carrier's permit within the meaning of the Motor Vehicles Act, 1939 one person could be carried free of charge in this particular vehicle. Now that. therefore, the only question which is required to be decided is as to whether that person was covered under the insurance policy.

13. The first case on which reliance was placed by the learned advocate Shri M. 1. Patel is a case Oriental Fire and General Insurance Co. Ltd.. New Delhi v. Smt. Gurdev Kaur reported in AIR 1967 Puni 486 (FB). It was a case of a goods truck and the owners of the goods were sitting in the truck when it met with an accident as a result of which some of them died. It was held - -

(I) that the deceased persons as hirers cum-owners of the goods did not come under clause (ii) of the, proviso to Section 95 (1) (b). So the policy was not one that was required to cover liability under clause (b) of sub-section (1', or Section 95. It was open to the insurer to prove that. This is not barred by any provision of Section 96 and In fact 9 Section 96 proceeds on the basis that such a Policy under Section 95 (11 (b) is required.

I

ii) That the hirers 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.

Now, therefore, it was a case where the persons who met with an accident were not traveling in pursuance of a contract of employment but they were travelling with the goods because they were owners of the goods. Apart from the question that in this case ' are concerned with the person who- is not the owner of the goods, but in other rulings of this Court it has. been held that the owner of the ~ goods who travelled with the goods in the, vehicle is also I covered and: the - insurer is

bound to indemnify but stzictly.speaking we,may say that this case is not applicable to. the facts of the case in hand.

14. The other case on which the learned advocate Shri M. I. Patel relied on is the case of The Common Wealth Assurance Co. Ltd., Bombay v. V. P. Rahim Khan Sahib reported in. AIR 1971 Mad 415. In that case it was held that a person who hires a lorry for carrying goods . and accompanies the goods cannot be said to be a passenger carried by reason of or in pursuance of a contract of employment within the meaning of the proviso.

15. The two other cases cited by the learned advocate shri M. 1. Patel are (1) the case of Parkash Vati v. Delhi Dayal Bagh Dairy Ltd. reported in 1967 Ace CJ 82 (Puni) and (2) the case South India Insurance Co. Ltd., Indore v. Heerabai, reported in 1967 Ace CJ 65 (Madh Pra). in first case a commission agent travelled in a goods vehicle for supply of goods to the owner of the vehicle on commission basis and it was held that the deceased was not shown to have been on the vehicle by reason of or in pursuance of any contract of employment; while the second case was a case ~ of a person who had hired a truck for carrying some load and he himself accompanied the load The truck met with an accident on the way, as a result of which lie sustained injuries, and died. It was held that the deceased was not a passenger carried by reason of or in pursuance of a contract I of employment at the relevant time and therefore. the appellant company Was not liable e to pay the claim.

16. In all the above cases the consistent findings was that if the owner of the goods travelled in a goods vehiclp and dies because of an accident, the insurance company would not be liable to pay compensation. We may state that the consistent view of this High Court has, been that if, an owner travels in: a goods, vehicle for the purpose of carrying his goods and. there is an accident which results in his. death, the insurance company would be liable. Apart from this * view we may also say that the facts of the case which we are dealing are entirely different. We are not dealing - with a Person who is the owner of the goods.

17. The learned. advocate :Shri B. J..Shelat ,who appeard on behalf if respondent no. 8 drew our attention to a case of the oriental Fire & General Insurance Co. Ltd. v. Ganchi Ratuanlal Kantllal reported in (1979) 20 Gui LR 134: (1979 Lab IC 531). It was a case where the employees of the Government of Gujarat which had entered into a contract with Modem Construction Company were allowed to travel in a station wagon belonging to Modern Construction Company. On the day of the accident, no Government vehicle was available. Therefore, those who were residing in the colony and had to go to work at the dam site would have been required to cover the distance on foot or would have been require to be carried by the vehicle of Modern Construction Company if their time was to be saved. In the above circumstances Ramanlal and Sevantilal were. taken in station wagon on 20th November, 1973 and the station wagon belonged to Modern Construction Company and was proceeding from Dharoi colony to Dharoi, project site. - The insurance company raised the contentions that the deceased were gratuitous passengers. Therefore, the Insurance Company under the terms of the, policy was not liable to Pay anything to the claimants in order to indemnify the insured.. It was held as under. (Paras 5 & 11 of Lab IC) -

'The expression ,any passenger' is an expression of very wide amplitude and means all passengers. whether they are gratuitous or whether they are carried. on payment. The fact that the expression 'any passenger' has been used in the policy without any qualifying words of the nature clearly shows that it includes within its ambit the gratuitous passengers as well.'

'The expression 'a contract. of employment' used in Sec * 95 (2) (b) is not conditioned by any qualifying - words. There is no reason to narrow down or squeeze its connotation so as to~ mean a contract of employment between the deceased and the insured. On the other hand the court cannot take such a view so I as, to mean any contract of employment -which the deceased may have with any one in the world. Therefore, what the expression 'a contract of employment's means is that the passenger carried in a vehicle must be a passenger who is either employed by'the'insured or, whose, employment with -some, one else has a reasonable and rational association with the business which the insured is carrying on.'

The learned advocate Shri Patel in regard to this ruling -submitted that the two persons Ramanlal and Sevantilal were carried in a station wagon and, therefore, it was a passenger vehicle while we are dealing with the cane of goods vehicle and, therefore, the ratio of this ruling should not be made applicable. We may only say that we rely on this ruling for only one purpose and that purpose is to cleared state the meaning which should be attached to the expression 'a contract of employment.' This court in a case of Sakinabibi v. Gordhanbhai Prabhudas Patel reported in (1974) 15 Guj LR 428 decided as under:-

'The goods vehicle is, under its permit under Rule 118 of the Motor Vehicles Rules. entitled to carry the owner or hirer or bona fide employee of the owner or hirer of the vehicle when he is so carried free of charge to the extent of limits specified. In case of such passengers, the relevant second prcvision to Sec, 95 (11 provides a positive cover by providing~ liability being covered in, respect of the death of or bodily injury to the person being carried in or upon the vehicle at the time of the occurrence of the event out of which the claim arises, if the condition laid down in the second proviso is fulfilled. The the second provision. when the coverage is required in respect of passenger risk, the limitative condition is not by reference to the passengers but by reference to the vehicle, The limitative condition in terms states that the vehicle must satisfy the test by answering the statutory description, and it is not the passenger who is to answer the statutory description, If the vehicle is a vehicle Which is one, in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment such vehicle must have passenger's risk covered by compulsory insurance policy for the third party risk irrespective of the fact as to what is the class of the passenger who was carried in or upon such vehicle at the time of the occurrence of the event which gives rise to the claim of compensation. - Where. therefore, persons ate thus normally carried by a I goods vehicle as passengers when, they are lawfully permitted even under Rule 118, it would be difficult to hold that such goods vehicle would not be required to be compulsorily insured so far as such passengers carried by it are concerned. The limitative words hardly be satisfied in the case of passengers who have been given life L by way of special kindness, or if casual solitary use is made of the vehicle for carrying a passenger, for some small reward whether by way of petrol charges or otherwise. Where, however, carriage of passengers by vehicle is as a business proposition or business exigencies or business reasons require carriage of these passengers by these vehicles, the legislature has rightly made insurance coverage compulsory for such passengers even in a commercial vehicle.

That was a case where the deceased had hired the truck in question for carriage of his goods. The hire charges paid by him ostensibly for the carriage of his goods, included consideration for his own travel and he was, therefore, 't a passenger for hire' within the meaning of clause (ii) in the proviso. It was held that 'passengers for hire or reward' within the meaning of clause (ii) in the proviso are not necessarily passengers who have paid fares for their own conveyance. They include passengers who have paid 'hire, charges for the vehicle. Therefore. if there is a passenger, L e. a traveler in a public conveyance who has paid 'hire' charges for the vehicle by which he travels (as distinguished from 'fare' for his own conveyance), he is a 'passenger for hire' and a vehicle which Carries such a Passenger must have compulsory insurance in respect of the liability arising out of the risk occurring from his accidental death if such a vehicle meets with a mishap.'

18. In that case the deceased was supplying milk from Anand DairY, Anand. to the Umreth Consumers Cooperative Society. He was bringing about five cans of milk daily and was paid Rs. 3/- per can per day. On July 3, 1967. the deceased -was traveling in the motor truck in question which was coming from Anand to Umreth on the Madiad Dakor Road which runs west to east. The accident happened at about 5.0 A. M. in the early morning when the truck which took a turn at a distance of about 239 feet had gone into the Kutcha road to its left and had dashed with two Babul trees in question peeling off their bark and as a result of which the deceased who was carried in the truck was thrown out and he sustained fatal injuries.

19. After the above case was decided, the Supreme Court in a case Pushpabai Parshottain Udeshi v. Ranjit Gin~ ning & Pressing Co. Pvt. Ltd. reported in AIR 1977 SC 1735 decided that it was not required that a policy of insurance should cover risk to the passengers who are not carried for hire or reward, The effect of this case was considered by the Full Bench of this Court in the case of Ambaben v. Usmanbhai Amirmiya Sheikh reported in (1978) 19 Gui LR 913: (AIR 1979 Guj 9). It was held that the decision in Sekinabibils case (197415 Guj LR 428) (supra) is toned down by the decision of the Supreme Court in Pushpabai's case (supra) and in the light of that decision, it was obvious iliac so far as the policy contemplated by Section 95 (1) fb) of the Motor Vehicles Act was concerned, it did not cover the risks to (a) persons other than those who were carried for hire or reward at the time of occurrence of event which gave rise to the claim against the insurer and (b) passengers other than those who were bona fide employees of the owner or hirer of the vehicle not exceeding six in number, carried in pursuance of or by reason of a contract of employment. The effect of Pushpabails case reported in AIR 1977 SC 1735 (supra) was considered by the Division Bench of this Court in the case of Jam Shri Satji Digvijayasingji v. Daud Taiyab reported in (1978) 19 Gui LR 404: (AIR 1978 Guj 153). In paragraph 36 (of Guj LR): (para 86 of AIR) of that judgment it was observed as under:-

'In view of these considerations it is clear that after the legal position is now settled by the Supreme Court, we can no longer fall back on the aforesaid business test which was adopted by us in the aforesaid decision and relying upon that business test which the vehicle must satisfy vile had contemplated its further extension as was done in England that if the vehicle satisfied this statutory business test it was immaterial whether on that particular occasion who was carried, a passenger for hire or reward or even a Person carried free of charge. if the relevant-test which is now evolved for the passenger risk is that the passenger must be one carried for hire or reward or by reason of or in pursuance of a contract of employment, which would automatically f fulfill the condition laid down in the exception that 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 on that particular occasion at the time of the occurrence of the event , of which the claim arises, it is obvious that the risk of such a passenger who was given a free lift and who was not carried for any hire or reward or by reason of or in pursuance of a contract of employment would not be required to be covered in view of the aforesaid settled legal position. This being ultimately a contract of indemnity, if the policy of insurance is not compulsory, the Insurance Company could not be held Iiable when it is not statutorily bound to cover this passenger risk of free passengers and when voluntarily it had not given any extra coverage as had happened in the case before their Lordships.'

It was also observed (Para 85 of AIR) .-

'A passenger who is carried for hire or reward or by reason of or in pursuance of a contract of employment must have his safe carriage implied in that consideration. That is why the Legislature, even while providing for the exception of the general passenger risk in S. 95 (1), has given this positive coverage making insurance compulsory when such a passenger is carried for hire or reward or by reason of or in pursuance of a contract of employment. That is why under Section 96 (2) (b) (i) (a) the Insurance Company is provided a special statutory defence by enacting that it can defend the action on the ground that there has been a breach of a specified condition of the policy being one of the following conditions, a condition excluding the vendors of the vehicle for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward. This statutory defence emphasises the user test and not the business test being kept in view and, therefore. the Insurance Company when the vehicle on the date of the insurance is not covered by a permit to apply for hire or reward, is given a right to raise this statutory defense provided a special term by way Of a condition in the policy is introduced excluding the user of the vehicle for hire or reward if that vehicle was not on the date of the contract of insurance a vehicle covered by a permit to ply for hire or reward. Such condition excluding such use is permitted by the legisture enabling the Insurance Company even to escape liability because under our law the owner making such occasional use would be required to be covered by the insurance Policy. But if he committed a breach of the condition with his Insurance Company, the Insurance Company would not have to indemnify.'

In a case of State of Mysore v. Syed Ibrahim reported in AIR 1967 SC 14_24 it was observed as under:-

'Therefore, even in the context of penal liability in our country this user test is applied and a motor vehicle occasionally used for carrying passengers for hire or reward is regarded when so used as a public service vehicle ............ The positive coverage is given by this exception '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,' and. therefore, the vehicle would satisfy the user test once the passengers fulfil this necessary condition of being carried for hire or reward or by reason of or in pursuance of a contract of employment on this particular occasion at the time of the occurrence of the event out of which the claim arises.'

Now so far as the facts of the present case are concerned, there is no room for doubt that the deceased was carried in a tempo in pursuance of 'a contract of employment. We are conscious of the fact that the statutory defense provided by Section 96 is available to the Insurance Company, but in this particular case only one person was carried in a tempo and R, 118 of the Bombay Motor Vehicles Rules. 1959 clearly permitted one person to be carried and, therefore, this is not a case where there was any breach of the condition of the policy or of the permit granted. We may repeat here that no defence is taken by the Insurance Company that there was a breach of the condition of the permit and, therefore, when the deceased was carried in the vehicle in pursuance of a contract of employment and the vehicle met with an accident the person who died was a Passenger who was trevelling in the vehicle by reason of or in

pursuance of a contract of employment both with Pal Dairy and the Jawahar Dudh Utpadak Sahakari Mandli Ltd. The Insurance Company would not be entitled to avoid the liability for making the payment to the heirs of the deceased.

20. Before we end we may refer to a case of State Insurance Officer, Trivandrum v. Sosamma Mani reported in AIR 1979 Ker 15. In that case the view taken was as under:-

'A person travelling in goods vehicle for and on behalf of the owner of goods, in pursuance of a contract of employment with the owner of the goods is covered by the policy of insurance of the motor vehicle against third Party risks.

The proviso to Section 95 (1) 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 emotions 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.'

21. In a case reported in (1979) 20 Guj LR 134: (1979 Lab IC 531) (supra) in paragraph 15, the Division . Bench of this Court referred to a case of Izzard v.Universal Insurance Co. Ltd., (1937) 3 All ER 79 decided by the House of lords. Tbe test applied wasthe test of practical and business reasons irrespective of the person whose employee the deceased was. If he was on the vehicle at the time of his accidental death for practical and business purposes reading to his employer, he must be deemed to be on the vehicle by reason of and in pursuance of a contract of employment. Presence of the deceased on the vehicle for practical and business purposes of his employer (other than the insured) establishes rational and reasonable relationship or nexus between him and the insured and satisfies the requirement of the expression 'a contract of employment' used by Parliament without any qualifying words in Section 95 (2) (b).

22. In view of all that has been stated above, we have come to the conclusion that the deceased was travelling on the vehicle in pursuance of 'a contract of employment' and, therefore. the Insurance Company must be held liable to indemnify respondent No. 8.

23. In the result the appeal fags and is dismissed.

24.The appellant to bear its own costs and pay the costs of the respondents.

25.Appeal dismissed


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