The New India Assurance Co. Ltd. v. TAHA KOYA and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:-** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **WEDNESDAY, THE 4TH DAY OF JULY 2018 / 13TH ASHADHA, 1940** ## **M.A.C.A.No.3205 of 2015-C** **---------------------------------------** **AGAINST THE AWARD IN O.P.(MV) NO.1691/2011 DATED 24.01.2015 OF THE COURT OF THE MOTOR ACCIDENTS CLAIMS TRIBUNAL, ERNAKULAM.** **-----------** **APPELLANT(S)/ 2ND RESPONDENT:------------------------------------------------------** **THE NEW INDIA ASSURANCE CO.LTD., REGIONAL OFFICE, KANDAMKULATHY TOWERS, M.G.ROAD, ERNAKULAM, REPRESENTED BY ITS DULY AUTHORISED OFFICER.** **BY ADV.SRI.V.P.K.PANICKER.** ## **RESPONDENT(S)/ 1ST RESPONDENT & PETITIONERS:-** **--------------------------------------------------------------------------------** **1. TAHA KOYA,** - **2/125, CHALAKARA HOUSE, PADAMUGHAL, THRIKKAKARA,** - **KAKKANAD, KOCHI-30, ERNAKULAM DISTRICT, PIN-682030.** **2. BUSHRA, W/O.LATE RAFFIQUE,** - **EDAPPARAMBU HOUSE, PALLURUTHY,** - **EDAKOCHI VILLAGE, KOCHI TALUK, ERNAKULAM DISTRICT-682006.** **3. RAFIATH, D/O.RAFFIQUE, EDAPPARAMBU HOUSE, PALLURUTHY, EDAKOCHI VILLAGE, KOCHI TALUK, ERNAKULAM DISTRICT-682006.** **4. SUBAIDA, M/O. LATE RAFFIQUE, EDAPPARAMBU HOUSE, PALLURUTHY, EDAKOCHI VILLAGE, KOCHI TALUK, ERNAKULAM DISTRICT-682006.** **R2 TO R4 BY ADVS. SRI.K.K.APPU SRI.ISAC SANJAY** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 04-07-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## K. Vinod Chandran, J ---------------------------------------M.A.C.A.No.3205 of 2015-C ----------------------------------------Dated this the 04[th] day of July, 2018 ## **JUDGMENT** The appeal is on a limited question, as to the liability of the appellant-Insurer, whether restricted to that under the Workmen's Compensation Act, 1923 [for brevity “WC Act”]. There was yet another contention with respect to the maintainability of the application under Section 163A of the Motor Vehicles Act, 1988 (for brevity “MV Act”] and the requirement of proof of negligence of the driver or the owner involved in the accident, which stands answered by a three judge bench of the Hon'ble Supreme Court in _**United Insurance Co. Ltd. v. Sunil Kumar**_ **[2017 (4) KLT 1093 (SC)],** overruling the decision of a two judge bench in _**National Insurance Co. Ltd. v. Sinitha**_ **[(2012) 2 SCC 356].** The Supreme Court understood the scope of Sections 163A of the MV Act to be not enabling an insurer to raise the defense of negligence to counter the claim of compensation. Hence, the Insurance Company does not press for that ground. The only ground urged before this Court in appeal is the restriction under the proviso to sub-clause (b) of Section 147(1) of the MV Act, which restricts the coverage of the policy to the liability under the WC Act. MACA.3205 of 2015 - 2 - 2. On facts, suffice it to notice that the deceased, whose legal heirs are the claimants, was driving an auto-rickshaw as an employee of the registered owner. While the vehicle was crossing an unmanned railway track, it was hit by a train in which accident the driver expired. The claimants were before the Motor Accidents Claims Tribunal [for brevity “MACT”/“Tribunal”] under Section 163A of the MV Act. 3. The contention of the learned Standing Counsel appearing for the Insurance Company is that the liability of the insurer, in a case in which there is no separate premium paid for the driver, would be restricted to that entitled by the deceased employee under the WC Act. It is also submitted that the normal procedure by which the insurer is obliged to satisfy the entire award amount and then proceed for recovery against the owner on whom the liability could be fixed, would not apply in the present case for reason of the statutory restriction on the liability, in a case in which an employee approaches the Tribunal, on the basis of an insurance coverage under the MV Act. It is also conceded that Section 167 of the MV Act, in such circumstance, gives an option to the employee, or on his demise his legal heirs, to approach the Workmen Compensation Commissioner or the MACT. In the present case, the respondents-claimants have MACA.3205 of 2015 **==> picture [36 x 15] intentionally omitted <==** approached the Tribunal, which has granted compensation in accordance with the claim raised. But, the liability of the insurer would be confined to that eligible under the WC Act. The balance compensation would have to be recovered by the claimants from the registered owner of the vehicle. There could be no direction to the insurer to pay such amounts and then recover it from the registered owner by reason of the statutory prescription. The recovery from the owner after satisfaction by the insurer, of the entire amounts awarded; could only be in the situation as seen from sub-section (4) of Section 149. ## 4. The proviso to Section 147(1)(b) is extracted hereunder: “Provided that a policy shall not be required - (i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923 (8 of 1923) in respect of the death of, or bodily injury to, any such employee - - (a) engaged in driving the vehicle, or (b) if it is a public service vehicle engaged as a conductor of the vehicle or in examining tickets on the vehicle, or ## (c) if it is a good carriage, being carried in the vehicle, or (ii) to cover any contractual liability”. - 4 - MACA.3205 of 2015 Sub-section (4) of Section 149, is also extracted, which reads as under: “(4) Where a certificate of insurance has been issued under sub-section (3) of section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in clause (b) of sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of section 147, be of no effect: Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person”. 5. Before proceeding to answer the specific question raised by the Insurance Company, it has to be noticed that sub-section (1) of Section 149 speaks of the liability of the insurer to pay the sum assured as directed in a judgment or award even if the insurer is entitled to avoid or cancel the policy. In the instant case there is no sum assured and the liability would be for the entire compensation awarded by the Tribunal in the case of an accident; unless in circumstances of an option exercised under Section 167 of the MV Act; by an employee or his legal heirs for compensation before the MACT. Sub-section (2) of Section 149 of the MV Act - 5 - MACA.3205 of 2015 speaks of the requirement of a notice issued by the Claims Tribunal on an application filed for compensation and an opportunity afforded to defend the application on the grounds enumerated under sub-clause (a) of subsection (2). Sub-section (4) makes the restrictions as applicable on the terms of the policy, as to conditions as provided under sub-clause (a) of sub-section (2) of Section 149 to have no effect in case of an action under sub-clause (b) of Section 147(1). This benefit of avoiding such restrictions is only to those restrictions imposed by the terms of the policy and not a restriction as imposed by the statute itself. 6. The proviso to Section 147(1)(b) specifically restricts the liability of an insurer in the case of an employee or his legal heirs approaching the MACT under the MV Act to the liability that could be fixed under the WC Act. On the above reasoning, the claim against the insurer as awarded by the Tribunal will have to be limited to that entitled to the legal heirs under the WC Act. 7. In the above circumstances, the direction to the insurer in the impugned award to deposit the entire award amounts is set aside. The issue is remanded to the MACT for consideration as to the limited extent of computation of the liability under the WC Act. It is made clear that the award passed is not interfered with by this Court - 6 - MACA.3205 of 2015 in the appeal. The remand is only for computation of the amounts due under the WC Act and any amount in excess of the liability under the WC Act, the claimants would be entitled to recover from the registered owner of the vehicle directly. 8. It has also to be noticed that out of the deposit, an amount of `.4,50,000/- [Rupees four lakhs and fifty thousand only] has already been paid to the claimants. The claim of the insurer in the appeal is that, under the WC Act the claimants would be entitled to only `.2,94,726.25. The computation shown is as follows: Rs.3,250/- x 50/100 x 181.37 = Rs.2,94,726.25 The Tribunal will verify such computation and and while computing the total amounts under the WC Act, will ensure that interest is calculated as available under the WC Act or the Employees' Compensation Act, whichever is applicable to the case. After such computation if any amounts are further due to the claimants under the WC Act, the Tribunal shall issue a cheque in the name of the claimants from the balance amount, which as per the interim directions issued by this Court is deposited in a Nationalised Bank as per the directions of this Court by order dated 29.08.2016. Any interest in the interregnum, between the award and the interim order of this Court will be the liability of the insurer to the extent of the liability fixed under the WC - 7 - MACA.3205 of 2015 Act. However, if on computation it is found that there are any excess amounts paid to the claimants, this Court, on equity, directs that no recovery need be effected from the claimants and the Insurance Company would be entitled to recover such excess amount from the registered owner of the vehicle. The Tribunal while computing the amounts, shall also ensure that a 'Certificate of Recovery' is issued to the claimants for the balance amount to be recovered from the registered owner of the vehicle. After such adjustments are made, whatever balance remains in deposit shall be returned to the Insurance Company. The parties shall appear before the Tribunal on 01.08.2018. The appeal is partly allowed, leaving the parties to suffer their respective costs. vku/- Sd/K.Vinod Chandran Judge [ true copy ]