Case Note & Summary
The case involves an appeal by the National Insurance Company Ltd. against an order of the Commissioner under the Employees Compensation Act, 1923, awarding compensation to the parents of a deceased labourer. The deceased, Govinda, was employed by respondent No.3, the owner of a tractor-trolley, to load sand from a stream bank. On 5 May 2005, while Govinda and other labourers were loading sand, a part of the bank collapsed, burying Govinda, who died from injuries. The parents filed a claim under the Act. The owner admitted employment and stated the vehicle was insured. The Insurance Company denied liability, arguing the accident did not arise out of the use of the vehicle. The Commissioner held the Insurance Company liable. The High Court framed two substantial questions of law: whether the claimants were entitled to compensation under Sections 3 and 4 of the Act given that the policy covered risk of use of the vehicle but the accident occurred when the vehicle was not in use, and whether the compensation amount was just and proper. The court analyzed the meaning of 'use' of a vehicle, relying on precedents that 'use' implies the vehicle is in operation or in motion. It found that the tractor-trolley was stationary, parked near the stream, and the accident occurred due to the collapse of the bank during loading, not due to any movement or operation of the vehicle. Therefore, the accident did not arise out of the use of the vehicle. The court held that the Insurance Company was not liable to indemnify the owner. Consequently, the appeal was allowed, the impugned order was set aside, and the claim against the Insurance Company was dismissed. The court did not address the second question as it became academic.
Headnote
A) Employees Compensation Act, 1923 - Sections 3, 4 - Employer's Liability - Insurance Coverage - The claimants sought compensation for death of their son who died while loading sand from a stream bank onto a tractor-trolley. The insurance policy covered the risk of use of the vehicle. The court held that the accident did not arise out of the use of the vehicle as the vehicle was stationary and not in motion; the death was due to collapse of the stream bank. The insurance company was not liable. (Paras 1-12) B) Insurance Law - Motor Vehicle Insurance - 'Use' of Vehicle - The term 'use' in an insurance policy requires the vehicle to be in operation or in motion. Loading/unloading activity not amounting to use unless specifically covered. The court found that the tractor-trolley was not in use at the time of accident, hence the insurer was not liable. (Paras 5-10)
Issue of Consideration
Whether the claimants are entitled to compensation under Sections 3 and 4 of the Employees Compensation Act, 1923, when the insurance policy covered the risk of use of the trailer and trolley but the accident occurred when the said vehicle was not in use.
Final Decision
The appeal is allowed. The impugned order dated 30/09/2011 passed by the Commissioner under the Employees Compensation Act, 1923, Bhandara in Application (ECA) No. 3/2006 is set aside. The claim against the appellant-Insurance Company stands dismissed. No order as to costs.
Law Points
- Insurance policy covers risk only when vehicle is in use
- not during loading/unloading
- Employer's liability under Employees Compensation Act
- 1923
- Interpretation of 'use' of vehicle
