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2007(4) Kar. L.J. 338
CHIDANANDA UILAL AND V. JAGANNATHAN, JJ.
NATIONAL INSURANCE COMPANY LIMITED, NIPPANI BRANCH, BELGAUM -Appellant
versus
LAGAMANNA AND OTHERS -Respondent
Miscellaneous First Appeal No. 3988 of 2002.
Decided on 8th June, 2006
Case Referred: (2005) 6 SCC 172.
Motor Accident Claims-Principles-Liability of insurer -Employer taken Act policy -No extra premium paid -Employee injured -Insurer is liable as under workmen s Compensation Act -Cannot be saddled with entire liability. See, Motor Vehicles Act, 1988 -Section 147.
Cases Referred: (2005) 6 SCC 172.
Motor Accident Claims-Principles-Liability of insurer -Employer taken Act policy -No extra premium paid -Employee injured -Insurer is liable as under workmen s Compensation Act -Cannot be saddled with entire liability. See, Motor Vehicles Act, 1988 -Section 147.
Case Referred: (2005) 6 SCC 172.
Motor Vehicles Act, 1988 -Section 147 -Liability of insurer -Employer taken Act policy -No extra premium paid -Employee injured -Insurer is liable as under workmens Compensation Act -Cannot be saddled with entire liability. [Chidananda Ullal and V. Jagannathan, JJ.] - In view of there being no dispute insofar as the facts of the case are concerned and the policy in force not indicating extra premium being paid to cover the case of the injured claimant who was travelling in the vehicle in question, the Tribunal could not have put the entire liability on the Insurance Co. Settled Principles: The expression -"Such liability as is required to be covered by a policy under Section of the policy" -occurring in Section 149(1) is important. It clearly shows that any such liability, which is mandatorily required to be covered by a policy under Section 147(1)(b), has to be satisfied by the insurance company. The effect of this provision is that an insurance policy, which covers only the liability arising under the Workmens Act in respect of death of or bodily injury to any such employee as described in sub-clauses (a) or (b) or (c) to proviso (i) to Section 147(1)(b) of the Act is perfectly valid and permissible under the Act. Therefore, where any such policy has been taken by the owner of the vehicle, the liability of the insurance company will be confined to that arising under the Workmens Act. The insurance policy being in the nature of a contract, it is permissible for an owner to take such a policy whereunder the entire liability in respect of the death of or bodily injury to any such employee as is described in sub-clauses (a) or (b) or (c) of proviso (i) to Section 147 (1)(b) may be fastened upon the insurance company and insurance company may become liable to satisfy the entire award. However, for this purpose the owner must take a policy of the Act particular kind for which he may be required to pay additional premium and the policy must clearly show, with a clause to that effect that the liability of the insurance company in case of death or bodily injury to the aforesaid kind of employees is not restricted to that provided under the Workmens Act and is either more or unlimited, depending upon the quantum of premium paid and the terms of the policy. Where the policy mentions "a policy for Act Liability" or "Act Liability", the liability of the insurance company qua the employees as aforesaid would not be unlimited but would be limited to that arising under the Workmens Act. The insurance policy taken by the owner in the present case contained a clause that it was a policy for "Act Liability" only. This being the nature of policy the liability of the appellant Insurance Co. would be restricted to that arising under the Workmens Act. The judgment of the High Court, therefore, needs to be modified accordingly. In case the appellant Insurance Co. has deposited the entire amount awarded by the High Court with the Motor Accidents Claims Tribunal or has paid the said amount to claimants, it will be open to it to recover the amount, which exceeds its liability under the Workmens Act, from the owners of the vehicle, Respondents 1 and 2, in accordance with law (2005) 6 SCC 172).
Cases Referred: (2005) 6 SCC 172.
JUDGMENT
In this appeal, National Insurance Company has questioned the finding of the Tribunal saddling liability on it to pay the compensation to the injured claimants.
2. We have heard learned Counsel Sri A.N. Krishna Swamy for the appellant and the learned Counsel Sri Vigneshwar Shastri for the respondents. It is contended by Sri A.N. Krishna Swamy that the policy in question does not cover the risk of the coolies carried in the tractor-cum-trailor as no extra premium was paid to cover such a larger liability and in view of this position, it is not in dispute between the parties that the Tribunal could not have fastened the entire liability on the Insurance Company, but at the most, it could have confined the liability of the respondent-Insurance Company to that which arises out of the Workmen's Compensation Act, 1923. In this regard, reliance is placed on the decision of the Apex Court. So far as the quantum of compensation is concerned, learned Counsel for the respondent has got no grievance. Therefore, the only issue is whether the Tribunal was right in fastening the entire liability on the Insurance Company.
3. In view of there being no dispute insofar as the facts of the case are concerned and the policy in force not indicating extra premium being paid to cover the case of the injured claimant who was travelling in the vehicle in question, the Tribunal could not have put the entire liability on the Insurance Company. This conclusion of ours is fortified by the law laid down by the Apex Court in the case of National Insurance Company Limited v Prembai Patel and Others1. In the said case, the Supreme Court has laid down the following proposition of law.-
"The expression "such liability as is required to be covered by a" policy under Section 147(1)(b) being a liability covered by the terms of the policy" occurring in Section 149(1) is important. It clearly shows that any such liability, which is mandatorily required to be covered by a policy under Section 147(1)(b), has to be satisfied by the insurance company. The effect of this provision is that an insurance policy, which covers only the liability arising under the Workmen's Act in respect of death of or bodily injury to any such employee as described in sub-clause (a) or (b) or (c) to proviso (i) to Section 147(1)(b) of the Act is perfectly valid and permissible under the Act. Therefore, where any such policy has been taken by the owner of the vehicle, the liability of the insurance company will be confined to that arising under the Workmen's Act. (Para 12)
The insurance policy being in the nature of a contract, it is permissible for an owner to take such a policy whereunder the entire liability in respect of the death of or bodily injury to any such employee as is described in sub-clause (a) or (b) or (c) of proviso (i) to Section 147(1)(b) may be fastened upon the insurance company and insurance company may become liable to satisfy the entire award. However, for this purpose the owner must take a policy of that particular kind for which he may be required to pay additional premium and the policy must clearly show, with a clause to that effect that the liability of the Insurance Company in case of death of or bodily injury to the aforesaid kind of employees is not restricted to that provided under the Workmen's Act and is either more or unlimited' depending upon the quantum of premium paid and the terms of the policy. Where the policy mentions "a policy for Act Liability" or "Act Liability", the liability of the Insurance Company qua the employees as aforesaid would not be unlimited but would be limited to that arising under the Workmen's Act. (Paras 13 and 16)
The insurance policy taken by the owner in the present case contained a clause that it was a policy for "Act Liability" only. This being the nature of policy the liability of the appellant-Insurance Company would be restricted to that arising under the Workmen's Act. The judgment of the High Court,
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