NEW INDIA ASSURANCE CO LTD Vs. DARSHANI DEVI

JUDGEMENT

(1.) This is an appeal by the insurance company challenging the order of the Commissioner for Workmen's Compensation directing that the compensation payable by the employer be paid by the insurance company. The mother of an employee, who was a cleaner of a bus, owned by Dayal Singh and Chandan Singh, met with an accident on account of one of the rear wheels of the bus going off and the bus falling in the khud. The mother filed a claim petition under the provisions of Workmen's Compensation Act, 1923, impleading therein the two employers and the insurance company as opposite parties. Since the insurance company did not contest the claim in spite of time being repeatedly granted, an ex parte order against it was passed and the liability fixed on the employer was made payable by the company. Aggrieved, in the present appeal, Sri M. P. Singh, learned counsel appearing for the insurance company, has urged that in proceedings under the Workmen's Compensation Act, no direction can be given to the insurance company to indemnify the employers, because, primarily it is a liability of the employer alone to pay the compensation under Section 3 of the said Act. According to him, the provisions of Sections 95 and 96 of the Motor Vehicles Act, 1939, cannot be pressed into service for making the insurance company liable for indemnifying the employers.

(2.) It is not disputed that the deceased was employed as a cleaner of motor vehicle No. UPS 8609 which stood insured by the appellant under Section 95 of the Motor Vehicles Act. According to Section 3 of the Workmen's Compensation Act, subject to the exceptions mentioned therein, an employer is liable to pay compensation to a workman who suffers personal injury by accident arising out of and in the course of his employment. Section 12, however, provides that a principal liable to pay compensation under the Act shall be entitled to be indemnified by the contractor or any other person from whom the workman could, have recovered compensation and all questions as to the right to and the amount of any such indemnity shall be settled by the Commissioner. Similarly, under Section 14 of the Act, the insurer steps into the shoes of the employer if there was a contract by the insurer in respect of any liability arising under the Act. From the various provisions contained in the Workmen's Compensation Act, therefore, it would appear that the liability that arises in favour of a workman against his employer may be indemnified by the insurer.

(3.) The argument of Sri Singh was that the liability which is incurred by the employer under the provisions of the Act cannot be fastened on the insurance company merely because there exists a contract of insurance between the employer and the company under the provisions of a different Act, i.e., the Motor Vehicles Act. The liability which the insurance company undertakes under the provisions of the Motor Vehicles Act cannot be extended to any liability which the employer may incur under the provision of the Workmen's Compensation Act.