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2023 Supreme(J&K) 724

HIGH COURT OF JAMMU AND KASHMIR AND LADAKH
SANJAY DHAR, J.
New India Assurance Co. Ltd. – Appellant
Versus
Anita Devi & Ors. – Respondent
MA No. 9900008 of 2013
Decided on : 10-03- 2023

Advocates:
Advocate Appeared:
For the Appellant : Udhay Bhaskar
For the Respondent: Divyanshu Malhotra

Headnote:(A) Employee's Compensation Act, 1923; Motor Vehicles Act, 1988 - Section 157 - Appeal against compensation award - Deceased employee died during course of employment as a driver; insurance company's claim of non-liability due to policy transfer failure rejected - Legal obligation of insurer persists despite ownership transfer - Court affirmed dependency on insured relationship for compensation coverage. (Paras 11-16)

(B) Liability of Insurance Company - Compulsory insurance risks transfer to new owner upon vehicle ownership transfer, ensuring third-party rights are protected - Non-transfer of certificate does not absolve insurer liability. (Paras 11-16)

Facts of the case:
The deceased, Pritam Lal, died on 14.10.2005 while working as a driver for Sunita Kumari. The insurance dispute arose from a claimed lack of employment relationship by the insurer and untransferred vehicle insurance.

Findings of Court:
The Commissioner concluded the insurance company was liable for compensation awarded and affirmed the deceased's employment status.

Issues: The primary issues examined included the employee definition, accident nature, and insurance liability.

Ratio Decidendi: The court clarified that the liability of an insurer remains intact for third-party claims if the vehicle’s ownership changes without proper insurance transfer, reaffirming established legal precedents.

Result: Appeal dismissed; awarded amount to be released to claimants.

Table of Content
1. overview of the compensation claim and related facts (Para 1 , 2 , 3 , 4 , 5)
2. issues framed by the commissioner (Para 6 , 7)
3. arguments raised by the insurance company (Para 8)
4. conclusion of the court regarding the appeal (Para 9 , 17)
5. analysis of vehicle insurance transfer and liability (Para 10 , 11 , 12 , 13 , 14 , 15 , 16)

JUDGEMENT

1. The appellant has preferred the instant appeal against award dated 07.08.2013 passed by the Commissioner Under Employee's Compensation Act (Assistant Labour Commissioner), Jammu (hereinafter to be referred as the Commissioner), whereby in a claim petition, filed by the claimants/respondents No. 1 to 3, have been awarded an amount of Rs. 7,60,651/- as compensation on account of death of deceased, Pritam Lal.

2. It appears that deceased Pritam Lal had died in an incident while working as a driver with truck bearing registration No. JK02A 3787. The incident took place on 14.10.2005 when the deceased was killed by the conductor of the truck Rakesh Kumar. The truck in question bearing registration No. JK02A 3787 was owned by Sunita Kumari respondent No. 4 herein. It appears that the deceased was done to death by the conductor as he had denied him the permission to leave the truck midway to destination because the same was loaded with cement. The dependents of the deceased i.e. respondent Nos. 1 to 3 filed a claim petition before the Commissioner, wherein it was pleaded that the deceased was 33 years old at the time of the incident, earning Rs. 6,000/- per month. It was also claimed that the deceased had died during the course of his employment with respondent No. 4 herein.

3. The claim petition was contested by the appellant/insurance company, with which the truck in question was insured at the relevant time. The insurance company in its objections to the claim petition disputed the claim of the claimants. It was submitted that the vehicle in question was insured with it with effect from 30.01.2005 to 29.01.2006 in the name of Sutanter Singh respondent No. 5 herein as such, the insurance company had no statutory and legal obligation to indemnify the respondent-Sunita Kumari, with whom it was claimed that the deceased was having a relationship of employment. It has been claimed that since the deceased was not in the employment of insured-Sutanter Singh as such, the insurance company is entitled to be exonerated from its liability to satisfy the award.

4. Respondent-Sutanter Singh in his reply to the claim petition submitted that he had sold the vehicle in question to one Khemraj who got the same transferred in the name of his wife-Sunita Kumari. It was further submitted by the said respondent that the certificate of insurance of the vehicle has not been transferred from his name.

5. The Commissioner in the face of the pleadings of the parties framed the following issues:

    1) “Whether the deceased 'Pritam Lal' falls under the definition of “employee” as prescribed under the Employee's Compensation Act 1923. OPP

    2) Whether the deceased met with an accident arising out of and in the course of his employment for respondent no. 1. OPP

    3) What was the age and wages of the deceased at the time of accident. OPP

    4) Whether the vehicle in question and involved in accident was insured and driven in violation of the terms and conditions of insurance policy. OPR-2

    5) Relief.”

6. An additional issue came to be framed at the instance of appellant insurance company which reads as under:

    “Whether the respondent no. 2 is liable to indemnify respondent no. 1 and 3 as per the contract of insurance policy.”

7. After appreciation of the evidence led by the parties, the Commissioner came to the conclusion that the deceased had died in an accident arising out of and in the course of his employment with respondent-Sunita Kumari. It was further concluded by the learned Commissioner that the vehicle in question was not being driven in violation of the terms and conditions of the policy of the insurance and tha

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