FAO-421-2000 (O&M) with 1 XOBJC-7-CII-2001 225 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Reserved on 29th of April, 2026 Pronounced on 28th of July, 2026 Uploaded on 31st of July, 2026 Whether only operative part of the judgment is pronounced? No Whether full judgment is pronounced? Yes FAO-421-2000 (O&M) with XOBJC-7-CII-2001 Oriental Insurance Company Limited ....Appellant Versus Devi Ditta and others ...Respondents CORAM: HON'BLE MR. JUSTICE PANKAJ JAIN Present: Mr. D.P. Gupta, Advocate for the appellant. Mr. Gopal Mittal, Advocate for cross-objectors/respondent No.3. PANKAJ JAIN, J. Present appeal is at the behest of the Insurance Company against order dated 25.10.1999 passed by Commissioner under Workmen's Compensation Act, 1923 (now known as Employee's Compensation Act, 1923 and hereinafter referred to as ‘the 1923 Act'). 2. Claimants filed claim application under 1923 Act seeking compensation on account of death of Dalip Singh, who lost his life at the age of 22 years while being employed as a driver on Maruti Van bearing No.HP- 38-0603 belonging to respondent No.3 and 5 on 27.05.1992. DEEPAK KUMAR 2026.07.31 15:32 I attest to the accuracy and integrity of this document FAO-421-2000 (O&M) with 2 XOBJC-7-CII-2001 3. Respondents No.3 to 5 filed joint written statement contesting the claim. As per respondents No.3 to 5, deceased Dalip Singh was never employed to drive the vehicle, in question. Respondent No.3 was owner of the vehicle in question since 11.02.1992. Van originally belonged to respondent No.5, who sold the same to respondent No.3 on 11.02.1992 for Rs.50,000/- vide agreement to sell dated 11.02.1992. As per respondents, Dalip Singh used to run his own scooter repair shop at Damtal. He approached respondents No.3 and 4 on 27.05.1992 and borrowed the vehicle. Since the relation between the parties were cordial, respondents No.3 and 4 lent the vehicle to Dalip Singh. The same met with an accident. As per respondents No.3 to 5, Dalip Singh was driving vehicle unauthorisedly and thus they are not liable to compensate him under the provisions of 1923 Act. 4. Insurance Company, who was arraigned as respondent No.4, in their written statement denied contents of claim petition, but admitted that the vehicle was insured for the period commencing from 29.01.1992 till 28.01.1993. 5. Commissioner allowed the claim petition holding appellant liable to pay compensation of Rs. 88,548/- jointly and severally along with respondents No.3 and 5. The Commissioner further held claimants entitled to interest @ 6% per annum on compensation amount from respondent No.3 and penalty to the extent of 25% of the compensation amount. DEEPAK KUMAR 2026.07.31 15:32 I attest to the accuracy and integrity of this document FAO-421-2000 (O&M) with 3 XOBJC-7-CII-2001 6. Counsel for the appellant has assailed the order passed by the Commissioner. He has drawn attention of this Court to the findings recorded on Issues No.5 and 6 to submit that despite recording a finding to the extent that the deceased was holding licence for driving scooter only, the Commissioner has held Insurance Company liable to pay compensation jointly and severally with the employer. Mr. Gupta submits that there being breach of terms & conditions of the policy, the Commissioner should have absolved the Insurance Company and held employer liable to pay compensation. 7. Counsel for cross-objector/respondent-owner submits that the licence of deceased, Exhibit P-7, is on record. Perusal thereof would reveal that the deceased possessed a valid licence for driving scooter/motor-cycle and car. At the time of accident, deceased was driving Maruti Van and thus, he was duly licensed to drive Maruti Van. 8. He further submits that the Insurance Company failed to lead any evidence questioning the validity of the driving licence. Thus, Commissioner rightly decided issue of licence against the Insurance Company. He further submits that cross-objector by way of cross-objections has challenged liability to pay penalty of 25% fastened upon him by the Commissioner. He refers to Insurance Policy, Exhibit R-3, which is part of record, to contend that additional premium of Rs.15/- was charged by Insurance Company to cover liability under 1923 Act. Thus, Insurance Company was liable to pay penalty. To support his contention, he relies DEEPAK KUMAR 2026.07.31 15:32 I attest to the accuracy and integrity of this document FAO-421-2000 (O&M) with 4 XOBJC-7-CII-2001 upon ratio of law laid down by Rajasthan High Court in the case of United India Insurance Company Limited vs. Roop Kanwar and others, 1991(1) TAC 289. 9. I have heard counsel for the parties and have gone through records of the case. 10. Section 10(2) of the Motor Vehicles Act, 1988 (hereinafter referred to as ‘the 1988 Act’) mandates that driving licence shall expressly provide class of motor vehicle which the holder of licence is entitled to drive. Prior to amendment of 1994, it provided for following categories: (a) motor cycle without gear; (b) motor cycle with gear; (c) invalid carriage; (d) light motor vehicle; (e) medium goods vehicle; (f) medium passenger vehicle; (g) heavy good vehicle; (h) heavy passenger vehicle. 11. ‘Light motor-vehicle’ is defined under Section 2(21) of the 1988 Act. The same reads as under: “(21) “light motor vehicle” means a transport vehicle or omnibus the gross vehicle weight of either of which or a motor car or tractor or road-roller the unladen weight of any of which, does not exceed 1 [7500] kilograms;” DEEPAK KUMAR 2026.07.31 15:32 I attest to the accuracy and integrity of this document FAO-421-2000 (O&M) with 5 XOBJC-7-CII-2001 12. ‘Motor car’ is defined under Section 2(26). The same reads as under: “(26) “motor car” means any motor vehicle other than a transport vehicle, omnibus, road-roller, tractor, motor cycle or invalid carriage;” 13. A conjoint reading of Section 10(2) read with Sections 2(21) and 2(26) of 1988 Act makes it abundantly clear that a person holding valid licence to drive a ‘Car’ is entitled to drive a ‘Van’ as well. 14. In view of above, this Court finds that the Commissioner has rightly answered the Issue regarding driving licence against the Insurance Company and in favour of the owner. 15. From the Insurance Policy, it is evident that the Insurance Company charged Rs.15/- as a premium to cover legal liability qua driver as per IMT16. In Roop Kanwar’s case (supra), Rajasthan High Court while dealing with the issue, observed as under: “16. There is also no force in the contention of the learned counsel for the appellant that the insurance company did not undertake the liability for the cleaner. As already observed above, additional premium of Rs. 16/- was paid besides paying the basic premium of Rs. 125/-. This additional premium of Rs. 16/-was for two persons, i.e., for the driver and the cleaner. The said truck No. RSN 5900 was not of that capacity and model which required two drivers. The above-quoted endorsement No. 16 leaves no manner of doubt that the liability of the cleaner was also undertaken by the appellant. 17. The last question for consideration is whether the appellant is not liable to pay the interest and penalty. The above-quoted DEEPAK KUMAR 2026.07.31 15:32 I attest to the accuracy and integrity of this document FAO-421-2000 (O&M) with 6 XOBJC-7-CII-2001 endorsement No. 16 clearly shows that the appellant in consideration of the payment of additional premium agreed to indemnify the insured employer against his liabilities under the Workmen's Compensation Act, 1923. Admittedly, the amounts of penalty and interest have been levied by the Commissioner under Section 4A of the Act of 1923. Sub-section (5) of Section 95 of the Act of 1939 reads as under: "(5) Notwithstanding anything elsewhere contained in any law, a person issuing a policy of insurance under this section shall be liable to indemnify the person or classes of person 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. Thus the Commissioner rightly made the appellant liable to pay the amounts of interest and penalty. In Gautam Transport v. Jiluben Huseinbhai 1989 ACJ 587 (Gujarat), the insurance policy had no endorsement like above-quoted endorsement No. 16. Thus there is no force in the appeal.” 16. The ratio of law laid down in Roop Kanwar’s case (supra) was considered and approved by Supreme Court in the case of Ved Prakash Garg vs. Premi Devi, (1997) 8 SCC 1, observing as under: “xxxxx In the case of United India Insurance Co. Ltd. v. Roop Kanwar and others (supra) a learned Single Judge of the Rajasthan High Court had to consider a situation where on payment of additional premium the insurance company had agreed in the light of endorsement No. 16 of the Policy to cover all liabilities incurred by the insured under Workmen's Compensation Act. In view of this contractual coverage of liability the insurance company in that case was held liable to meet the claim for penalty and interest as imposed upon the insured under Section 4- A(3) of the Compensation Act. This judgment proceeded on its own facts and was concerned with a situation converse to the one as was DEEPAK KUMAR 2026.07.31 15:32 I attest to the accuracy and integrity of this document FAO-421-2000 (O&M) with 7 XOBJC-7-CII-2001 examined by the Karnataka High Court in Oriental Insurance Co. Ltd. v. Raju and Ors. (supra). In the case decided by the Karnataka High Court, as seen earlier, there was an express exclusion of such liability of the insurance company. In the aforesaid case decided by the Rajasthan High Court there was expression inclusion of such liability for the insurance company which had taken additional premium. This judgment also, therefore, is of no assistance to either side. 17. In view of above, this Court finds that the issue qua liability to pay penalty being squarely covered in favour of the owner and against the Insurance Company in terms of ratio of law laid down in Roop Kanwar’s case (supra), the cross-objections need to be allowed. 18. In view of discussion held herein-above, the appeal as well as cross-objections are disposed off as under: (i) The impugned order passed by the Commissioner is upheld. (ii) Findings on Issues No.1 to 6 are maintained. (iii) Finding on relief awarded by the Commissioner is modified to the extent that the appellant/Insurance Company will be liable to shoulder the liability to pay penalty as well. 19. A copy of this order be kept on the file of other connected case. July 28, 2026 (Pankaj Jain) Dpr Judge Whether speaking/reasoned : Yes Whether reportable : Yes DEEPAK KUMAR 2026.07.31 15:32 I attest to the accuracy and integrity of this document