J.B.MEHTA - (1.)This appeal is filed by the claimants as their claim of compensation for Rs. 30 0 in respect of the death of the deceased Gulam Hussein was dismissed by the Tribunal on the ground that no negligence was established and that the accident was inevitable. Gulam Hussein was aged 45 years being born on February 3 1922 The claimants are his widow and five minor children. The deceased was supplying milk from Amul Dairy Anand to the Umreth Consumers Co-operative Society. He was bringing about five cans of milk daily and was paid Rs. 3/per can per day. On July 3 1967 the deceased was travelling in the motor truck in question which was coming from Anand to Umreth on this Nadiad Dakor Road which runs west to east. The truck belongs to respondent No. 1 whose driver respondent No. 3 was driving this truck. The truck was insured with respondent No. 2 insurer. The accident happened at about 5-0 A. M. in the early morning when this truck which took a turn at a distance of about 239 ft. had gone into the Kutcha road to its left and had dashed with two Babul trees in question peeling off their bark and as a result of which the deceased who was carried in this truck was thrown out and he sustained fatal injuries. The deceased was removed to the General Hospital where he expired. The claim for compensation having been dismissed by the Tribunal the present appeal is filed. [ The Hobble Court after discussing the evidence held that the deceased died as a result of gross negligent on the part of the truck driver in question. The Hobble Court also held that the loss amount to be awarded as compensation must be Rs. 30 0 which cannot be increased * *
(2.)The material question which now arises is as to the liability of the insurance company to satisfy this award. In the written statement at Ex. 5 the insurance company has raised a plea that the deceased was not bona fide employee of the opponent No. 1 at the time of the accident and therefore under the policy of insurance Ex. 68 the claimants were not entitled to any compensation from the insurer. The insurance policy Ex. 68 is Commercial Vehicle (Comprehensive) Policy. In sec. I under the heading of liability to third parties clause (1) provides that subject to limits of liability the company will indemnify the insured against all sums including claimants costs and expenses which the insured shall become legally liable to pay in respect of (i) death of or bodily injury to any person caused by or arising out of the use (including the loading and/or unloading) of the motor vehicle. The limit of liability under this head in sec. 11 (1) (i) is unlimited. The proviso to this sec. 11 (i) (b) provides that except so far as is necessary to meet the requirements of sec. 95 of the Motor Vehicles Act 1939 the company shall not be liable in respect of death of or bodily injury to any person in the employment of the insured arising out of and in the course of such employment. Sub-clause (c) provides that except so far as in necessary to meet the requirements of sec. 95 of the Motor Vehicles Act 1939 in relation to liability under the Workmen's Compensation Act 1923 the company shall not be liable in respect of or bodily injury to any person (other than a passenger carried by reason of or tn pursuance of a contract of employment) being carried in or upon or mounting or alighting from the Motor Vehicle at the time of occurrence of the event out of which any claim arises. Clause 3 is the usual drivers extension clause which insures even the permitted driver. In terms of and subject to the limitations of the indemnity which is granted by this section to the insured the company shall indemnify any driver who is driving the Motor Vehicle on the insureds order or with his permission. The avoidance clause then provides that nothing in the policy or any endorsement hereon shall affect the right of any person indemnified by this policy or any other person to recover an amount under or by virtue of the provisions of the Motor Vehicles Act 1939 sec. 96 but the insured shall repay to the company all sums paid by the company which the company would not have been liable to pay but for the said provisions.
(3.)At the outset we will consider the relevant provisions of the Act in order to find out whether this commercial vehicle required compulsory policy of insurance under Chapter VIII of the Motor Vehicles Act 1939 as it stood at the time of the accident before its amendment by Act 56 of 1969 Sec. 94(1) in Chapter VIII provides that 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 requirement of this Chapter. The requirements of policies and limits of liability are laid down in sec. 95. Sec. 95(1) provides that...a policy of insurance must be a policy which
(a) is issued by a person who is authorised insurer (or by a co-operative society allowed under sec. 108 to transact the business) and

(b) insures the person or classes of persons specified in the policy to the extent specified in sub-sec. (2) against any liability which may be incurred by him or them in respect of the death or bodily injury many person caused by or arising out of the use of the vehicle in a public place..... Provided that a policy shall be required (i) to cover liability in respect of the death arising out 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 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 vehicle being carried in the vehicle or (ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises or (iii) to cover any contractual liability. (2) Subject to the proviso to sub-sec. (1) a policy of insurance shall cover any liability incurred in respect of any one accident upto the following limits namely(a) where vehicle is a goods vehicle a limit of twenty thousand rupees in all including the liabilities if any arising under the Workmen's Compensation Act 1923 in respect of the death of or bodily injury to employees (other than the driver) not exceeding six in number being carried in the vehicle; (b) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment in respect of persons other than passengers carried for hire or reward a limit of twenty thousand rupees; and in respect of passengers a limit of twenty thousand rupees in all and four thousand rupees in respect of an individual passenger if the vehicle is registered to carry not more than six passengers excluding the driver or two thousand rupees in respect of an individual passenger if the vehicle is registered to carry more than six passengers excluding the driver; (c) where the vehicle is a vehicle of any other class the amount of the liability incurred ....

Sec. 95(5) provides that notwithstanding anything elsewhere contained in any law a person issuing a policy of insurance this section shall indemmify the person or classes of persons specified in the policy in respect of any liability which the policy purported to cover in the case of that person or those classes of persons. Sec. 96(1) then provides as under : (1)If after a certificate of insurance has been issued under sub-sec. (4) of sec. 95 in favour of the person by whom a policy has been effected judgment in respect of any such liability as is required to be covered by a policy under clause (b) of sub-sec. (1) of sec. 95 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy then notwithstanding e. g. that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy the insurer shall subject to the provisions of this section pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder as if he were the judgment debtor in respect of the liability together with any amount payable in respect of costs and any sum payable in respect of interest of that sum by virtue of any enactment relating to interest on judgments.

Sec. 96(2) provides as under : No sum shall be payable by an insurer under sub-sec. (1) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the Court of the bringing of the proceedings or in respect of any judgment so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing or any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds: (a) that the policy was cancelled by mutual consent or by virtue of any provision contained therein before the accident giving rise to the liability and that either the certificate of insurance was surrendered to the insurer or that the person to whom the certificate was issued has made an affidavit stating that the certificate has been lost or destroyed or that either before or not later than fourteen days after the happening of the accident the insurer has commenced proceedings for cancellation of the certificate after compliance with the provisions of sec. 105; or (b) that there has been breach of a specified condition of the policy be in one of the following conditions namely (i) a condition excluding the use of the vehicle (a) for hire or reward where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward or (b) for organised racing and speed testing or (c)for a purpose not allowed by permit under which the vehicle is used where the vehicle is a public service vehicle or a goods vehicle or....

Sec. 96(6) provides that the insurer shall not be entitled to avoid his liability otherwise than in the manner provided for in sec. 96(2). Even though no such defence on the grounds mentioned in sec. 96(2)(b) and (c) was pleaded in the written statement Ex. 6. Mr. Shah has raised a ground that the compulsory insurance policy itself was not necessary in the present case so as to cover much passenger risk under sec. 95(1) proviso (ii) and therefore there was no question of the liability of the insurance company to satisfy this judgment.

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