1 2.FA.1883.2019.odt IN THE HIGH COURT OF JUDICATURE OF BOMBAY NAGPUR BENCH, NAGPUR FIRST APPEAL NO.1883 OF 2019 Dinesh Bhimrao Thorat, aged 41 years, Occu. Nil, R/o Gawandgaon, Tq. Anjangaon Surji, Dist. Amravati. ... APPELLANT VERSUS 1. Mr. Ashish Shridhar Deshmukh, aged Adult, Occu. Owner, R/o Village Gawandgaon, Tq. Anjangaon, Surji, Dist. Amravati. (Owner of Tractor bearing No.MH-27- L-1741) 2. United India Insurance Co. Ltd., through its Manager Legal Off. At “Kanchan” 1st floor, Nawathe, Badnera Road, Amravati, Tq. &Dist Amravati. (Insurer of Tractor Bearing No.MH-27- L-1741) 3. Shri Madhukarrao Trimbakrao Deshmukh, Aged Adult, Occu. Owner, R/o Gawandgaon, Tq. Anjangaon Surji, Dist. Amravati. (Owner of Trailer/Trolley Bearing No.MH-27-F-5545) 4. HDFC ERGO General Insurance Co. 2025:BHC-NAG:2089 2 2.FA.1883.2019.odt Ltd., through its Manager Office at 6th floor, Lila Business Park, Andheri Kurla Road, Andheri (East), Mumbai – 400 059 (Insurer of Trailer/Trolley Bearing No.MH-27-F-5545) … RESPONDENTS. _____________________________________________________________ Shri Sawan Alaspurkar, Advocate for the appellant. Shri Ajay C. Chaphale, Advocate for respondent no.2 Shri Hitesh N. Verma, Advocate for respondent no.4. ______________________________________________________________ CORAM : ROHIT W. JOSHI, J. DATE : 11.02.2025. JUDGMENT : Heard. 2. Before dealing with the controversy involved in the matter, it needs to be mentioned that copy of Insurance Policy bearing No.230381/31/14/02/00001011 placed on record was an incomplete document. The appellant and respondent no.2 were directed to produce complete policy document on record vide order dated 11.02.2025. The appellant produced complete document of Insurance Policy on record on 11.02.2025. The learned Advocate for respondent nos. 2 to 4 did not dispute the veracity of the said document. 3. The present appeal is preferred under Section 30 of the Corrected as per oral directions of his Lordship on 01.03.2025 3 2.FA.1883.2019.odt Employee’s Compensation Act, 1923 (‘the Act’) challenging the judgment and order dated 20.06.2019 passed by the learned Commissioner under the Employees Compensation Act, Labour Court, Amravati in Application WCA(NF) No.07 of 2016. The appellant is the Original Claimant. The appellant was employed as a labour for unloading bags of Tur in the field of respondent no.1. The respondent no.1 is the owner of a Tractor bearing registration No.MH-27-L-1741. On the date of incident i.e. on 31.12.2015, the said Tractor was attached with a Trolley bearing registration No.MH-27-F-5545, which is owned by respondent no.3. The Tractor and Trolley were attached to each other. The Tractor was insured with the respondent no.2 and the Trolley was insured with respondent no.4. On 31.12.2015, while the appellant was loading bags of Tur in the Trolley, the panel of the Trolley opened all of a sudden, as consequence of which bags loaded in Trolley fell on the hand of the appellant and his hand got jammed between the Trolley and the bags. Due to the injury suffered, left hand of the appellant was required to be amputated. The appellant preferred the above compensation case under Section 22 of the Workmen’s Compensation Act, 1923 in which the present respondents were arrayed as non-applicants. 4. After recording the evidence and hearing the parties, the 4 2.FA.1883.2019.odt learned Commissioner awarded compensation of Rs.4,89,704/- to the appellant along with the interest @ 12% per annum from 01.02.2016 till the date of realization of the compensation amount. However, the Insurance Company of the Tractor came to be exonerated on the ground that the Tractor was not involved in the accident. The respondent no.3/owner of the Trolley and the respondent no.4/Insurer of the Trolley were exempted on the ground that there was no employer-employee relationship between the appellant and respondent no.3, and consequently, the respondent no. 3 could not be held responsible for payment of compensation under the Act. 5. The appellant is aggrieved by the said order to the extent it exonerates the respondent nos.2 to 4 from the liability to pay the compensation and has challenged the said order to the said extent. 6. Vide order dated 22.11.2019, this Court has issued notice in the matter on the following three Substantial Question of Law : (i) Whether the learned Commissioner of Labour erred in exonerating the respondent Nos.2 and 4 from the liability ? (ii) Whether the learned Commissioner of Labour is justified in holding that there is no relationship of employer and employee between appellant and respondent no.3 ? (iii) Whether the learned Commissioner erred in holding that 5 2.FA.1883.2019.odt petitioner claim against the respondent Nos.3 and 4 is not maintainable ? (iv) Whether the learned Commissioner has erred in fastening the liability to pay interest on the respondent no.2/Insurance Company jointly and severally along with respondent no.1/Owner of Tractor. 7. Subsequently, the appeal was directed to be placed for final hearing vide order dated 16.01.2020. 8. Heard Shri S.S. Alaspurkar, learned Counsel appearing for the appellant. He contends that the Tractor was attached to the Trolley due to which the accident had occurred. He contends that the Tractor was insured with respondent no.2 as on the date of accident and that it was permissible to attach a Trolley with the Tractor. He states that at the time of accident, the Trolley was attached with the Tractor and crop harvested in the agricultural farm of owner of the Tractor was being uploaded in the Trolley for transportation, and therefore, it cannot be said that the Insurance Company of the Tractor is not liable to honor the claim. Learned Counsel draws attention to the Insurance Policy of the Tractor to point out the limitation as to use and limits of liability as mentioned in the Policy. The relevant clause reads as follows : “Limitations as to use : Use only for agricultural and forestry purposes. The policy does not cover (1) Use 6 2.FA.1883.2019.odt for hire or reward or for racing pace making reliability trial or speed testing; (2) Use for the carriage of passengers for hire or reward. (3) Use whilst drawing a greater number of trailers in all than is permitted by law.” 9. The learned Counsel for the appellant states that the Tractor was permitted to be used for agricultural and forestry purposes under the terms of Insurance Policy. He also draws attention to exception no.3 and submits that the attachment of a Trailer/Trolley to the Tractor is expressly permitted under the Policy. He then draws attention to schedule of premium to demonstrate that, workmen compensation claim to the extent of five employees was covered and premium of Rs.250/- was charged for the said purpose under the Insurance Policy. He, therefore, contends that the Insurance Company of the Tractor i.e. respondent no.2 cannot escape the liability, only on the ground that the accident had occurred due to the Trolley and not the Tractor. The learned Counsel for the appellant has not advanced any submission with respect to the liability of respondent nos.3 and 4. 10. Per contra, learned Counsel Shri Ajay Chaphale appearing for respondent no.2 contends that the accident has not occurred for any fault or reason attributable to the Tractor. He, therefore, contends that unless that seems there is no fault on the part of the owner or the 7 2.FA.1883.2019.odt driver of the Tractor, the liability cannot be fasten on the Insurance Company of the Tractor i.e. respondent no.2 in the present matter. 11. I have heard the rival submissions as aforesaid and have examined the record of the case with able assistance of both the learned Counsel. As is apparent from the submissions recorded above, the learned Counsel for the appellant has given up substantial question nos.2 and 3 during the course of arguments. He has emphasized on substantial question of law at serial no.1 alone and that too to the extent of liability of respondent no.2. 12. The facts that emerge from the record are that on 13.12.2015, the present appellant was employed as a labour for uploading bags containing Tur Dal in a Trolley attached to the Tractor owned by respondent no.1. The Tractor and Trolley were attached to each other and were parked in the agricultural land of the respondent no.1. The respondent no.1 is undisputedly employer of the appellant. As mentioned above, the accident has occurred because panel of the Trolley opened all of a sudden. The question that now falls for consideration is as to whether in such a situation, the Insurance Company of the Tractor will be jointly and severally liable to honor the claim along with the owner of Tractor - respondent no.1. The said question needs to be answered, having regard to the fact that the 8 2.FA.1883.2019.odt Insurance Policy of Tractor covers liability for five employees and attachment of Trolley is also permissible under the Insurance Policy. 13. Similar controversy had arisen before this Court in the case of National Insurance Company Ltd. vs. Budha Watuji Choudhari and ors. AIR OnLine 2019 Bom 1042. In the said case, son of the original claimants was engaged for loading sand from river bed in the Trolley, which was attached to the Tractor. The Tractor and Trolley were in a standstill position, when the accident had occurred. The Policy in question was a third party Policy taken under “Farmers Package Insurance”. The son of the claimants suffered fatal injuries while he was loading sand in the Trailor. On account of his demise, his parents lodged a claim under the Act. The Insurance Company denied the claim on the ground that the motor vehicle was stationary as such was not being used. In the backdrop of aforesaid facts, the question that fell for consideration before this Court was as to whether the motor vehicle, which is stationary, can be said to be in use thereby rendering Insurance Company of the motor vehicle liable to honor the claim. This Court had expressly held that the Tractor/Trolley though stationary was in use as sand was being filled in the Trolley on the instructions of the owner. The contention of the Insurance Company that, the Tractor/Trolley being stationary at the relevant time, could not be 9 2.FA.1883.2019.odt termed to be a motor vehicle, was accordingly rejected. This Court has applied doctrine of “Notional Extension” and has held that, if an accident occurs, while doing some work ancillary to the main purpose, the risk will be covered under proviso to Section 147 of the Motor Vehicles Act, 1988, and accordingly, Insurance Company will be liable to honor the claim. In view of the aforesaid, the appeal filed by the Insurance Company was rejected. 14. It will also be profitable to refer the judgment of the Hon’ble Supreme Court in the case of Poonam Devi and ors. vs. Oriental Insurance Co. Ltd. AIR 2020 SC 1305. In the matter before the Hon’ble Supreme Court a truck driver had parked the Truck along side a road in order to fetch water from a canal and also to freshen up. While he entered in the canal, he slipped and died. The legal heirs of deceased driver lodged a claim under the Workmen’s Compensation Act, 1923. The issue that fell for consideration in the matter was that as to whether the Insurance Company would be liable to honor the claim since the vehicle was not being plied at the time of accident, and further that, the deceased driver was not even occupying the vehicle at the time of accident. Considering the controversy the Hon’ble Supreme Court has pressed into service doctrine of “Notional Extension”. It is held that it was necessary for the driver to fetch water to drink and also 10 2.FA.1883.2019.odt to freshen up, while he was performing duties of a driver, and therefore, even though he met with an accident by slipping in the canal and not while he was plying or occupying the vehicle, the Insurance Company would be liable to honor the claim. 15. Based on the aforesaid two judgments, the learned Counsel for the appellant submitted that the Insurance Company of the Tractor should be held liable to honor the claim. 16. Per contra, learned Counsel Shri Ajay Chaphale appearing for respondent no.2 placed reliance on the Lachoo Ram and ors. vs. Himachal Road Transport Corporation (2014) 13 SCC 254 to contend that unless an accident is caused due to rash and negligent act of a driver of an insured vehicle, an insurer will not be liable for payment of compensation. With respect the ratio of the said judgment cannot be applied to the facts of the present case. Undisputedly, the present claim is by an employee under the provisions of the Employees Compensation Act to which fault principle cannot be applied. 17. Learned Counsel places reliance on the judgment of the Karnataka High Court in case of Branch Manager, National Insurance Co. Ltd. vs. Ramalingegowda s/o Thimmegowda and ors. 2012 ACJ 1595. In the said judgment, engine of a Tractor was attached to a 11 2.FA.1883.2019.odt thresher machine. The said machine was being used for separation of grain from the shaft. The worker employed on the machine had suffered injury while operating the machine. In such circumstance, it was held that Insurance Company of the Tractor cannot be held liable to honor the claim, since the thresher is an independent and separate machine and it cannot be considered to be an extension of the Tractor. The said judgment also cannot be applied to the facts of the present case. In the said case the engine of the Tractor was connected to a thresher machine. The thresher machine operated with support of power provided by engine of the Tractor. The Tractor is not supposed to perform the said work. The use to which engine of the Tractor was put cannot be said to be ancillary to the use of Tractor. However, in the present case, the Tractor was attached to the Trolley. Perusal of prohibition clause titled as “Restrictions of use” indicates that there was a restriction of drawing greater number of Trailers than what is permissible in law. The said Clause indicates that a Trolley could be attached to the Tractor. The permitted use of the Tractor is agricultural and forestry purposes. As stated above, the Tractor was attached to Trolley and food-grains harvested in the agricultural land of owner of the Tractor, were being loaded in the Tractor for the purpose of transportation. This clearly indicates that the grains were being loaded 12 2.FA.1883.2019.odt for the purpose of transportation, which is an ancillary purpose. In this regard it will be proper to refer the contents in IMT 40, which is included in the policy of the Tractor. Clause (3) of the proviso to IMT 40 provides that the insured was under obligation to keep a record of names of driver, cleaner, conductor or person employed in loading and/or unloading and the amount of wages paid to such employees by the insurer. It is undisputed that premium for coverage of liability of five employees under the Workmen’s Compensation Act, 1923 is paid by owner of the Tractor. 18. In such circumstances, there cannot be any shred of doubt that while the food-grains were being loaded in the Trolley, which was attached to the Tractor, the work that was being done was ancillary to the function of the Tractor. 19. In such circumstances, applying the doctrine of Notional Extension, the Insurance Company of the Tractor will be responsible to indemnify the owner of the Tractor for the claim of employee under the Act, in as much as, the accident has occurred during the course of employment and premium for claim under the Act, is also charged by the Insurance Company. In such a circumstances, the question of law (i) frame by order dated 22.11.2019 is answered holding that respondent no.2 Insurer of the Tractor owned by respondent no.1 Employer will 13 2.FA.1883.2019.odt also be liable to satisfy the claim of the appellant/employee. 20. Learned Counsel for the appellant vehemently argued that the liability for payment of interest should also be fastened on respondent no.2. He contends that although penalty cannot be imposed against the insurer, liability to pay the interest has to be fastened on the Insurer since the Insurer is bound to completely indemnify the owner with respect to his principal liability as well as liability for payment of interest. He contends that there is no prohibition in the Insurance Policy against imposing liability of payment of interest on the Insurance Company. The contention is that it will be difficult for the appellant to recover the amount from respondent no.1/Owner and therefore, respondent no.2/Insurer must be held jointly and severally responsible to honor the claim. As against this, learned Counsel for respondent no.2 contends that in the absence of any Clause in the insurance policy imposing liability with respect to payment of interest on the Insurer, the said liability cannot be fastened on it. Learned Counsel has placed reliance in this regard on the judgment of the Hon’ble Supreme Court in the cases of Ved Prakash Garg vs. Premi Devi and ors. AIR 1997 SC 3854 and L.R. Ferro Alloys Ltd. vs. Mahavir Mahto and anr. (2002) 9 SCC 450. Both these judgments do not support the case of the respondent no.2. The said judgments hold that liability for payment of 14 2.FA.1883.2019.odt penalty cannot be imposed on the Insurance Company. The learned Commissioner has completely exonerated the respondent no.2/Insurance Company. Both these judgments hold that the liability for payment of interest can be fastened on the Insurance Company. On the aspect of payment of interest, the Hon’ble Supreme Court has held in the matter of Kunnel Engineers and Contractors Pvt. Ltd. vs. New India Assurance Company Limited and anr. (2023) 15 SCC 776 that Insurance Company cannot be held liable to pay interest, if there is a specific prohibition in that regard in the Insurance Policy. The Hon’ble Supreme Court has held that contract for insurance with respect to workmen compensation claims are contractual in nature, and therefore, it is permissible for the Insurance Company to insist that it will not be liable for payment of interest on the amount of compensation under the Act. It is held that in the cases where the contract for insurance includes prohibition against payment of interest on compensation awarded, the Insurance Company will not be liable to pay the interest. I have perused the contract of insurance between the respondent nos. 1 and 2 with the assistance of the learned Counsel. In the Insurance Policy placed on record, there is no Clause excluding liability of Insurer to make payment of interest. In absence of any such Clause, the respondent no.2/ Insurance Company will have to be held to be jointly 15 2.FA.1883.2019.odt and severally liable to pay the amount of interest as well apart from the amount of compensation. 21. In view of the aforesaid, the appeal is partly allowed. The appeal is dismissed against respondent nos.3 and 4. 22. The respondent no.1 /Ashish Shridhar Deshmukh and respondent no.2/United India Insurance Co. Ltd. respectively are held jointly and severally liable to pay amount of compensation along with the interest as awarded in the impugned judgment and order dated 20.06.2019 passed by the learned Commissioner under the Employees Compensation Act, Labour Court, Amravati in Application WCA(NF) No.7 of 2016. 23. Interest will be payable at the statutory rate of 12% per annum from 01.02.2016 up to 20.06.2019 i.e. the date of judgment and order passed by the learned Commissioner, and thereafter, interest will be payable at the rate of 7.5% per annum. 24. The First Appeal stands disposed of accordingly. (ROHIT W. JOSHI, J.) Trupti