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REPORTABLE

                   IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION  

CIVIL APPEAL NO. 1970 OF 2015 (Arising out of SLP(C) No. 28265/2014)

Praveenbhai S. Khambhayata                    ...Appellant

Versus

 United India Insurance Company                               Ltd. & Ors.        ...Respondents

J U D G M E N T  

R. BANUMATHI, J.

Leave granted.

2. This  appeal  is  preferred  against  the  judgment  dated  

16.04.2014 passed by the High Court of Gujarat at Ahmedabad  

dismissing   the  appellant’s   First  Appeal  No.282  of  2014  

observing   that  the   Insurance  Company  was  not  liable  to  

indemnify him, thereby confirming the order dated 11.11.2013  

passed  by  the  Commissioner  for  Workmen’s  

Compensation/Labour Court, Rajkot.

3. The brief facts which led to the filing of this appeal are  

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as  follows:-  Proforma  respondents  2-4/claimants,  namely,  

Lalmani   Yadav-father,  Dashmiya  Lalmani  yadav-mother  and  

Janaki alias Babli Ramesh Yadav-wife of the deceased, Ramesh  

Lalmani  Yadav filed a claim petition before Commissioner  for  

Workmen’s  Compensation/Labour  Court,  Rajkot,  claiming  

compensation for the death of deceased Ramesh Lalmani Yadav  

on 20.05.2002 in the course of his employment.  On the fateful  

day  of  20.05.2002,  deceased  Ramesh  Lalmani  Yadav  was  

working as a cleaner in the vehicle bearing No.GJ-3V-7785, in  

the employment of the appellant and respondent No.5.  In the  

afternoon at about      12.30 p.m., deceased was filling water in  

the radiator  of  the vehicle when suddenly the bonnet of  the  

vehicle fell down on the head of the deceased, as a result of  

which  he  fell  down  and  died.   Stating  that  Ramesh  Lalmani  

Yadav died in the course of his employment, respondents No.2  

to  4  filed  the  claim  petition  claiming  compensation  of  

Rs.4,15,093/- and that appellant and respondent No.1–Insurance  

Company are liable to pay the compensation of Rs.4,15,093/-.  

4.  Before the Commissioner,  both the parties adduced  

oral  and  documentary  evidence.   Upon  consideration  of  the  

records, the Commissioner held that FIR dated 20.05.2002 was  

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lodged by the driver of the vehicle bearing No. GJ-3V-7785 in  

which it was mentioned that on the fateful day while reversing  

the said vehicle he saw deceased putting water in the radiator  

of another vehicle bearing no. GJ-3U-5391 and that he slipped  

on the bonnet of vehicle, fell on his head and deceased Ramesh  

Lalmani  Yadav  sustained  injuries  and  died.   The  Labour  

Court/Commissioner  held  that  the  insurance  policy  produced  

before him was in respect of the vehicle GJ-3V-7785 which was  

not involved in the vehicular accident and therefore Insurance  

Company–first respondent is not liable to pay the compensation.  

However, the learned Commissioner held that the appellant and  

respondent No.5 being the owner of the vehicle,  were jointly  

and severally liable to pay the compensation of Rs.3,25,365/-  

along with 10% penalty and annual interest at the rate of 6%.

5. Being  aggrieved,  the  appellant–owner  of  the  vehicle  

preferred the first  appeal  in the High Court of Gujarat.   Vide  

order dated 16.04.2014, the High Court dismissed the appeal  

filed  by  the  appellant  observing  that  since  vehicle  No.GJ-3V-

7785 was not  involved in  the accident  and that  only vehicle  

No.GJ-3U-5391  was  involved  and  since  the  deceased  was  

employed as a cleaner was only in vehicle No. GJ-3V-7785, the  

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insurance company is not liable to indemnify the appellant for  

the accident caused by the vehicle bearing No.GJ-3U-5391.  In  

this appeal, the appellant seeks to assail the said judgment.

6. Learned counsel for the appellant contended that both  

the  vehicles,  namely,  GJ-3V-7785  and  GJ-3U-5391  were  duly  

owned by the appellant and both the vehicles were insured with  

the same insurance company viz.  the first  respondent–United  

India Insurance company and while so, the courts below are not  

justified in holding that the first respondent–insurance company  

is not liable to indemnify the appellant.  It was submitted that  

the  deceased  was  an  employee  of  the  appellant  in  vehicle  

No.GJ-3V-7785 and died during the course of the employment  

and as such, the fact that he was employed in another vehicle  

cannot exonerate the insurance company from indemnifying the  

appellant.  It was further submitted that under Section 147 of  

the Motor Vehicles Act 1988, being a beneficial legislation and  

both the vehicles being insured with the first respondent, the  

courts below erred in observing that the insurance company is  

not responsible for any liability even though under Section 147  

of the Act.  The insurance company is bound to indemnify the  

appellant  for  the  loss  occurring  on  account  of  the  death  of  

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workman in the course of his employment.  In support of his  

contention,  reliance  was  placed  upon  Ved  Prakash  Garg vs.  

Premi Devi & Ors.1

7. Learned  counsel  for  the  first  respondent–insurance  

company submitted that the deceased-Ramesh Lalmani Yadav  

was employed as a cleaner only in the vehicle GJ-3V-7785 and  

since only GJ-3U-5391 was involved in the accident, insurance  

company  does  not  have  any  responsibility  to  pay  any  

compensation  and  to  indemnify  the  insurer  and  the  courts  

below  rightly  exonerated  the  insurance  company  from  

indemnifying the insurer.

8. It is an admitted fact that the deceased was employed  

as a cleaner in vehicle No. GJ-3V-7785 and on perusal of the  

statement  of  Ramlallu  D.  Patel,  the  driver  of  the  above-said  

vehicle, it emerged that the deceased was actually filling water  

in the radiator of the another dumper bearing No. GJ-3U-5391  

and met with an accident and died due to the injuries sustained  

by him.   The same is substantiated by the panchnama of the  

scene of the accident. From the written statement filed by fifth  

1  (1997) 8 SCC 1

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respondent – Viraj Krishna Techtonics Pvt. Ltd. Vijayrath,  it is  

apparent  that  the  employer  has  admitted  that  the  death  of  

Ramesh Lalmani Yadav was caused while he was filling water in  

the radiator  of  the vehicle bearing No.  GJ-3U-5391 owned by  

him.  Taking into consideration the facts of the case, it is evident  

that vehicle GJ-3V-7785 was not involved in the accident.

9. Vehicle  No.  GJ-3V-7785  was  insured  with  the  first  

respondent-insurance company under Section 147 of the Act.  

The insurance policy of a public service vehicle is deemed to  

cover an employee engaged in the said vehicle and the liability  

of the insurance company to pay compensation for the death or  

injuries sustained by the workman.  Payment of compensation  

for the death of workman or injuries sustained by the workman  

is limited to the liability arising in the Employees Compensation  

Act, 1923.  Since vehicle No.GJ-3V-7785 was not involved in the  

accident, insurance company was not liable to indemnify the  

owner of the vehicle towards the compensation payable to his  

employee  -  deceased-cleaner  Ramesh  Lalmani  Yadav  under  

Workmen’s Compensation Act, 1923.

10. As noticed earlier, only the dumper bearing No.GJ-

3U-5391 was involved in the accident.  The insurance policy of  

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the vehicle No.GJ-3U-5391 was not produced either before the  

Commissioner or before the High Court.  Insurance policy of the  

said vehicle No.GJ-3U-5391 for the period from 13.09.2001 to  

12.09.2002 was produced before this Court. The accident was  

on 20.05.2002 during which period the vehicle No. GJ-3U-5391  

had a valid insurance policy.

11. The point falling for consideration is that even if  

the  vehicle  No.  GJ-3U-5391  had  a  valid  insurance  policy,  

whether  the  first  respondent-insurance  company  is  liable  to  

indemnify the owner of the vehicle for death of a person who  

was employed by him in another vehicle.  Insofar as vehicle  

dumper                No.GJ-3U-5391, admittedly deceased-Ramesh  

Lalmani Yadav was not an employee and he was only a third  

party. Onbehalf of the appellant, an argument was advanced  

that  since  both  the  vehicles  were  insured  with  the  same  

insurance company viz., United India Insurance Company and  

since  Section  147  of  the  Motor  Vehicles  Act  is  a  beneficial  

legislation,  the insurance company ought  to  have been held  

liable to indemnify the insured.  As contended by the appellant,  

both the vehicles were insured with the respondent-insurance  

company  and  both  the  vehicles  are  one  and  the  same.  

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Considering  the  facts  of  the  case,  both  the  vehicles  were  

parked in the same space and it can be safely stated that the  

deceased cleaner was filling the water in the radiator of vehicle  

no.GJ-3U-5391 only on the direction of the employer and thus  

the   cleaner was working in the course of employment.  The  

High Court rejected the claim of the appellant on the ground  

that  the  insurance policy  of  vehicle  No.  GJ-3V-7785  was  not  

produced  but  now  since  the  appellant  has  produced  the  

insurance  policy  which  covers  the  vehicle  involved  in  the  

accident which provides to indemnify the owner of the vehicle  

in case of any accident caused to the workman limited to the  

extent of liability under Workmen’s Compensation Act.  

12. Both  the  vehicles  were  insured  with  the  first  

respondent-insurance company and the owner being one and  

the same and since the deceased being the cleaner and the  

claimants  hailing  from  the  lowest  strata  of  society,  in  our  

considered view, in exercise of our extra-ordinary jurisdiction  

under Article 142 of the Constitution of India, it is appropriate  

to direct the first respondent-insurance company to indemnify  

the appellant for the death of deceased.

13. In  a  situation  of  this  nature  for  doing  complete  

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justice between the parties, this Court has always exercised the  

jurisdiction under Article 142 of the Constitution of India.  In  

Oriental Insurance Company Ltd. vs. Brij Mohan And Ors.2, this  

Court has held as under:-

“13. However,  Respondent 1 is  a poor labourer.  He had  suffered grievous injuries. He had become disabled to a  great extent. The amount of compensation awarded in his  favour  appears  to  be  on  a  lower  side.  In  the  aforementioned  situation,  although  we  reject  the  other  contentions  of  Ms  Indu  Malhotra,  we  are  inclined  to  exercise our extraordinary jurisdiction under Article 142 of  the Constitution of  India so as to direct  that  the award  may be satisfied by the appellant but it would be entitled  to realise the same from the owner of the tractor and the  trolley wherefor it would not be necessary for it to initiate  any separate proceedings for recovery of the amount as  provided for under the Motor Vehicles Act.

14. It is well settled that in a situation of this nature this  Court in exercise of its jurisdiction under Article 142 of the  Constitution  of  India  read  with  Article  136  thereof  can  issue  suit  directions  for  doing  complete  justice  to  the  parties”.

14.       In  Deddappa & Ors.  vs. National Insurance Company  

Ltd.3,  it was  observed as under:-

“26. However, as the appellant hails from the lowest strata  of  society,  we are of  the opinion that  in  a  case of  this  nature,  we  should,  in  exercise  of  our  extraordinary  jurisdiction under Article 142 of the Constitution of India,  direct Respondent 1 to pay the amount of  claim to the  appellants herein and recover the same from the owner of  the vehicle viz. Respondent 2, particularly in view of the  fact  that  no  appeal  was  preferred  by  him.  We  direct  accordingly”.

2   (2007) 7 SCC 56

3   (2008) 2 SCC 595

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15. Labour  Court  awarded  compensation  of  

Rs.3,25,365/-  along   with  10% penalty  and  6% interest  per  

annum.   As  per  Section  4-A  (3)(a)  of  the   Workmen’s  

Compensation Act,  where any employer commits  default in  

paying the compensation due under the Act within one month  

from the date it  fell  due,  the Commissioner shall  direct the  

employer  to pay simple interest thereon at the rate of 12% per  

annum  or at such higher  rate not exceeding maximum  of the  

lending rates of any scheduled bank as may be specified by the  

Central Government.  As per Section  4-A (3)(b),  in addition to  

the  amount  of  arrears  and  the  interest  thereon,  the  

Commissioner  shall  direct  the employer  to  pay further   sum  

not exceeding 50% of such amount by way of penalty.   The  

legal  representatives  of  the  deceased  employee  are  thus  

entitled to the statutory interest at the rate of 12% and penalty  

not  exceeding  50%  of  the  amount  of  compensation.   The  

Commissioner for Workmen’s Compensation has awarded only  

6%  interest  and  10%  penalty  as  against  the  statutory  

entitlement  of  the dependents of  the deceased employee in  

terms of  Section  4-A(3)  of  the Act.    Having regard to  the  

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passage of time and in the interest of justice, in our considered  

view,  statutory  rate  of  penalty  i.e.  15% is  to  be  ordered  in  

addition to the statutory interest  payable at the rate  of 12%  

per annum.

16. The appellant has deposited Rs.3,25,365/- i.e. the  

principal  amount  with  the  Labour  Court/Commissioner  for  

Workmen’s Compensation,  Rajkot  on 18.2.2014.  The matter  

was listed before the Supreme Court Lok Adalat on 6.12.2014  

wherein  the  appellant  was  directed  to  deposit  the  balance  

amount.  The 1st respondent-insurance company shall deposit  

the balance compensation being 15% penalty and the interest  

at the rate of 12% after one month from the date when the  

compensation amount fell due and also 15% penalty with the  

Labour  Court/Commissioner  for  Workmen’s  Compensation  

within a period of six weeks from today.   On such deposit, the  

same shall be disbursed to respondents No.2 to 4. The amount  

of  Rs.3,25,365/-  already deposited by the appellant  with the  

Commissioner  for  Workmen’s  Compensation  shall  also  be  

disbursed to respondents No. 2 to 4 if not already disbursed.  

After disbursing the amount to the dependents No.2 to 4, the  

Commissioner  for  Workmen’s  Compensation,  Rajkot  shall  

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submit a report to this Court regarding compliance at an early  

date preferably not exceeding four months from today. The 1st  

respondent-insurance  company  shall  pay  the  amount  of  

Rs.3,25,365/- to the appellant which it has already deposited  

towards  compensation  within  a  period  of  six  weeks.  The  

impugned  judgment  of  the  High  Court  is  set  aside  and  the  

appeal is allowed in terms of the above directions.  In the facts  

and circumstances of the case,  we make no order as to costs.

             ...……......................J.      (V. GOPALA GOWDA)   

 ……........................J.                                                        (R. BANUMATHI)

New Delhi; February 17, 2015  

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