IMPORTANT POINT
Insurance Company is not liable for employees of the owner of the goods.

Judgment :-

Dipak Misra, J.

Leave granted.

2. The centripodal issue that emanates for consideration in these appeals is whether the insurer is obliged under law to indemnify the owner of a goods vehicle when the employees engaged by the hirer of the vehicle travel with the owner of the goods on the foundation that they should be treated as “employees” covered under the policy issued in accordance with the provision contained under Section 147 of the Motor Vehicles Act, 1988 (for brevity “the Act”).

3. The expose’ of facts are that a truck bearing HP/10/0821 was hired on 12.4.2000 for carrying iron rod and cement by one Durga Singh who was travelling with the goods along with two of his labourers. When the vehicle was moving through Khara Patthar to Malethi, 1.5 KM ahead of Khara Patthar, about 4.30 p.m., it met with an accident as a consequence of which the labourers, namely, Nagru Ram and Desh Raj and also Durga Singh, sustained injuries and eventually succumbed to the same.

4. The legal heirs of all the deceased persons filed separate claim petitions under Section 166 of the Act before the Motor Accidents Claims Tribunal (II), Shimla (for short “the tribunal”). Before the tribunal, respondent No. 3, namely, National Insurance Company Ltd., apart from taking other pleas, principally took the stand that it was not liable to indemnify the labourers employed by the hirer. The owner of the truck, the present appellant, admitted the fact of hiring the truck but advanced the plea that the insurer was under legal obligation to indemnify the owner.

5. On consideration of the evidence brought on record, the tribunal came to hold that the legal representatives of Nagru Ram and Desh Raj were covered as per the insurance policy, exhibit RW-2/3/A, as the policy covered six employees and accordingly fixed the liability on the insurer. As far as the legal representative of Desh Raj is concerned, the tribunal treated him as the owner of the goods who was travelling along with the goods and accordingly saddled the liability on the 3rd respondent therein.

6. Being grieved by the awards passed by the tribunal, the insurer preferred FAO (MBA) Nos. 175, 176 and 178 of 2003 before the High Court of Himachal Pradesh at Shimla. In appeal, the learned single Judge, by order dated 13.1.2006, allowed FAO Nos. 175 and 176 of 2003 wherein the legal representatives of the deceased employees were the claimants. As far as FAO No. 178 of 2003 is concerned, the High Court concurred with the finding recorded by the tribunal that Durga Singh was the owner of the goods and travelling along with the goods and, therefore, the insurer was liable to pay compensation to his legal representatives. It is worthy to note that as the insurance company had already deposited the amount of compensation, the High Court, placing reliance on the decision in National Insurance Company Ltd. v. Baljit Kaur and others [(2004) 2 SCC 1], directed that the insurance company having satisfied the award shall be entitled to recover the same along with interest from the owner-insured by initiating execution proceedings before the tribunal. Hence, the present appeals at the instance of the owner of the vehicle.

7. We have heard Mr. Rajesh Gupta, learned counsel for the appellant, and Mr. M. K Dua, learned counsel for respondent No. 1.

8. It is submitted by Mr. Gupta that the High Court has committed serious error in coming to hold that an employee of the hirer is not covered without appreciating the terms of the policy which covers the driver and six employees. Learned Counsel has laid emphasis on the words “any person” used in Section 147 of the Act. Referring to the said provision, it is urged by him that the term “employee” has to be given a broader meaning keeping in view the language employed in the policy and also in view of the fact that the Act is a piece of beneficial legislation. It is his further submission that there is a distinction between “passenger” in a goods vehicle and an “employ