The Divisional Manager, The Oriental Insurance Co., Ltd. v. Sri.Shivappa

Judgment

1. Sri.Shivappa S/o Sri. Dukkappa Jalli Age:Major, Resident of Katharaki, Koppala Taluk and District. Appellant -2-

2. Sri. Shashikanth .S. Siddanala Owner of the Truck No.KA.22/7057, LIG-159, Mahantesh Nagar, Belgaum Respondents (BY Sri.S.M.Kalwad,Adv. for Ri Sri. B.S.Kamate, Adv.for R2) This MFA is filed under Section 30(1) of WC Act against the judgment dated 23.06.2006 passed in WCA No.24/2004 on the file of the Labour Officer and Commissioner Workmen’s Compensation, Gadag, awarding compensation of Rs.80,539/- with interest at 12% p.a. from 13.08.2004 till deposit. * C This titio coming on for orders this day, the court made the following: JUDGEMENT Appeal listed for admission. By consent of learned advocates appearing for

the parties and also taking into consideration the appeal is of the year 2006, it is taken up for final disposal. This appeal is by the insurer is filed questioning the correctness and legality of the order and award dated

23.06.2006 passed by the Labour Officer and Commissioner for Workmen’s Compensation at Gadag whereunder, claim petition has been allowed in part and compensation of 4- -3- .80,539/- has been awarded by fastening liability on the appellant insurer.

2. Brief, the facts leading to filing of the appeal are as under. 1st respondent herein filed claim petition seeking compensation under W.C. Act contending that he was in the offending vehicle namely, bearing registration No.KA.22/7057 as spare driver and on 21.12.2003 said lorry met with an accident on account of which he sustained injuries resulting in permanent physical disability and consequential loss of earning capacity. On registration of claim petition notices were issued to respondents and the employer did not choose to appear before the Commissioner and contest the matter. The insurer appeared and filed detailed statement of objections denying the claim averments. Petitioner got himself examined and also examined the doctor who treated him as PW.3 and also one witness Sri.Basappa Bhimappa Doddamani. It was contended by insurer that claimant being the 2nd driver (spare driver) was not covered under contract of insurance policy received in respect of the offending vehicle and as such it was absolved from its liability to pay compensation awarded if any. The Commissioner on considering pleadings and evidence on record rejected plea put forward by the insurer and allowed the claim petition in part and awarded total compensation of 80,539/- with interest payable at 12% p.a. one month after the date of the accident by the insurer. It is this order and award dated

23.06.2006 which is questioned in this appeal by the insurer.

3. Heard Sri.G.N.Raichur, learned advocate appearing for appellant Sri.S.M.Kalwad, learned advocate appearing for the 1st respondent and Sri.B.S.Kamate, learned advocate appearing for 2nd respondent.

4. Sri. G.N.Raichur would contend admittedly claimant was the 2nd driver in the offending lorry belonging to Mr.Mohammed Gouse and it is only the risk of 1st driver that is covered insurance policy and the claimant herein was not engaged in driving of the vehicle and as such appellant is not liable to answer the claim of 1st respondent. He would also submit that claim made by the 1st driver in WCA.No.24/2004 has been accepted by the insurer and compensation has been -5- paid and as such, contends that the insurer need not indemnify the insured to cover the risk of the 2nd driver. He would draw the attention of Court to Section 147 of the Motor Vehicles Act, 1998 to buttress his arguments. He contends it is only person “engaged in driving” as mandated under Section 147 would be entitled to lay claim against the insurer and if the claimant falls outside this he would not be entitled to maintain claim petition against the insurer. He would also bring to the notice of the Court, the general regulations prescribed under the Indian Motor Tariff formulated by insurance company, based on the Tariffs Advisory Committee recommendations and as per IMT.828, the legal liability of the insurer under the WC Act arises only in respect of spare driver for whom additional premium has been paid and would contend that under IMT.39.A, the legal liability of the insurer under Workmen’s Compensation Act, applies to only coolies and in this case no additional premium was paid to cover spare driver and claimant was not a coolie. Mr. G.N.Raichur also contended that the interest awarded by the Commissioner is not in consonance of the dicta laid down by the Hon’ble Supreme Court in AIR 2009 SCW 3717. -6-

5. Per contra, Sri.S.M.Kalwad and Sri.B.S.Kamate would bring to the notice of the court that appellant insurer had not produced the insurance policy before the Commissioner. Taking into consideration the law laid down by this Court in United India Insurance Company limited Vs Nagaraja and Another reported in 2006 to KCCR 1023, Commissioner had held that spare driver is also covered when additional premium has been collected from them. They would also contend, the policy in question covers the risk of spare driver since, additional premium of . 125/- has been collected which covers the spare driver also and as such, contends that contentions put forth by the appellants’ counsel is liable to be rejected.

6. Having heard the learned advocates appearing for the parties, I am of the view that following substantial questions of law would arise for consideration i) Whether insurer is liable to indemnify the insured and pay compensation to spare driver as per provision of Motor Vehicle Act and General -7- Regulation Committee recommendation? issued Tariff Advisory ii) Whether order of the Commissioner in fastening the liability on the appellant insurer in the instant case is liable to be reversed and affirmed? iii) Whether interest Commissioner at 12% p.a. has to be affirmed, reversed and modified? awarded

7. The accident in question, injuries sustained by claimant are not in dispute. Hence on these aspects discussion is not made in this appeal. The only issue which requires to be considered in the appeal is liability of the insurer to indemnify the insured in respect of spare driver’s claim arising under the Workmen’s Compensation Act. The substantial questions of law 1 and 2 formulated herein above being inter linked with each other and finding on one question is likely to overlap with other, they are taken-up together for consideration for disposal of these two questions. -8-

8. In so far as contention of Mr,G.N.Raichur about the applicability of Section 147 is concerned in respect of spare driver has been considered by this Court in the case of United India Insurance Company Limited Vs Nagaraja and Another referred to supra and it has been held that, in the event of insurer collecting additional premium for spare driver, insurer cannot claim immunity from answering the claim arising thereunder. The decision has been rendered by this Court following this decision in the case of Oriental Insurance Company Limited Vs Kashim reported in ILR 1996 Karnataka

9. As rightly submitted by the learned advocate for the respondents, for the reasons best known to them, the insurer had with held the production of policy in question issued to the offending vehicle. However, Mr.G.N.Raichur during the course of his submission before this Court has made available a copy of the insurance policy issued to the offending vehicle. The perusal of the same would depict the total premium of Rs.4,238/- has been collected from the owner of the vehicle. The break up reads as under. SCHEDULE OF PREMIUM (A) LIABILITY Basic Liability (a) Total ADD PA Non Fare Passengers Legal Liability Employee / Driver Any Extra Loading (b) Total LESS (c) Total Total of (B) (Rs.) Total_Premium_(A+B)_(Rs,) 3,580.00 3,580.00

100.00 75.00 1 25.00 358.00 658.00

0.00 4,238.00

10. On perusal of the policy and break up of the premium collected would go to show that additional premium of 125/- has been collected by the insurance company from the insured, It would also go to show that insurer has committed its legal liability to pay employee/ driver. To the question of the Court as to how many employees are covered and whether appellant’s counsel is able to furnish details thereof, learned counsel for appellant was fair to accept that he is unable to produce those details,

11. Under Regulation IMT.828 there is reference to liability of the insurer, Admittedly additional premium of 125/- is collected and there cannot be any dispute on this aspect. - 10 - Admittedly, the vehicle in question is a goods vehicle travelling inter state and which would normally carry two drivers and it is in this background insured has remitted additional premium and same has been collected by insurer. As such the contentions of Mr.G.N.Raichur that until and unless “driver is engaged in actual driving” alone would be entitled to claim compensation from the insurer cannot be accepted and it has been negatived in Nagaraja’s case referred to supra holding that if additional premium has been collected the insurer cannot be absolved, of its liability. In the instant case as noted herein above insurer has collected additional premium of Rs. 125/- and as such insurer cannot be absolved from its liability. In view of the above discussions, the substantial questions of law 1 and 2 formulated herein above is answered against the appellant insurer and in favour of respondents/claimants.

12. In so far as the award of interest is concerned the said issue is no more res-integra, in view of the law laid down by Hon’ble Supreme Court in Oriental Insurance Company Limited Vs.Mohd. Nasir and another reported in AIR 2009 -11 SCW 3717 and as such it is ordered that the respondents No.1 would be entitled to interest on the award amount 7 ½% P.A from the date of claim petition till the date of award and @ 12% P.A from the date of award till the date of payment whichever is earlier. Accordingly, question No.3 formulated herein above, is answered.

13. Appeal is dismissed/disposed of by answering the substantial questions of law in favour of the respondents and passed in WCA.No. Commissioner for Workmen’s Compensation, Gadag District, Gadag dated 23.06.2006 is hereby modified by holding claimant is entitled to interest @ 7½% p.a from the date of claim petition at @ 12% p.a. from the date of award till date of payment or deposit whichever is earlier. The amount deposit is ordered to be transmitted to jurisdictional tribunal forthwith. MckJ JL/ J1L11X