Karnataka High Court
The Manager vs Sri K C Achaiah on 11 September, 2012
Author: N.Ananda
Bench: N. Ananda
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED: THIS THE 11th DAY OF SEPTEMBER, 2012
BEFORE
THE HON'BLE MR. JUSTICE N. ANANDA
MISCELLANEOUS FIRST APPEAL No.10676/2010 (WC-SJ)
BETWEEN:
The Manager,
The New India Assurance Co. Ltd.,
Coffee Krupa Building,
Madikere,
Kodagu Dist.
Represented by its Manager,
Regional Office, No.2-B,
Unity Building Annexe,
Mission Road,
Bangalore-560 027. ... APPELLANT
(By Sri R. Rajagopalan, Adv.)
AND:
1. Sri K.C. Achaiah @ Mani,
S/o Sri K.V. Chundaiah,
Major,
C/o Sri N.N. Chandrashekara,
Pushpagiri Plantation,
Mudenadu,
Madikeri Taluk,
Kodagu District.
2. Sri N.N. Chandrashekara,
Major,
2
Pushpagiri Plantation,
R/a Yelepet, Mahadevapet,
Mudenadu,
Madikeri Taluk,
Kodagu District. ... RESPONDENTS
(By Sri. K.L. Sreenivas & Sri K.O. Harish, Advs. for
R-1, R-2 served)
...
This Miscellaneous First Appeal is filed under
Section 30(1) of the Workmen's Compensation Act,
1923 against the judgment dated 29.1.2010 passed in
WCA/KNP/NF-05/2007 on the file of the Labour
Officer and Commissioner for Workmen
Compensation, Kodagu District, Madikeri, awarding a
compensation of Rs.1,63,498/- with interest @ 12%
from 24.6.2005.
This Miscellaneous First Appeal coming on for
Admission this day, the Court delivered the following:
JUDGMENT
In this appeal, the Insurance Company has raised following substantial questions of law:
"(i) Compensation on loss of earning capacity has not been based on any medical evidence and is arbitrary.3
(ii) Fastening of the liability on the appellant for the entire amount is contrary to the provisions of the Contract.
(iii) Directing the appellant-insurance company to pay the Interest amount is contrary to the provisions of contract of insurance.
(iv) Awarding of interest one month from the date of accident instead of one month from the date of adjudication."
2. I have heard Sri R. Rajagopal, learned Counsel for Insurance Company and Sri K.L. Sreenivas, learned Counsel for claimant.
3. The learned Counsel for Insurance Company would submit that in the impugned award, liability to pay entire compensation should not have been fastened on the insurance company. In terms of the policy, the insurance company is liable to pay compensation proportionate to wages of claimant and 4 the premium collected thereon by the insurance company. In support of this contention, the learned Counsel for insurance company has relied on a judgment of this Court reported in 1998(6) Kar.L.J. 433 in the case of Oriental Insurance Company Limited -vs- Gangavva and Another. This decision has been rendered with reference to terms and conditions of the insurance policy.
4. I have perused the contents of insurance policy. The relevant clauses of policy are as hereunder:
"NOW THIS POLICY WITNESSETH that if any time during the period of insurance any employee in the insured's immediate service shall sustain personal injury by accident or decease arising out of and in the course of his employment by the insured in the Business and if the insured shall be liable to pay 5 compensation for such injury either under the Laws(s) set out in the Schedule or at Common Law Then subject to the terms exception and conditions contained herein or endorsed hereon the Company will indemnify the insured against all sums for which the insured shall be so liable and will in addition be responsible for all costs and expenses incurred with its consent in defending any claim for such compensation.
PROVIDED ALWAYS that in the event of any changes in the law(s) or the substitution of other legislation thereof this policy shall remain in force but the liability of the Company shall be limited to such sum as the Company would have been liable to pay if the Law(s) had remained unaltered.
Law(s) 6
1. The Workmen's Compensation Act, 1923 and subsequent amendments of the said Act, prior to the date of the issue of Policy. 2. The Fatal Accidents Act, 1855.
It is hereby understood and agreed that the Workmen's Compensation (Amendment) Acts, of 1959 (8 of 1959) and 1962 (64 of 1962) and 1976 (65 of 1976) and 1984 (22 of 1984) and 1995 (30 of 1995) and 2000 (46 of 2000) and deemed to be added to the Laws set out in the Schedule to the Policy.
Provided that the Insurance granted hereunder is not extended to include:
(i) any interest and/or penalty imposed on the Insured on account of his/her failure to comply with the requirements laid down under the W.C. Act, 1923 and 7
(ii) any compensation payable on account of occupational diseases listed in part 'C' of schedule III of the W.C. Act, 1923."
In the policy, the following exceptions are carved out:
"EXCEPTIONS
1. The Company shall not be liable under this Policy in respect of
(a) any injury by accident or disease, directly attributable to ward, invasion, act of foreign enemy, hostilities (whether war be declared or not) civil war, mutiny, insurrection, rebellion, revolution or military or usurped power.
(b) The insured's liability to employees of contractors to the insured.
(c) Any employee who is not a "workman within meaning of the Law(s)"8
(d) Any liability of the insured which is attached by virtue of an agreement but which would not have attached in the absence of such an agreement.
(e) Any sum which the Insured would have been entitled to recover from any party but for an agreement between the Insured and such party.
The exclusion clauses carved out in the police are:
"2. This Policy does not cover:
(a) any accident or any loss or destruction of or damage to any property whatsoever or any loss of expenses whatsoever resulting or arising therefrom or any consequential loss.
(b) any legal liability of whatsoever nature.
(c) payment of compensation in respect of death, injury, disablement, of the insured person, directly or indirectly caused by or contributed to by or arising from ionising radiation or 9 contamination by radioactivity from any source whatsoever.
3. The indemnity or compensation provided by this Policy shall not apply to nor include any accident, loss destruction damage or legal liability directly or indirectly caused by or contributed to by or arising from nuclear weapons material."
5. In view of the aforesaid terms of policy, the insurance company cannot contend that liability of insurance company shall be restricted to compensation determined on the wages and premium structure contained in the policy.
6. As per medical evidence, claimant had suffered injury to left wrist and permanent physical disability of left wrist is assessed at 50%. The Commissioner for Workmen's Compensation without considering medical evidence and that injury suffered by claimant is not a schedule injury has assessed permanent physical disability at 50%. 10
It has also failed to assess the loss of earning capacity by taking into consideration the workman can perform all the acts and therefore, the claimant is restricted from doing the physical work.
7. Therefore having regard to fact that the claimant was sustaining by physical labour and he cannot change his avocation, permanent physical disability vis-à-vis., loss of earning capacity is assessed at 40%. The other facts not being in dispute, claimant is entitled to a compensation of Rs. 1,30,790/- (Rs. 1680 x 194.64 x 40%). In terms of the policy, the insurance company is not liable to pay interest and penalty and the same are payable by the insured.
8. In view of the above discussion, the appeal is accepted in part. Compensation of Rs.1,63,498/- awarded under the impugned award is reduced to Rs.1,30,790/-. The interest on compensation of Rs. 1,30,790/- shall be paid by the insured. The liability of the insurance company is restricted to payment of 11 compensation of Rs. 1,30,790/-. The amount in deposit shall be transferred to the Commissioner for Workmen's Compensation. If the insurance company has deposited amount in excess of what has been awarded herein the same shall be refunded to insurance company.
Sd/-
Judge Nsu/-