(Prayer: This MFA filed under Section 30(1) of W.C Act against Judgment dated 31/07/2008 passed incase NO. KAACHI/KANAPA/NF/CR-224/2006 on the file of the Labour Officer and Commissioner for Workmen compensation, Chitradurga District, Chitradurga awarding a compensation of Rs. 1,71.234/- with interest @ 12% p.a.)
1. The following questions are referred to this Bench for determination:
1) Whether an insurance company can be fastened with the liability to pay compensation to a person, who was working as a conductor in a bus, conductor’s license having expired and having not been renewed on the date of occurrence of the accident and sustaining of injury/permanent disability?
2) Whether the judgment dated 1/08/2010 passed in MFA. 2570/2005 is per incuriam?
2. The brief facts leading to the reference are as under:-
The second respondent herein is the owner of the stage carriage bus bearing registration No.KA-16-774. He employed the first respondent as a conductor of the vehicle. On 19/11/2003, the vehicle met with an accident because of the negligence of the driver of the bus, as a result of which, the first respondent herein sustained injuries. The injured filed claim petition against the second respondent (Bus Owner/insured) and the appellant herein (insurer of the vehicle).
The policy of the insurance was valid as on the date of the accident. The injury sustained in the accident by respondent No.1 was on account of and during the course of employment. The Commissioner of Workmen’s Compensation (‘Commissioner’ for short) held that the claimant being the Conductor in the vehicle falls within the definition of ‘workman’ and as the vehicle involved in the accident had been insured, the appellant is liable to pay compensation to the injured, who suffered permanent disability. The compensation was quantified at Rs.1,71,234/- with interest. The said award has been questioned by the Insurance Company in MFA.11236/2008
During the course of arguments in MFA No.11236/2008 before learned Single Judge, learned counsel for the Insurance Company is seems to have contended that Ex.P6 – conductor’s Licenses of the claimant had expired on 04/03/1997 and the accident has taken place on 19/11/2003. Since the claimant did not possess the valid and effective conductor’s license as on the date of accident, the insurer cannot be fastened with the liability. He placed reliance on the decision of the Apex Court in the case of RamashraySingh vs. New India Assurance Co. Ltd and other, reported in 2003 ACJ 1550in support of his arguments.
Per contra, it was the contention of the owner of the vehicle (the employer of the claimant) that the claimant had possessed Conductor’s license as per Ex.P6 and that on account of non-renewal of license, the insurer cannot avoid liability. Sri. K .Ram Bhat appearing on behalf of the employer /owner of the vehicle is stated to have placed reliance on the observations made by another Division Bench of this court in paragraph-10 of the judgment dated 11/08/2010 passed in MFA.2570/2005 to submit that the commissioner is justified in fastening the liability on the Insurance Company.
Learned single Judge, after referring to various provisions of Motor Vehicles Act, 1988 ( hereinafter referred to M.V. Act) and the judgment of the Apex Court in RamashraySingh’s Case (Supra) and the judgment in the case of National Insurance Company Limited Vs. Vidhyadhar Mahariwala, reported in (2008) 12 SCC 701, has observed that except the provision under Section 29 the Motor Vehicles Act (for short M.V. Act), the Division bench in MFA,2570/2005 has not considered other provisions of Motor Vehicle Act, 1988 and the ratio of law laid donw by the Apex court in the aforementioned judgments. In other words, learned single Judge, was of the opinion that the observations made by the Division Bench in paragraph -10 of the judgment in MFA.2570/2005 need to be revisited. In view of the same, aforementioned questions were raised by the learned Single Judge in MFA.11236/2008 and the said questions are referred to this Bench of determination.
3. The undisputed facts of the case in brief are as under:-
The claimant was a conductor in a stage carriage bus owned by the second respondent. The bus was insured with the appellant-Insurance company. The accident took place on 19/11/2003. The policy of Insurance was valid as on the date of the accident. The Conductor’s license was issed in favour of the claimant on 05/03/1994. The same was renewed from time to time till 04/03/2003. However the Conductor’s license of the claimant was not renewed subsequent to 04/03/2003. As aforementioned, the accident took place on 19/11/2003. Thus admittedly, the conductor’s licenses had expired about eight months prior to the accident.
Before proceeding further, it is beneficial to note certain provisions of M.V. Ac and the judgment relied on by the learned advocates on the both sides.
The relevant provisions of the M.V. Act, 1988 are as under:-
“Section :2(5) “Conductor” in relation to a stage carriage, means a person engaged in collecting fares from passengers, regulating their entrance into, or exit from, the stage carriage and performing such other functions as may be prescribed.
Section 2(6):“Conductor’s licence” means the licence issued by a competent authaority under chapter III authorizing the person specified therein to act as a conductor.
Section 29 –Necessity for conductor’s licence: (1) No person shall act as a conductor of a stage carriage unless he holds an effective conductor’s licence issued to him authorizing him to act as such conductor; and no person shall employ or permit any person who is not so licensed to act as conductor of a stage carriage.
Section 36.Certain provisions of Chapter II to apply to conductor’s licence - The provisions of sub-section (2) of Section 6, Sections 14, 15 and 23, sub-sections (1) of Section 24 and Section 25 shall, so far as may be, apply in relation to a conductor’s licence as they apply in relation to a driving licence.
Section 15. Renewal of driving licences- (1) Any licensing authority may, on application made to it, renew a driving licence issued under the provisions of this Act with effect from the date of expiry:
PROVIDED that in any case where the application for the renewal of a licence is made more than thirty days after the date of its expiry, the driving licence shall be renewed with effect from the date of its renewal.
PROVIDED FURTHER THAT where the application is for the renewal of a licence to drive a transport vehicle or where in any other case the applicant has attained the age of fifty years, the same shall be accompanied by a medical certificate in the same from and in the same manner as it referred to in sub-section (3) of Section 8, and the provisions of sub-section (4) or Section 8 shall, so far as may be, apply in relation to every such case as they apply in relation to a learner’s licence.
(2) An application for the renewal of a driving licence shall be made in such form and accompanied by such documents as may be prescribed by the Central Government.
XXX XXX XXX XXX
(6) Where the authority renewing the driving licence is not the authority which issued the driving licence it shall intimate the fact of renewal to the authority which issued the driving licence.
Section 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
extend specified in sub section (2)-
(i) against any liability which may be incurred by him in respect of 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;
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 Conductor of thevehicle or in examining ticketson the vehicle, or
(c) If it is a goods carriage, being
carried in the vehicle or
(ii) to cover any contractual liability.
Explanation:for the removal of doubts, it is hereby declare that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of , the use of a vehicle in a public place notwithstanding that the person who is dead or injured of the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.
(2) Subject to the proviso to sub-section (1), a policy of insurance referred to in a sub-section(1), shall cover any liability incurred in respect of any accident, up to the following limits, namely:-
(a) save a provided in clause (b), the amount
of liability incurred;
(b) in respect of damage to any property of a
third party, a limit of rupees six thousand:
PROVIDED that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.
(3) A policy shall be of no effect for the purposes of this chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases.
(4) where a cover note issued by the insurer under the provisions of this chapter or the rules made there under is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe.
(5) Not withstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this Section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of person.”
(Emphasis supplied)
4. In case of RamashraySingh Vs New India Assurance Co. Ltd., and others reported in2003 ACJ 1550, the appellant was the owner of the vehicle, he had employed Mr. Shashi Bhushan Singh as “khalasi” of the vehicle. Said vehicle met with an accident, as a result of which Shashi Bhushan Singh sustained injuries and died. A claim petition was filed by the legal representatives of the deceased employee. The Commissioner for Workmen’s Compensation concluded that the Insurance Company is liable to pay compensation, since the accident had occurred during the period of insurance and as the policy. The matter reached the Apex Court. Taking into consideration the rival contentions and the relevant provisions, the apex Court held thus:-
“The appellant’s first submission was that Shashi Bhushan Singh was a passenger. The appellant’s submission that thee phrases ‘any person’ and ‘any passenger’ in clauses (i) and (ii) of sub-section (b) of section 147 (1) are of wide amplitude, is correct. [See: New India Assurance Co. Ltd V. Satpal Singh, 2009 ACJ I (SC)]. However, the proviso to the sub-section carves out an exception in respect of any class of persons and passengers, namely, employees of the insured. In other words, if the ‘person’ or ‘ passenger’ is an employee, then the insurer is required under the statute to cover only certain employees. As stated earlier, this would still allow the insured to enter into an agreement to cover other employees, but under proviso to section 147(1) (b), it is clear that for the purposes of section 146(1), a policy shall not be required to cover liability in respect of death arising out of and in the course of any employment of the persons insured unless---- first, the liability of the insured arises under workman’s compensation Act 1923 and second: if the employee is engaged in driving the vehicle and if it is public service vehicle m engaged as conductor of the vehicle or in examining tickets on the vehicle. If the concerned employee is neither a driver nor conductor nor examiner of tickets, the insured cannot claim that the employee would come under the description of ‘any person’ or ‘passenger’. If this was permissible , then there would be no need to make special provisions for employees of the insured. The mere mention of the word ‘cleaner’ while describing the seating capacity of the vehicle does not mean that the cleaner therefore a passenger. Besides the claim of the deceased employee was adjudicated upon by the Workmen’s compensation Court which could have assumed jurisdiction and passed an order directing compensation only on the basis that the deceased was an employee. This order cannot now be enforced on the basis that the deceased was a passenger.”
(Emphasis supplied)
5. In the case of National Insurance Co. Ltd., Vs. Vidhyadhar Mahariwala and others reported in 2008 (12) SCC 701, the accident occurred on 11/06/2004. The driver’s licence was renewed only up to 14/12/2000. Thereafter, the deriver’s licence was once again renewed from 16/05/2005 to 15/05/2008. It was contended by the insurance company that the deriver’s licence was not valid as on the date of the accident and therefore Insurer had no liability to pay the compensation. The Motor Accident Claims Tribunal turned down the said plea. The order of the Motor Accident claims Tribunal was confirmed by the High Court. The matter was taken to Apex Court. The Apex Court taking into consideration the decision in the case of Ishwar Chandra Vs. Oriental Insurance Co. Ltd., reported in (2007) 10 SCC 615 and the judgment in the case of National Insurance Colt., Vs. Kusum Raj reported in 2006 ACJ 1336 (SC) and the judgment of National Insurance Co. Ltd., Vs. Swaran Singh reported in 2004 ACJ 1 (SC) held the insurance company have no liability to pay the compensation. However, while deciding the matter the Apex Court has also reserved as under:-
“ in each case on evidence led before the Claims Tribunal a decision has to be taken whether the fact of the driver possessing licence for one type of vehicle but found driving another type of vehicle, was the main or contributory cause of accident. If on facts. It is found that accident was caused solely because of some other unforeseen or intervening causes like mechanical failures and similar other causes having no nexus with driver not possessing requisite type of licence, the insurer will not be allowed to avoid its liability merely for technical breach of conditions concerning driving licence.”
(Emphasis supplied)
6. In the case of Ram Babu Tiwari Vs. United India Insurance Co., Ltd., and others reported in 2008 ACJ 2654, the driving licence of the driver of offending vehicle had expired about three years prior to the accident and was got renewed after the date of accident. The Apex Court after considering various provisions of Motor Vehicles Act,1988 and other judgments of the Apex Court has observed thus:-
“It is beyond any doubt or dispute that only in the event an application for renewal of licence is filed within a period of 30 days from the date of expiry thereof, the same would be renewed automatically which means that even if an accident had taken place within the aforementioned period, driver may be held to be possessing a valid licence. The proviso appended to sub-section (1) of Section 15, however clearly states that the driving licence shall be renewed with effect from the date of its renewal in the event the application for renewal in the event the application for renewal of a licence is made more than 30 days after the date of it expiry. It is , therefore, evident that so on renewal of the licence on such terms, the driver of the vehicle cannot be said to be holding a valid licence, the insurer would not be liable to indemnify the insured.
(Emphasis Supplied)
7. In the case of United India Insurance Co. Ltd., Vs. Lehru and others report in 2003 (3) SCC 338, the apex Court has observed that where the owner has satisfied himself that the driver has a Licence and is driving competently prior to hiring the driver, there would be no breach of section 149 (2) (a) (ii) of M.V. Act and the insurer would not be absolved of liability. If ultimately the licence is found to be fake, the insurer would continue to be liable unless he proves that the owner/insured was aware of that fact and had still permitted that person to drive. Even in such a case, the insurer would remain liable to the innocent third party, but may be able to recover the amount from the insured. In the said matter, the Apex court has held that in case if the third parties have suffered due to accident, they should be paid compensation by the insurer and thereafter the insurer may recover the am0unt from the insured.
8. In the case of The Oriental Insurance Company Vs. Mohammed Sab Ali Sab Kaladagi and Ors. Reported in ILR 1998 KAR 4014, this Court has held that inspite of expiry of the driving licence prior to the accident, the insurance company is liable to pay compensation, even if the driving licence had not been renewed.
9. In the aforementioned two judgments i.e., in the case of United India Insurance Co. Ltd., Vs. Lehru and others reported in (2003) 3 SCC 338 and the Oriental Insurance Company Vs. Mohammed Sab Ali Sab Kaladagi and Ors. reported in ILR 1998 KAR 4014,the third parties had suffered due to accident. The persons who claimed compensation were not employees, but were third parties. Even otherwise, in view of subsequent judgments of the Supreme Court in the case of National Insurance Co. Ltd., Vs. Vidhyadhar Mahariwala and others, Ram Babu Tiwari Vs. United India Insurance Co. Ltd. and Ramashray Singh vs. New India Assurance co. Ltd., mentioned supra, the observations and the dictum laid down in the matter of The Oriental Insurance Company Vs. Mohammed? Sab Ali Sab Kaladagi and Ors. Reported in ILR 1998 KAR 4014 and United India Insurance Co. Ltd., Vs. Lehru and others reported in (2003) 3 SCC 338 may not be much help to the case of respondent No.2 (insured).
10. Section 2(5) of the Motor Vehicle Act, 1988 defines “conductor”. To act as conductor, conductor’s licence is necessary.Conductor’s licence is defined under Section 2 (6) of the Act. Section 29 of the Act mandates that no person shall act as a conductor of a stage carriage unless he holds an effective conductor’s licence issued to him authorizing him to act as a conductor. It also` mandates that no person shall employ or permit any person who is not so licensed to act as a conductor of a stage carriage. Thus it is clear that Section 29not only directs the workman that he shall not act as a conductor unless he holds an effective conductor’s licence issued to him, but also mandates the employer that he shall not employ or permit any person whop isnot so licensed to act as conductor of a stage carriage.
From the above, it is clear that it is absolutely necessary to have conductor’s licence for conducting stage carriage bus, which means that a person who does not have conductor’s licence cannot act as conductor and consequently he cannot be termed as conductor.
11. Section 36 of the M.V. Act states that provisions of Sub-section (2) of Section 6, sections 14, 15 and 23 and sub-section (1) of Section 24 and section 25 of the M.V. Act shall, so far as may be, apply in relation to a conductor’s licence, as they apply in relation to a driving licence. Hence, it is clear that the provision of Section 15 which deals with renewal of driving licence applies in relation to renewal of conductor’s licence also. Section 36 read with Sub-Section(1) of Section 15 discloses that the licensing authority may, on application may to it, renew a driving /conductor’s licence issued under the provisions of M.V. Act with effect from date of its expiry. Proviso to sub-section (1) of Section 15 further clarifies that where the application for renewal of licence is made more than thirty days after the date of its expiry, the driving licence/conductor’s licence shall be renewed with effect from the date of its renewal. Thus it is amply clear that in case if a person applies for renewal of conductor’s licence within 30 days of its expiry i.e., with retrospective effect, whereas, if the conductor who’s licence has expired, files an application for renewal of conductor’s licence beyond the period of 30 days from the date of expiry, then the licence will be renewed with prospective effect i.e., from the date of renewal of the licence.
12. Hence, it is clear beyond any doubt or dispute that only in the event an application for renewal of licence is filed within thirty days from the date of expiry, the same would be renewed automatically, which means, if the accident has taken place within the aforesaid period of the 30 days, the driver may be held to be possessing valid licence. The proviso appended to sub-section (1) of Section 15 of M.V. Act further makes it clear that the driving licence shall be renewed with effect from the date of its renewal, in the event, the application for renewal of licence is made more than 30 days after the date of its expiry. Hence, as held by the Apex Court in the case of Ram Babu Tiwari cited supra, in such an event, the conductor of the vehicle cannot be said to be holding valid and effective conductor’s licence during the interregnum, in case if such an application is not filed for renewal within 30 days from the date of its expiry and consequently insurer would not be liable to indemnify the insured.
13. Proviso appended to sub-section (1) of Section 147 of M.V. Act clarifies that insurance policy shall not be required to cover liability in respect of the death arising out of and in the course of employment of the employee of a person insured or in respect of body injury sustained by such an employee arising out of and in the course of employment other *than liability arising under the Workmen’s Compensation Act, 1923 and in respect of the death of, or bodily injury to any such any employee engaged in driving the vehicle, conducting the vehicle, examining tickets on the vehicle, or the employee who is being carried in the vehicle in case of goods carriage.
14. Thus, it is clear that the conductor also who conducts the vehicle is also entitled to be compensated by the insurer provided, the conductor is having effective conducting licence as on the date of accident.
If the conducting licence and if no renewal is made within 30 days of the date of expiry, then the insurer is not obliged to cover liability to pay the compensation in respect of conductor whose licence had expired. In case if the conductor has made an application for renewal of licence within 30 days from the date of expiry thereof, the licence would be automatically renewed, which means that if the accident had taken place within the period of 30 days, the driver or conductor, as the case may be, will be held to be possessing a valid licence. But in case if such an application for renewal is not made within 30 days from the date of expiry of licence, the licence would be renewed from the date of renewal and does not have retrospective effect. In the matter on hand, the licence was not renewed after 04/03/2003 and the accident had occurred on 19/11/2003, which means, the licence had expired eight months prior to the accident. If it is so, insurer would not be liable to indemnify the insured and consequently the insurer is not liable to pay compensation.
15. In paragraph 10 of the judgment dated 11/08/2010 passed by this Court in MFA NO. 2570/2005, it is observed thus:-
“Looking into the provisions of Section 29 of the Motor Vehicles Act, it is clear that a person who does not possess conductor’s licence cannot be appointed as a conductor. If a person does not possess conductor’s licence is appointed as a conductor, it would be an offence under the Motor Vehicle Act. The purpose of obtaining licence by a person to work as conductor to see that he shall manage the passengers by giving first aid whenever an accident occurs or during emergency requirement, but a person has been appointed without there being a licence, insurance company cannot contend that it cannot satisfy the award if a claim petition is lodged by the such conductor if he suffers any injury during the course of his employment. Therefore, we are of the opinion that the insurance company cannot take a stand since the respondent – claimant had not possess the conductor’s licence, does not liable to satisfy the award. “
(Emphasis supplied)
16. While making the aforementioned observations, the Bench has taken into consideration the provisions of Section 29 of M.V. Act. It has not taken into consideration the other provisions of M.V. Act quoted supra. It has also not taken into consideration the judgments of Apex Court mentioned supra. Thus the observations has made in para 10 in MFA No. 2570/2005 are per-incuriam, inasmuch as, those observations run contrary to the observations made by the Apex Court in the case of Rama Babu Tiwari Vs. United India Insurance Co. Ltd., and others and in the case of National Insurance Co. Ltd., Vs. Vidhyadhar Mahariwala and others and in the case of RamashraySingh cited supra. If the observations contained in para – 10 are accepted, then, any employee who is not covered under Section 147 of M.V. Act also will have the benefit of insurance coverage to which he is not actually entitled. Accordingly, the question referred are answered as under:-
1. Insurance company cannot be fastened with liability to pay compensation to a person who was working as conductor in a bus, conductor’s licence having expired and having not been renewed on the date of occurrence of the accident and sustaining an injury/permanent disability.
2. The entire judgment dated 11/08/2010 in MFA NO. 2570/2005 is not per incuriam, but observations made in para 10 of the said judgment are per incuriam.
The Registry is directed to place the file before Hon’ble Chief Justice for further orders regarding posting of the matter before the appropriate Bench.