IMPORTANT POINT
The court established that the relationship of employer and employee can be established indirectly, and the insurer cannot escape liability based on the established facts and legal provisions.

JUDGMENT :

Satyen Vaidya, J.

This is an appeal by insurer under Section 30 of the Employees Compensation Act, 1923, against award dated 27.07.2012, passed by learned Commissioner, Rampur Bushahr, District Shimla, H.P., in case No. 13-2 of 2012.

2. Respondents No. 1 and 2 (hereinafter referred to as ‘claimants’), filed a petition under Employees Compensation Act (for short ‘The Act’) for grant of compensation on account of death of their son Sh. Ram Krishan. As per claimants, their son was employed by respondent No. 2 Sh. Chet Ram, to drive auto-rickshaw No. HP-50-0523. On 19.05.2006, at about 6:30 PM, the auto-rickshaw driven by Sh. Ram Krishan met with an accident, resulting in death of Sh. Ram Krishan on the spot. The claimants averred that the deceased was being paid salary of Rs. 4,000/- per month by respondent No. 2 Sh. Chet Ram. It was also averred that though the registered owner of auto-rickshaw was respondent No.1 Sh. Baldev, but he had reportedly sold the vehicle to respondent No. 2, Sh. Chet Ram.

3. Since, Sh. Ram Krishan was unmarried, the claimants being his parents preferred the claim.

4. Oriental Insurance Company (for short ‘The insurer’) was impleaded on the ground that at the time of accident the vehicle was insured with the insurer.

5. Respondent No. 1 came up with the stand that he had already sold auto-rickshaw to respondent No. 2 Sh. Chet Ram. The relationship of employer and employee between respondent No. 2 and deceased was specifically denied.

6. Respondent No. 2, Sh. Chet Ram, also entered into his defence and in reply specifically denied to have purchased auto-rickshaw from respondent No.1 Sh. Baldev. He also denied having employed the deceased.

7. The insurer came up with the defence that it was not liable to pay compensation on account of breach of conditions of the policy.

8. Learned Commissioner framed the following issues:-

1. Whether the deceased was workman within the meaning of Workmen’s Compensation Act ? OPP

2. Whether the deceased died during the course of his employment or because of the accident of vehicle in question ? OPP

3. Whether the petitioners are entitled to get the compensation, as claimed ? OPP.

4. Relief.

All the issues were decided in affirmative and the claimants were awarded a total sum of Rs. 9,08,656/-, out of which, a sum of Rs. 1,33,626/-was on account of penalty @ 30%. The award was ordered to be satisfied by the insurer except the amount of penalty which was held to be paid by respondents No. 1 and 2.

9. The appeal was admitted on 01.12.2012, on following substantial questions of law:-

“1. Whether liability for payment of compensation money to claimants could be foisted no insurance company when it was proved that deceased was not employed as a driver on insured auto rickshaw by Sh. Baldev, registered owner of the vehicle who had sold the vehicle to Sh. Chet Ram prior to the date of accident and as such, respondent No.3 was having no insurable interest?

2. Whether in the absence of employer-employee relationship between respondent No. 3 and deceased proved on record, the insurance company could be made liable to pay the amount as compensation to the claimants.

3. Whether the indemnification of the claim by the insurer could be ordered when the deceased was not having valid and effective driving license to drive the auto rickshaw and thereby, breach of policy conditions was committed?”

10. I have heard learned counsel for the parties and have also gone through the records of the case carefully.

11. Sh. Ashwani K. Sharma, learned Senior Advocate, for the insurer, at the very outset submitted that the substantial question No. 3 would not be pressed by him as there was no specific issue raised or decided by learned Commissioner with respect to the absence of driving license with the deceased at the time of accident.

12. As regards, the other two questions, both are overlapping and can be answered by common findings.

13. It stands established on record that on the date of accident of auto-ric