2013 Supreme(SC) 700

Supreme Court of India
G.S. SINGHVI, GYAN SUDHA MISRA,JJ,
Ramchandra
Versus
Regional Manager United India Insurance Co. Ltd.
Civil Appeal No. 8725 of 2012
Decided On : 02-08-2013

IMORTANT POINT
Compensation payable to the employee cannot be restricted merely under the Workmen's Compensation Act and it can be expanded provided the contractual document which is the policy of insurance incorporates such clause regarding the premium to be paid taking into account the nature of the policy.

Headnote:Motor Vehicles Act , 1988- Section 147 (1) (b) clauses (a) or (b) or (c) of proviso (i)- Extent of liability if insurance company in respect of death or bodily injury to an employee - The liability to pay compensation in respect of death or bodily injury to an employee should not be restricted to that under the Workmen's Compensation Act but should be more or unlimited. However, the determination would depend whether a policy has been taken by the vehicle owner by making payment of extra premium and whether the policy also contains a clause to that effect. (Para 17)

        Motor Vehicles Act , 1988- Section 147 - Apportionment of liability - If the insurance company acquiesced with the situation and allowed the proceeding to continue even in absence of the insured/owner of the vehicle who has been held liable to pay the amount even though the insured might have been liable to pay higher premium, the consequence of the same obviously will have to be borne by the insurance company and the claimant cannot be made to suffer. (Para 22)

        Motor Vehicles Act , 1988- Section 147 - Liability of Insurance company and owner of vehicle - In fact, if the insurance company were to succeed in establishing by leading cogent evidence at the initial stage itself before the Tribunal that it is the owner of the vehicle which is liable to pay even if the evidence is ex parte in nature, it would at least facilitate the issue in the subsequent proceeding when the insurer initiates proceeding for realising the amount from the owner/insured. But in absence of such evidence, the insurer/companies are a loser and enures advantage to the owner who happens to gain by choosing not to appear. The Insurance Companies would fair better if they were to address this issue before the Tribunal itself instead of becoming wiser at the stage of appeal. What is wished to be emphasized is that if the owner chooses not to appear before the Tribunal although his appearance is necessary in a given case, the insurance company would do well instead of acquiescing with their absence to their detriment giving an upper edge to the owner at their own peril. (Para 25)

       Facts of the case :

        The driver of the vehicle drove the same in a rash and negligent manner and the vehicle dashed against the lorry parked on the road as a result of which the appellant who was travelling on the said vehicle as a cleaner sustained grievous injuries. The appellant sustained fracture of right shaft femur. He was an inpatient for a period of one and a half month wherein his leg was operated and rod was fixed to the fractured bone, head injury was sutured and treated conservatively. After discharge, he also had to undergo follow up treatment by visiting the hospital for a period of one year once in 15 days a month as advised by the doctors. The Motor Accident Claims Tribunal on an assessment of the injury sustained by the claimant and the expenses incurred on the treatment was pleased to hold that the claimant was entitled to a sum of Rs.1,42,800/- towards compensation.

        The learned single Judge of the High Court directed that the liability of the insurance company was restricted to one under the Workmen's Compensation Act which would be Rs.32,091/- and the balance will have to be shouldered by the insured/owner of the vehicle.

        The question before the Supreme Court was when the labourer/employee is injured during the course of employment due to negligence of the driver of the vehicle which caused the accident, then whether the compensation could be limited to the amount admissible under the Workmen's Compensation Act or compensation would also be payable under the Motor Vehicles Act ? The insurer company had neither produced the policy of insurance before the High Court nor led any evidence to establish that as per terms and conditions of policy extra premium had not been paid.

       Findings of the Court:

        The liability to pay compensation in respect of death or bodily injury to an employee should not be restricted to that under the Workmen's Compensation Act but should be more or unlimited. However, the determination would depend whether a policy has been taken by the vehicle owner by making payment of extra premium and whether the policy also contains a clause to that effect. As the High Court had failed to examine the nature and clauses of the policy which was not produced even before the Tribunal, the judgment and order of the High Court is fit to be struck down as invalid.

       Result : Appeal allowed.