MALLAMMA (D) BY LRS. Vs NATIONAL INSURANCE CO. LTD. .
Bench: P SATHASIVAM,S.A. BOBDE,N.V. RAMANA
Case number: C.A. No.-001391-001391 / 2009
Diary number: 25185 / 2005
Advocates: V. N. RAGHUPATHY Vs
M. K. DUA
Page 1
REPORTABLE
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1391 OF 2009
MALLAMMA (DEAD) BY L.Rs. … APPELLANT(S)
VERSUS
NATIONAL INSURANCE CO. LTD. & ORS. … RESPONDENTS
JUDGMENT
N.V. RAMANA, J.
1. This appeal by special leave is directed against the impugned
judgment and order dated 10th August, 2005 passed by the High
Court of Karnataka in M.F.A. No. 3842 of 2003 whereby the High
Court partly allowed the appeal preferred by the Respondent No. 1—
National Insurance Company discharging it from the liability of
payment of compensation to the claimants— Appellants.
2. The brief facts of the case leading to this appeal are that on 3rd
April, 1997 at about 1.00 p.m., when Honniah @ Dodda Thimmaiah
was returning from the field driving a tractor with the sand load on the
trailor, the tractor overturned and Honnaih @ Dodda Thimmaiah died
1
Page 2
owing to the injuries sustained in the accident. Appellants herein are
the claimants—legal representatives of the deceased Honniah @
Dodda Thimmaiah. The tractor involved in the accident had the
registration number KA 18/717-718 and the tractor was originally
registered in the name of one Gangadhara (Respondent No. 3) and
the same was insured with the Respondent No. 1 while the deceased
was employed as a driver with the Respondent No. 2-Jeeva Rathna
Setty.
3. On 4th September, 1997, the legal representatives of the
deceased, filed an application before the Commissioner for
Workman’s Compensation, Chickmagalur (hereinafter referred to as
“the Commissioner”) claiming compensation under the Workmen’s
Compensation Act.
4. The Commissioner while issuing notices to the respondents
called for filing of objections, if any. The respondents filed objections
denying their liability to pay compensation. The National Insurance
Company (Respondent No. 1) deposed before the Commissioner that
as per its records on the date of accident, the vehicle was no doubt
under the insurance policy but in the name of Gangadhara, not in
the name of Jeeva Ratna Setty, hence there is no relation of
2
Page 3
employee-employer between the deceased and Gangadhara and
therefore, it has no burden of liability to pay compensation to the
claimants.
5. After hearing parties and perusing the documents brought on
record, the Commissioner came to the conclusion that the deceased
was employed with Jeeva Rathna Setty, hence there is an employee-
employer relationship between the deceased and the Respondent
No. 1 and the deceased had died during the course of his
employment. At the time of accident, the age of the deceased was
determined as 25 years with a monthly earning capacity of Rs.2,000/-
p.m. and thereby the Commissioner fixed compensation at
Rs.2,16,910/-. As the Insurance Company did not deposit the
amount, the Commissioner awarded an interest @ 12% p.a. from 3 rd
April 1997 till the date on which he passed the order, i.e. 14 th
February, 2003, which amounted to Rs.1,50,265/- and ordered that
the appellants are entitled to receive a total compensation of
Rs.3,67,275/- from the employer Jeeva Ratna Setty and the
Insurance Company. Finally, by the Award dated 28 th February, 2003,
the Commissioner held that though the insurance policy was in the
name of Gangadhara, the ownership of the vehicle on the date of
3
Page 4
accident was with the Jeevaratna Setty; it is proved that during the
validity period of the said insurance policy, the said vehicle was
transferred from Gangadhara to Jeevaratna Setty; as per Section
157(1) of the Motor Vehicles Act, 1968 whenever a vehicle is
transferred from one person to another, the benefits of the insurance
policy shall also be transferred to the new owner; accordingly instant
policy benefits will also be automatically transferred from Gangadhara
to Jeevaratna Setty. Therefore, the National Insurance Company
shall be liable to pay the compensation and interest thereupon to the
claimants. Accordingly, the Commissioner fixed the liability of paying
compensation on the Insurance Company and Jeeva Ratna Setty
individually and severally and directed them to deposit the amount
within a period of 30 days from the date of the Award failing which
they shall further be liable to pay interest @ 9% p.a. for the delayed
period. The Commissioner, however, discharged Gangadhara
(Respondent No. 3) and Laxmana Bhovi, (Respondent No. 4) from
the case.
6. Aggrieved by the said order of the learned Commissioner, the
Insurance Company (Respondent No. 1) filed M.F.A. No. 3842 of
2003 before the High Court of Karnataka urging that no liability could
4
Page 5
have been fastened by the Commissioner on the Insurance
Company.
7. The High Court, by the impugned order, affirmed the findings of
the Commissioner that (i) the deceased workman was actually
employed with Jeeva Rathna Shetty, and therefore, there is a relation
of employee-employer between them; (ii) the deceased workman
having died as a result of an accident arising out of and in the course
of employment, hence the claimants as legal representatives of the
deceased are entitled to recover compensation, (iii) there was a valid
insurance policy in force on the date of accident (iv) and the original
owner of the tractor was Gangadhara. However, the High Court
excluded the liability of the Insurance Company on the ground that
the contention of deemed transfer of the insurance policy in favour of
Jeeva Rathna Setty by virtue of Section 157 of M.V. Act was not
actually urged before the Commissioner.
8. Against the Judgment of the High Court relieving the Insurance
Company from the liability of payment of compensation, the claimants
are before this Court in this appeal.
9. We have heard learned counsel for the parties and perused the
material on record.
5
Page 6
10. Before us, learned counsel for the appellants relying upon
Section 157 of the M.V. Act, contended that there is an admitted
transfer of ownership of the vehicle as proved before the
Commissioner. Once the ownership of the vehicle is admittedly
proved to have been transferred to Jeeva Rathna Setty, the existing
insurance policy in respect of the same vehicle will also be deemed to
have been transferred to the new owner and the policy will not lapse
even if the intimation as required under Section 103 of the M.V. Act is
not given to the insurer, hence the impugned order passed by the
High Court is contrary to law. In support of this contention, learned
counsel for the appellant has relied upon a judgment of this Court in
G. Govindan Vs. New India Assurance Co. Ltd. (1999) 3 SCC 754.
11. Learned counsel has also brought to our notice a relevant
portion from the ‘Schedule of Premium’ of the insurance policy, a
copy of which is available on record as Annexure P-1., which reads
thus:
B.
Add:
LIABILITY TO PUBLIC RISK Liability to Trailor
for L.L. to persons employed in Connection with the operation and/ or loading of vehicle (IMT 19)
Rs. 120-00 Rs. 87-00
Rs. 15-00
6
Page 7
Add: for increased third party property damage limits. Section II-I(ii) upto Rs. Unltd. IMT 70
TOTAL PREMIUM (A +B)
Rs. 75-00
Rs. 1318-00
12. On the other hand, learned counsel for the National Insurance
Company, mainly contended that unless it is proved by evidence that
the vehicle has been transferred in the name of Jeeva Rathna Setty,
the deeming provision of Section 157 of the M.V. Act would not be
applicable. In the absence of such evidence on record the High
Court has rightly absolved the Insurance Company from the liability
and the order passed by the High Court does not require any
interference from this Court.
13. The counsel for the Insurance Company of course contended
that as per their records, on the date of accident, the vehicle was
registered in the name of Gangadhara. Hence in the absence of a
valid proof that the ownership of the vehicle has been transferred in
the name of Jeeva Ratna Setty, the benefits of insurance policy
cannot be given to Jeeva Ratna Setty. However, the said contention
is contrary to record. A specific finding by the Commissioner to this
effect in his order dated 28th February, 2003 reads thus:
7
Page 8
“The 4th respondent had stated that on the date of the accident, this vehicle was in the name of Sh. Gangadhara. But the applicants have proved the said statement as false through documents and on the date of the accident, the vehicle was in the name of the Respondent No.1.”
14. In view of the above finding, it can be discerned that on the
date of accident, the ownership of the tractor stood transferred from
Gangadhara to Jeeva Ratna Setty. In addition to that, a perusal of the
‘Schedule of Premium’ extracted above shows that an amount of
Rs.15-00 has been paid as premium “for L.L. to persons employed in
connection with the operation and/or loading of vehicle (IMT 19)”.
15. In view of the above discussion we are of the considered view
that as on the date of accident, the deceased workman was in the
course of employment of Jeeva Rathna Setty in whose name the
ownership of the vehicle stood transferred and the said vehicle was
covered under a valid insurance policy, the High Court ought not
have simply brushed aside the decision of the Commissioner
fastening joint liability on the Insurance Company in the light of the
deeming provision contained in Section 157 (1) of the M.V. Act.
8
Page 9
16. For the foregoing reasons, we allow this appeal, set aside the
impugned judgment passed by the High Court and restore the
judgment of the trial Court.
17. There shall, however, be no order as to costs.
…………………………………………CJI. (P. SATHASIVAM)
……………………………………………J. (S.A. BOBDE)
……………………………………………J. (N.V. RAMANA)
NEW DELHI, APRIL 07, 2014
9