NANCHARAYYA Vs. MUTYALAMMA

JUDGEMENT

(1.) This appeal has been preferred by the owner of the lorry APT-5384 which was involved in the accident that occurred at about 4-30 a.m. on 18-10-1978 resulting in the death of the deceased Oleti Swamy Reddy. The mother of the deceased and the minor daughter of the deceased claimed compensation of Rupees 25,000/-. On a consideration of the evidence on record, the lower Tribunal came to the conclusion that the accident in question leading to the death of the deceased was due to rash and negligent driving by the driver of the lorry. The Insurance Company disclaimed its liability for compensation on the ground that the policy of the Insurance covering the vehicle in question does not specify the class of persons like that of the deceased so as to entitle the legal heirs of the deceased to claim compensation from the Insurance Company. The lower Tribunal negatived all the contentions raised by the owner of the lorry, the driver and the Insurance Company and awarded a compensation of Rs. 20,000/- with interest and costs on the owner and the driver of the vehicle. The lower Tribunal, while negativing the contention of the Insurance Company that the Insurance Company was not liable for compensation to the legal heirs of the deceased, held that as the deceased was not an employee of the owner of the Jorry but was an employee of one Mr. R.R. Murthy, who hired the lorry in question from the owner-appellant herein, the claim of the claimants against the Insurance Compuny is maintainable inasmuch as there was violation of the permit issued by the Road Transport authority for plying the lorry in question. Accordingly the lower Tribunal dismissed the claim-petition against the Insurance Company and decreed the claim of the claimants jointly and severally against the owner and the driver.

(2.) Tn this appeal the only contention urged on behalf of the appellant, who is the owner of the lorry is that the Insurance Company is equally liable for the compensation granted by the lower Tribunal against the appellant as there was no violation of any of the conditions imposed in the Insurance Policy. I find that there is substance in the contention raised by the appellant, the owner of the lorry. Reliance is placed upon the decision reported in Vanguard Insurance Co. vs. Chinnammal wherein it is held that the liability of the insurer to indemnify an employee is not restricted to the condition that the employee must be that of the insured and even if a person is on the vehicle in pursuance of a contract of employment with the owner of the goods carried in it, the insurer is liable. It further held that the words "contract of employment" in Section 95 of the MOTOR VEHICLES ACT, 1988 would cover not only the contract of employment with the owner of the insured vehicle, but also those who were on vehicle in pursuance of a contract of employment. The lower Tribunal found that the appellant herein, who is the owner of the lorry, had entered into a contract with one Mr. R.R. Murthy to use his lorry for the transportation of fish and in connection with that contract Mr. R.R. Murthy had engaged coolies for loading and unloading the fish baskets and therefore the Insurance Company is liable to pay damages in respect of the death of the employee of the hirer, if there are no other statutory limitations. But strangely the lower Tribunal absolved the Insurance Company of the liability from paying compensation to the claimant for violation of the conditions of the permit issued by the Road Transport Authority. On a perusal of the Insurance Policy Ex. B-3, I find that the liability of the Insurance Company to pay compensation to the third parties is strictly governed by the condition therein. It is not in dispute that the Policy in question Ex B-3 covers its liability to the third parties also. The limitation of liability is restricted to Rs. 50,000/-. The further limitations imposed as per the terms of the Policy are that the Policy does not cover; (1) use for organised rac'ng, etc., (2) use while drawing trailor, etc., and (3) use for conveyance of passengers for hire or reward.

(3.) Under the column 'driver', the persons entitled to drive the vehicle are : (1) the insured himself viz., the appellant (2) or any other person provided he is an employee of the insured and is driving the vehicle on his order or with bis permission.