The insurer's liability under an insurance policy extends beyond the compensation payable under the Workmen's Compensation Act, 1923, to include wider liability under Common Law, as agreed upon in the policy, and the insurer is liable to indemnify the insured for such wider liability.

JUDGMENT :

S.C. Mohapatra, J. - This is an insurer's appeal u/s 110-D of the Motor Vehicles Act, 1939 (for short 'the Act'). Quantum of liability of the insurer is the subject-matter of this appeal.

2. Deceased Sadhu Charan Behera was employed as helper in the truck bearing registration number OSC-5589 belonging to Respondent No. 1. Helper is otherwise known as cleaner. On 17-3-1979, the truck met with an accident resulting in the death of the helper Sadhu Charan who was one of the occupants in the truck.

3. On 7-7-1979, respondent No. 2, the widow of Sadhu Charan, filed an application before the Tribunal u/s 110-A of the Act claiming Rs. 40,000/- as compensation for herself and her three minor sons, who are admittedly dependants of the deceased under the Workmen's Compensation Act, 1923. The owner and the insurer both contested the claim.

4. The Tribunal found the death of Sadhu Charan to due to rash and negligent driving of the vehicle. While assessing the compensation payable to the dependants to be Rs. 66,323/-, it awarded Rs. 40,000/- claimed by the dependants.

5. Mr. S.S. Basu, the learned Counsel for the insurer-appellant, submitted that the liability of the insurer is limited only to the extent of the sum payable under the Workmen's Compensation Act, 1923, in view of the statutory limitation to the liability fixed u/s 95 of the Act and not beyond.

6. Insurance is a contract under which on payment of a sum towards consideration of the contract known as premium, the insurer agrees to indemnify the insured taking the risk and liability of the insured. The terms of the agreement by the insurer are contained in a document called Policy of Insurance. Respondent No. 1, the insured in this case, produced the Policy issued by the insurer which is on record. It is seen therefrom that wider legal liability in respect of driver, cleaner and four coolies has been agreed to be indemnified by the insurer on receipt of a premium of Rs. 48/- from the insured. The wider liability has been included in Endorsement No. IM 16. The relevant portion thereof is extracted hereunder:

Legal Liability to persons employed in connection with the operation and/or Maintenance and/or leading and/or unleading of Motor Vehicles.

In consideration of the payment of an additional premium it is hereby understood and agreed that notwithstanding anything contained herein to the contrary the company shall indemnify the insured against his legal liability under:

The Workmen's Compensation Act, 1923 and subsequent amendments of that Act prior to the date of this Endorsements, the Fatal Accidents Act, 1855 or at Common Law in respect of personal injury to any paid driver (or cleaner or conductor or person employed in leading and/or unleading) whilst engaged in the service of the insured in such occupation in connection with the Motor Vehicle and will in addition be responsible for all costs and expenses incurred with its written consent.

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(Emphasis supplied)

7. A bare reading of this clause in the Insurance Policy would make it clear that in consideration of the payment of an additional premium, the appellant has undertaken to indemnify the insurer (against his legal liability under Workmen's Compensation Act, 1923, the Fatal Accidents Act, 1855 or at Common Law so far as driver/cleaner and four coolies employed in the vehicle.

8. The wider coverage in the Policy as in this case was the subject-matter of consideration of a decision of this Court in Miscellaneous Appeal No. 150 of 1979 decided on 4-10-1982 (Ram Chandra Sahu and Anr. v. Sardar Kudatsingh and Anr.). Explaining the words 'common law' it was held:

...The liability of the owner on account of rash and negligent driving of the vehicle by the driver is a liability under the Law of Torts. So the liability is one under Common Law....

It was held that by payment of an additional premium this liability was to be indemnified and there can be little doubt that the insurer shall bear the entire burden as determin