Insurance Company Not Liable If Motor Vehicle At Time Of Accident Was In Breach Of 'Purpose Of Use' As Per Policy: Telangana High Court

Brief Facts of the Case

One Padma-deceased was working as a labourer in the employment of the owner of the Tractor and Trailor. One day, while the deceased along with other labourers were proceeding in the Tractor and Trailer from one village to another, the tractor fell in a road side ditch due to which one of the labourers died on spot.

The insurance company deposed that the vehicle in question was a goods carrying vehicle and at the time of accident it was carrying a marriage party with nearly 25 persons and thus, the owner of the vehicle violated the terms of the policy and thus was not liable to indemnify the owner. This fact was supported by the police record as well. The insurance policy coverage was only at the time of loading and unloading operations for five coolies.

The Commissioner held that the deceased was returning from work along with other labourers and thus, the accident occurred during the course of employment. Moreover, the premium by insurance company was collected to cover the risk of five labourers under the policy. Therefore, the owner and insurer were jointly and severally liable to pay compensation to the dependents of the deceased workman.

M/s United India Insurance Company Limited who is the appellant filed the appeal aggrieved by the order dated 07.12.2006 passed by the Commissioner of Labour for Workmen's Compensation.

Issue of Law

Whether the Commissioner was justified in awarding compensation even if the claimants have not established employee and employer relationship between the deceased and Opposite Party and when the accident has not taken place during and in the course of employment?

Whether the Commissioner was correct in applying the provisions of Motor Vehicle Act for a claim petition under Workmen Compensation Act?

Observation of the Court

Justice P. Sree Sudha, on perusal of the charge sheet observed that the deceased and injured were labourers, but they were not working with the owner of the Tractor and Trailor and there was no employer and employee relationship between them and that the accident had not occurred during the course of employment since the deceased and injured were returning after attending the labour work in a Tractor along with marriage party and then they met with an accident.

Therefore, it amounted to breach of terms and conditions of the policy and the insurance company was not liable to pay the compensation.

The appeal by insurance company was thus allowed.

Case Title : M/S.UNITED INDIA INSURANCE CO LTD v. SRI RAMA SWAMY & 2 ORS

Citation: 2022 LiveLaw (Tel) 35

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