SUPREME COURT HOLDS EMPLOYER LIABLE TO PAY WORKMAN COMPENSATION IN CASE OF ACCIDENT

A Three Judge Bench of the Hon’ble #SupremeCourt comprising of Justices Sanjay Kishan Kaul, Aniruddha Bose and Krishna Murari passed a Judgment dated September 23, 2020 in the case of Beli Ram v. Rajinder Kumar & Anr. Civil Appeals Nos. 7220-7221 of 2011 and held that if a valid #drivinglicense of an #employee has expired, the #employer is #liable under the Workmen’sCompensationAct, 1923 and not the employee or the #insurance company.

In this case, the First Respondent who was gainfully employed by the Appellant, met with an accident on 20.5.1999, and as a result of which he was 20 per cent permanently disabled. Subsequently, a Petition was filed on 17.2.1999 by the First Respondent under the Workmen’s Compensation Act, 1923 before the Commissioner, Sadar, Bilaspur seeking compensation of an amount of Rs. 5,00,000/- from the Appellant and the Insurance Company which had insured the vehicle. The Commissioner on 8.12.2004 awarded compensation of Rs. 94,464/- for the injuries suffered and Rs. 67,313/- towards the medical expenses of the First Respondent. The Commissioner ordered that amount awarded as compensation shall carry interest at 9% and which was to be paid by the Appellant whereas the compensation amount was mulled on to the Insurer. Aggrieved by the said Order, Appeals were filed in the High Court of Rajasthan.

High Court’s View

An important issue that was raised before the High Court related to the validity of the driving license of the First Respondent at the time of the accident. The said driving license which expired on 6.9.1996 was endorsed by the Superintendent of R&LA Office, Udaipur and there was no endorsement for renewal thereafter. Thus, the First Respondent was employed as the driver of the Appellant for almost three years without the license being approved.

Thus, the High Court while taking into account the non-validity of the driving license passed a Judgment dated 3.3.2009 and held that that the Insurance Company is absolved of any liability and it is the Appellant who is guilty of material breach of Insurance Policy. Furthermore, the High Court while placing reliance on Section 4 of the Workmen’s Compensation Act, 1923 (the Act) opined that there is no provision under the said Act for payment of medical expenditure incurred by the claimant for the treatment. The monthly wages at the time of the accident was Rs.4500/- and as per the provision of the Act, the maximum amount of wages permissible under the said Act for the purpose of determining the compensation could be Rs. 2000/-. The said compensation was to be paid within 30 days of the accident and the amount could be recovered from the insurance company if it was established that the insurer was liable to indemnify the insured.

However, the Appellant breached the provisions of the Act and therefore, was held to be liable to pay interest and penalty of 50 per cent.

Aggrieved by the Order of the High Court, an Appeal was filed in the Apex Court. The question of law involved in the present Appeal was if a valid driving license has expired, whether it will absolve the insurer from his/her liability.

Contentions of the Appellant

The main contention of the Appellant was that he being the insured had exercised reasonable care at the time of the employment and had properly verified the driving license of the First Respondent and that liability can be fixed on him only if he had the knowledge that the license was fake or invalid and he still permitted the First Respondent to drive. The Appellant further stated that it was the responsibility of the First Respondent to get his license renewed and that there was negligence on his part.

Verdict of the Supreme Court

The Supreme Court while deciding the case opined that it is the employer who has to take basic care of verifying the driving license and to check the validity and the renewal of the driving license. The Court observed that there was a gross negligence on the part of the Appellant as the driving license was not renewed for a period of three years.

Further, the Apex Court held that there was a lack of reasonable care on the part of the Appellant, as being a lawful employer he was under a responsibility to check the validity and the timely renewal of the driving license and that too in respect of a commercial vehicle like truck in the present case. The Appellant is, therefore, liable as he permitted the driver to drive with an expired license and that too for a period of three years.

Further, this was a case of claim under the Workmen’s Compensation Act, 1923 and not the Motor Vehicles Act, thus, the Apex Court held the Appellant-Employer liable as he did not exercise reasonable care in verifying and renewing the license of his Employee. The Apex Court did not fasten any liability on the Employee and the Insurance Company in this case. The Appeals were accordingly disposed off.

Suchitra Upadhyay

Associate

The Indian Lawyer