Smt Yamuna Channabasappa Shetty vs K Raghukumar @ Raghu on 19 July, 2019

[Cites 27, Cited by 1]

Karnataka High Court

Smt Yamuna Channabasappa Shetty vs K Raghukumar @ Raghu on 19 July, 2019

Bench: B. Veerappa

                         1
                                      R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 19TH DAY OF JULY, 2019

                      BEFORE

       THE HON' BLE MR. JUSTICE B. VEERAPPA

MISCELLANEOUS FIRST APPEAL No.2509/2019(ECA)

BETWEEN:

SMT. YAMUNA CHANNABASAPPA SHETTY
W/O CHANNABASAPPA SHETTY,
AGED ABOUT 65 YEARS,
R/AT "SHIVALAYA",
OPP:GOVT. ITI COLELGE,
2ND CROSS, TILAK PARK ROAD,
VIJAYAPURA,
CHIKKAMAGALURU.
                                      ... APPELLANT
(BY SRI RAJASHEKAR K., ADVOCATE FOR
MS. RASHMI JADHAV, ADVOCATE)

AND:

K. RAGHUKUMAR @ RAGHU
S/O KOTRAPPA,
AGED ABOUT 34 YEARS,
R/AT 2ND STAGE, 2ND CROSS,
NEAR GANESHA TEMPLE,
WATER TANK ROAD,
BYPASS ROAD,
KALYANANAGAR,
CHIKKAMAGALURU.
                                     ... RESPONDENT
(BY SRI GIRISH B. BALADARE, ADVOCATE FOR
CAVEATOR/RESPONDENT)
                         .....
                             2

     THIS MISCELLANEOUS FIRST APPEAL IS FILED
UNDER SECTION 30(1) OF ECA ACT, 1923. AGAINST THE
JUDGMENT AND AWARD DATED:29.01.2019 PASSED IN
ECA NO.279/2014 ON THE FILE OF THE PRL. SENIOR
CIVIL JUDGE & CJM, CHIKKAMAGALURU, AWARDING
COMPENSATION OF `11,51,000/- WITH INTEREST @ 12%
P.A. FROM THE DATE OF ACCIDENT TILL THE DATE OF
PAYMENT.


     THIS MISCELLANEOUS FIRST APPEAL COMING ON
FOR ORDERS THIS DAY, THE COURT DELIVERED THE
FOLLOWING:


                     JUDGMENT

The present Appeal is filed by the alleged employer against the judgment and award dated 29.01.2019 made in E.C.A.No.279/2014 on the file of the Prl. Senior Civil Judge and CJM, Chikkamagaluru, awarding total compensation of `11,51,000/- with interest at 12% per annum after expiry of 30 days from the date of accident till the date of payment. The appellant has also filed 3 I.A.No.3/2019 seeking permission to deposit the award amount.

I. FACTS LEADING TO FILE THE APPLICATION FOR PERMISSION TO DEPOSIT

2. After filing of the appeal, the appellant has filed Memo of statutory deposit dated 26.06.2019 along with a demand draft bearing No.661499 dated 25.06.2019 drawn on the Canara Bank, Basavanahalli Extension Branch, Chikkamagaluru, for `11,51,000/-. On 29.06.2019, the appellant has also filed I.A.No.3/2019 under the provisions of Section 151 of Code of Civil Procedure r/w Section 30(1) of the Employee's Compensation Act, 1923, ('Act' for short) seeking permission to deposit the award amount before this Court, contending that, the counsel for the appellant, by mistake, deposited a sum of `11,51,000/- by way of demand draft bearing No.661499 dated 25.06.2019 drawn on the Canara Bank, Basavanahalli Extension 4 Branch, Chikkamagaluru, on 26.06.2019 before this Court, without obtaining the permission of this Court. Therefore, the present application is filed seeking permission to deposit the said award amount. It is also prayed to direct the registry to invest the said amount in any nationalized bank.

3. Therefore, the matter is posted for acceptance of the deposit made by the appellant.

4. The application I.A.No.3/2019 seeking permission to deposit the award amount is heard on maintainability. Since the issue involved in the present application is of general importance, the members of the Bar were also permitted to assist the Court along with the learned counsel for the appellant and learned counsel for the caveator/respondent.

5. Heard the learned counsel for the parties and members of the Bar on maintainability of the application, I.A.No.3/2019.

II. ARGUMENTS ADVANCED BY THE LEARNED COUNSEL FOR THE APPELLANT

6. Sri Rajashekhar.K, learned counsel for the appellant contended that the present application filed seeking permission to deposit the award amount made before this Court on 25.06.2019 is maintainable, in view of the Memo dated 17.06.2004 issued by the Registrar (Judicial), High Court of Karnataka, Bengaluru, in pursuance of the Order dated 25.02.2003 made in MFA No.7560/2002. He would contend that this Court can allow the application as the appellant has already deposited the entire award amount of `11,51,000/- before this Court on 25.06.2019, by way of demand draft bearing No.661499 dated 25.06.2019 drawn on the Canara Bank, Basavanahalli Extension Branch, Chikkamagaluru.

7. He further contended that, in case the appellant had deposited the amount before the Commissioner for 6 Workmen/Tribunal, there was every chance that the claimant would have withdrawn the entire amount even before the appeal is filed before this Court, though liability is challenged. Admittedly, in the present case, appellant had filed objections before the Tribunal/Commissioner for Workmen Compensation, and had denied the liability and the relationship of employer and employee. In those circumstances, if the permission is not granted to deposit the amount before this Court, the very purpose for which the appeal is filed under Section 30(1) of the 'Act' would be frustrated.

8. He further contended that, under the provisions of Section 30(2) of the 'Act', the legislature thought fit to fix the period of limitation to file the appeal as, 'sixty days'. In some cases, even before the expiry of the appeal period and in view of the mandate provided under third proviso to Section 30(1) of the 'Act', if the appellant or insurance company deposits the amount before the 7 Commissioner for Workmen Compensation or Tribunal, there are every chances that the claimant may withdraw the award amount even before the appeal is filed before this Court, within the time stipulated in the statute. In those circumstances, even if the employer/insurance company succeeds in the appeal, it is very difficult to recover the award amount already withdrawn by the claimant, in the absence of any bond executed by the claimant to that effect.

9. He would contend that the Miscellaneous First Appeal is continuation of the original proceedings filed under Section 22 of the 'Act'. Therefore, this Court can also permit the appellant to deposit the entire award amount as contemplated under the third proviso to Section 30(1) of the 'Act', before this Court. He also contended that it is not mandatory under the provisions of Section 30 of the 'Act' to deposit the amount before the Tribunal or Commissioner for Workmen 8 Compensation. Therefore, he sought to allow the application filed by the appellant and permit the appellant to contest the matter on merits. III. ARGUMENTS ADVANCED BY THE LEARNED COUNSEL FOR THE RESPONDENT

10. Sri Girish Baladare, learned counsel appearing for the respondent/claimant submits that the very application filed before this Court for the first time, after filing of the appeal, seeking permission to deposit the award amount is not maintainable and the application is liable to be rejected. He contended that, in view of the third proviso to Section 30(1) of the 'Act', it is mandatory on the part of the appellant to produce the certificate by the Commissioner for having deposited the award amount, along with Memorandum of Appeal. Therefore, he submits that the application is liable to be rejected.

IV. SUBMISSIONS MADE BY THE LEARNED COUNSEL FROM THE BAR

11. Sri O.Mahesh, learned counsel from the Bar submits that the word 'employer' used in the third proviso to Section 30(1) of the 'Act', does not mean 'insurance company'. He also invited attention of the Court to the definition of the word 'employer' under Section 2(1)(e) of the 'Act' and contended that the same does not include the 'Insurance Company'. Therefore, he submits that the application filed by the appellant for the first time before this Court can be entertained, in the interest of justice.

12. Sri A.N.Krishna Swamy, learned counsel from the Bar contended that the provisions of Section 8 of the 'Act' clearly depicts that 'no payment of compensation in respect of an employee whose injury has resulted in death, and no payment of a lump sum as compensation to an employee or a person under a legal disability, shall 10 be made otherwise than by deposit with the Commissioner, and no such payment made directly by an employer shall be deemed to be a payment of compensation'. The proviso to Section 8 stipulates that, in the case of death of an employee, an employer may make to any dependant advances on account of compensation and that amount shall be deducted by the Commissioner from such compensation and repaid to the employer.

13. He further contended that the provisions of Section 8 refers to 'employer' and that does not mean 'insurance company'. He also referred to the provisions of Section 12 and 13 of the 'Act', and submits that, no where it refers to 'insurance company'. Therefore, in the appeal filed by the insurance company before this Court, depositing the award amount is not mandatory before filing the appeal or at the time of filing the appeal and hence, application to deposit the award amount can 11 be filed before this Court. He also contended that under the provisions of Section 30(1)(a) of the 'Act', only aggrieved person can file an appeal and not otherwise. He also referred to the provisions of Rule 39 of the Workmen's Compensation Rules, 1924, i.e., Procedure where indemnity claimed under Section 12(2) of the 'Act'.

14. Sri Nagaraj, learned counsel from the Bar contended that any aggrieved party including insurance company shall have to comply the provisions of third proviso to Section 30(1) of the 'Act' and it is mandatory.

15. Smt.Suguna R Reddy, learned counsel from the Bar contended that the provisions of Section 30(1) of the 'Act' are mandatory. It is mandatory for any party aggrieved by the judgment and award passed by the Tribunal or Commissioner for Workmen Compensation under the provisions of Section 22 of the 'Act', to deposit 12 the award amount before the Tribunal/ Commissioner itself, prior to filing of an appeal before this Court.

16. She would further contend that, once the insurance company enters into contract with the employer, the insurance company steps into the shoes of the employer and is bound by the provisions of third proviso to Section 30(1) of the 'Act'. In support of her contentions, learned counsel relied upon the Full Bench decision of the Madhya Pradesh High Court in the case of New India Assurance Co. Ltd. vs. Savita Sen reported in LAWS(MPH) 2003 4 37, para 13, 14, 22 and 26 and contended that under the third proviso to Section 30(1) of the 'Act' the word used 'employer' as well as 'appellant' includes 'insurance company'. Therefore, it is mandatory on the part of any aggrieved party to deposit the award amount and produce the certificate to that effect issued by the Commissioner/Tribunal, in the appeal. Therefore, she 13 contended that the application filed by the present appellant for the first time before this Court is not maintainable.

17. Smt. Sunitha B.H. learned counsel from the Bar contended that the 'Act' is a beneficial legislature and it is mandatory that any person including the 'insurance company', aggrieved by the judgment and award passed by the Commissioner for Workmen's Compensation or Tribunal, to deposit the award amount and produce the certificate issued by the Commissioner, while presenting the Appeal before this Court. In support of her contention, learned counsel relied upon the Division Bench judgment of this Court in the case of United India Insurance Co.Ltd. vs. Kashimsab and others reported in ILR 1993 KAR 1991, para 20 and 21; and in the case of Mehaboobi and others vs. Abdul Rashid and others reported in 2000 ACJ 493, para 12. 14

V. POINTS FOR CONSIDERATION

18. In view of the aforesaid rival contentions urged by the learned counsel for the parties, the points that arise for consideration are:

(i) Whether the application filed by the appellant under Section 151 of Code of Civil Procedure r/w Section 30(1) of the Employee's Compensation Act, 1923, for permission to deposit the award amount, is maintainable, in view of the mandate of third proviso to Section 30(1) of the Act?

(ii) Whether this Court can permit the appellant to deposit the amount before this Court for the first time, in view of the Memo dated 17.06.2004 issued by the Registrar (Judicial) of this Court, in the facts and circumstances of the case?

VI. CONSIDERATION

19. I have given my anxious consideration to the arguments advanced by learned counsel for the parties as well as the learned Members of the Bar and perused 15 the entire material on record and the provisions of the Employee's Compensation Act, 1923, carefully.

20. The controversy in the present application is, whether the application filed before this Court for the first time seeking permission to deposit the award amount is maintainable in view of the provisions of third proviso to Section 30(1) of the 'Act'. For better understanding, it is necessary to extract the provisions of Section 30(1) of the 'Act', which reads as under:

30. Appeals. --

(1) An appeal shall lie to the High Court from the following orders of a Commissioner, namely:--

(a) an order awarding as compensation a lump sum whether by way of redemption of a half-monthly payment or otherwise or disallowing a claim in full or in part for a lump sum;

[(aa) an order awarding interest or penalty under section 4A;]

(b) an order refusing to allow redemption of a half-monthly payment;

(c) an order providing for the distribution of compensation among the dependants of a deceased [employee], or disallowing any claim of a person alleging himself to be such dependant;

(d) an order allowing or disallowing any claim for the amount of an indemnity under the provisions of sub-section (2) of section 12; or

(e) an order refusing to register a memorandum of agreement or registering the same or providing for the registration of the same subject to conditions:

Provided that no appeal shall lie against any order unless a substantial question of law is 17 involved in the appeal, and in the case of an order other than an order such as is referred to in clause (b), unless the amount in dispute in the appeal is not less than three hundred rupees:

Provided further that no appeal shall lie in any case in which the parties have agreed to abide by the decision of the Commissioner, or in which the order of the Commissioner gives effect to an agreement come to by the parties:

Provided further that no appeal by an employer under clause (a) shall lie unless the memorandum of appeal is accompanied by a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against.] (2) The period of limitation for an appeal under this section shall be sixty days.

(3) The provisions of section 5 of [the Limitation Act, 1963 (36 of 1963)], shall be applicable to appeals under this section.

21. A careful reading of the said provisions makes it clear that, an appeal shall lie to the High Court from the Orders of a Commissioner, i.e., an order awarding as compensation a lump sum whether by way of redemption of a half monthly payment or otherwise or disallowing a claim in full or in part for a lump sum; an order awarding interest or penalty under Section 4A; an order refusing to allow redemption of a half-monthly payment; an order providing for the distribution of compensation among the dependants of a deceased employee, or disallowing any claim of a person alleging himself to be such dependant; an order allowing or disallowing any claim for the amount of an indemnity under the provisions of sub-section (2) of section 12; or an order refusing to register a memorandum of agreement or registering the same or providing for the registration of the same subject to conditions. 19

The first proviso to Section 30(1), clearly depicts that no appeal shall lie against any order unless a substantial question of law is involved in the appeal, and in the case of an order other than an order such as is referred to in clause (b), unless the amount in dispute in the appeal is not less than three hundred rupees.

The second proviso to Section 30(1), provides further that no appeal shall lie in any case in which the parties have agreed to abide by the decision of the Commissioner, or in which the order of the Commissioner gives effect to an agreement come to by the parties.

The third proviso to Section 30(1) provides further that no appeal by an employer under clause (a) shall lie unless the memorandum of appeal is accompanied by a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against.

Sub Section (2) of Section 30 stipulates the period of limitation for an appeal under this Section as 'sixty days'.

Sub Section (3) of Section 30 depicts that the provisions of Section 5 of the Limitation Act, 1963, shall be applicable to appeals under this Section.

22. A careful reading of the third proviso to Section 30(1) of the 'Act', makes it clear that, it is only when the employer or aggrieved person or insurance company deposits the entire award amount along with memorandum of appeal duly certified by the Commissioner, the appeal is regarded as properly filed in conformity with the requirements of Section 30(1) of the 'Act'.

23. In other words, an appeal provided under Section 30(1) of the 'Act' to the High Court against the order of the Commissioner/Tribunal is not like a Regular First Appeal akin to the provisions of Section 96 of Code of Civil Procedure, which could be heard both on facts and law. The appellate jurisdiction under the provisions of Section 30 of the 'Act' to decide the appeal is confined only to examine the substantial questions of law arising in the case.

24. When an aggrieved party/employer/insurance company files an appeal, he is under legal obligation to deposit the entire award amount in terms of third proviso to Section 30(1) of the 'Act' as a pre-condition to file an appeal in the High Court, except where the appeal is filed against the Order filed in clause (b) of the said Section. It is only when the aggrieved party/ employer/insurance company deposits the entire award amount along with memorandum of appeal duly certified by Commissioner, his appeal is regarded as being properly filed in conformity with the requirement of Section 30(1) of the 'Act'.

25. Therefore, it is clear that, no appeal by an aggrieved party/employer/insurance company shall be filed unless the memorandum of appeal is accompanied by a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against. 23

26. It is also no doubt true that in view of the provisions Sub Section (2) and (3) of Section 30 of the 'Act', the legislature provided limitation period of sixty days to file an Appeal before this Court and the provisions of Section 5 of the Limitation Act is applicable in appeals, in case of any delay.

27. For better understanding, it is relevant to refer to the definition of the word 'employer' under the provisions of Section 2(1)(e) of the 'Act', which reads as under:

2(1)(e) "employer" includes any body of persons whether incorporated or not and any managing agent of an employer and the legal representative of a deceased employer, and, when the services of an employee are temporarily lent or let on hire to another person by the person with whom the employee has entered into a contract of service or apprenticeship, means such other person while the employee is working for him".

28. A careful reading of the said provision makes it clear that the word 'employer' includes any body of persons whether incorporated or not and any managing agent of an employer and the legal representative of a deceased employer, and, when the services of an employee are temporarily lent or let on hire to another person by the person with whom the employee has entered into a contract of service or apprenticeship, means such other person while the employee is working for him which includes managing agent of the employer/insurance company.

29. The Hon'ble Supreme Court, in the case of Zila Sahakari Kendriya Bank Maryadit vs. Shahjadi Begum and others reported in (2006)11 SCC 692 while considering the definition of the word 'employer', held that, 'not only a person who employs another either permanently or on temporary basis but also those who were, in control of the workman temporarily lent or 25 let on hire to them by the person with whom the workman entered into a contract of service'.

30. When a policy is taken by the employer with the insurance company, automatically a contract between 'employer' and 'insurance company' takes place and the insurance company becomes the managing agent of the employer. Therefore, the contention of the learned counsel for the appellant that, an 'employer' does not include the 'insurance company', cannot be accepted.

31. It is well established fact that the Employee's Compensation Act, 1923, is a beneficial legislation whereby the interest of the workmen is sought to be protected. The object of adding third proviso, to Section 30(1) of the 'Act' is to ensure the compliance of the award passed by the Commissioner for Workmen's Compensation/Tribunal, in the event of dismissal of the appeal filed by the employer, so that the workmen is not required to run from pillar to post for years together for 26 getting the amount of compensation. This becomes further apparent from the fact that the right of appeal under Section 30 of the 'Act' is restricted by providing that an appeal under Section 30 would lie only on a substantial question of law. The literal interpretation of the term 'employer' as suggested by the learned counsel for the appellant and learned counsel appearing for the insurance company is bound to lead to an anomalous situation, where though the employer is required to deposit the amount of compensation before filing an appeal against the award and file certificate of deposit along with memorandum of appeal, but the insurer, if chooses to file an appeal against the same award becomes liable to pay the compensation on account of contract of insurance between the employer and the insurer, can file appeal without depositing the amount of compensation and without certificate of deposit. This could never be the intention of the legislature while enacting the third proviso to Section 30(1) of the 'Act'. 27 Section 30(1) of the 'Act' does not give any independent right of appeal to the insurer. Virtually the right of appeal given to the employer is availed by the insurer, who feels aggrieved by the award on account of the contract of insurance between the insurer and the employer. How then the insurer can be on a better footing than the employer? It goes without saying that the said right can be availed by the insurer under those restrictions only which are imposed on the employer. Therefore, the contention that the 'insurer' cannot become 'employer' cannot be accepted.

32. It is also well settled that the liability of the insurer is co-extensive and co-terminus with that of the insured. i.e., the employer and the insurer cannot question the order awarding compensation by raising grounds which are not open to the employer so far as the quantum of compensation is concerned. The question, whether the insurer can question the 28 quantum of compensation awarded to a workman by preferring an appeal is another one. Considering the intendment in requiring the entire amount payable under the order appealed against to be deposited is to see that the fruits of the order are not denied or delayed and are assured and considering the fact that the 'Act' itself is a beneficial legislation, the insurer cannot be placed in a different position than that of the insured i.e., the employer. Therefore, this Court is inclined to take the view that, an employer and the appellant are used interchangeably for the purposes of the third proviso to Section 30(1) of the 'Act'. This is not doing violence to the language of the third proviso, on the other hand, it is ironing the ruck created by the dual expressions used, i.e., employer at one place and appellant at another, by a process of interpretation to further the object and intendment of the legislature in enacting the third proviso in accordance with the well established principles of interpretation. 29

33. By a liberal and wider interpretation to the term 'employer' in the third proviso to Section 30(1) of the 'Act', it can be held that, as the insurer gets the right to file an appeal against the award by stepping into the shoes of the employer on account of contract of insurance between them, the restrictions imposed by third proviso on the appeal at the behest of the employer would equally apply to the appeal filed by the insurer meaning thereby, the appeal at the instance of the insurer will also have to accompany a certificate from Commissioner for Workmen's Compensation that the amount of compensation has been deposited and in the absence of such a certificate, the appeal would not be maintainable.

34. Sri A.N.Krishna Swamy, learned counsel for the insurance company relied upon the provisions of Sections 12(2), 13 and 14 of the 'Act'. Section 12 deals with contracting, Section 13 deals with Remedies of 30 employer against stranger and Section 14 deals with Insolvency of employer. By combined reading of the said provisions, it clearly indicates that, the person other than employer can also be made liable to pay the compensation under the 'Act' and moreover, the expression used 'any person' under Section 19 of the 'Act' covers an 'insurer' also. Therefore, this Court finds no substance in the submission of the learned counsel for the insurance company that insurance company is not liable to pay compensation amount.

35. It is well settled that the Employee's Compensation Act, 1923, is a piece of social security and welfare legislation, its dominant purpose is to protect the workman and, therefore, the provisions of the 'Act' should not be interpreted too narrowly so as to debar the workman/employee from compensation which the parliament thought they ought to have. The intention of the legislature was to make the employer an 31 insurer of the workman responsible against the loss caused by the injuries or death, which ought have happened, while the workman was engaged in his work.

36. Insofar as the contention of the learned counsel for the appellant that this Court can permit the appellant to deposit the amount of compensation awarded by the Commissioner/Tribunal when appeal is filed before this Court, in view of the Memo dated 17.06.2004 issued by the Registrar (Judicial) of this Court on the basis of the Order dated 25.02.2003 passed in MFA No.7560/2002, cannot be accepted, for the simple reason that, it was a case where this Court had observed that, 'it is difficult to appreciate how the Registry has accepted the deposit and converted itself into the office of Commissioner under the Workmen's Compensation Act' and further, directed the Registrar (Judicial) to look into the aspect and seek appropriate directions and guidelines on the administrative side 32 from Hon'ble The Chief Justice to be followed in future. It was a case where the appellant deposited only the principal amount before this Court. The interest awarded by the Commissioner was not deposited. The said aspect was not noticed by the Registrar (Judicial), nor mentioned the same. The Memo dated 17.06.2004 gives an impression that the award amount in toto has been deposited and therefore, this Court directed the Registrar (Judicial) to look into the matter and seek appropriate directions/guidelines on the administrative side from Hon'ble The Chief Justice. The Hon'ble Chief Justice, by the administrative order dated 14.06.2004 observed as under:

"Certificate is necessary otherwise prior permission from the High Court to deposit the award amount is necessary."

37. With great respect to the administrative Order passed by the then Hon'ble Chief Justice on the administrative side, the Memo dated 17.06.2004 issued 33 by the Registrar (Judicial) is contrary to the mandate of third proviso to Section 30(1) of the 'Act'. It is well settled that the administrative note, or a resolution passed by the Full Court on administrative side, cannot dilute the mandatory provisions of the 'Act' stated supra. It is also well settled that any administrative action by Hon'ble The Chief Justice on administrative side or even the Full Court resolution on the administrative side is not binding on the judicial side. Accepting the order passed on administrative side and permitting the appellant to deposit the award amount before this Court is impermissible, in view of the mandate of third proviso to Section 30(1) of the 'Act'.

38. There is some force in the contention of the learned counsel for the appellant that, in case the appellant/insurer deposits the award amount before the Commissioner for Workmen Compensation or the Tribunal, there is every chance that the claimants may 34 withdraw the amount even before filing of the appeal by the employer/insurer before this Court or before expiry of sixty days as stipulated under Section 30(2) of the 'Act' and in the cases where liability is challenged, if the claimant is permitted to withdraw the entire compensation amount even before the expiry of appeal period, and if the appellant /insurer succeeds in the appeal, the very purpose of filing the appeal by the insurance company or employer will be frustrated. For example: a claimant filed an application under Section 22 of the 'Act' claiming compensation against the employer contending that he was employed under a particular employer and accident occurred arising out of and during the course of employment and where the employer filed objection and took a specific stand that he had not at all employed the employee and the accident had not occurred during the course of employment, even in the absence of any document, oral and documentary, if for any reason the Commissioner 35 for workmen's compensation proceeds to pass award against the employer or insurance company, in those circumstances, even before the appeal is filed within the time stipulated under the 'Act', if the amount is permitted to be withdrawn by the claimant, then the very purpose for which the appeal is filed will be frustrated. Even if the appellant/employer/ insurance company succeeds in the appeal, by that time, the amount would be withdrawn even before the expiry of period of limitation, then it is very difficult to recover the compensation amount which would be worth about lakhs of rupees.

39. No doubt, the mandate of the third proviso to Section 30(1) of the 'Act' stipulates that no appeal by an employer under clause (a) of Section 30(1) shall lie unless the memorandum of appeal is accompanied by a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable 36 under the order appealed against, the fact remains that the aggrieved party, either the employer or the insurance company have time to file an appeal as contemplated under the provisions of Section 30(2) of the 'Act', and the period of limitation prescribed for an Appeal under the said Section is sixty days and there is also provision under Section 30(3) that in case of any delay in filing the Appeal, application can be filed under Section 5 of the Limitation Act in the appeal to condone the delay. Therefore, it is clear that the appeal provision is provided to either the aggrieved party/ employer/ insurance company in case of compensation awarded, or in case of compensation not awarded or if a claim petition has been rejected, the aggrieved party can file an appeal before this Court under Section 30(1) within a period of two months. While exercising powers under Section 30(1) of the 'Act', this Court as first appellate authority can vary the award or modify or enhance the compensation. Under these circumstances, if the 37 claimant is allowed to receive the compensation amount even before expiry of the period of appeal i.e., two months, then the very purpose for which the legislature enacted the appeal provision will be defeated. The legislature, while enacting the appeal provision, was of the view that this Court while exercising powers of appellate authority, can reverse, modify or enhance the compensation. Therefore, the interest of the aggrieved party has to be protected atleast till completion of the appeal period of two months after exclusion of copying period as contemplated under the provisions of Section 4 of the Limitation Act. Therefore, in order to protect the interest of both the parties, atleast for a period of two months, the compensation awarded should not be disbursed, enabling the aggrieved party to file an appeal before this Court.

40. Insofar as the contention of the learned counsel for the appellant that the Miscellaneous First Appeal is 38 continuation of original proceedings and therefore this Court can permit to file an application for permission to deposit the amount awarded by the Commissioner for workmen compensation, cannot be accepted for the simple reason that the appeal provided under Section 30(1) of the 'Act' to this Court against the Order of the Commissioner for Workmen Compensation or Tribunal is not like a Regular First Appeal akin to the provisions of Section 96 of the Code of Civil Procedure which can be heard both on facts and law. But the appellate jurisdiction of the High Court under the provisions of Section 30(1) of the 'Act' to decide the appeal is confined only to examine the substantial question of law arising in the case and the legislature enacted the third proviso of Section 30(1) of the 'Act' that it is under legal obligation to deposit the entire award amount as a pre- condition to file appeal before this Court. Only when the aggrieved party deposits the entire award amount along with a memo duly certified by the Commissioner, 39 the appeal is regarded as properly filed in conformity with Section 30(1) of the 'Act'. Therefore, the contention of the learned counsel that the appeal is continuation of the original proceedings, cannot be accepted.

41. The Hon'ble Supreme Court, in the case of Zila Sahakari Kendriya Bank Maryadit vs. Shahjadi Begum and others reported in (2006)11 SCC 692, at Para 11 and 12 has held as under

11. The Act was enacted to provide for payment by certain classes of employers to their workmen of compensation for injury by accident. The term "employer" has been defined in Section 2(1)(e) of the Act in the following terms:

"2. (1)(e) 'employer' includes any body of persons whether incorporated or not and any managing agent of an employer and the legal representative of a deceased employer, and, when the services of a workman are temporarily lent or let on hire to 40 another person by the person with whom the workman has entered into a contract of service or apprenticeship, means such other person while the workman is working for him;"

12. However, the term "employee" has not been defined in the Act. The definition of employer, therefore, embraces within its fold not only a person who employs another either permanently or on temporary basis but also those who were in control of the workman temporarily lent or let on hire to them by the person with whom the workman has entered into a contract of service. It is, therefore, a broad definition.

42. The Full Bench of the Madhya Pradesh High Court, in the case of New India Assurance Co. Ltd. vs. Savita Sen reported in LAWS(MPH) 2003 4 37, considering the provisions of Section 30(1) of Workmen's Compensation Act, 1923, at para 13, 14, 22 and 26, has held as under:

13. Workmen's Compensation Act is a beneficial Legislation, whereby interest of the workmen is sought to be protected. The object of adding third proviso, to sub-section (1) of section 30 is to ensure the compliance of the award passed by the Commissioner for Workmen's Compensation in the event of dismissal of the appeal filed by the employer, so that the workmen is not required to run from pillar to post for getting the amount of compensation for years together. This becomes further apparent from the fact that the right of appeal under section 30 is restricted by providing that an appeal under section 30 would lie only on a substantial question of law. The literal interpretation of the term 'employer' as suggested by the learned counsel for the appellants is bound to lead to an anamolous situation, where though the employer is required to deposit the amount of compensation before filing an appeal against the award and file certificate of deposit along with memorandum of appeal, but the Insurer, if chooses to file an appeal against the same award becoming liable to pay the compensation on account of a contract of insurance between the employer and the Insurer, can file appeal without depositing the amount of compensation and without certificate of deposit.

This could never be the intention of the Legislature while adding third proviso to section 30(1), of the Act.

14. The matter needs to be examined from yet another angle. Section 30, of the Act, does not give any independent right of appeal to the Insurer. Virtually the right of appeal given to the employer is availed by the Insurer, who feels aggrieved by the award on account of the contract of Insurance between the insurer and the employer. How then the Insurer can be on a better footing than the employer? It goes without saying that the said right can be availed by the Insurer under those restrictions only which are imposed on the employer.

22. Division Bench of Andhra Pradesh High Court also considered this question in Gangireddy Venkateswara Rao v. Divisional Manager, New India Assurance Co. Ltd., 1999 ACJ (1) 262, and said in para 7 that:

"7. It is, therefore, obvious that the insurer steps into the place of the employer when he prefers an appeal against the order of the Commissioner directing him to pay 43 the compensation. He would be preferring it as employer because he steps into the shoes of the employer and consequently the insurer is attracted by the 3rd proviso to section 30(1), of the Act. The language of that proviso is a wee bit confusing because at one place the expression 'employer' is used and at another place 'appellant' is used - it begins by saying "provided further that no appeal by an employer under clause (a) shall lie ......" and it ends saying"....... A certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against" (emphasis supplied). It is well settled that the liability of the insurer is co-extensive and co-terminus with that of the insured, i.e., the employer herein and the insurer cannot question the order awarding compensation by raising grounds which are not open to the employer so far as the quantum of compensation is concerned. The 44 question whether the insurer can question the quantum of compensation awarded to a workman by preferring an appeal is another one - which we are not answering in these cases.

Considering that the intendment in requiring the entire amount payable under the order appealed against to be deposited is to see that the fruits of the order are not denied or delayed and are assured and considering the fact that the Act itself is a beneficial legislation, we are of the view that the insurer cannot be placed in a different position than that of the insured, i.e., the employer, in matters like this. We are, therefore, inclined to take the view that 'an employer' and 'the appellant' are used interchangeably for the purposes of the 3rd proviso. This is not doing violence to the language of the 3rd proviso; on the other hand, it is ironing the ruck created by the dual expressions used, i.e., 'employer' at one place 45 and 'appellant' at another, by a process of interpretation to further the object and intendment of the legislature in enacting the 3rd proviso in accordance with the well established principles of interpretation. We are supported in this view by the Division Bench decision of the High Courts of Mysore, Karnataka, Kerala and Orissa."

26. From the decisions referred to above, we gather that High Courts have taken divergent views on this question. However, majority of the High Courts namely; Kerala, Karnataka, Patna, Andhra Pradesh, Punjab and Haryana and Orissa have preferred a liberal and wider interpretation to the term 'employer' in the third proviso to section 30(1), of the Act, and have held that as the Insurer gets the right to file an appeal against the award by stepping into the shoes of the employer on account of contract of insurance between them, the restrictions imposed by third proviso on the appeal at the behest of the employer would equally apply to the appeal filed by the Insurer meaning thereby, the appeal at the 46 instance of the Insurer will also have to accompany a certificate from Commissioner for Workmen's Compensation that the amount of compensation has been deposited and in the absence of such a certificate the appeal would not be maintainable.

43. The Division Bench judgment of this Court in the case of United India Insurance Co.Ltd. vs. Kashimsab and others reported in ILR 1993 KAR 1991, para 20 and 21, has held as under:

20. Referring to the construction of the word 'employer' as found in the third Proviso, we are of the view that we must construct the said Proviso such as to give effect to the scope and object of the Act. In other words, we must construct that Proviso with a view to advancing cause of Justice and not to defeat it. The Supreme Court in a recent Decision in A.A. Haja Muniuddian v. Indian Railways [(1992) 4 SCC 736 : AIR 1993 SC 361.] , has held in paragraph-5 as follows:--

"A view which advances cause of justice must be preferred to the one which defeats it. When an indigent 47 person approached the Tribunal for compensation for the wrong done to him, the Tribunal cannot refuse to exercise jurisdiction merely because he does not have the means to pay the fee. The ends of justice require that the Tribunal should follow the procedure laid down in Order XXXIII of the Code to do justice."

Thus, following the Ruling of the Supreme Court in the above case, to construct the Proviso-3 of Section 30(1) of the Act, we should not confine to the literal meaning of the Act, but, on the other hand, we must hold, having regard to the object of the Proviso and the fact that the insurer could be adjudged as if a judgment debtor under the decree, that in a case where an appeal is filed by the insurer challenging the judgment and award of compensation in favour of the workman, it cannot be entertained unless it is accompanied by a Certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against, or otherwise, the very object of the Proviso would be defeated. In the instant case, since the insurer has not filed the Certificate 48 along with the appeal for having deposited the compensation amount awarded by the Commissioner, the Appeal is not maintainable. It is not possible to accede to the contention of Sri Mahesh that the Parliament intended to exempt the insurer from complying with the requirement of the third Proviso to Section 30(1) of the Act.

21. Having answered the preliminary objection as to the maintainability of the Appeal under Section 30(1)(a) Proviso-3 of the Act against the insurer, we think it necessary to say that it is only when the appellant-insurer complies with the requirement of the third Proviso to Section 30(1) of the Act and wants findings on the grounds 1 to 4, referred to above, urged in the Appeal, then only the Court will have to record its findings on those grounds. Therefore, there is no need for us at this stage to record our findings on the four grounds raised in the Appeal.

44. The Division Bench of this Court, in the case of The Divisional Manager, The New India Assurance Company Ltd. vs. Smt. Susheelamma and others, reported in ILR 2012 KAR 1869 at paragraphs 14 and 15 has held as under:

"14. The appeal is in the first instance is not maintainable before this Court without being accompanied by a certificate issued by the Commissioner that the amount has been deposited before him as per the requirements in the proviso-2 of Section 30 quoted above.

15. Deposit before this Court is of no consequence as that is not the requirement of law. Moreover, the object of the Act is to ensure that some relief is provided to the injured workmen or the dependents of an employee who died in the course of employment. A deposit before this Court and resistance on the part of the claimants/dependents to withdraw the amount by the Insurance Company only betrays the most cantankerous attitude on the part of the appellant Insurance Company."

VII. CONCLUSION

45. For the reasons stated above, the first point raised for consideration in this appeal has to be answered in the negative holding that the application filed by the 50 applicant/appellant under Section 151 of Code of Civil Procedure read with Section 30(1) of the 'Act' for permission to deposit the award amount is not maintainable, in view of the mandate of third proviso to Section 30(1) of the 'Act'. Consequently, the second point raised in the present appeal is answered in the negative holding that this Court cannot permit the appellant to deposit the compensation amount for the first time, in view of the memo dated 17.06.2004 of the Registrar (Judicial) of this Court while exercising powers under the provisions of Section 30(1) of the 'Act'.

46. In view of the aforesaid reasons, the appellant has not made out any ground to allow the application.

Accordingly, the application I.A.No.3/2019 is rejected.

Consequently, the Appeal is disposed off as it is not an appeal in the eye of law.

47. At this stage, learned counsel for the appellant submits that liberty may be reserved to the appellant in the present case to comply the provisions of the third proviso to Section 30(1) of the 'Act' and thereafter, to file an appeal before this Court, if necessary, by filing an application for condonation of delay.

48. Taking into consideration the peculiar facts and circumstances of the case, in the interest of justice, this Court is of the considered view that such a prayer has to be acceded. Accordingly, it is always open for the appellant to approach the jurisdictional claims Tribunal/ Commissioner for Workmen Compensation to comply the provisions third proviso to Section 30(1) of the 'Act' and thereafter, file an Appeal before this Court, along with an application for condonation of delay, if any in accordance with law.

49. The Office is directed to return the original demand draft bearing No.661499 dated 25.06.2019 52 drawn on the Canara Bank, Basavanahalli Extension Branch, Chikkamagaluru, for `11,51,000/-, filed in this appeal, along with certified copy of this Judgment to the appellant or her counsel, after following the procedure as contemplated, forthwith, in accordance with law.

The concerned Tribunal/Commissioner is directed not to disburse the award amount for a period of three weeks from the date of receipt of certified copy of this Order.

VIII. GUIDELINES

50. In order to serve the cause of justice, more particularly, the innocent and illiterate claimants/ victims who are more often coming from the lower strata of Society, economically impoverished and suffering further misery due to the accident or the death of bread winner, and in order to avoid complications for depositing the compensation amount before passing the award and after passing the award, it is necessary to issue guidelines as under:

PROCEDURE BEFORE PASSING AWARD

(i) The Claims Tribunals/Commissioner for Employee's (Workmen's) Compensation shall without exception, at the time of commencement of trial and evidence on the side of claimants, obtain and ensure that the bank account details of all the claimants as follows:

1 Name of the claimant(s)/victim(s) with address 2 Name of the Bank & Branch 3 Bank IFSC Code 4 Account No(s). of the claimant(s)/victim(s) The first page of the bank pass-book, which will compulsorily contain the photograph of the claimant(s)/victim(s), duly attested by the Bank concerned, should be made available. Wherever the claimant(s)/victim(s) are impleaded as respondents, before the claims tribunal or the Court, their account details, as above, will have to be furnished.

(ii) In case after disclosure of the bank account details before the Claims Tribunal in terms of 54 Clause (i), a new person is added in the account for any reason whatsoever, it is incumbent on the part of the claimant/victim to disclose the same to the Claims Tribunal, indicating the relationship of the newly added person to the claimant/victim and the purpose.

(iii) The Claims Tribunals/Commissioner for Employee's (Workmen's) Compensation shall also obtain and ensure the marking of Pan Card of all the claimants, wherever available.

(iv) If the claimant/victim does not have a Pan Card, the Claims Tribunal/Commissioner for Employee's (Workmen's) Compensation shall endeavour to advise the claimant/victim about the importance of having such a card, namely, to avoid higher Tax Deduction at Source, for their own benefit, before conclusion of trial. For this purpose, the District Legal Services Authorities and Taluk Legal Services Authorities can facilitate and provide assistance.

(v) The Claims Tribunals may verify and confirm if the claimant/victim has an Aadhaar card, and if there is one, he/she may be called 55 upon to mark a self attested copy of the Aadhaar Card.

(vi) In case of minor claimants, their bank account details should be obtained and marked. The name of the guardian has to be specified with all details.

(vii) The Claims Tribunals/Commissioner for Workmen's Compensation shall ensure compliance of clause (i) above, before conclusion of trial.

PROCEDURE AFTER PASSING AWARD

(viii) The Claims Tribunal/Commissioner for Employee's (Workmen's) Compensation after passing the judgment and award, on depositing the compensation amount by the aggrieved party/ employer/insurance company or corporation, shall not disburse/release the award amount in favour of the claimant(s) till the expiry of the period of limitation for filing the appeal i.e., sixty days, excluding the copying time, enabling aggrieved party to file an appeal as contemplated under the 'Act'.

(ix) The Claims Tribunals/Commissioner for Employee's (Workmen's) Compensation shall, as a matter of rule, direct the insurance companies or transport corporations or such other entities held liable to pay the compensation, to deposit the award sum to the credit of the bank account of the Claims Tribunal directly by NEFT or RTGS mode. The Registry of this Court shall issue appropriate directions in this regard enabling the respective Claims Tribunal or the District Court concerned to open separate account, which will bear a suffix ECA to identify that the account is in relation to employees compensation claims.

(x) The aggrieved party/Insurance Companies/Transport Corporations shall instruct their banks to ensure deposit of the award sums by way of Direct Bank Transfer to the specified bank account of the Claims Tribunal containing the following information in the prescribed format, by way of compliance of the award.

1 ECA Number 2 On the file of (Claims Tribunal Name) 3 Date of award 57 4 Compensation Amount 5 Income Tax Deduction at Source 6 Bank Transaction Reference No. /Unique Transaction Reference (UTR) Number.

(xi) In turn, the bank of the Claims Tribunal shall receive the deposited sum and capture the above information and furnish a statement of account on a daily basis to the Registry of the Claims Tribunal/Commissioner for Workmen's Compensation to enable the said Registry to reconcile the deposits of compensation and the respective ECAs towards which such deposits were made.

(xii) On such deposits being made, the insurance companies and transport corporations shall submit a letter to the Registry of the Claims Tribunal enclosing a copy of the said bank advice, in prescribed format as above, as per which the deposit was made to the bank account of the Claims Tribunal, to enable the Claims Tribunal to keep tab on the deposits made in the Employees Claims Tribunal for which they were made, which is a fundamental need for a smooth implementation of this well intentioned scheme. 58 The Payment advice for remittance of compensation is as under:

PAYMENT ADVICE FOR REMITTANCE OF COMPENSATION From:

............Bank....................

To:

................Tribunal/Commissioner for Workmen Compensation We confirm remittance of compensation as follows on instructions of.................................... (aggrieved party/employer/insurance company/transport corporation):--

1 ECA Number 2 On the file of (Claims Tribunal Name), Place 3 Date of award 4 Amount Deposited 5 Income Tax Deduction at Source, if any 6 Unique Transaction Reference (UTR) Number.

(xiii) The aggrieved party/employer/Insurance Companies, Transport Corporations and such other entities making such deposit, shall also send a copy of the payment advice in Clause (ix) to the Claims Tribunal concerned and serve a copy of the same on the claimants or their counsel as the case may be.

(xiv) Insofar as tax deduction at source is concerned, Form 16-A of the IT Act should be provided to the claimant/victim on whose behalf the deduction has been made so as to enable him/her to seek refund of tax deducted.

(xv) The Claims Tribunals shall ensure that the benefit of details of such bank account of the Claims Tribunal concerned are identified in the award itself, for compliance by those required to satisfy the award.

(xvi) The Claims Tribunals/Commissioner for Workmen Compensation shall ensure that as and when an order is passed for disbursal of compensation amount, it will ensure that such disbursal of compensation shall be made directly 60 to the credit of the bank account of the claimant/victim, as the case may by NEFT or RTGS. The bank account details of the claimant/victim(s) shall be stated in the award/order of the Claims Tribunal.

(xvii) The Claims Tribunals shall, in case of minor claimants, retain the amounts in court deposit until they attain majority. Thereafter, the Claims Tribunal shall ensure deposit of their shares by Direct Bank/Benefit Transfers to the accounts of the parties, who were minors. Wherever the Claims Tribunal feels it appropriate to direct withdrawal of interest for the benefit of the minor, interest shall be paid by direct transfer to the account of the minor through natural guardian.

(xviii) The Claims Tribunals shall also ensure that in case the claimant or claimants die pending proceedings and legal representatives are brought on record, the same procedure as above in respect of claimants shall be strictly adhered to in respect of impleaded legal representatives also. 61 (xix) The Claims Tribunals shall also ensure that in case of compromise being recorded in Lok Adalat proceedings, at the time of such compromise, the details of bank accounts, Pan Card (if available) of the claimant or claimants and/or legal representatives shall also be obtained and disbursal of the amount compromised shall also be only by way of NEFT/RTGS. In cases where the claimants or victims have Adhaar Cards, a self attested copy of the same may also be obtained.

(xx) The High Court Registry is directed to place the matter before the Hon'ble Chief Justice so that appropriate circular can be issued to all the District Judges and the Claims Tribunals to publish the above interdict, as it needs to be widely publicized and displayed in the notice board and also by way of intimation to insurance companies, transport corporations and other departments that they are required to follow these instructions, strictly.

(xxi) The Registry to send copy of this Order to all the District Judges /concerned Tribunal under Employee's Compensation Act or the Motor 62 Vehicles Claims Act, and shall ensure strict compliance of the above directions.

(xxii) The Claims Tribunals are hereby instructed to abide by the above direction without any let or hindrance, scrupulously.

51. This Court appreciates the fairness on the part of the members of legal fraternity in assisting this Court and also appreciates the efforts put in by Sri K.Rajashekar for Ms.Rashmi Jadhav, learned counsel for the appellant, Sri Girish B. Baladare, learned counsel for the caveator/respondent, Sri O. Mahesh, Sri A.N.Krishna Swamy, Sri Nagaraj, Smt.Suguna R Reddy and Smt.Sunitha B.H. learned members of the Bar in formulating the guidelines/ directions as stated supra.

Ordered accordingly.

Sd/-

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