Insurance policy covers alternate/spare driver under Employees Compensation Act if only one driver's claim is preferred.

The 1st Respondent (claimant) was engaged as an alternate/spare driver by the 2nd Respondent (owner) for a long-distance journey from Namakkal to Uttar Pradesh.

On September 12, 2022, while the regular driver was operating the vehicle, it collided with a parked lorry, causing the 1st Respondent to sustain a serious EPL injury to his left thumb.

The claimant filed a petition under Section 10(1) of the Employees Compensation Act, 1923.

The Joint Commissioner of Labour-II, Chennai, found an employer-employee relationship and awarded compensation of Rs. 3,80,222/- with 12% interest, holding the appellant-insurer liable.

The Insurance Company appealed, contending that the policy only covered the driver "on the wheels" and not an alternate driver.

1. Whether an alternate/spare driver is covered under an insurance policy that covers a "paid driver" without additional premium specifically for the spare driver.

2. Whether the Joint Commissioner of Labour erred in fixing the loss of earning capacity at 27% without a Medical Board assessment.

Section 2(dd)(II)(c) of the Employees Compensation Act, 1923, which provides an expansive definition of "employee" to include persons recruited in connection with a motor vehicle.

Section 147(1) of the Motor Vehicles Act, 1988, regarding the requirement for insurance coverage of employees.

The court distinguished Manager, National Insurance Co. Ltd. v. Saju P. Paul (2013) and Ramashray Singh v. New India Assurance Co. Ltd. (2003), which limited liability for gratuitous passengers.

Principle from the Karnataka High Court in Mohammedgouse v. Mohammed Ismail (2024), which held that if only one driver (even a spare one) is injured, the policy for a single paid driver covers them.

The court reasoned that in long-distance goods transport, employing an alternate driver is standard practice to share the driving burden.

Under the beneficial legislation of the Employees Compensation Act, "driver" must be construed liberally to include an alternate driver.

The court clarified that if both the regular and spare drivers were injured, the insurer’s liability would be limited to one person (the driver on the wheels) unless extra premium was paid; however, where only the alternate driver is injured, the policy's coverage for a "paid driver" extends to him.

Regarding quantum, the court found that since the claimant was not referred to a Medical Board and the injury was to the thumb (which the Schedule notes as 30% for total loss), a 27% assessment for a restricted joint was excessive.

The appeal was partly allowed only regarding the quantum; the total compensation was reduced from Rs. 3,80,222/- to Rs. 1,50,108/- (comprising Rs. 1,40,823/- for loss of earnings and Rs. 9,285/- for medical expenses). The 1st Respondent was permitted to withdraw the modified amount with interest, while the appellant-insurer was permitted to withdraw the excess deposit.