Deepak Gupta, J.
1. By this judgment three appeals being FAO Nos. 175, 176 and 178 of 2003 are being disposed of as they arise out of the same accident and the points involved are similar.
2. Truck No. HP-10-0821 belongs to respondent Sanjeev Kumar. Respondent Gulshan Datta was the driver of the said truck. This truck met with an accident on 12.4.2000 at about 4.30 p.m. All the three deceased were travelling in the said truck died. The legal heirs of the victims filed the claim petitions.
3. FAO No. 175 of 2003 arises out of claim petition No. 87-S/2 of 2001/2000 in which the claimants are the widow and children of late Nagru Ram. In this claim petition it was alleged that the deceased was a daily-wage beldar. It was further stated that the deceased was engaged as a labourer by one Durga Singh, owner of the cement and other construction material, which was being carried in the truck. It was stated that the deceased Nagru Ram had boarded the truck at Kharapather on the asking of Durga Singh. In the reply filed by the owner and driver these facts were not denied. The Insurance Company took up the plea that the deceased was an unauthorized/gratuitous passenger in the vehicle. A plea was also raised that the Insurance Company was not liable to pay compensation as there is no coverage with regard to such passengers.
4. FAO No. 176 of 2003 arises out of claim petition No. 89-S/2 of 2001/2000. This claim petition has been filed by the widow, children and parents of late Desh Raj. The deceased in this case was also working as beldar with PWD. Rest of the pleadings in this case are virtually identical. The case set-up is that he was employed as labourer by Durga Singh. The replies of the owner and the Insurance Company were same as in FAO No. 175 of 2003.
5. FAO No. 178 of 2003 has been filed by the widow and children of late Durga Singh. He was the hirer of the truck and was alleged to have been travelling in the truck alongwith his goods. This fact was admitted by the owner and driver. The Insurance Company took up the plea that the deceased was an unauthorized /gratuitous passenger.
6. The learned Tribunal in the first two cases held that the deceased were travelling as employees and since six employees were covered as per the Insurance Policy Ext.RW-2/3/A he has held that the Insurance Company is liable to satisfy the award with regard to these employees. In the last case he held that the deceased was owner of the goods and hence the Insurance Company was liable.
7. FAO No. 178 of 2003 :
As far as this case is concerned it stands proved from the evidence on record and the statements of the witnesses including the owner of the vehicle that the truck in question had been hired by Durga Singh for transporting his cement, sand and other construction material. Deceased Durga Singh was travelling as owner of the goods and as such the Insurance Company was rightly held liable to pay the compensation. Hence, this appeal is dismissed.
8. FAO Nos. 175 and 176 of 2003 :
In these two appeals the main contention of Mr. Ashwani Sharma is that even if it is held that the deceased were the employees of the hirer of the truck i.e. Durga Singh then also the Insurance Company could not have been held liable since the Insurance Company is not bound to cover the liability with respect to the employees of the hirer of the truck. According to Mr. Ashwani Sharma it is only the liability in respect of employees of the owner of the truck i.e. the insured which is required to be covered.
9. Mr. R.S. Verma and Mr. Parneet Gupta, Advocates have contested this position. Mr. Verma also argued that in fact the two deceased persons were the employees of the owner of the truck. Dealing with the contention of Mr. Verma first, from the pleadings it is absolutely clear that the case set out was that the deceased have been engaged by Durga Singh to unload the cement and other construction material. This fact is also clear from the statement of PW-2 Mangat Ram who was also travelling in the truck and had sustained injuries. He has clearly stated that he, Nagru and Desh Raj have been engaged by Durga Singh to unload the material. The owner stepped into the witness box as RW-1. In his own statement he has stated that his truck had been hired by Durga Singh and he further states that Durga Singh alongwith his labour had sat in the truck. Nowhere has he stated that deceased Desh Raj and Nagru were his employees. Therefore, this contention of Mr. Verma is rejected.
10. The question, which arises in this case, is, whether under the provisions of the Motor Vehicles Act it is compulsory for the insurer to cover the risk in respect of persons not employed by the owner but employed by the hirer or some other person.
11. Section 2(14) of the Motor Vehicles Act defines 'goods carriage' as follows :
(14) 'goods carriage' means any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods.
Section 147(1) of the Motor Vehicles Act reads as follows :
147. Requirements of policies and limits of liability.-(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which-
(a) is issued by a person who is an authorized insurer; and
(b) insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2)-
(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including owner of the goods or his authorized representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;
(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:
Provided that a policy shall not be required-
(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, any such employee-
(a) engaged in driving the vehicle, or
(b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or
(c) if it is a goods carriage, being carried in the vehicle, or (ii) to cover any contractual liability.
A perusal of these legal provisions shows that a 'goods carriage' is meant exclusively for carrying goods and not for carrying passengers. In fact the Apex Court has repeatedly held so in a number of cases such as National Insurance Company Ltd. v. Baljit Kaur and Ors. : AIR2004SC1340 ; National Insurance Company v. Chinnamma and Ors. : AIR2004SC4338 ; National Insurance Company Ltd. v. Ajit Kumar and Ors. : AIR2003SC3093 ; Oriental Insurance Company v. Devireddy Konda Reddy : [2003]1SCR537 ; New India Assurance Co. Ltd. v. Asha Rani and Ors. (2003) 1 SCC 223.
12. The owner of the goods is entitled to travel and is covered after the amendment brought in the Act w.e.f. 14.11.2004. With regard to employees the proviso to Section 147(1) makes it clear that the Insurance Company is not required to cover liability with regard to the death of an employee except in so far as it is necessary to get the requirements of the Workmen's Compensation Act. It is important to mention that this requirement is also necessary only in regard to the 'employee of a person insured by the policy'. Therefore, the driver in terms of Clause (a) of the proviso to Section 147(1) of the Motor Vehicles Act, the conductor in case of a public service vehicle and any employees of the insured being carried in case of a goods carriage are bound to be covered by the Insurance Company. However, the liability of Insurance Company will be limited to the amount payable under the Workmen's Compensation Act. Needless to say the Insurance Company can give wider coverage by charging extra premium. However, under a policy which is only meeting the requirements of the Motor Vehicles Act which in common parlance is known as 'Act Policy' the Insurance Company is only liable to cover the risk under the Workmen's Compensation Act with regard to the employees of the insured. In my view a bare reading of the Act shows that it is only the employees of the insured whose risk is to be covered. No judgment has been brought to my notice wherein this question has specifically been decided.
13. A special five Judge Bench of the Karnataka High Court in Bhimavva and Ors. v. Shankar and Ors. 2003 ACJ 1829, while dealing with the question with regard to the liability of the employees of owner and insured in the context of Section 147(1) of the Act held as follows :
A plain reading of the proviso to Sub-section (1) of Section 147 of Motor Vehicles Act, 1988, states that an insurer is not compulsorily required to cover the risk of all employees of the insured but is only required to cover the risk in respect of certain employees of the insured stated therein to the extent of the. liability arising under Workmen's Compensation Act in respect of death of or bodily injury to any such employee. In other words, everybody has to take a policy against any liability which may be incurred by him in respect of death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place, but no such policy cover for his employees is necessary except to such employees stated in the proviso to Sub-section (1) of Section 147 to the extent of liability arising under the Workmen's Compensation Act. The liability cannot be more than what is required under the statute itself, but for higher compensation he has to take a policy of wider cover.
Justice T.S. Thakur in a concurring judgment held as follows :
39. Significantly even in regard to the aforementioned classes of employees, the liability required to be covered by the insurance policy in terms of Section 147 need not be a liability other than the one arising under the Workmen's Compensation Act, 1923, consequently, a policy of insurance would satisfy the requirements of Section 146 and proviso to Section 147 of Motor Vehicles Act if the same covers the liability of the insured arising from the death or bodily injuries to the employees mentioned in the proviso even when such coverage is limited to the liability that would arise against the insured under the Workmen's Compensation Act. The language of Sections 146 and 147 of the Act and in particular the proviso to Section 147 is much too clear to admit of any other interpretation. The argument that the insurance policy must cover qua such employees, the entire liability arising against the owner and not just the liability that arises under the Workmen's Compensation Act does not find any support from the plain language employed in the proviso. The expression 'other than a liability arising under the Workmen's Compensation Act' appearing in the proviso simply means that no liability in excess of what arises under the said Act need be compulsorily covered by the insurance policy. To hold otherwise would clearly tantamount to rewriting the provision or doing violence to the same.
14. Though this judgment clearly lays down that unless wider coverage is taken the liability of the Insurance Company is limited to the amount payable under the Workmen's Compensation Act. However, the question which has been raised in the present case i.e. whether it is only liability of the employees of the owner-insured, which is covered, was not in issue before the Full Bench of the Karnataka High Court.
15. The Apex Court in National Insurance Co. Ltd. v. Prembai Patel and Ors. : (2005)IILLJ1109SC , while dealing with a similar question held as follows:
12. The heading of Chapter XI of the Act is Insurance of Motor Vehicles Against Third Party Risks and it contains Sections 145 to 164. Section 146(1) of the Act provides that no person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of Chapter XL Clause (b) of Sub-section (1) of Section 147 provides that a policy of insurance must be a policy which insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2) against any liability which may be incurred by him in respect of death of or bodily injury to any person or passenger or damage to any property of a third party caused by or arising out of the use of the vehicle in public place. Sub-clauses (i) and (ii) of Clause (b) are comprehensive in the sense that they cover both 'any person' or 'passenger'. An employee of owner of the vehicle like a driver or a conductor may also come within the purview of the words 'any person' occurring in Sub-clause (i). However, the proviso (i) to Clause (b) of Sub-section (1) of Section 147 says that a policy shall not be required to cover liability in respect of death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Act if the employee is such as described in sub-clauses (a) or (b) or (c). The effect of this proviso is that if an insurance policy covers the liability under the Workmen's Act in respect of death of or bodily injury to any such employee as is described in sub-clauses (a) or (b) or (c) of proviso (i) to Section 147(1)(b), it will be a valid policy and would comply with the requirements of Chapter XI of the Act. Section 149 of the Act imposes a duty upon the insurer (insurance company) to satisfy judgments and awards against persons insured in respect of third-party risks. The expression 'such liability as is required to be covered by a policy under Clause (b) of Sub-section (1) of Section 147 being a liability covered by the terms of the policy' occurring in Sub-section (1) of Section 149 is important. It clearly shows that any such liability, which is mandatorily required to be covered by a policy under Clause (b) of Section 147(1), has to be satisfied by the insurance company. The effect of this provision is that an insurance policy, which covers only the liability arising under the Workmen's Act in respect of death of or bodily injury to any such employee as described in sub-clauses (a) or (b) or (c) to proviso (i) to Section 147(1)(b) of the Act is perfectly valid and permissible under the Act. Therefore, where any such policy has been taken by the owner of the vehicle, the liability of the insurance company will be confined to that arising under the Workmen's Act.
(Emphasis supplied)
13. The insurance policy being in the nature of a contract, it is permissible for an owner to take such a policy whereunder the entire liability in respect of the death of or bodily injury to any such employee as is described in sub-clauses (a) or (b) or (c) of proviso (i) to Section 147(1)(b) may be fastened upon the insurance company and insurance company may become liable to satisfy the entire award. However, for this purpose the owner must take a policy of that particular kind for which he may be required to pay additional premium and the policy must clearly show that the liability of the insurance company in case of death of or bodily injury to the aforesaid kind of employees is not restricted to that provided under the Workmen's Act and is either more or unlimited depending upon the quantum of premium paid and the terms of the policy.
16. Section 146 of the Motor Vehicles Act makes it compulsory that every vehicle should have a policy of insurance against third party risk except vehicles belonging to the Governments, local authorities, State Transport Undertakings etc. Section 147 provides the requirements and limits of the policy. Under Section 147 in addition to covering third party risk the Insurance Company must also cover risk for certain categories of employees mentioned in this Section so as to meet the requirements of the Workmen's Compensation Act. However, as I have already indicated above this only extends to the employees of the person insured by the policy and not in respect of the employees of any other person being carried in the goods carriage. Therefore, in my view the employees of the hirer of the vehicle cannot be termed to be the employees of the owner-insured and therefore their liability is not required to be covered under the Motor Vehicles Act. The hirer may be liable under the Workmen's Compensation Act but the Insurance Company has not entered into any contract with the hirer to cover his employees. Though this question was not directly in issue either before the Apex Court or before the Karnataka High Court, the reasoning given in the said judgments indicates that the coverage compulsorily required is only in respect of the employees of the insured.
17. In view of the above discussion, these, two appeals being FAO Nos. 175 and 176 of 2003 filed by the Insurance Company are allowed and it is held that the Insurance Company was not liable. However, in view of the fact that the Insurance Company has already deposited the amount of compensation and also in view of the law laid down by the Apex Court in Baljeet Kaur's case (supra) that the judgment would have prospective effect while holding that the Insurance Company is not liable I direct that the Insurance Company shall satisfy the award but shall be entitled to recover the amount paid by it alongwith interest from the owner-insured by filing execution proceedings before the Motor Accident Claims Tribunal and shall not be required to file any other legal proceedings to establish its claim and the present judgment shall be taken to be the adjudication on the dispute between the insured and the insured. There will be no order as to costs.