# The New India Assurance Co. Ltd v. Sri Yamin & Ors

- **Citation:** (2023) 8 ILRA 800
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-05-23
- **Case number:** First Appeal from Order No. 2367 of 2013
- **Bench:** Ajay Bhanot
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/the-new-india-assurance-co-ltd-v-sri-yamin-ors-50601
- **Pages:** 16

## Headnote

A. Civil Law-Workmen's Compensation
Act,
1923-Section
30,
4(1)(a)-
Commissioner has awarded compensation
of Rs.301034/- with 1% rate of interestChallenge against- The death happened
during the course of employment and
arose out of employment of the deceased
8 All. The New India Assurance Co. Ltd. Vs. Sri Yamin & Ors.
801
with the insured-The income of the
deceased determined by the Workmen's
Commissioner is Rs. 2714.56/- per month-
the accidental death is proved beyond
reasonable doubt - Section 4(1)(a) of the
Workmen's
Compensation
Act,
1923
provides for under the head of future
prospects is fifty percent of the wages -
The claimants/workmen are entitled to
grant of future prospects while calculating
compensation under the E.C. Act since the
conditions precedent for the same are
duly
satisfied-
--Thus,
the
total
compensation is granted Rs. 4,52,800/- at
the rate of 12%.(Para 1 to 68)

B. Substantial question of law- Section
4(4) of the E.C. Act, 1923-the funeral
expenses have been explicitly provided for
under the scheme of E.C. Act. Hence there
can be no lawful recourse to or authorities
arising out of the M.V. Act while granting
compensation under the EC Act under that
head If the injury of the [employee]
results in his death, the employer shall, in
addition to the compensation under subsection
(1),
deposit
with
the
Commissioner a sum of [two thousand
and five hundred rupees] for payment of
the
same
to
the
eldest
surviving
dependant of the [employee] towards the
expenditure
of
the
funeral
of
such
[employee] or where the [employee] did
not have a dependant or was not living
with his dependant at the time of his
death to the person who actually incurred
such expenditure. (Para 63)

The appeal is dismissed. (E-6)

List of cases cited:

## Text

_Characters 0–39,997 of 49,414. This is a partial read: ask again with offset=39997 for what follows._

800 INDIAN LAW REPORTS ALLAHABAD SERIES

25. Having heard learned counsel for
the parties, the income of the deceased
looking to his profession can be considered
to be Rs.23,803/- per month. To which,
25% to be added towards future loss of
income. The deduction towards personal
expenses of the deceased would be 1/3rd as
the deceased was 47 years of age in view of
the decision of the Apex Court in National
Insurance Company Limited Vs. Pranay
Sethi and Others, 2017 0 Supreme (SC)
1050 . The deceased being 47 years of age,
the multiplier applicable would be 13 in
view of the decision in Sarla Verma Vs.
Delhi Transport Corporation, (2009) 6
SCC 121. As far as amount under the head
of non pecuniary damages are concerned,
Rs.70,000/- is granted.

26. Hence, the total compensation
payable to the appellants is computed
herein below:

i. Income per annum : Rs.23803 x 12
= 2,85,636/-

ii. Percentage towards future prospects
: 25% namely Rs.71,409/-

iii. Total income : Rs.2,85,636 +
71,409 = Rs.3,57,045/-

iv. Income after deduction of 1/3
towards personal expenses : Rs.36,000-

v. Multiplier applicable : 13

vi. Loss of dependency: Rs.2,38,030 x
13 = Rs.30,94,390/-

vii. Amount under non pecuniary
heads : Rs.70,000/- /-

viii.
Total
compensation
:
Rs.31,64,390/-

27. As far as issue of rate of interest is
concerned, the claimants would be entitled
to 6% rate of interest on the enhanced
compensation from the date of filing the
claim petition till the amount is deposited.
The rate of interest granted by the Tribunal
on
originally
awarded
amount
is
maintained.

28. In view of the above, the appeal
sans merits and is dismissed. The oral cross
objection is allowed as per the judgment of
this Court passed in F.A.F.O. No.2389 of
2016 (National Insurance Co. Ltd. Vs.
Smt. Vidyawati Devi And 2 Others)
decided on 27.7.2016. The earlier amount
be paid to the claimants after ascertaining
their identity as more than 20 years have
elapsed from the date of filing of this
appeal.

29. Interim relief shall stand vacated
forthwith. The record of the Tribunal be
sent back forthwith.
----------
(2023) 8 ILRA 800
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 23.05.2023

BEFORE

THE HON'BLE AJAY BHANOT, J.

First Appeal from Order No. 2367 of 2013

The New India Assurance Co. Ltd.
 ...Appellant
Versus
Sri Yamin & Ors. ...Respondents

Counsel for the Appellant:
Sri Brijesh Chandra Naik

Counsel for the Respondents:
Sri Nigamendra Shukla, Sri Ashok Kumar Singh,
Sri Rohit Nandan Pandey

A. Civil Law-Workmen's Compensation
Act,
1923-Section
30,
4(1)(a)-
Commissioner has awarded compensation
of Rs.301034/- with 1% rate of interestChallenge against- The death happened
during the course of employment and
arose out of employment of the deceased
8 All. The New India Assurance Co. Ltd. Vs. Sri Yamin & Ors.
801
with the insured-The income of the
deceased determined by the Workmen's
Commissioner is Rs. 2714.56/- per month-
the accidental death is proved beyond
reasonable doubt - Section 4(1)(a) of the
Workmen's
Compensation
Act,
1923
provides for under the head of future
prospects is fifty percent of the wages -
The claimants/workmen are entitled to
grant of future prospects while calculating
compensation under the E.C. Act since the
conditions precedent for the same are
duly
satisfied-
--Thus,
the
total
compensation is granted Rs. 4,52,800/- at
the rate of 12%.(Para 1 to 68)

B. Substantial question of law- Section
4(4) of the E.C. Act, 1923-the funeral
expenses have been explicitly provided for
under the scheme of E.C. Act. Hence there
can be no lawful recourse to or authorities
arising out of the M.V. Act while granting
compensation under the EC Act under that
head If the injury of the [employee]
results in his death, the employer shall, in
addition to the compensation under subsection
(1),
deposit
with
the
Commissioner a sum of [two thousand
and five hundred rupees] for payment of
the
same
to
the
eldest
surviving
dependant of the [employee] towards the
expenditure
of
the
funeral
of
such
[employee] or where the [employee] did
not have a dependant or was not living
with his dependant at the time of his
death to the person who actually incurred
such expenditure. (Para 63)

The appeal is dismissed. (E-6)

List of cases cited:

1. National Ins. Co. Vs Pranay Sethi & ors.
(2017) 16 SCC 680

2. New India Assr. Co. Ltd Vs Urmila Shukla &
Ors (2021) SCC OnLine SC 822

3. New India Assr. Co. Ltd. Vs Amit Kumar
Yadav & anr.

4. K. Suresh Vs New India Assc. Co. Ltd. & ors.

5. Lancashire & Yorkshire Railway Co. Vs
Highley (1917) AC 352

6. Mackinnon Mackenzie & Co. Pvt. Ltd Vs
Ibrahim Mahommed Issak

7. Reg.Dir. Employees' St. Ins. Corp. Vs High
Land Coffee Works of P.F.X. Saldanha & Sons &
ors. S.K. Gupta & ors. Vs K.P. Jain & ors.

8. Ramanlal Bhailal Patel & ors. Vs St. of Guj.

9. Sunita Devi Vs Autar Singh & ors.

10. A & F Overseas Trade Ltd. Vs Appellate
Authority under the Payment of Gratuity Act &
ors.

11. Div. Mgr. TATA AIG Gen. Ins. Co. Ltd Vs
A.C. Jagadeesann & anr..

12. Regional Provident Fund Commr. Vs
Hooghly Mills Co. Ltd & ors.

13. Brahampal @ Sammay & anr.. Vs National
Ins. Co.

14. Board of Control for Cricket in India Vs Reg.
Dir. Employees' St. Ins. Corp. & ors.

15. Chillu Kahar Vs Burn & Co. Ltd

(Delivered by Hon'ble Ajay Bhanot, J.)

1. The judgment is being structured in
the following conceptual framework to
facilitate the discussion:

I
Introduction
II
Findings in the impugned award
III
Submissions of learned counsels
IV
Substantial questions of law
V
Consideration and analysis
VI
Conclusions & Directions
VII
Appendix
802 INDIAN LAW REPORTS ALLAHABAD SERIES

I. Introduction

2. The instant appeal arises out of an
award made by the learned Workmen's
Compensation Commissioner & Assistant
Labour Commissioner, U.P. Ghaziabad
Region, Ghaziabad in Case No. W.C.
239/2009 (Sri Yamin Vs M/s Saini @
Private Ltd. and another) on 19.06.2013
under the Workmen's Compensation Act,
19231.

3. By Section 4 of the Workmen's
Compensation (Amendment) Act, 2009 (45
of 2009) nomenclature of the Act has been
amended
by
substituting
the
word
"Employee's" for the word "Workmen's"
(w.e.f. 18.01.2010). Now the Act stands as
THE EMPLOYEE'S COMPENSATION
ACT, 1923 (8 of 1923) (Came into force on
1.7.1924). In this view the Workmen's
Compensation Act shall be referred to as
Employee's Compensation Act, 19232.

4. The appeal has been filed by the
insurance company. Cross objections have
been raised on behalf of the claimantsrespondents.

II. Findings in the impugned award

5.

The
learned
Workmen's
Compensation Commissioner found these
facts in the impugned award. The deceased
worked as a helper and tasked to clean the
truck. The deceased received his wages
from the truck owner and worked under his
orders. The employer did not contest the
employer employee relationship between
former and the deceased. The deceased
died of injuries sustained in an accident
while he was travelling in the truck on
27/28.06.2006. The death happened during
the course of employment and arose out of
employment of the deceased with the
insured. The income of the deceased
determined
by
the
Workmen's
Commissioner is Rs. 2714.56/- per month.

6. On the fateful day the truck stood
duly insured by the appellant insurance
company which was found liable to pay the
compensation. The learned Workmen's
Commissioner
awarded
compensation
depicted in tabulated form hereunder:

Sr.
No.
Heads
Amount
(in
Rupees)
1.
Annual Income
32774.7
2
2.
Factor- 219.95 as per
Schedule
IV
to
the
Workmen's
Compensation Act

3.
Income-
Rs.
2714.56
wages per month as per
Minimum Wages Act,
1948

4.
Compensation- 2714.56 x
219.95 x 50%
2,98,53
4/-
5.
Non pecuniary (funeral
expenses)
2500
6.
Total compensation
3,01,03
4/-
7.
Interest
1

III. Submissions of learned counsels

7. Sri B.C. Naik, learned counsel for
the appellant insurance company contends
that employee-employer relationship was
not established and is a substantial question
of law.
8 All. The New India Assurance Co. Ltd. Vs. Sri Yamin & Ors.
803

8. This Court finds that impugned
order reflects full application of mind to the
material and impeccable appraisal of
evidences in the record which show that the
deceased was in the employ of the insured.
He drew his salary from the employer and
worked directly under the orders of the
latter.
All
ingredients
of
employer
employee relationship are matters of fact
which were established before Tribunal by
credible evidence. There is no infirmity in
these findings nor any perversity could be
pointed out. No substantial question of law
arises from these findings of facts as
regards employer employee relationship.

9. Sri Nigamendra Shukla, learned
counsel
for
the
claimants-respondents
presses the cross objections. It is contended
that the compensation was not granted in
adherence to the statutory provisions.

10. Initial objections of the appellant to the
maintainability of cross objections were
fairly waived by the appellant insurance
company after arguments. The cross
objections are held to be maintainable since
they disclose fault lines in the award which
go to the root. The grounds in the
objections raise substantial questions of
law.

IV. Substantial questions of law

11. Sri Nigamendra Shukla, learned
counsel for the respondents submits that
provisions of Employee's Compensation Act
and Motor Vehicles Act, 19883 sometimes
overlap, and in such common areas of
operation the provisions/judicial authorities
under the M.V. Act can be applied to award
just compensation under E.C. Act. Future
prospects and funeral expenses payable under
the M.V. Act, can be claimed by claimants
under the Employee's Compensation Act,
1923.

12. Sri B.C. Naik, learned counsel for
the appellant submits that the E.C. Act and
the M.V. Act cover separate fields and
provisions of one Act cannot be applied to
proceedings under the other enactment.
Particularly funeral expenses are duly
provided for under the E.C. Act and applying
said provisions/judicial authorities under the
M.V. Act would be contrary to the scheme of
former Act.

13. After the arguments learned counsel
for the parties agree that the following
substantial questions of law arise in the facts
of the case:

(a) Whether future prospects are liable
to be granted to claimants in the instant
proceedings
under
the
Employee's
Compensation Act? If yes, the prerequisites
to be established for grant of said benefits and
the manner of computation of the same?

(b) Whether the claimants under the
Employee's Compensation Act, 1923 are
entitled to funeral expenses in line with
compensation granted under the same head in
proceedings taken out under the Motor
Vehicles Act, 1988?

V. Consideration and analysis:

14. In these dear times welfare
legislation often holds the only security for
workmen and their dependents against
vagaries of fate. "Just compensation"
flowing from law and awarded by courts
provides
succour
to
claimants
from
privations imposed by misfortune.

15. The beneficent intent of the
legislature while enacting the Employee's
804 INDIAN LAW REPORTS ALLAHABAD SERIES
Compensation Act, 1923 is disclosed in the
object of the legislation which is to provide
for
payment
of
compensation
for
injury/death by accident by certain class of
employers to their employees. The settled
cannons of statutory interpretation require
that the E.C. Act, 1923 being a welfare
legislation is liable to be interpreted
liberally to ensure that just compensation is
provided to the class of workmen who are
targeted beneficiaries of the E.C.Act, 1923.
At the same time caution has to be
exercised to ensure that no illegal benefit
accrues to an unentitled person. [Ref: A &
F Overseas Trade Ltd. Vs Appellate
Authority
under
the
Payment
of
Gratuity Act and others4; Divisional
Manager, TATA AIG General Insurance
Company Limited Vs A.C. Jagadeesann
and another5; Regional Provident Fund
Commissioner
Vs
Hooghly
Mills
Company
Limited
and
others;
Brahampal alias Sammay and another
Vs
National
Insurance
Company6;
Board of Control for Cricket in India Vs
Regional Director, Employees' State
Insurance Corporation and others7].

16. The concept of "stretched
construction" propounded by the Calcutta
High Court in Chillu Kahar Vs Burn &
Co. Ltd.8 holds true today and will apply to
this case:

"16. Reading the reports in the books,
it is impossible to avoid the feeling that a
desire to assist a workman in distress, who
has undoubtedly suffered from causes
arising out of his employment, has often
led to a stretching of the language of the
statute. Even in the cases where the
decision was in favour of the workman, the
observations of the learned Judges make it
perfectly clear that they felt the pressure of
reason on the other side and perhaps
decided in favour of the workman in
pursuance of what they conceived to be the
policy of the Act. Mr. Sanyal pointed out,
and in my opinion rightly, that with the
progress of the times, the conception of the
circumstances in which the workman is
entitled to compensation has widened and
become more and more liberal. Even if,
therefore, the view taken by the highest
courts in recent times, on facts which are
more or less similar to the facts one has to
deal with, be a view which only a stretched
construction of the Act can bear, it will not
be wrong to follow it so long as it is not
something
violently
opposed
to
fundamental principles."

17. It would also be apposite to refer
to the holdings of the Jharkhand High
Court in Sunita Devi Vs Autar Singh and
others.9 While interpreting the scheme of
the Employee's Compensation Act, 1923:

"12. It is well settled that the Act is a
piece of social security and welfare
legislation, Its dominant purpose is to
protect the workman and, therefore, the
provisions of the Act should not be
interpreted too narrowly so as to debar the
workman from compensation which the
Parliament thought they ought to have. The
intention of the legislature was to make the
employer an insurer of the workman
responsible against the loss caused by the
injuries or death, which ought have
happened, while the workman was engaged
in his work."

18. A birds eye view of the legislative
scheme for grant of compensation will
preface the discussion. Section 2 (m) of the
E.C. Act, 1923 defines wages while Section
3 of the enactment imposes the liability on
the employer for compensation. The
method of calculating the compensation is
8 All. The New India Assurance Co. Ltd. Vs. Sri Yamin & Ors.
805
stated in Section 4 read with the Schedule,
and the manner of computing wages is
provided in Section 5 of the E.C. Act.

19. Section 2(m) of the E.C. Act,
1923 defines wages in the following
manner:-

"(m) "wages", includes any privilege
or benefit which is capable of being
estimated in money, other than a travelling
allowance or the value of any travelling
concession or a contribution paid by the
employer of a *[employee] towards any
pension or provident fund or a sum paid to
a *[employee] to cover any special
expenses entailed on him by the nature of
his employment; "

20. The provision contains an
inclusive definition of 'wages' and confers a
wide ambit to the said term. There is an
implicit legislative acknowledgment that
the term wages has several components.
Monthly salary which is a principal
ingredient has to be aggregated with other
components to determine "wages" for grant
of compensation under the E.C. Act.
Enlarged scope of the word "wages"
created by inclusive definition is supported
by the holding of Supreme Court in
Ramanlal Bhailal Patel and others Vs
State of Gujarat10, which explained the
scope inclusive definition in statutes in
these terms:

"Where the definition is an inclusive
definition, the use of the word 'includes'
indicates an intention to enlarge the
meaning of the word used in the Statute.
Consequently, the word must be construed
as comprehending not only such things
which they signify according to their
natural import, but also those things which
the interpretation clause declares that they
shall include. Thus, where a definition uses
the word 'includes', as contrasted from
'means', the word defined not only bears its
ordinary popular and natural meaning, but
in addition also bear the extended statutory
meaning."

(Also
see
Regional
Director,
Employees' State Insurance Corporation
Vs High Land Coffee Works of P.F.X.
Saldanha and Sons and others11, S.K.
Gupta and others Vs K.P. Jain and
others12).

21. Just wages of labour cannot be
denied. Future rise in income is a given in
economics and law. Criteria for fixing
wages for example (consumer price index,
inflation etc.) witness a constant rise thus
creating
the
need
for
corresponding
increase
in
wages.
This
inexorable
economic reality has received statutory
recognition. Regular notifications hiking
wages are taken out by appropriate
governments from time to time under the
Minimum Wages Act acknowledging the
imperative of timely raise in wages. In this
regard Section 4 (IB) of the E.C. Act, 1923
may also be referenced (quoted below):

"[(1B) The Central Government may,
by notification in the Official Gazette,
specify, for the purposes of sub-section (I),
such monthly wages in relation to an
employee as it may consider necessary.]"

22. Enhanced wages in future is a
legislative safeguard for the worker class
against
uncertainties
arising
from
escalating costs of living. Assurance of
hike in future wages is the bulwark of
industrial peace, and the engine of
industrial growth. The legislative intent to
provide just compensation to a worker and
the preambled constitutional goal of
806 INDIAN LAW REPORTS ALLAHABAD SERIES
securing social and economic justice to all
citizens are achieved by this measure. Rise
in future wages comes within the meaning
of "wages" as defined in the E.C. Act,
1923.

23. The computation of the amount of
compensation is described in Sections 4
and 5 of the E.C. Act, 1923. The relevant
paras of Section 4 are extracted below:-

"4 (1) (a) where
death results from
the injury
: an amount equal to
fifty per cent. of the
monthly wages of the
deceased
[employee]
multiplied
by
the
relevant factor;
or
an amount of [one lakh
and twenty thousand
rupees], whichever is
more;

24. Section 5 (insofar as it is
applicable here) states as under:-

"Section 5. Method of calculating
wages.- In this Act and for the purposes
thereof the expression "monthly wages"
means the amount of wages deemed to be
payable for a month's service (whether the
wages are payable by the month or by
whatever other period or at piece rates),
and calculated as follows, namely:--

(emphasis supplied)

(a) where the *[employee] has, during
a continuous period of not less than twelve
months
immediately
preceding
the
accident, been in the service of the
employer
who
is
liable
to
pay
compensation, the monthly wages of the
*[employee] shall be one-twelfth of the
total wages which have fallen due for
payment to him by the employer in the last
twelve months of that period;

(b) where the whole of the continuous
period of service immediately preceding
the accident during which the *[employee]
was in the service of the employer who is
liable to pay the compensation was less
than one month, the monthly wages of the
*[employee] shall be the average monthly
amount which, during the twelve months
immediately preceding the accident, was
being earned by a *[employee] employed
on the same work by the same employer,
or, if there was no *[employee] so
employed, by a *[employee] employed on
similar work in the same locality;

(c) in other cases [including cases in
which it is not possible for want of
necessary information to calculate the
monthly wages under clause (b)], the
monthly wages shall be thirty times the
total wages earned in respect of the last
continuous period of service immediately
preceding the accident from the employer
who is liable to pay compensation, divided
by the number of days comprising such
period. "

25. Section 4 and Section 5 are
reproduced
in
their
entirety
in
the
appendixi.

26. Most established practices in
industrial jurisprudence make wages payable on
a monthly basis. Future rise in wages is based
on past service and last wages drawn. The claim
for future wages matures with each day of
service of a workman. The amount and period
when future wages are payable cannot be
determined ex-ante with exactitude. The phrase
"whatever other period" in Section 5 of the E.C.
Act brings in its fold future prospects which
8 All. The New India Assurance Co. Ltd. Vs. Sri Yamin & Ors.
807
comprise enhanced wages payable at a yet
undefined future date.

27. In summation, wages is the
foundational basis and future prospects is an
essential component of "wages" under the E.C.
Act, 1923. The monthly wages will be
determined strictly in accordance with the E.C.
Act, 1923. Method of calculating future
prospects is not provided under the E.C. Act.
Body of judicial precedents under the Motor
Vehicles Act, 1988 and statutory rules (Uttar
Pradesh Motor Vehicle Rules, 1998) framed
thereunder
can
enable
determination
of
compensation under that head.

28. The discussion shall be taken forward
by making a comparative and parallel
evaluation of provisions of E.C. Act and M.V.
Act.

29. Section 2(e) of the E.C. Act, 1923
defines 'employer" as follows:

2. Definitions.- (e) "employer" includes
any body of persons whether incorporated or
not and any managing agent of an employer
and the legal representative of a deceased
employer, and, when the services of a workman
are temporarily lent or let on hire to another
person by the person with whom the workman
has entered into a contract of service or
apprenticeship, means such other person while
the workman is working for him;

30. Section 2 (30) of the Motor Vehicles
Act, 1988, defines 'owner' as follows:

"(30) "owner" means a person in whose
name a motor vehicle stands registered, and
where such person is a minor, the guardian of
such minor, and in relation to a motor vehicle
which is the subject of a hire-purchase,
agreement, or an agreement of lease or an
agreement of hypothecation, the person in
possession
of
the
vehicle
under
that
agreement."

31. The definition of "employer"
under the EC Act and of "owner" under the
M.V. Act establishes that any owner of a
vehicle can be the employer under the E.C.
Act too. Obligation cast by the M.V. Act on
the owner for the compulsory insurance of
the vehicle may also bind an employer.

32. Similarly, the workman under the
E.C. Act who is plying the owner's vehicle
can be entitled to third party cover under
the M.V. Act. If entitlement to third party
benefits under M.V. Act is established, it
will be difficult to justify denial of the
same.

33. The entitlements of third party
under the M.V. Act is provided in Section
146 which is extracted hereunder:

"146.
Necessity
for
insurance
against third party risk.-(1) No person
shall use, except as a passenger, or cause or
allow any other person to use, a motor
vehicle in a public place, unless there is in
force in relation to the use of the vehicle by
that person or that other person, as the case
may be, a policy of insurance complying
with the requirements of this Chapter: 1

[Provided that in the case of a vehicle
carrying, or meant to carry, dangerous or
hazardous goods, there shall also be a
policy of insurance under the Public
Liability Insurance Act, 1991 (6 of 1991).]

Explanation.-A person driving a
motor vehicle merely as a paid employee,
while there is in force in relation to the use
of the vehicle no such policy as is required
by this sub-section, shall not be deemed to
act in contravention of the sub-section
808 INDIAN LAW REPORTS ALLAHABAD SERIES
unless he knows or has reason to believe
that there is no such policy in force.

(2) Sub-section (1) shall not apply to
any
vehicle
owned
by
the
Central
Government or a State Government and
used
for
Government
purposes
unconnected
with
any
commercial
enterprise.
(3) The appropriate Government may, by
order, exempt from the operation of subsection (1) any vehicle owned by any of the
following authorities, namely:-

(a) the Central Government or a State
Government, if the vehicle is used for
Government purposes connected with any
commercial enterprise;

(b) any local authority;

(c) any State transport undertaking:

Provided that no such order shall be made
in relation to any such authority unless a fund
has been established and is maintained by that
authority in accordance with the rules made in
that behalf under this Act for meeting any
liability arising out of the use of any vehicle of
that authority which that authority or any person
in its employment may incur to third parties.

Explanation.-For the purposes of this
sub-section, "appropriate Government" means
the Central Government or a State Government,
as the case may be, and- (i) in relation to any
corporation or company owned by the Central
Government or any State Government, means
the
Central
Government
or
that
State
Government; (ii) in relation to any corporation
or company owned by the Central Government
and one or more State Governments, means the
Central Government; (iii) in relation to any
other State transport undertaking or any local
authority, means that Government which has
control over that undertaking or authority."

34. The scope of limitations of the
insurance contracts are described in Section
147 of the M.V. Act which states thus:

"147. Requirements of policies and
limits of liability.-(1) In order to comply
with the requirements of this Chapter, a
policy of insurance must be a policy
which-

(a) is issued by a person who is an
authorised insurer; and

(b) insures the person or classes of
persons specified in the policy to the extent
specified in sub-section (2)-

(i) against any liability which may be
incurred by him in respect of the death of
or bodily 1 [injury to any person, including
owner of the goods or his authorized
representative carried in the vehicle]or
damage to any property of a third party
caused by or arising out of the use of the
vehicle in a public place;

(ii) against the death of or bodily
injury to any passenger of a public service
vehicle caused by or arising out of the use
of the vehicle in a public place:

Provided that a policy shall not be
required-

(i) to cover liability in respect of the
death, arising out of and in the course of his
employment, of the employee of a person
insured by the policy or in respect of bodily
injury sustained by such an employee
arising out of and in the course of his
employment other than a liability arising
under the Workmen's Compensation Act,
1923 (8 of 1923), in respect of the death of,
or bodily injury to, any such employee -

(a) engaged in driving the vehicle, or

(b) if it is a public service vehicle
engaged as a conductor of the vehicle or in
examining tickets on the vehicle, or

(c) if it is a goods carriage, being
carried in the vehicle, or

(ii) to cover any contractual liability."

1[Requirement of policies and limits
of liability. --(1) In order to comply with
8 All. The New India Assurance Co. Ltd. Vs. Sri Yamin & Ors.
809
the requirements of this Chapter, a policy
of insurance must be a policy which--

(a) is issued by a person who is an
authorised insurer; and

(b) insures the person or classes of
persons specified in the policy to the extent
specified in sub-section (2)--

(i) against any liability which may be
incurred by him in respect of the death of
or bodily injury to any person including
owner of the goods or his authorised
representative carried in the motor vehicle
or damage to any property of a third party
caused by or arising out of the use of the
motor vehicle in a public place;

(ii) against the death of or bodily
injury to any passenger of a transport
vehicle, except gratuitous passengers of a
goods vehicle, caused by or arising out of
the use of the motor vehicle in a public
place.

Explanation.--For
the
removal
of
doubts, it is hereby clarified that the death of
or bodily injury to any person or damage to
any property of a third party shall be deemed
to have been caused by or to have arisen out
of, the use of a vehicle in a public place,
notwithstanding that the person who is dead
or injured or the property which is damaged
was not in a public place at the time of the
accident, if the act or omission which led to
the accident occurred in a public place.

(2) Notwithstanding anything contained
under any other law for the time being in
force, for the purposes of third party
insurance related to either death of a person
or grievous hurt to a person, the Central
Government shall prescribe a base premium
and the liability of an insurer in relation to
such premium for an insurance policy under
sub-section (1) in consultation with the
Insurance Regulatory and Development
Authority.

(3) A policy shall be of no effect for
the purposes of this Chapter unless and
until there is issued by the insurer in favour
of the person by whom the policy is
effected, a certificate of insurance in the
prescribed
form
and
containing
the
prescribed particulars of any condition
subject to which the policy is issued and of
any other prescribed matters; and different
forms, particulars and matters may be
prescribed in different cases.

(4)
Notwithstanding
anything
contained in this Act, a policy of Insurance
issued before the commencement of the
Motor Vehicles (Amendment) Act, 2019
shall be continued on the existing terms
under the contract and the provisions of this
Act shall apply as if this Act had not been
amended by the said Act.

(5) Where a cover note issued by the
insurer under the provisions of this Chapter
or the rules or regulations made thereunder
is not followed by a policy of insurance
within the specified time, the insurer shall,
within seven days of the expiry of the
period of the validity of the cover note,
notify the fact to the registering authority or
to such other authority as the State
Government may prescribe.

(6)
Notwithstanding
anything
contained in any other law for the time
being in force, an insurer issuing a policy
of insurance under this section shall be
liable to indemnify the person or classes of
persons 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 persons.]"

35. The liability incurred under the
E.C. Act may also be covered by a contract
executed under the M.V. Act. The
insurance policy in this case pertains to the
period prior to the Motor Vehicles.
(Amendment) Act, 2019. However, even as
per the unamended provisions of the M.V.
Act and the insurance contract executed
810 INDIAN LAW REPORTS ALLAHABAD SERIES
between the insurer and the insured in the
instant case cover the liability of an
employer/insured under the E.C. Act.

36. There is another aspect of the
controversy. The cause of action for claim
petition under the M.V. Act arises when the
death is caused by negligent driving of the
insured vehicle.

37. Liability to pay compensation
arises under the E.C. Act only if death by
accident
occurs
in
course
of
the
employment of the workman-deceased.

38. Negligent driving happens when
there is failure to drive prudently and non
adherence to the norms of safe driving. In
other words, failure of the driver of the
offending vehicle to take "reasonable care".

39. Similarly, an employee under the
E.C. Act is expected to observe reasonable
care while performing the chores of his
employment. The case of a claimant is
weakened when death of an employee is
caused by sheer negligence or imprudence
of the deceased.

40. The discussion can be fortified by
authority in point. The Supreme Court in
Mackinnon Mackenzie & Co. Pvt. Ltd vs
Ibrahim
Mahommed
Issak13while
considering the impact of a workman's
imprudence on grant of compensation
under the Workmen's Compensation Act
held:

"5. To come within the Act the injury
by accident must arise both out of and in
the course of employment. The words "in
the course of the employment" mean "in
the course of the work which the workman
is employed to do and which is incidental
to
it."
The
words
"arising
out
of
employment" are understood to mean that
"during the course of the employment,
injury has resulted from some risk
incidental to the duties of the service,
which, unless engaged in the duty owing to
the master, it is reasonable to believe the
workman
would
not
otherwise
have
suffered." In other words there must be a
causal relationship between the accident
and the employment. The expression
"arising out of employment" is again not
confined to the mere nature of the
employment. The expression applies to
employment as such - to its nature, its
conditions, its obligations and its incidents.
If by reason of any of those factors the
workman is brought within the zone of
special danger the injury would be one
which arises 'out of employment'. To put
it differently if the accident had occurred
on account of a risk which is an incident
of the employment, the claim for
compensation must succeed, unless of
course the workman has exposed himself
to an added peril by his own imprudent
act. In Lancashire and Yorkshire Railway
Co.v.Highley[(1917) AC 352] Lord Sumner
laid
down
the
following
test
for
determining whether an accident "arose out
of the employment":

"There is, however, in my opinion,
one test which is always at any rate
applicable, because it arises upon the very
words of the statute, and it is generally of
some real assistance. It is this: Was it part
of the injured person's employment to
hazard, to suffer, or to do that which caused
his injury? If yes, the accident arose out of
his employment. If nay, it did not, because,
what it was not part of the employment to
hazard, to suffer, or to do, cannot well be
the cause of an accident arising out of the
employment. To ask if the cause of the
workman was within the sphere of the
8 All. The New India Assurance Co. Ltd. Vs. Sri Yamin & Ors.
811
employment, or was one of the ordinary
risks of the employment, or reasonably
incidental
to
the
employment,
or
conversely, was an added peril and outside
the sphere of the employment, are all
different ways of asking whether it was a
part of his employment, that the workman
should have acted as he was acting, or
should have been in the position in which
he was, whereby in the course of that
employment he sustained injury."

41. The phrase "just compensation" in
Section 168 of the M.V. Act, 1988
discloses the legislative intent of achieving
a welfare measure through adjudication by
courts in accordance with evolved judicial
standards.

42. The phrase "just compensation"
has not been defined in the M.V. Act.
Content and the scope of the expression of
"just compensation" under the M.V. Act
has been evolved by courts in light of good
authorities
in
law
of
torts.
The
compensation under the E.C. Act is liable
to be a just compensation which has to be
calculated in adherence to the scheme of
the E.C. Act.

43. The Supreme Court in K. Suresh
Vs. New India Assurance Company Ltd.
and Others14, advocated the path of golden
mean while granting "just compensation"
by setting forth as under:

"2. ... There cannot be actual
compensation for anguish of the heart or
for
mental
tribulations.
The
quintessentiality lies in the pragmatic
computation of the loss sustained which
has to be in the realm of realistic
approximation. Therefore, Section 168 of
the Motor Vehicles Act, 1988 (for brevity
"the Act") stipulates that there should be
grant of "just compensation". Thus, it
becomes a challenge for a court of law to
determine "just compensation" which is
neither a bonanza nor a windfall, and
simultaneously, should not be a pittance."

44. More recently in an injury case
the Allahabad High Court in New India
Assurance Company Ltd. Vs. Amit
Kumar Yadav and another15 emphasized
on foot of good authority that just
compensation
envisages
that
"compensation should fully and adequately
restore claimant to the position prior the
accident" by holding:

"It observed that scheme of Act, 1988
shows that award must be "just", which
means that compensation should, to the
extent possible, fully and adequately
restore claimant to the position prior to the
accident. The object of awarding damages
is to make good the loss suffered as a result
of wrong done as far as money can do so,
in a fair, reasonable and equitable manner.
A person is not only to be compensated for
physical injury, but also for the loss which
he suffered as a result of such injury. It
means that he is to be compensated for his
inability to lead a full life, his inability to
enjoy those normal amenities which he
would have enjoyed but for the injuries,
and his inability to earn as much as he used
to earn or could have earned."

45. Concept of just compensation
consistent with the scheme of the E.C. Act
enables
realisation
of
the
legislative
mandate.

46. In the facts of this case the
appellant had the option to take out
proceedings under M.V. Act and the E.C.
Act for seeking compensation. He chose
the latter. In this regard reference may be
812 INDIAN LAW REPORTS ALLAHABAD SERIES
had to Section 167 of the M.V. Act, which
is reproduced below:

"167. Option regarding claims for
compensation
in
certain
cases.-
Notwithstanding anything contained in the
Workmen's Compensation Act, 1923 (8 of
1923) where the death of, or bodily injury
to, any person gives rise to a claim for
compensation under this Act and also under
the Workmen's Compensation Act, 1923,
the person entitled to compensation may
without prejudice to the provisions of
Chapter X claim such compensation under
either of those Acts but not under both."

47.

The
question
is
whether
provisions of M.V. Act, Rules framed
thereunder and cases in point can aid the
computation of future prospects under the
E.C. Act.

48. M.V. Act and E.C. Act are
separate statutes which cover distinct fields
and envisage proceedings in different
tribunals. However, diversity of statutes
does not necessarily depict disparate
legislative intendments and multiplicity of
forums cannot cause denial of legal
entitlements. Comparative examination of
the
statutes
made
in
the
preceding
paragraphs also manifests the overlapping
areas of operation of the two enactments.
The overarching congruency of purpose
and the underlying similarity of objects of
the two statutes evidenced in the common
fields of operation can be achieved by an
integrated interpretation of the enactments.
Provisions of one statute and authorities
thereunder can be applied by analogy to the
other enactment to realise the legislative
intent of the latter.

49. Integrated approach of statutory
construction will ensure that the claimants
are not denied their legal entitlements
under the enactments merely because one
forum
is
chosen
in
preference
to
proceedings under the other Act. Integrated
interpretation will entail a composite
reading of the statutes and conflated
application
of
analogous
judicial
authorities. The statutes will be read as part
of an extended legislative scheme to the
extent of their overlapping and consistent
fields of operation.

50. Now the caution. Before invoking
the
integrated
method
of
statutory
interpretation certain prerequisites have to
be established and while applying it various
limitations have to be observed. Firstly, it
has to be established for a fact that the
claimants had a right to equally approach
either of the two tribunals under the
respective statutes.