First Appeal No.1892 of 2013

18th September, 2014

Petitioner Counsel: Mr. DILIP MANDARIA
Respondent Counsel: Mr. V.M. PARKAR, Mr. RAHUL MEHTA

Cases Cited:
Chavas Ramji Mavji Vs. Khavas Shantilal Kanji & Anr., F.A./1379/1982, Dt.14/15-11-1995 [Para 9,17]
Divisional Manager, M/s. Reliance General Insurance Co. Ltd., Solapur Vs. Lakshmi Mahadev Sargar & Ors., 2013(5) ALL MR 125 =2013 (4) Mh.L.J. 129 [Para 10,23]
New India Assurance Co. Ltd. Vs. Tanaji Vithal Jamdale and Ors., F.A./161/2013, Dt.24/6/2013 [Para 11,23]
Hasbannessa Vs. Quazi Zahirddin Mohammed Babar, AIR 1964 Calcutta 61 [Para 17]
Doggett Vs. Waterloo Taxi-cab Co. Ltd., (1910) 3 BWCC 371 [Para 17]

JUDGMENT

JUDGMENT :- Admit. Learned counsel for the respondents waive service. By consent of the parties, the appeal is heard finally.

2. This appeal is filed under Section 30 of the Employees' Compensation Act, 1923 and is directed against the order dated 31st December, 2011 passed by the learned Commissioner for Workmen's Compensation and the Judge, 11th Labour Court, Mumbai dismissing his claim and the order dated 19th May, 2012 passed in review application filed by the appellant dismissing his review application. Some of the relevant facts are described for deciding the appeal which are as follows :-

3. The appellant was claimant before the learned Commissioner. It was the case of the claimant that he was in the employment of respondent no.1 as a Driver of an Auto-Rickshaw bearing No.MH03-R-5430. The claimant met with an accident on 16th July, 2009 at Chembur Wadala Link Road, Opp. Anik Bus Depot, Wadala (E), Mumbai-400 022 and sustained injuries. It was urged by the claimant that the said auto-rickshaw was insured with the insurance company-respondent no.2-insurance company. It was urged that the claimant was entitled to compensation of Rs.3,91,368/- with interest and penalty from both the respondents.

4. Before the learned Commissioner, the respondent no.1 filed his written statement admitting the fact of the employment of the applicant with him. He also admitted that the accident occurred during the course of employment. The respondent no.2insurer also filed its appearance and opposed the claim of the applicant by filing its written statement. It was the contention of the insurer that the applicant was not an employee of respondent no.1 and the applicant was driving the auto-rickshaw on shift basis and was paying rent to the respondent no.1 or was getting commission from respondent no.1. It was pleaded by the insurer that there existed no employer-employee relationship between the applicant and the respondent no.1. The insurance company also denied the occurrence of accident during the course of employment, age and salary of the applicant. The learned Commissioner framed six issues which are as under :

"1. Whether applicant proves that he is a 'workman' as defined under W.C. Act and there exist employer employee relationship between the applicant and opp. No.1?

2. Whether applicant proves that the accident dated 16/7/2009 occurred during the course of and arising out of employment on vehicle no. MH-03-R-5430, as a driver?

3. Whether applicant proves that he was 47 years of age and was earning Rs.4500/- p. m. Towards salary on the date of accident?

4. Whether the applicant is entitled for the compensation as claimed towards loss of 100% earning capacity?

5. Whether the applicant is entitled for interest and penalty, if yes, then to what extent ?

6. What order?"

5. The applicant examined himself and deposed that the accident occurred during the course of employment and sustained serious injuries for life time. The applicant filed disability certificate issued by Dr.Satish Puranik. The applicant also lodged first information report by giving statement to the police at Sion hospital and the treatment was taken at the said hospital.

6. Neither respondent no.1 nor respondent no.2 led any oral evidence. By judgment dated 31st December, 2011, the learned Commissioner for Workmen's Compensation dismissed the claim application filed by the applicant on the ground that the applicant failed to prove employer-employee relationship which was mandatory condition for granting any claim of compensation under the provisions of the Employees' Compensation Act, 1923.

7. The appellant thereafter filed a review application inter alia praying for recalling the said order dated 31st December, 2011. The learned Commissioner for Workmen's Compensation rejected the said review application by passing an order on 19th May, 2012.

8. The learned counsel appearing for the appellant submits that the appellant was driver of respondent no.1 and while driving an auto-rickshaw, he met with an accident. It is submitted that it is not in dispute that the applicant met with the accident while driving the said auto-rickshaw and the said auto-rickshaw was insured with respondent no.2. The learned counsel submits that neither the appellant hired the auto-rickshaw from respondent no.1 nor he was driving the auto-rickshaw on behalf of respondent no.1 and the fact that the applicant was driving an auto-rickshaw on commission basis is irrelevant to ascertain the employer-employee relationship.

9. The learned counsel appearing for the appellant placed reliance on the definition of 'employee' under Section 2(1)(dd)(c) of the Employees' Compensation Act, 1923 and submitted that an employee would include the person recruited as driver. It is submitted that since the appellant was driving the auto-rickshaw, the appellant was an employee within the definition of 'employee' under Section 2(1)(dd)(c) of the said Employees' Compensation Act, 1923. It is submitted that the learned Commissioner misconstrued the definition of employee and dismissed the claim application filed by the applicant. In support of his submission, the learned counsel placed reliance on the judgment of Gujarat High Court in the case of Chavas Ramji Mavji Vs. Khavas Shantilal Kanji & Anr. decided on 14th/15th November, 1995 in First Appeal No.1379 of 1982. Reliance is placed on paragraphs 16 and 17 of the said judgment which read thus-

"16. On the true and correct appraisal of the evidence, there is no hesitation in holding that the applicant was working as a driver of original opponent No.1 on the date of accident. There is not dispute about the fact that original opponent No.1 Shantilal Kanji was the owner of the auto-rickshaw No. GTP 734, which was involved in the accident. There is also no dispute about the fact that the applicant had sustained accidental injuries. The applicant has, therefore, successfully proved that he was an employee or workman of original opponent No.1 - owner of the auto-rickshaw and he sustained accidental injuries during the course of employment while he was driving the auto-rickshaw of original opponent No.1 as his driver.

17. Though opponent No.1 contended that he never knew the applicant, it was sought to be argued before the learned Commissioner that the applicant was working as a commission agent. Unfortunately, the learned Commissioner committed a serious error in accepting this contention. The learned Commissioner was pleased to hold that original opponent No.1 had allowed to ply the auto-rickshaw on commission basis. The theory of working on commission basis by the original applicant was neither pleaded nor established. However, this point was upheld by the learned Commissioner against the applicant. Therefore, the learned Commissioner found that since the applicant was driving the auto-rickshaw of opponent No.1 on commission basis, he would not be a workman within the meaning of the Act. He also relied on the judgment rendered in the case of Hasbannessa V Guazi Zahirddin Mohammed Babar, reported in Air 1964 Calcutta 61. It appears that the learned Commissioner failed to appreciate the facts of the present case and wrongly relied on the said case. The said decision is not at all applicable to the facts of the present case. There is evidence on record to prove that the applicant was driving the auto-rickshaw of opponent No.2 and he had sustained accidental injuries, on 5-1-1980, during the course of his employment with opponent No.1. The finding of the learned Commissioner on this point is erroneous. Therefore, it is required to be quashed. It is very clear from the evidence on record that the applicant sustained injuries in an accident which was caused in the course of the employment. Thus the applicant was working as a workman of opponent No.1 and he sustained accidental injuries out of and in the course of his employment with opponent No.1."

10. The learned counsel also placed reliance on the judgment of this Court in the case of Divisional Manager, M/s. Reliance General Insurance Co. Ltd., Solapur Vs. Lakshmi Mahadev Sargar & Ors. reported in 2013 (4) Mh.L.J. 129 : [2013(5) ALL MR 125] in support of his submission. Paragraph 7 of the said judgment reads thus :

"7. It is not denied that deceased was actually engaged by lessee, and he was driving the truck. Person who was driving the vehicle as an authorised/legally engaged by lessee has to be believed to be duly engaged and hence was an employee as defined in section of The Employees' Compensation Act, 1923. Section of The Employees' Compensation Act, 1923 defines an employee as "a person recruited as driver, helper, mechanic, cleaner or in any other capacity in connection with a motor vehicle."

11. The learned counsel appearing for the applicant placed reliance on the unreported order of this Court dated 24th June, 2013 in the case of New India Assurance Co. Ltd. Vs. Tanaji Vithal Jamdale and Ors. passed in First Appeal No.161 of 2013. He submits that there was no positive suggestion given to the witness examined by the appellant stating that he was not a driver possessing valid driving license. Paragraph 10 of the said unreported order reads thus :

"10. The next contention of the learned counsel about the claimant not possessing valid driving license is concerned, I would have appreciated the submission of the learned counsel, had there been any positive suggestion on the part of the present appellant about claimant not having submitted an application for renewal. No such positive suggestion appears in the cross examination. It has also been observed that in the pleadings also, this aspect has not been raised by the appellant. As far as the employer-employee relationship is concerned, the appellant in his cross-examination has not positively denied the said fact."

12. The learned counsel appearing for respondent no.1-owner of the auto-rickshaw supported the case of the appellant and submits that there was no dispute that the appellant was an employee of respondent no.1.

13. Mr. Mehta, learned counsel appearing for the insurer invited my attention to the various findings of the learned Commissioner and would submit that merely because respondent no.1 had admitted that the appellant was his employee, it could not be said that the appellant is eligible unless he satisfies the definition of 'employee' under Section 2(1)(dd)(c) of the Employees' Compensation Act, 1923. Learned counsel submits that the appellant himself has admitted four times before the learned Commissioner that the appellant used to take auto-rickshaw on rent and earned money on the said rental vehicle and feed his family for last one year. It is submitted that it is thus clear that the appellant would not fall under the definition of 'employee' under Section 2(1)(dd)(c) of the Employees' Compensation Act, 1923. It is submitted that there was obvious collusion between the appellant and respondent no.1. The learned counsel submits that the learned Commissioner for Workmen's Compensation after giving detailed reasons has also rejected the review application filed by the appellant against the judgment passed in the claim application filed by him.

14. A short question arises for consideration in this appeal is whether the appellant who had admittedly taken the auto-rickshaw on rent from the owner of the auto-rickshaw and met with an accident can be construed as an employee within the meaning of Section 2(1)(dd)(c) of the Employees' Compensation Act, 1923.

15. Section 2(1)(dd)(c) of the Employees' Compensation Act, 1923 is extracted as under:

"2. Definitions- (1)

(dd)-'employee' means a person, who is-

(i)....

(ii)(a)....

(b)....

(c) a person recruited as driver, helper, mechanic, cleaner or in any other capacity in connection with a motor vehicle."

16. A perusal of the record clearly indicates that it was not in dispute that respondent no.1 was owner of the auto-rickshaw. It is also not in dispute that the appellant used to take the said auto-rickshaw on rent from respondent no.1 on shift basis and earned money on the said rental vehicle for last one year prior to accident.

17. In the case of Chavas Ramji Mavji (supra), the Gujarat High Court has considered the Judgment of Calcutta High Court in the case of Hasbannessa Vs. Quazi Zahirddin Mohammed Babar reported in AIR 1964 Calcutta 61. In the said judgment, Calcutta High Court was considering the case where the claimant had suffered an accident while driving Cab on alternate days on commission basis. The claimant therein used to get certain percentage of collection. The Calcutta High Court adverted to the case decided by the Court of Appeal in England in the case of Doggett Vs. Waterloo Taxi-cab Co. Ltd. reported in (1910) 3 BWCC 371 where a Cab driver took out a cab owned by the respondents from their yard every day. In that case, the contract between the parties was that the driver paid over to the respondents 75 percent of his daily takings, retaining 25 percent for himself less the price of petrol which he purchased from the respondents. It held that the relationship between the parties was not the one of a contract of service but the one of a bailment and, accordingly, the compensation to such driver was refused. Paragraphs 7 to 11 of the said judgment of Calcutta High Court read thus:-

"7. The question here raised is a question of same importance. It is one of those cases in which the workman is entrusted with the property belonging to another to whom he pays the share of the profits or takings. The question whether in such a case a contract of service is primarily determined by the amount of control exercised over the alleged worker. That is a question of fact. The leading case on this point is Doggett v. Waterloo Taxi-cab Co., Ltd., reported in There a taxi driver took out a cab owned by the respondents from their yard each day. In that case also the contract between the parties was that the driver paid over to the respondents 75 per cent of his daily takings, retaining 25 per cent, for himself less the price of petrol which he purchased from the respondents. The Court of Appeal in England held that the relationship between the parties was not one of a contract of service but one of bailment and the compensation was refused.

8. Doggett's case is a leading decision on many propositions. Firstly, it is a leading case for the proposition which I have already mentioned above that the burden of proof rests upon the applicant to prove that the relationship between the parties is a contract of service. Cozens-Hardy, M. R. at pages 376-377 of the report says:

"In my opinion these various points do not suffice, either singly or collectively, to justify a finding that the relation between the parties was a contract of service. The burden of proof rests upon the applicants; and they have not discharged that burden. I think that the relation was that of bailment, although it may possibly be contended that the parties were co-adventurers." Secondly, it is also a leading case for the proposition that control is the test. If the owner controls, then the taxi driver under him is a workman employed under a contract of service. If there is no such control, then he is only a bailee of the employer's taxi. At page 376 of 3 Butterworths Workmen's Compensation Cases Report, Cozens-Hardy, M. R. in that case observes:

"The contract between the proprietor and the driver is for the day on which the Taxi-cab is taken out, as the learned Judge finds. The driver is not bound to come the next day, and if he does come the proprietor is not bound to let him have a taxi-cab. He is not paid anything as wages. He is accountable to the proprietor for 75 per cent of the takings, his own remuneration being a sum equal to 25 per cent of the takings. This mode of remuneration tends against, and not in favour of, the view that he is a servant."

Apparently the learned Master of the Rolls affirmed that the share of the collections as a mode of remuneration was against the view that the taxi driver was a servant. Thirdly, Doggett's case lays down the proposition at page 376 of the report that-

"The proprietor exercises no control over the driver who can go when and where he pleases." The freedom of the taxi driver to take the taxi wherever he pleases, to adopt any route where to ply and to use the car according to his own decision is apparently unlimited. These are factors which suggest that the taxi driver is not a workman within the meaning of tha Workmen's Compensation Act. In considering the question of control the learned Master of the Rolls appears to doubt whether mere could be dismissal or discharge of a person whose contract was for the day only. Again another wholesome principle laid down by Doggett's case is that the facts of each particular case should determine whether the workman was under a contract of service or whether he was only a bailee in such cases. No hard and fast rule and no doctrinaire attitude should be adopted in such cases, It is unwise to say and incorrect that in every case a taxi driver is' a bailee and not a servant. Equally it is unwise and incorrect to say that in every case the taxi driver is a servant and not a bailee. Every case depends on the merits and the facts and the exact and actual terms of employment. Cozens-Hardy, M. R. in Doggett's case at page 377 of the report observed:

"I think that the relation was that of bailment, although it may possibly be contended that the parties were co-adventurers. In the above observations I dealt only with the facts of this particular case. There may be cases in which the proprietor of a Taxi-cab exercises such an amount of control over the driver as to justify the conclusion that the relation of master and servant exists. Rex v. Solomons apparently furnishes an instance."

9. This point was forcefully made clear in the observations of Kennedy, L J. in Doggett's case at pages 381-82 of that report:

"Reference was made in the course of the argument to a recent case of which came before the Court of Criminal Appeal after a trial at the Central Criminal Court. The proprietors of the Taxi-cab in that case were not the same as those in the present case. Evidence was given at considerable length in that case which was not given in the present case. No one asserts that the owner of a Taxi-cab and its driver cannot possibly create between themselves the relation of master and servant; the question in each case as to whether they have or have not done so is a question of proof by evidence' of the particular facts; and it appears to me that it would not be right or proper to introduce into our consideration of the present appeal either the verdict of the jury in (ub sup.), or the judgment of the Court of Criminal Appeal which supported that verdict."

10. In order to be a workman under the Workmen's Compensation Act in India he has to satisfy certain conditions laid down in the definition of Section 2(n) read with the second schedule under the Act. One limitation is that he must not be a person of a casual nature. A driver can certainly be a workman under Clauses (1) of the second schedule of the Act which expressly refers to a person employed in connection with the operation of a vehicle propelled by a mechanical power or by electricity. But then all drivers are not workmen. The owner driver is not. Similarly, the driver who hires out the car and has complete freedom during the period of hire to use the car for purposes and routes as he may think best with no control from the owner, is not a workman. There has to be an employment. He is to have an employer within the definition of Section 2(e) of the Workmen's Compensation Act and also Section 3 thereof. Those rests, on the ' facts of this case, are not satisfied. Persons buy car on a hire purchase agreement and during the hire if the hirer's driver meets with an accident, it is the hirer who so liable to pay compensation as the employer and not the person or the company or the owner who gave the car on hire purchase agreement to the hirer.

11. The House of Lords in Smith v. General Motor Cab Co., Ltd. had to consider a similar question. There the respondents let out a Taxi-cab to the appellant, who was injured by an accident while he was driving the cab. On the facts of that case it was held that the relation of the respondents with the appellant WES that of a bailor and bailee of the Taxi-cab and it was not a case of a contract of service, and therefore, the House of Lords came to the decision that the appellant was not entitled to a compensation. In explaining this position Lord Atkinson observes at pages 191-192 of the report of the case in as follows:

"It may be necessary to point out that the decision of your Lordships' House on this appeal does not in any way touch the question of the liability of the cab proprietor to third parties, passengers, wayfarers, or others, for the acts of the driver. It may well be that though the relation between the Taxi-cab owner and his driver inter so be that of bailor and bailee, the driver may still quoad third parties be treated as the agent of the proprietor authorised to ply for hire in the streets for reward to the latter; and the proprietor be thereby rendered liable for those acts of the driver which were within the scope of the letter's authority. The general result of the cases of Fowler v. Lock Venables v. Smith King v. London Improved Cab Co., Ltd. Smith v. Balley and Gates v. R. Bill and Son cited in Doggett's case is that in the case of horse-drawn cabs, where drivers were given them in charge under terms resembling those admitted to exist in the present case, the relation between the proprietor and driver was that of bailor and bailee, but that quoad third parties the drivers were, under the provisions of the Metropolitan Hackney Carriage Act, 1843 (admittedly applicable to Taxi-cabs), deemed to be the servants of the proprietors."

18. A perusal of the record clearly indicates that the appellant himself had made a statement that he used to take the vehicle on rent. The appellant did not produce any documents on record to show the terms and conditions of alleged employment of the appellant with respondent no.1. It is admitted by the appellant that he had taken the auto-rickshaw on shift basis. It is thus clear that the appellant used to pay rent for taking auto-rickshaw on hire and the auto-rickshaw was completely under the control of the appellant during the period of such hire.

19. In my view, the appellant does not satisfy the definition of 'employee' within the meaning of Section 2(1)(dd)(c) of the Employees' Compensation Act, 1923. Section 2(1)(dd) (iii) provides that employee defined under Section 2(1)(dd)(c) has to be employed in any such capacity as is specified in Schedule II. Schedule II provides a list of persons which is subject to the provisions of Section 2(1)(dd) those who are included in the definition of workmen.

20. In my view, the appellant, though driving an auto-rickshaw, was not employed as a driver as provided in Clause XXV of Schedule II appended to the said Act and was the person of a casual nature. A party paying a rent or commission for taking a motor vehicle on hire from the owner or sharing profit out of the income earned by him cannot be construed as an employee within the meaning of Section 2(1)(dd)(c) read with Schedule II of the Employees' Compensation Act, 1923. He did not get any wages or remuneration from the owner of the vehicle but was paying certain amount to the owner.

21. In my view, the appellant was at full liberty to take the auto-rickshaw on rent or not from respondent no.1. At the same time, even respondent no.1auto-rickshaw owner was also at liberty not to give such auto-rickshaw on rent to the appellant and to give to others on rent on shift basis. An employee can be a driver but a driver need not be an employee. In my view, there was no employer-employee relationship between the appellant and respondent no.1 in view of the fact that the appellant had taken the auto-rickshaw on rent basis and was not in employment of respondent no.1. Respondent no.1 was not an employer within the meaning of Section 2(1)(e) of the Employees' Compensation Act. Under Section 22 of the Employees' Compensation Act, 1923, an employee is entitled to make an application for claim of compensation only when the liability to pay compensation to an employee arises and not otherwise. In my view, since the employer-employee relationship did not exist between the appellant and respondent no.1, such application for compensation under Section 22 of the Act itself was not maintainable.

22. In so far as the judgment of the Gujarat High Court relied upon by the learned counsel for the appellant is concerned, a perusal of the said judgment indicates that in the matter before the Gujarat High Court, the respondents had not pleaded that vehicle was on commission basis. However, it is not in dispute that respondent no.2 insurer in this case had disputed the relationship of employer-employee between the appellant and respondent no.1 and the evidence led by the appellant clearly indicates that the auto-rickshaw was on rent and was hired by the appellant from respondent no.1 for last one year. The judgment of the Gujarat High Court thus, in my view, does not assist the case of the appellant.

23. In so far as the judgment in case of the Divisional Manager, M/s. Reliance General Insurance Co. Ltd., [2013(5) ALL MR 125] (supra) relied upon by the learned counsel for the appellant is concerned, a perusal of the said judgment clearly indicates that there was no dispute that the deceased was actually employed by the lessee and was driving the truck. In view of the facts of that case, this Court held that such driver would be construed as an employee within the meaning of Section 2(1)(dd)(c) of the Employees' Compensation Act, 1923. In this case, the relation of the appellant with respondent no.1 as an employee itself is not proved. The judgment in the case of Divisional Manager, Reliance General Insurance Co. Ltd. thus is clearly distinguishable with the facts of this case and does not assist the case of the appellant. In so far as the unreported judgment dated 24th June, 2013 in the case of the New India Assurance Co. Ltd. (supra) passed in First Appeal No.161 of 2013 is concerned, this Court has rendered a finding that there was no positive suggestion on the part of the insurer that there was no application for renewal of the policy. This Court rendered a finding that in the cross-examination of the appellant, the employer-employee relationship was not positively denied. In my view, in the facts of this case, the evidence led by the appellant himself would clearly indicate that there was no relationship of employer-employee within the meaning of employee under Section 2(1)(dd)(c) of the Employees' Compensation Act, 1923. The said unreported judgment therefore does not assist the case of the appellant.

24. A perusal of the impugned order passed by the learned Commissioner dismissing the claim application as well as review application clearly indicates that both the orders are well reasoned orders passed by the learned Commissioner for Workmen's Compensation and Judge after considering the evidence and definition of employee under Section 2(1)(dd)(c) of the Employees' Compensation Act, 1923 and has rendered the correct interpretation thereof.

25. In my view, no infirmity can be found in the impugned orders. Appeal is accordingly dismissed. No order as to costs.

Appeal dismissed.