Insurers may be liable under Workers’ Compensation Act even if the accident does not involve the insured vehicle, based on notional extension principles.

JUDGMENT

Second opposite party in ECC 153/2021 of the Industrial Tribunal and Employees' Compensation Commissioner, Kozhikode has filed this appeal. Respondents 1 to 3 were the applicants before the Commissioner. They are respectively the wife, minor son and mother of late Sri.Lyju.K., a Reserve Conductor in KSRTC who passed away in a road traffic accident on 30.10.2019 at about 5:45 am while travelling on his motorcycle to join duty at Kannur depot of KSRTC. The place of accident was between his residence and place of employment. He was bound to join duty for operating a bus owned by the KSRTC scheduled to start its first trip at 6:20 am on the fateful day.

2. The learned Commissioner found that the respondents 1 to 3 were entitled for compensation. An amount of Rs.23,60,401/- was awarded as compensation with simple interest at 12%. Rs.15,000/- was granted towards funeral expenses. The appellant was the insurer of the bus bearing registration No.KL-15-8419 in which the deceased was employed. Hence, the learned Commissioner held that the appellant was liable to indemnify the employer, KSRTC. Aggrieved by the said conclusion of the learned Commissioner, the appellant has filed this appeal. According to the appellant, various substantial questions of law are involved in this M.F.A. The appeal was admitted on the following question of law— 'whether the Commissioner was legally correct in directing the appellant insurer to bear the liability to pay compensation though the insured vehicle was not involved in the accident’.

3. Respondents 1 to 3 entered appearance through their counsel and the Standing Counsel appeared for 4^th respondent KSRTC. Heard the learned counsel for the appellant and the learned counsel for the respondents 1 to 3 as also the learned Standing Counsel for the 4^th respondent.

4. The learned counsel for the appellant contended that the policy issued by the appellant was a Motor Vehicle Policy for the bus owned by the KSRTC. The said vehicle was not involved in the accident which resulted in the death of Sri.Lyju. Hence the learned counsel contended that the appellant is not liable to indemnify the employer, KSRTC. He submitted that the deceased was travelling on his motor cycle when he met with the accident. Therefore, the appellant, as the insurer of the KSRTC bus, was not liable in any view of the matter, to indemnify the employer for a claim arising under the Employees’ Compensation Act. The learned counsel relied on a judgment of the Madras High Court in Jothi and Others v. K.P.Saraswathi and Another [2022 KHC 2658]. He also relied on some other judgments dealing with the principle of notional extension. He contended that notional extension cannot be extended in each and every case when there is no connection between the insured vehicle and the accident which occurred at some other place.

5. Learned counsel for the appellant pointed out the following observation of the Madras High Court in Jothi and Others (supra):-

“22. This court is of the considered opinion that the fundamental aspect of insurance for vehicles is to cover accident “caused by or arising out of use of the vehicle“ as per S.146 and S.147 of Motor Vehicles Act . Thus, the requirement of coverage is for accident caused by or arising out of use of the vehicle. Liability under Workmen's Compensation Act is only for death arising out of and in the course of employment and unless the accident occurs during use of the vehicle, the insurer of the