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2025 Supreme(Ker) 2255
IN THE HIGH COURT OF KERALA AT ERNAKULAM
M.A.ABDUL HAKHIM, J.
United India Insurance Company Limited - Appellant
Versus
Gopalan, S/o. Sekharan - Respondent
MFA (ECC) No. 73 of 2021
Decided on : 15-07-2025
Advocate Appeared:
For the Appellant : SRI.MATHEWS JACOB (SR.), SHRI.P.JACOB MATHEW
For the Respondent: SRI.A.R.NIMOD, SRI.M.A.AUGUSTINE
Insurance companies cannot limit their liability under the Workmen’s Compensation Act by insurance policy clauses, as statutory provisions require full coverage of compensation.
Headnote:(A) Motor Vehicles Act, 1988 - Sections 147 and 149 - Workmen’s Compensation Act, 1923 - Clause in insurance policy limiting liability - The Commissioner found employer-employee relationship and held the insurance company liable for full compensation beyond the policy limit of Rs.1,00,000/- due to statutory provisions. (Paras 3, 4, 11, 14)
(B) Liability of Insurance Company - Statutory liability cannot be contractually limited. Liability under Workmen’s Compensation is mandatory under Section 147 despite any contrary term in the insurance policy. Findings confirmed against the insurance company's appeal. (Paras 10, 14)
Facts of the case:
The deceased, employed as a mason, died from an accident during the course of work on 26/12/2015, leading to a compensation claim against the insurance company that had insured the employer.
Findings of Court:
The employer-employee relationship was validated, ruling the insurance policy's limit ineffective, mandating the insurance company to cover total compensation.
Issues: Whether the employer-employee relationship was established and whether the policy's liability cap was enforceable.
Ratio Decidendi: The court upheld that the statutory provisions of the Motor Vehicles Act take precedence over insurance contract terms, invalidating limitations on compensation liability.
Result: Appeal dismissed without costs.
| Table of Content |
|---|
| 1. application for compensation by dependents (Para 1 , 2 , 3) |
| 2. arguments on insurance liability limits (Para 4 , 6 , 7) |
| 3. court's consideration of rival arguments (Para 5 , 8 , 9) |
| 4. statutory requirements of insurance policies (Para 10 , 11 , 13) |
| 5. dismissal of the appeal (Para 14 , 15) |
M.A.ABDUL HAKHIM, J.
1. The appellant is the Opposite Party No.2/Insurance Company before the Employees’ Compensation Commissioner. The Respondents Nos.1 to 4 are the Applicants and the Respondent No.5 is the Opposite Party No.1 before the Employees’ Compensation Commissioner.
2. The Applicants filed the Application claiming compensation as the dependents of one Raghunathan, who died on 26/12/2015, consequent to the accident that happened on 24/12/2015, on the allegation that he was employed as a mason under the Opposite Party No.1 and the death was in the course of employment under the Opposite Party No.1.
3. The Commissioner found that there is an employer-employee relationship between the deceased and the Opposite Party No.1; that the Motorcycle involved in the accident was insured with the Opposite Party No.2 and that the Opposite Party No.2 is liable to pay the compensation. The Commissioner fixed compensation at Rs.8,39,680/- with interest @ 12% per annum from the date of death till the date of deposit and directed the Opposite Party No.2 to deposit the compensation and interest, with funeral expenses of Rs.15,000/-.
4. This appeal was admitted on 09/03/2022 on the substantial questions of law raised in the Appeal, which are extracted hereunder.
1. “Whether the Commissioner is justified in finding employer-employee relationship between the 5th respondent herein and the deceased without any evidence and also considering the fact that the deceased was employed only as a mason?
2. Whether the Commissioner is justified in making the appellant liable for more than Rs.1,00,000/- as Exhibit B1 policy clearly shows that the maximum liability of the appellant is only Rs.1,00,000/-?”
5. I heard the learned Senior Counsel for the appellant, Sri. Mathews Jacob, instructed by P. Jacob Mathew and the learned counsel for the respondents 1 to 4, Sri. A.R. Nimod.
6. The learned Senior Counsel for the appellant invited my attention to the limitations of liability in Ext.B1 Policy by which the maximum liability of the appellant for the accident of the driver of the vehicle is limited to Rs.1,00,000/-. Senior Counsel contended that in view of the specific clause in Ext.B1 Contract of Insurance binding on the parties, limiting the liability of the Opposite Party No.2 to Rs.1,00,000/-, the balance compensation is liable to be paid by the Opposite Party No.1.
7. On the other hand, the learned counsel for the Respondents 1 to 4 contended that the clause limiting the liability of the Insurance Company for the accident of the driver to Rs.1,00,000/- is unsustainable in view of the statutory liability cast upon the Insurance Company as per Section 147 of the MOTOR VEHICLES ACT , 1988, to cover the entire liability arising under the Workmen’s Compensation Act, 1923. The learned counsel cited the decisions of the Hon'ble Supreme Court in Ramchandra v. Regional Manager, United India Insurance Company Ltd. [AIR 2013 SC 2561] , Ved Prakash Garg v. Premi Devi and Others [AIR 1997 SC 3854] and National Insurance Co. Ltd. v. Prembai Patel and Others [AIR 2005 SC 2337] and contended that it is well settled in those decisions that under an Act Policy, the Insurance Company is liable to pay the entire compensation payable under the Workmen’s Compensation Act.
8. I have considered the rival contentions.
9. The Commissioner has found an employer-employee relationship between the deceased and the Opposite Party No.1. The liability as per Ext.B1 Insurance Policy is admitted by the Opposite Party No.2. The contention raised by the Opposite Party No.2 is that its liability is limited to Rs.1,00,000/- in view of the conditions in Ext.B1 Policy.
10.The aforesaid dec
