The Allahabad High Court has dismissed an appeal filed by The Oriental Insurance Company Limited, upholding the liability of the insurer to indemnify the compensation awarded for the death of a driver. The Court ruled that the registered owner continues to be the owner for the purposes of the Employee’s Compensation Act, 1923, even if the vehicle has been physically sold but not transferred in the records. Furthermore, the Court held that the collection of premium under IMT-29 covers the liability for a paid driver.
Case Background
The appeal was filed against the judgment and award dated November 3, 2025, passed by the Employee Compensation Commissioner/Deputy Labour Commissioner, Moradabad. The case arose from the death of Dharamveer, who was employed as a driver on a Qualis Car (No. UA-07-C-6274). On February 26, 2015, Dharamveer died in a road accident during the course of his employment.
The Commissioner awarded a compensation of Rs. 8,26,495/- along with interest at the rate of 12% per annum to the claimants. The Insurance Company was directed to indemnify this amount. Aggrieved by this order, the Insurance Company approached the High Court.
Arguments of the Appellant
The counsel for the appellant-Insurance Company, Mr. Akhilesh Sharan Srivastava, raised two primary contentions:
- Transfer of Ownership: The policy was taken by one Rakesh, but the vehicle was sold to Nirdosh Kumar prior to the accident. Although the policy was not transferred, the possession was with Nirdosh Kumar. Therefore, it was argued that there was no master and servant relationship between the deceased and Rakesh (the insured), and thus, no compensation could be awarded against the appellant.
- Scope of Policy: It was submitted that the Insurance Company had “not taken any premium for insuring the driver of the above vehicle,” and therefore, was not liable to pay compensation.
Court’s Analysis and Observations
1. Liability of the Registered Owner
Justice Sandeep Jain rejected the argument regarding the transfer of ownership. The Court observed that Rakesh was the registered owner on the date of the accident, and the vehicle was transferred to a third party (Mrs. Jaykari Devi) only on July 6, 2016, which was after the accident.
The Court relied on the Supreme Court judgments in Pushpa @ Leela & others Vs. Shakuntala and others (2011) and the recent decision in Brij Bihari Gupta vs Manmet and others (2025), noting that “when transfer of ownership of vehicle was made prior to accident, but neither transferor nor transferee took any steps to change the name of owner in registration certificate… transferor must be deemed to continue as the owner of the vehicle for the purposes of the Act.”
Quoting the Supreme Court in Brij Bihari Gupta, the High Court noted:
“The liability to pay falls squarely on the registered owner, even if there has been successive transfers which has to be indemnified by the insurer.”
2. Coverage Under IMT-29
Regarding the coverage of the paid driver, the Court examined the insurance policy. It was found that the vehicle was insured under a “private car liability only policy.” The Court noted that the insurer had charged Rs. 50/- as premium under IMT-29 (Legal Liability to Employees).
The Court observed:
“It is further evident that under IMT-29 only a premium of Rs.25/- per employee is charged but in the instant case, the insurance company has charged premium of two persons, which proves that the driver was also covered under the instant insurance policy.”
The Court further reasoned that since the offending vehicle was a private car, it required a driver, unlike commercial trucks which might employ conductors or cleaners. Therefore, the premium charged for employees necessarily included the paid driver.
The Bench also referred to the directions issued by the Insurance Regulatory and Development Authority of India (IRDAI) circular dated October 18, 2023, which mandated general insurers to provide cover to employees travelling in an employer’s vehicle, including paid drivers, under IMT-29 as an inbuilt coverage.
Decision
The Court held that the appeal did not raise any substantial questions of law. Justice Sandeep Jain dismissed the appeal, stating:
“In view of the above premium charged by the Insurance Company, which was towards two employees of the insured, which also included paid driver of the car, hence the contention of the learned counsel of the appellant, contrary to it, is liable to be rejected.”
The Court noted that the Insurance Company had already deposited the compensation amount of Rs. 17,94,718/- (including interest) on January 2, 2016. The Commissioner was directed to disburse this amount to the claimants in accordance with the judgment.
Case Details:
- Case Title: The Oriental Insurance Company Limited Versus Ramchandrapal Singh And 5 Others
- Case Number: First Appeal From Order No. 130 of 2026
- Coram: Justice Sandeep Jain
