RAM CHANDRAversusREGIONAL MANAGER UNITED INDIA INSURANCE CO. LTD.

                     (2013] 14 S.C.R. 1


                      RAM CHANDRA                              A
                             v.
 REGIONAL MANAGER UNITED INDIA INSURANCE CO.
                        LTD.
          (Civil Appeal No. 8725 of 2012)
                                                                B
                     AUGUST 2, 2013
             '                    .
     [G.S. SINGHVI AND GYAN SUDHA MISRA, JJ.]

     Compensation - Liability to pay compensation - In
respect of death or bodily injury to an employee :.:. In a motor C
accident - Whether to be estricted to Workmenls
Compensation Act or would be also under Motor Vehicles Act
- Held: The liability cannot be restricted under Workmen's
Compensation Act and it can be expanded under Motor
Vehicles Act, provided the contractual document (policy of D
insurance) incorporates such clause regarding the premium
to be paid taking into account the nature of the policy- Hence
claimant is entitled to amount of compensation over and
above Worl<inen's Compensation Act, subject to the rider that
the statutory liability cannot be more thari what is required E
 under the statute u/s. 95 of Motor Vehicles Act - Worl<men's
Compensation Act, 1923 - Motor Vehicles Act, 1988.
    The question for consideration in the present appeal
was, when the labourer/employee is injured during the
course of employment due to negligence of the driver of         F
the vehicle, which caused the accident, whether the
compensation could be limited to the amount admissible
under Workmen's Compensation Act, 1923 or
compensation would also be payable under the Motor
Vehicles Act, 1988.                                             G
                                      .·
    . Allowing the appeal, the Court
    HELD: 1. The liability to pay compensation in respect
of death or bodily injury to an employee should not be
                              1                                 H
    2      SUPREME COURT REPORTS             [2013] 14 S.C.R.


A   restricted to that under the Workmen's Compensation Act
    but should be more or unlimited. However, the . ·
    determination would depend whether a policy has been
    taken by the vehicle owner by making payment of extra
    premium and whether the policy also contains a clause
B   to that effect. [Para 17] [16-G-H]
        National Insurance Company vs. Prembai Patel and Ors,
    (2005) 6 SCC 172: 2005 (3) SCR 655; New India Assurance
    Company Ltd. vs. C.M. Jaya and Ors. (2002) 2 SCC 278:
    2002 (1) SCR 298; New India Assurance Co. Ltd. vs. Shanti
C   Bai and Ors. (1995) 2 SCC 539: 1995 (1) SCR 871; Amrit
    Lal Sood vs. Kaushalya Devi Thapar and Ors. (1998) 3 SCC
    744: 1998 (2) SCR 284 - relied on.
      2. The High Court was not correct in holding that the
  claimant/appellant was not entitled to any compensation
0
  over and above the liability under the Workmen's
  Compensation Act and hence the direction issued by the
  High Court that the appellant/insurance company,
  respondent herein, will be liable to pay only Rs. 320911-
  and the balance will have to be shouldered by the
E insured/owner of the vehicle is fit to be struck down as
  invalid as the High Court had failed to examine the nature
  and clauses of the policy which was not produced even
  before the Tribunal. [Para 19] [17-0-E]
F       3. The claimant/appellant is entitlecl to the amount of
    compensation over and above the Workmen's
    Compensation Act. The rider no doubt is that the
    statutory liabilitY cannot be more than what is required
  · under the statute under Section 95' of the Motor Vehicles
    Act which cannot bind the parties or prohibit them from
G contracting or creating unlimited or higher liability to
    cover wider risk and the insured is bound by the terms
    of the contract specified. in the policy in regard to
    unlimited or higher liability as.the case may be. [Para 20]
H [17-F-H]
   RAMCHANDRA v. REGIONAL MANAGER UNITED                   3
          INDIA INSURANCE CO. LTD.
     4. In the instant matter insofar as the entitlement of A
the claimant to the compensation under the Motor Vehicle
Act is concerned, the right of the claimant is not affected.
However, the respondent/insurance company had filed an
appeal in the High Court contending that the order of the
Tribunal could not be sustained in law to the extent of B
liability over and above the liability under the Workmen's
Compensation Act and on this point the contention of the
appellant/company has been accepted by the High Court
overlooking the more important fact that the Respondent
insurer company had neither produced the policy of c
insurance before the High Court nor led any evidence to
establish that as per terms and conditions of policy extra
premium had not been paid. [Para 21) [18-C-E)

     5. The High Court, however, further overlooked that
the apportionment of the amount of compensation D
between the owner of the vehicle and the insurance
company was an inter se dispute between insurance
company and the insured/owner of the vehicle and,
therefore, the order due to non-appearance of the
insured/owner of the vehicle could not have been passed E
to the detriment of the claimant as the claimant in any
case is entitled to the amount of compensation
determined by the tribunal. If the insurance company
acquiesced with the situation and allowed the proceeding
to continue even in absence of the insured/owner of the F
vehicle who has been held liable to pay the amount even
though the insured might have been liable to pay higher
premium,. the consequence of the same obviously will
have to be borne by the insurance company and the ·
claimant cannot be made to suffer. [Para 22) [18-G-H; 19- G
A-CJ

    6. Hence, at the stage of appeal before the High
C'ourt, there is no legal justification for the High Court to
leave it open to the insurance company to realize the
                                                                H
    4      SUPREME COURT REPORTS            [2013] 14 S.C.R.


A amount of compensation beyond Rs. 32,091/- from the
  insured/owner as the plea of the respondent/insurance
  company althrough was that the claimant is not entitled
  to any compensation beyond the extent of liability under
  the Workmen's Compensation Act and the respondent/
s insurance company had not taken the alternative plea
  either before the tribunal or the High Court that in case
  the claimant is held entitled to compensation beyond the
  extent of liability under the Workmen's Compensation
  Act, the same was not payable as no extra premium was
c paid by the insured/owner under the policy of insurance.
  The insurance company had failed to raise any plea
  before the courts below i.e. either the Motor Accident
  Claims Tribunal or the High Court and it did not even
  contend that in case the claimant is entitled to any
  compensation beyond what was payable under the
0
  Workmen's Compensation Act, it is the insured owner
  who was liable to pay as it had no contractual liability
  since the insured/owner of the vehicle had not paid any
  extra premium. Thus, this plea was never put to test or
  gone into by the Motor Accident Claims Tribunal since
E the insurance company neither took this plea nor
  adduced any evidence to that effect so as to give a cause
  to the High Court to accept this plea of the insurance
  company straight away at the appellate stage. [Para 23)
  [19-C-H]
F
       7. Consequently, the High Court's view impliedly
  holding that the claimant/appellant was not entitled to any
  compensation under the Motor Vehicles Act beyond the
  entitlement under the Workmen's Compensation Act so
G as to leave it open to the Respondent/Insurance
  Company to realise it from the owner of the vehicle at the
  belated stage of appeal before the High Court when the
  respondent/insurance company had failed even to urge
  the alternative plea regarding non-payment of extra
H
   RAMCHANDRA v. REGIONAL MANAGER UNITED                   5
          INDIA INSURANCE CO. LTD.

premium by the owner of the vehicle and had even                A
reconciled to the fact that the owner of the vehicle had
failed to appear in spite of service of notice, is not fit to
be sustained. [Para 24) [20-A-C]

     8. The insurance companies although contend before
                                                               8
the Motor Accident Claims Tribunal and even at the appeal
stage that it is the owner of the vehicle which is liable to
bear a part or the entire liability of making the payment
of compensation to the claimant in view of the nature of
policy, or even due to invalid licence by the driver of the
owner of the vehicle, the insurance company fails to lead C
any evidence to establish as to how the owner and not
the insurance company is liable to pay the compensation
and even submits to non-appearance of the owner of the
vehicle whose appearance is vital in view of inter-se
contest between the owner of the vehicle and the D
insurance company. In absence of the owner of the
vehicle, when the Motor Accident Claims Tribunal or the
High Court leaves it open to the insurance company
subsequently to realise the amount from the owner of the
vehicle by instituting a fresh proceeding. It gives rise to E
a fresh proceeding between the owner and the insurance
company putting unnecessary burden on the Motor
Accident Claims Tribunal to try the issue all over again.
In fact, if the insurance company were to succeed in
establishing by leading cogent evidence at the initial F
stage itself before the Tribunal that it is the owner of the
vehicle which is liable to pay even if the evidence is ex
parte in nature, it would at least facilitate the issue in the
subsequent proceeding when the insurer initiates
proceeding for realising the amount from the owner/ G
insured. But in absence of such evidence, the insurer/
companies are a loser and enures advantage to the
owner who happens to gain by choosing not to appear.
[Para 25] [20-D-H; 21-A-B]

    9. The Insurance Companies would fair better if they        H
    6       SUPREME COURT REPORTS            [2013] 14 S.C.R.


A were to address this issue before the Tribunal itself
  instead of becoming wiser at the stage of appeal. What
  is wished to be emphasized is that if the owner chooses
  not to appear before the Tribunal although his
  appearance is necessary in a given case, the insurance
B company would do well instead of acquiescing with their
  absence to their detriment giving an upper edge to the
  owner at their own peril. [Para 25] [21-8-0)

      General Manager, Kera/a State Road Transport
  Corporation, Trivandrum vs. Sussama Thomas (1994) 2 SCC
C 176 - relied on.

        10. In the instant matter, the High Court although had
   granted liberty to the insurance company to realise the
   amount from the owner of the vehicle, it failed to record
 o expressly that the respondent insurance company shall
   pay the amount to the appellant/claimant determined by
   the Motor Accident Claims Tribunal although impliedly the
   High Court ha's not denied the amount to the claimant/
   appellant. But in absence of a categorical direction to the
.E respondent/insurance company to pay the entire amount
   to the appellant as determined by the Motor Accident
   Claims Tribunal, the appellant is bound to confront
   impediments in realizing the amount. Hence, the direction
   of the High Court is clarified to the extent by recording
 F that the respondent/insurance company shall pay the
   balance amount also beyond Rs.32,091/- along with
   interest to the Claimant expeditiously but not later than
   a period of six weeks from the date of receipt of this
   order. [Para 26) [21-0-G]

G     11. The High Court which impliedly held that the
  employee/claimant is entitled to compensation only
  under the Workmens' Compensation Act and not under
  the Motor Vehicle's Act stands set aside and the liberty
  granted to the Respondent/Insurance Company to realise
H the amount from the owner without a corresponding
    RAMCHANDRA v. REGIONAL MANAGER UNITED                     7
           INDIA INSURANCE CO. LTD.
  direction to the Respondent/Insurance company to pay            A
  the amount to the Claimant/Appellant making the
. appellant liable to realise it from the owner of the ve!Jicle
  stands modified as indicated. (Para 27) (21-H; 22-A-B]

      Suresh Chandra vs. State of UP.and Anr. 1996 ACJ 1;
                                                                  8
 Karnataka State Road Transport Corporation and Ors. vs. R.
 Maheshwari and Ors. ILR 2003 Kar 3562; National Insurance
 Company Ltd. vs. Lagamanna and Ors. 2007 ACJ 50 -
 referred to.
                      Case Law Reference:                         c
      1996 ACJ 1               referred to         . Para 2
      ILR 2003 Kar 3562        referred to          Para 9
      2007 ACJ 50              referred to          Para 11
                                                                  D
      2005 (3) SCR 655         relied on            Para 13
      2002 (1) SCR 298         relied on            Para 15
      1995 (1) SCR 871         relied on            Para 15
                                                                  E
      1998 (2) SCR 284         relied on            Para 15
      (1994) 2 sec 176         relied on            Para 25
     CIVIL APPELLATE JURISDICTION : Civil Appeal No.
 8725 of 2012.                                                    F
     From the Judgment and Order dated 17.04.2007.of the
 High Court of Karnataka at Bangalore in MFA N0.6711 of 2004
 (MV).

      V.N. Ragnupathy for the Appellant.                          G

      P. R. Sikka for the respondent.

      The Judgment of the court was delivered by
      GYAN SUDHA MISRA, J. 1. The judgment and order              H
    8       SUPREME COURT REPORTS                (2013] 14 S.C.R.


A dated 17.4.2007 passed by the High Court of Karnataka at
  Bangalore in M.F.A.No. 6711/2004 (MV) is the subject matter
  of challenge in this appeal whereby the learned single Judge
  of the High Court was pleased to allow the appeal preferred
  by the respondent No.1- United India Insurance Company Ltd.
B through its Regional Manager holding therein that the liability
  of the respondent No.1-United India Insurance Company Ltd.
  (shortly referred to as 'the Insurance Company') to pay
  compensation is restricted to one under the Workmen's
  Compensation Act, 1923 and the amount to which the
c respondent No.1 herein will be liable to pay is Rs.32091/-
  (Rupees Thirty Two Thousand and Ninety One Only) and the
  balance amount will have to be borne by the insured -owner of
  the vehicle who had been impleaded by the appellant/claimant
  as respondent No. 2 herein but was allowed to be deleted by
D this Court from the array of parties at the risk of the appellant/
  claimant herein. The High Court vide its impugned order was
  thus pleased to hold that the liability of the insurance company/
  respondent No.1 is restricted to the one under the Workmen's
  Compensation Act, 1923 only and hence was not liable to pay
  any compensation under the Motor Vehicles Act, 1988.
E
       2. The substantial question of law in this appeal therefore
  is confined to determination of the question as to whether the
  learned single Judge of the High Court could have passed the
  impugned order holding therein that when the labourer/
F employee is injured during the course of employment due to
  negligence of the driver of the vehicle which caused the
  accident, then whether the compensation could be limited to
  the amount admissible under the Workmen's Compensation
  Act or compensation would also be payable under the Motor
G Vehicles Act ?
      The appellant/claimant has raised this question relying
  specially on the ratio of the judgment of this Court in Suresh
  Chandra vs. State of U. P. & Anr. reported in 1996 ACJ 1
  wherein this Hon'ble Court has held that when the labourer
H sustains injuries during the course of his employment due to
   RAMCHANDRA v. REGIONAL MANAGER UNITED                        9
 INDIA INSURANCE CO. LTD. [GYAN SUDHA MISRA, J.]

 negligence of the driver which met with an accident and the         A
 claim is made under the Motor Vehicles Act, the compensation
·could not be limited to the amount admissible under the
 Workmen's Compensation Act.

     3. Relevant factual details giving rise to the aforesaid        B
question in this appeal disclose that the appellant/claimant filed
a claim petition claiming compensation for the injuries
sustained by him in a road traffic accident which took place on
10.9.1996 about 4.00 p.m. when the claimant was travelling in
a Swaraj Mazda Matator bearing registration No. KA-01-2337
as a cleaner. According to the case of the claimant, the driver      C
of the vehicle drove the same in a rash and negligent manner
and when the said vehicle came near Doddabande Crossing,
the vehicle dashed against the lorry bearing registration No. TN-
28B-8397 which was parked on the road as a result of which
the appellant who was travelling on the said vehicle as a            D
cleaner sustained grievous injuries. The injured was, therefore,
taken for the first aid treatment at Penukonda Government
Hospital and was later shifted to Victoria Hospital, Bangalore
as an inpatient. The 2nd respondent in this appeal was Mr. S.
Sathyamurthy who admittedly is the owner of the vehicle Swaraj       E
Mazda and the said vehicle was insured with the 1st respondent
herein the United India Insurance Company Ltd. Hence, the
claimant laid claim against both the respondents before the
Motor Accident Claims Tribunal and Court of Small Causes at
Bangalore wherein he urged that the respondents are liable to        F
pay just and adequate compensation.

      4. The respondent No.1- insurance company appeared
 and filed objections contending therein that the vehicle was
 being driven without a valid and effective driving license in       G
 contravention of the provisions of the Act due to which the
 insurance company was not required to pay any compensation.
 It was further contended by the insurance company that the
 vehicle in question is a passenger carrying vehicle and the
 policy of insurance issued was only an act coverage in which
                                                                     H
    10       SUPREME COURT REPORTS                [2013] 14 S.C.R.


A the claimant appellant was proceeding as a cleaner. Hence the
  policy of insurance issued by the respondent does not cover
  the risk of the cleaner as per Section 147 of the Motor Vehicles
  Act since the policy of insurance covering the accident vehicle
  being an act of coverage does not cover the risk of the cleaner;
B hence the respondent insurance company was not liable to pay
  compensation. The respondent -insurance company, therefore,
  sought dismissal of the claim petition.

       5. The respondent No.2/the owner of the vehicle herein
  although was served with the notice, he failed to appear before
C the tribunal and hence the matter proceeded only against the
  respondent - insurance company.

        6. The Motor Accident Claims Tribunal on a scrutiny and
  analysis of the evidence led by the contesting parties, was
D pleased to record a finding that the appellanUclaimant was
  travelling in the Matadar van and the accident took place due
  to rash and negligent driving of the said van by its driver due
  to which the app.ellant herein sustained grievous injuries. On the
  basis of the evidence it was further recorded that the appellant ·
E sustained fracture of right shaft femur. He was an inpatient at
  Victoria Hospital for a period of one and a half month wherein
  his leg was operated and rod was fixed to the fractured bone,
  head injury was sutured and treated conservatively. After
  discharge, he also had to undergo follow up treatment by visiting
F the hospital for a period of one year once in 15 days a month
  as advised by the doctors. The tribunal on.an assessment of
  the injury sustained by the claimant and the expenses incurred
  on the treatment was pleased to hold that the claimant was
  entitled to a sum of Rs.1,42,800/- towards compensation.

G         7. Since the quantum of compensation is not under
    challenge in this appeal, it is inessential to go into the details
    of the nature of injury and the amount awarded to the claimant.
    In addition, the plea of the insurance company that the driver
    was not holding a valid license had also been rejected by the
H
  RAMCHANDRA v. REGIONAL MANAGER UNITED                         11
INDIA INSURANCE CO. LTD. [GYAN SUDHA MISRA, J.]
tribunal which finding is not under challenge and hence it is         A
equally inessential to deal with this aspect.

      8. The principal ground of challenge at the instance of the
respondent-insurance company was that the appellant was
travelling in a matador van as a cleaner; hence his remedy was
                                                                      B
to claim compensation under the Workmen's Compensation
Act and the tribunal had no jurisdiction to entertain the claim
filed by the cleaner.

       9. However, the tribunal referred to the law laid down by
the full Bench of the Karnataka High Court in the case of             C
Karnataka State Road Transport Corporation and Ors. Vs. R.
Maheshwari and Ors. reported in ILR 2003 Kar 3562, wherein
it was held that the insurer 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 even in           D
proceedings under the Motor Vehicles Act without such liability
having been first determined or adjudged under the Workmen's
Compensation Act. In view of the ratio of this decision, the
tribunal was pleased to hold that the respondent-insurance
company being the insurer was liable to pay compensation. The         E
claim petition consequently was allowed in part awarding
compensation of Rs. 1,42,800/- together with costs and interest
at 6 per cent per annum from the date of filing of claim petition
till the date of payment against the respondent - insurance
company and respondent-insured/owner of the vehicle jointly           F
and severally. However, the respondent-insurance company
being the insurer of the offending vehicle, it was ordered to pay
the entire compensation awarded.

     10. The respondent-insurance company assailed the
judgment and order of the tribunal by filing a first appeal bearing   G
MFA No.6711/2004 in the High Court of Karnataka at
Bangalore wherein the learned single Judge recorded that the
only grievance of the appellant-insurance company was that
while allowing the claim petition, the first respondent/claimant
                                                                      H
    12       SUPREME COURT REPORTS                 [2013] 14 S.C.R.


A had put the entire burden on the appellant to satisfy the amount
  of Rs. 1,42,800/- which was awarded to the claimant. The
  counsel representing the insurance company submitted before
  the High Court that it was not in dispute that the claimant was
  travelling as a cleaner in the matador van in question and,
B therefore, the liability of the appellant ought to have been
  restricted under the Workmen's Compensation Act. As such,
  the order of the tribunal could not be sustained in law to the
  extent of liability over and above the liability under the
  Workmen's Compensation Act.
c        11. The learned single Judge of the High Court almost
    summarily allowed the appeal as he was of the view that the
    claimant having been a cleaner in the matador van insured with
    the appellant herein, the liability could not have been over and
    above the liability under the Workmen's Compensation Act.
D   The learned single Judge in support of his view relied upon the
    judgment and order reported in the case of National Insurance
    Company Ltd. Vs. Lagamanna & Ors. reported in 2007 ACJ
    50. The learned single Judge recorded that the Division Bench
    in the said decision had held that when no cover premium is
E   paid to cover larger liability, the liability of the insurance
    company will be restricted to the one under the Workmen's
    Compensation Act. It was, therefore, held that in the light of
    such settled position of law, the tribunal could not have put the
    entire liability on the appellant. The learned single Judge,
F   therefore, directed that the liability of the insurance company
    was restricted to one under the Workmen's Compensation Act
    which would be Rs.32,091/- and the balance will have to be
    shouldered by the insured/owner of the vehicle. It was further
    ordered that the rate of interest will be as per order of the Motor
G   Accident Claims Tribunal. The appeal was allowed to this extent
    but a further direction was given that if excess amount had been
    deposited, the same will be refunded to the insurance company.

      12. Since, the insured/owner of the vehicle had never
H appeared either before the tribunal or the High Court, the
   RAMCHANDRA v. REGIONAL MANAGER UNITED                       13
 INDIA INSURANCE CO. LTD. [GYAN SUDHA MISRA, J.]
claimant-appellant felt aggrieved and has, therefore, come up        A
in appeal before this court assailing the judgment and order of
the High Court wherein the directions recorded hereinabove is
under challenge.

     13. Learned counsel for the appellant/claimant in
                                                                     B
substance contended that the High Court ought not to have
passed the impugned order in view of the ratio of the judgment
and order passed by this Court in Suresh Chandra vs. State
of UP. & Anr. reported in 1996 ACJ 1 wherein this Hon'ble
Court has held that when the labourers sustain injuries during       C
the course of his employment due to the negligence of the driver
and the claim is made under the Motor Vehicles Act, the
compensation could not be limited to the amount admissible
under the Workmen's Compensation Act. Therefore, it was
submitted that the impugned order is liable to be set aside by
this Court. The counsel had further submitted that the tribunal      D
was justified and rightly directed the respondent-insurance
company to pay the compensation together with costs and
interest at 6 per cent per annum from the date of petition to the
date of payment and the first respondenUinsurance company
being the insurer of the vehicle was rightly directed to pay the     E
entire compensation. The learned single Judge was thus in
error in allowing the appeal of the respondent insurance
company in part which js fit to be struck down as illegal and
invalid.
                                                                     F
      14. Learned counsel representing the insurance company
 repelled the arguments advanced by the counsel for the
 claimanUappellant and essentially submitted that the liability of
 the insurance company to pay compensation to the claimant
 cleaner who was injured during the course of employment due         G
·to negligence of the driver would not be entitled to claim
 compensation under the Motor Vehicles Act but ~is
 compensation would be limited to the amount admissible under
 the Workmen's Compensation Act. Learned counsel while
 elaborating his submission however yielded to the extent that
                                                                     H
    14       SUPREME COURT REPORTS                   [2013] 14 S.C.R.


A although the insurance company may be held liable to pay
  compensation under the Motor Vehicles Act beyond what is
  admissible under Workmen's Compensation Act, the same
  would be payable provided the insured/owner of the vehicle had
  paid higher premium to cover the liability of its employees and
B only then the insurance company would be liable to pay the
  compensation to the employees over and above the liability
  under the Workmen's Compensation Act. In absence of
  payment of cover premium, the liability of insurance company
  will be restricted only to the one which is payable under the
c Workmen's Compensation Act. It was, therefore, submitted
  that the High Court was correct in allowing the appeal of the
  insurance company by restricting its liability to Rs. 32,091/- only
  and rightly ordered refund of the amount by the claimant/
  appellant which has been assailed by the claimant herein.
D       15. In support of his submission, counsel for the insurance
  company has invited the attention of this Court to the case of
  National Insurance Company vs. Prembai Patel & Ors.,
  reported in (2005) 6 SCC 172. In this matter, the claim petition
  had been filed by the respondent/claimant 3 to 6 claiming
E compensation for the death of one Sunder Singh who was an
  employee of the insured/owner of the vehicle who died in the
  accident in course of his employment and a claim petition was
  filed claiming compensation under the Motor Vehicles Act. The
  main question which arose for consideration in the said appeal
F was whether the appellant/insurance company was liable to pay
  the entire amount of compensation awarded to the claimants
  or its liability was restricted to that which was prescribed under
  the Workmen's Compensation Act. The learned Judges in this
  matter observed as under:
G
         "The insurance policy being in the nature of a contract, it
         is permissible for an owner to take such a policy wherein
         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 the proviso 1 to Section 147 (1)(b) of the
H
  RAMCHANDRA v. REGIONAL MANAGER UNITED                          15
INDIA INSURANCE CO. LTD. [GYAN SUDHA MISRA, J.]
    Motor Vehicles Act may be fastened upon the insurance              A
    company and the 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       B
    company in case of death of or bodily injury in the
    aforesaid kind of employee is not restricted to that
    provided under the Workmen's Compensation Act and is
    either more or unlimited depending upon the quantum of
    premium paid and the terms of the policy."                         c
     The learned Judges in this ruling held that this interpretation
is in consonance with the view expressed by a Constitution
Bench in New India Assurance Company Ltd. vs. C.M. Jaya
& Ors., reported in (2002) 2 SCC 278 wherein while interpreting
the provision.s of Section 95 (2) of the Motor Vehicles Act 1939,      D
the Court held as under in para 10 of the report :-

     " ........................ The liability could be statutory or
     contractual. A statutory liability cannot be more than what
     is required under the statute itself. However, there is           E
     nothing in Section 95 of the Act prohibiting the parties from
     contracting to create unlimited or higher liability to cover
     wider risk. In such an event, the insurer is bound by the
     terms of the contract as specified in the policy in regard
     to unlimited or higher liability as the case may be. In the
                                                                       F
     absence of such a term or clause in the policy, pursuant
     to the contract of insurance, a limited statutory liability
     cannot be expanded to make it unlimited or higher. If it is
     so done, it amounts to rewriting the statute or the contract
     of insurance which is not permissible."
                                                                       G
     Several other authorities were also relied upon which were
rendered in New India Assurance Co. Ltd. vs. Shanti Bai &
Ors. (1995) 2 SCC 539 and Amrit Lal Sood vs. Kaushalya
Devi Thapar & Ors., (1998) 3 SCC 744 wherein it was held
that in case of insurance policy not taking any higher liability       H
    16      SUPREME COURT REPORTS                  [2013) 14 S.C.R.


A by accepting a higher premium, the liability of the insurance
  company is neither unlimited nor higher than the statutory liability
  fixed under Section 95 (2) of the Motor Vehicles Act 1939. It
  was further laid down that it is open to the insured to make
  payment of additional higher premium and get higher risk
B covered in respect of 3rd party also. But in the absence of any
  such clause in the insurance policy, the liability of the insurer
  cannot be unlimited in respect of 3rd party and it is limited only
  to the statutory liability.

         16. The learned Judges therefore held that in case the
c owner of the vehicle wants the liability of the insurance company
  in respect of death of or bodily injury to any such empl()yee as
  is described in clauses (a) or (b) or (c) of proviso (i) to Section
  147 (1) (b), the same should not be restricted to that under the
  Workmen's Compensation Act but should be more or unlimited,
D but he must take such a policy by making payment of extra
  premium and the policy should also contain a clause to that
  effect. However, where the policy mentions "a policy for Act
  Liability" or "Act Liability", the liability of the insurance company
  qua the employees as aforesaid would not be unlimited but
E would be limited to that arising under the Workmen's
  Compensation Act. The learned Judges were, therefore,
  pleased ·to hold that the liability of the insurance company to
  satisfy the award would be restricted to that arising under the
  Workmen_'s Compensation Act and the owner of the vehicle
F was held liable to satisfy the remaining portion of the award.

           17. A perusal of the aforesaid judgment and order of this
    Court thus indicate that this Court has clearly held that the
    liability to pay compensation in respect of death or bodily injury
    to an employee should not be restricted to that under the
G Workmen's Compensation Act but should be more or unlimited.
  · However, the determination would depend whether a policy has
    been taken by the vehicle owner by making payment of extra
    premium and whether the policy also contains a clause to that
    effect.
H
  RAMCHANDRA v. REGIONAL MANAGER UNITED                             17
INDIA INSURANCE CO. LTD. [GYAN SUDHA MISRA, J.]
      18. Thus in so far as the view of the High Court is                  A
concerned to the extent that the compensation would be
restricted to be paid only to the extent which is payable under
the Workmen's Compensation Act by making a sweeping
generalisation, the same is clearly contrary to the view taken
by this Court even in the judgment and order on which reliance             B
has been placed by the counsel for the respondent-insurance
company as it is sufficiently clear and unambiguously laid down
which is recorded hereinbefore that the compensation payable
to the employee cannot be restricted merely under the
Workmen's Compensation Act and it can be expanded                          c
provided the contractual document which is the policy of
insurance incorporates such clause regarding the premium to
be paid taking into account the nature of the policy.

      19. In the light of the aforesaid legal position, it is clear that   D
the High Court was not correct in holding that the claimanU
appellant was not entitled to any compensation over and above
the liability under the Workmen's Compensation Act and hence
the direction issued by the High Court that the appellant/
insurance company, respondent herein, will be liable to pay only
Rs. 32091/- and the balance will have to be shouldered by the              E
insured/owner of the vehicle is fit to be struck down as invalid
as the High Court had failed to examine the nature and clauses
of the policy which was not produced even before the Tribunal.

     20. The claimanUappellant is surely entitled to the amount            F
of compensation over and above the Workmen's
Compensation Act in view of the ratio of the decisions referred
to hereinbefore. The rider no doubt is that the statutory liability
cannot be more than what is required under the statute under
Section 95 of the Motor Vehicles Act which cannot bind the                 G
parties or prohibit them from contracting or creating unlimited
or higher liability to cover wider risk and the insured is bound
by the terms of the contract specified in the policy in regard to
unlimited or higher liability as the case may be. Thus, it is
although correct that limited statutory liability cannot be
                                                                           H
    18       SUPREME COURT REPORTS                [2013] 14 S.C.R.


A extended to make it unlimited or higher, it is also manifestly
  clear that insofar as the entitlement of the claimanUdeceased
  cleaner of the vehicle is concerned, the same cannot be
  restricted to the compensation under the Workmen's
  Compensation Act and is entitled to compensation even under
B the Motor Vehicles Act which will depend upon the terms and
  conditions of the policy of insurance.

        21. From this legal position it is also equally clear that in
  the instant matter insofar as the entitlement of the claimant to
C the compensation under the Motor Vehicle Act is concerned,
  the right of the claimant is not affected. However, the
  respondenUinsurance company had filed an appeal in the High
  Court contending that the order of the Tribunal could not be
  sustained in law to the extent of liability over and above the
  liability under the Workmen's Compensation Act and on this
D point the contention of the appellant/company tras been
  accepted by the High Court overlooking the more important fact
  that the Respondent insurer company had neither produced the
  policy of insurance before the High Court nor led any evidence
E to establish that as per terms and conditions of policy extra
  premium had not been paid.

       22. The question, therefore, is whether the amount of
  compensation could rightly be apportioned between the insurer/
  insurance company and the insured/owner of the vehicle.
F However, the owner of the vehicle had not appeared before the
  tribunal but the insurance company allowed the matter to be
  proceeded before the tribunal and wheFI the respondenU
  insurance company filed an appeal in the High Court, the
  insured/owner of the vehicle once again failed to appear but
G the Respondent- Insurance Company did not pursue for his
  appearance. The High Court, however, further overlooked that
  the apportionment of the amount of compensation between the
  owner of the vehicle and the insurance company was an inter
  se dispute between insurance company and the insured/owner
H of the vehicle and, therefore, the order due to non-appearance
  RAMCHANDRA v. REGIONAL MANAGER UNITED                         19
INDIA INSURANCE CO. LTD. [GYAN SUDHA MISRA, J.]
of the insured/owner of the vehicle could not have been passed        A
to the detriment of the claimant as the claimant in any case is
entitled to the amount of compensation determined by the
tribunal. If the insurance company acquiesced with the situation
and allowed the proceeding to continue even in absence of the
insured/owner of the vehicle who has been held liable to pay          B
the amount even though the insured might have been liable to
pay higher premium, the consequence of the same obviously
will have to be borne by the insurance company and the
claimant cannot be made to suffer.

      23. Hence, at the stage of appeal before the High Court,        c
we find no legal justification for the High Court to leave it open
to the insurance company to realize the amount of
compensation beyond Rs.32,091/- from the insured/owner as
the plea of the respondent/insurance company althrough was
that the claimant is not entitled to any compensation beyond          D
the extent of liability under the Workmen's Compensation Act
and the respondent/insurance company had not taken the
alternative plea either before the tribunal or the High Court that
in case the claimant is held entitled to compensation beyond
the extent of liability under the Workmen's Compensation Act,         E
the same was not payable as no extra premium was paid by
the insured/owner under the policy of insurance. The insurance
company had failed to raise any plea before the courts below
i.e. either the Motor Accident Claims Tribunal or the High Court
and it did not even contend that in case the claimant is entitled     F
to any compensation beyond what was payable under the
Workmen's Compensation Act, it is the insured owner who was
liable to pay as it had no contractual liability since the insured/
owner of the vehicle had not paid any extra premium. Thus, this
plea was never put to test or gone into by the Motor Accident         G
Claims Tribunal since the insurance company neither took this
plea nor adduced any evidence to that effect so as to give a
cause to the High Court to accept this plea of the insurance
company straight away at the appellate stage.
                                                                      H
    20       SUPREME COURT REPORTS                  [2013] 14 S.C.R.


A       24. Consequently, the High Court's view impliedly holding
  that the claimanUappellant was not entitled to any compensation
  under the Motor Vehicles Act beyond the entitlement under the
  Workmen's Compensation Act so as to leave it open to the
  RespondenUlnsurance Company to realise it from the owner of
B the vehicle at the belated stage of appeal before the High Court
  when the respondenUinsurance company had failed even to
  urge the alternative plea regarding non-payment of extra
  premium by the owner of the vehicle and had even reconciled
  to the fact that the owner of the vehicle had failed to appear in
c spite of service of notice, is not fit to be sustained.
          25. At this stage, we deem it appropriate to take note of
    an important step which the insurance company generally fail
    to take and that is related to non appearance of the owner of
    the vehicle in spite of service of notice. The insurance
D   companies although contend befo~e the Motor Accident Claims
    Tribunal and even at the appeal stage that it is the owner of
    the vehicle which is liable to bear a part or the entire liability of
    making the payment of compensation to the claimant in view
    of the nature of policy, or even due to invalid licence by the
E   driver of the owner of the vehicle, the insurance company fails
    to lead any evidence to establish as to how the owner and not
    the insurance company is liable to pay the compensation and
    even submits to non appearance of the owner of the vehicle
    whose appearance is vital in view of inter se contest between
F   the owner of the vehicle and the insurance company. In absence
    of the owner of the vehicle, when the Motor Accident Claims
    Tribunal or the High Court leaves it open to the insurance
    company subsequently to realise the amount from the owner
    of the vehicle by instituting a fresh proceeding in view of the
G   ratio of the case of General Manager, Kera/a State Road
    Transport Corporation, Trivandrum Vs. Sussama Thomas,
    (1994) 2 sec 176, it gives rise to a fresh proceeding between
    the owner and the insurance company putting unnecessary
    burden on the Motor Accident Claims Tribunal to try the issue
H   all over again. In fact, if the insurance company were to succeed
  RAMCHANDRA v. REGIONAL MANAGER UNITED         21
INDIA INSURANCE CO. LTD. [GYAN SUDHA MISRA, J.]
in establishing by leading cogent evidence at the initial stage         A
itself before the Tribunal that it is the owner of the vehicle which
is liable to pay even if the evidence is ex parte in nature, it would
at least facilitate the issue in the subsequent proceeding when
the insurer initiates proceeding for realising the amount from
the owner/insured. But in absence of such evidence, the insurer/        B
companies are a loser and enures advantage to the owner who
happens to gain by choosing not to appear. The Insurance
Companies would fair better if they were to address this issue
before the Tribunal itself instead of becoming wiser at the stage
of appeal. What is wished to be emphasized is that if the owner         C
chooses not to appear before the Tribunal although his
appearance is necessary in a given case, the insurance
company would do well instead of acquiescing wjth their
absence to their detriment giving an upper edge to the owner
at their own peril.
                                                                        D
     26. In the instant matter, we have noted that the High Court
although had granted liberty to the insurance company to realise
the amount from the owner of the vehicle, it failed to record
expressly that the respondent insurance company shall pay the
amount to the appellant/claimant determined by the Motor                E
Accident Claims Tribunal although impliedly the High Court has
not denied the amount to the claimant/appellant. But in absence
of a categorical direction to the respondent/insurance company
to pay the entire amount to the appellant as determined by the
Motor Accident Claims Tribunal, the appellant is bound to               F
confront impediments in realizing the amount. Hence, the
direction of the High Court is clarified to the extent by recording
that the respondent/insurance company shall pay the balance
amount also beyond Rs.32,091/- along with interest to the
Claimant expeditiously but not later than a period of six weeks         G
from the date of receipt of this order.

     27. We are , thus, pleased to hold that the judgment and
order of the High Court which impliedly held that the employee/
claimant is entitled to compensation only under the Workmens'
                                                                        H
   22        SUPREME COURT REPORTS              (2013] 14 S.C.R.


A Compensation Act and not under the Motor Vehicle's Act
  stands set aside and the liberty granted to the Respondent/
  Insurance Company to realise the amount from the owner
  without a corresponding direction to the Respondent/Insurance
  company to pay the amount to the Claimant/Appellant making
B the appellant liable to realise it from the owner of the vehicle
  stands modified as indicated hereinbefore. The appeal
  accordingly is allowed but we refrain from making any order as
  to costs.
   Kalpana K. Tripathy                              Appeal allowed.