SBAIK SAIDA Vs. AVULA VIRMA

JUDGEMENT

(1.) This is a reference made by our learned brother, P. A. Choudary,J, on November 13, 1980. The question is : Whether the Insurance Company is liable to pay the compensation determined in an accident claim under Section 94 of the Motor Vehicles Act, 1939 (Act No. 4 of 1939) (for short 'the Act') when an employee of the owner of the goods meets with an accident while travelling with the goods with the permission of the driver.

(2.) The facts not in dispute are that at about 4-00 a.m. on July 1,1976 when the lorry bearing No. AAG 3312 was carrying black Cuddapah slabs from Macherla to Nemalikallu, the accident occurred in which the deceased died. The finding of the tribunal below is that the accident occurred due to the negligence of the driver. The tribunal below awarded a sum of Rs. 8500/- as compensation but limited the liabib'ty against the owner, the appellant, and it was held that the Insurance Company is not liable. Thus this appeal.

(3.) Sri Bali Reddy, the learned counsel for the appellant, contended that under Clause (ii) of the proviso to Section 95 (1) (b) of the Act once there is a contract between the Insurance Company and the appellant to cover the risk of death of or bodily injury to an employee of the owner of the goods the Insurance Company is liable to pay the compensation and the appellant is to be indemnified to that extent by virtue of the contract of insurance. In support thereof, he relied upon number of decisions which we would refer to subsequently.