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SUPREME COURT OF INDIA
R.F. Nariman, S. Ravindra Bhat, JJ.
SUSHILABEN INDRAVADAN GANDHI & ANR. – Appellant
VERSUS
THE NEW INDIA ASSURANCE COMPANY LIMITED & ORS. – RESPONDENTS
Civil Appeal No. 2235 of 2020 (Arising Out of SLP (Civil) No. 1170 of 2019)
Decided on : 15-04-2020
Motor Vehicles Act, 1988 – Section 166 – Death in road accident – Deceased was 28 years old at the time of his death and was earning a monthly income of INR 13,000/- – Compensation of INR 37,28,100/- awarded by Tribunal – Liability of Insurance Company was pegged to INR 50,000/- by High Court, liability of Respondent No. 2 and Respondent No. 3 being for balance amount – No one test of universal application can ever yield correct result – It is a conglomerate of all applicable tests taken on totality of fact situation in a given case that would ultimately yield, particularly in a complex hybrid situation, whether contract to be construed is a contract of service or a contract for service – Court can only perform a balancing act weighing all relevant factors which point in one direction as against those which point in opposite direction to arrive at correct conclusion on facts of each case – In present case, factors which make contract one for service outweigh factors which would point in opposite direction – Deceased victim is not a regular employee, he is not entitled to any financial benefit as might be applicable to other regular employees – Contract entered into between parties is one between an Institute and an independent professional – Exemption of liability clauses in insurance contracts are to be construed in case of ambiguity contra proferentum – Contra proferentum rule must be applied, making it clear that such “employment” refers only to regular employees of Institute which deceased victim was certainly not – Full amount should be paid by respondent No.1-Insurance Company and amount beyond liability to be paid by respondent No.1 may be recovered by the Insurance company from respondent No.2. (Paras 24, 28, 29, 34 and 35)
Facts of the Case:
Fatal accident. husband of the Appellant No.1, Dr. Alpesh I. Gandhi, had entered into a contract for services, dated 04.05.1996, as an Honorary Ophthalmic Surgeon at the aforesaid Respondent No. 3 institute. Since the important question to be determined in this appeal is whether Dr. Alpesh I. Gandhi can be said to be employed by the Respondent No. 3 or has only entered into a contract for services with Respondent No. 3 as an independent professional.
Findings of the Court:
The question that arises before us is as to whether the expression “employment” is to be construed widely or narrowly – if widely construed, a person may be said to “employed” by an employer even if he is not a regular employee of the employer. However, wider meaning that has been canvassed for by the insurance company cannot possibly be given, given the language immediately before, namely, “in the course of”, thereby indicating that “employment” can only be that of a person regularly employed by employer.
Result : Appeal allowed.
JUDGMENT
The Court is convened through Video Conferencing.
R.F. Nariman, J.
Leave granted.
2. On 09.06.1997, the husband of the Appellant No.1, who was a surgeon, was travelling in a mini-bus that was owned by the Rotary Eye Institute, Navsari (the Respondent No. 3 herein) along with other medical staff of the said Institute. The mini-bus had been driven with excessive speed, as a result of which at around 8.30 P.M. when the mini-bus was passing through the Gandevi-Navsari Road, near Kabhar Patiya, the driver of the mini-bus lost control and the vehicle turned turtle. The husband of Appellant No.1 was seriously injured and ultimately succumbed to his injuries.
3. On 17.04.1997, the Respondent No. 3 had entered into a comprehensive Private Car 'B' Policy from the New India Assurance Company Limited (the Respondent No. 1 herein). The aforesaid Insurance Policy was valid from 24.04.1997 till 20.04.1998. The limitation of liability clause which has been relied upon by the impugned judgment of the High Court is set out as follows:
"SECTION II LIABILITY TO THIRD PARTIES
1. Subject to the limits of liability as laid down in the Schedule hereto the Company will indemnify the insured in the event of an accident caused by or arising out of the use Motor Car against all sums including claimant's costs and expenses which the insured shall become legally liable to pay in respect of
(a) death of or bodily injury to any person including occupants carried in the motor car (provided such occupants are not carried for hire or reward) but except so far as it is necessary to meet the requirements of Motor Vehicles Act, the Company shall not be liable where such death or injury arises out of and in the course of the employment of such person by the insured."
In addition, endorsement IMT-5 states:
"I.M.T.5. Personal Accidental cover to unnamed passengers other than the insured and his paid driver or cleaner.
In consideration of the payment of an additional premium it is hereby understood and agreed that the Company undertakes to pay compensation on the scale provided below for bodily injury as hereinafter defined sustained by any passenger other than the insured and/or his paid driver attendant or cleaner and/or a person in the employ of the insured coming within the scope of the Workman Compensation Act,1923 and subsequent amendments of the said Act and engaged in and upon the service of the insured at the time such injury is sustained whilst mounting into dismounting from or traveling in but not driving the motor car and caused by violent accidental external and visible means which independently of any other cause shall within three calendar months of the occurrence of such injury result in:
| Scale of Compensation | |
| a) Death only | 100% |
| b) Total and irrecoverable loss of: | |
| i) Sight of both eyes or of the actual loss by physical separation of the two entire hands or two entire feet or of one entire hand and one entire food or of such loss of one eye and such loss of one entire hand or of one entire foot | 100% |
| ii) Use of two hands or two feet, or of one hand and one foot or of such loss of sight of one eye and such loss of use of one hand or one foot. | 100% |
| c) Total and irrecoverable loss of: | |
| i) the sight of one eye or the actual loss by physical separation of one entire hand or one entire foot | 100% |
| ii) Use of a hand or a foot without physical separation | 100% |
There is no dispute that additional premium was paid for endorsement IMT-5, which will therefore be applicable in the facts of this case. It is also undisputed that endorsement IMT-16, which deals with a general liability to employees of the insured who may be travelling in the employer's car, other than paid drivers, may also be covered on payment of an additional premium. It is undisputed on the facts of this case that as far as endorsement IMT-16 is concerned, no such additional premium was paid.
4. The husband of
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