Rajasthan High Court - Jodhpur
Johari Lal vs Smt.Khetu Devi And Ors on 21 October, 2019
Equivalent citations: AIRONLINE 2019 RAJ 1215
Author: Pushpendra Singh Bhati
Bench: Pushpendra Singh Bhati
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Misc. Appeal No. 1604/2004
Johari Lal
----Appellant
Versus
Smt.Khetu Devi & Ors.
----Respondent
For Appellant(s) : Mr. Anil Bhandari
For Respondent(s) : Mr. Sanjeev Johari & Mr. Arun Dadhich
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
Order 21.10.2019
1. The matter was heard at length on 14.10.2019 and while order was being dictated for dismissing the appeal, counsel for the appellant sought some time to show certain citations. On his request, the matter is listed today in "To be mentioned"
category.
2. This misc. appeal U/s.30 of Workmen's Compensation Act, 1923 has been preferred for the following prayer :
"It is, therefore, most humbly and respectfully prayed that this appeal may kindly be allowed with costs, the judgment/ order dated 23.8.2004 passed by learned Workmen's Compensation Commissioner, District Udaipur in W.C. Case No.39/2000 (ALC) may kindly be set aside to the extent of penalty and funeral expenses imposed upon the appellant and the Insurance Company (respondent no.6) may kindly be held liable for payment of penalty and funeral expenses."(Downloaded on 05/06/2021 at 03:24:48 PM)
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3. This appeal has been preferred by employer of the driver-Jethpuri Goswami, who met with an accident on 12.5.2000 during the course of his employment.
4. The learned Commissioner awarded compensation of Rs.1,97,060/- with interest @ 12% per annum from the date of filing of claim petition and also imposed penalty of 30% i.e. an amount of Rs.59,118/- upon the employer.
5. Counsel for the appellant has placed reliance upon the following citations :-
1] Ved Prakash Garg Vs. Premi Devi & Ors.
1998 ACJ 01 2] Oriental Insurance Company Ltd. Vs. Smt. Kaki Bai & Ors.
2005 R.A.R. 494 (Raj.) 3] Kamlesh & Others Vs. Gian Chand & Ors.
2016 ACJ 2263 4] Amba & Ors. Vs. V. Sowbhagyamma & Ors.
2002 ACJ 536 5] United India Insurance Co. Vs. Rati Ram & Anr.
2005 (10) RDD 4750 (Raj.) 6] National Insurance Co. Ltd. Vs. Laxmi & Ors.
2004 Western Law Cases (Raj.) UC page 706 7] L.R.s of Natwar Lal Vs. Gotam & Ors.
2008 R.A.R. 183 (Raj.) 8] Civil Misc. Appeal No.1604/2004 order dated 18.10.2004 9] United India Insurance Co. Ltd. Vs. Smt. Roopkanwar & Ors.
MACD 2006(1) (Raj.) 584
6. Counsel for the respondent has relied upon Division Bench judgment of this Court in United India Insurance Co.
Ltd., Vs. Smt. Sira Kanwar & Ors. (D.B. Civil Misc. Appeal No.768/2005, decided on 27.4.2007); relevant portion whereof reads as follows :-
(Downloaded on 05/06/2021 at 03:24:49 PM)(3 of 7) [CMA-1604/2004] "Having perused the aforesaid judgments and heard learned counsel for the parties we are of the opinion that no such dichotomy exists between two sets of judgments referred to by learned Single Judge in the order of reference. The principle was clearly enunciated by the Supreme Court in Ved Prakash Garg's case. In the said case, the Supreme Court distinguished the liability arising on account of interest payable on delayed payment of compensation and liability to the penalty levied under Section 4A (3)(b) of the Workmen's Compensation Act as under:-
"But similar consequence will not follow in a case where additional amount is added to the principal amount of compensation by way of penalty to be levied on the employer under circumstances contemplated by Section 4-A (3)(b) of the Compensation Act after issuing show cause notice to the employer concerned who will have reasonable opportunity to show cause why on account of some justification on his part for the delay in payment of the compensation amount, he is not liable for this penalty... So far as this penalty amount is concerned, it cannot be said that it automatically flows from the main liability incurred by the insured employer under the Compensation Act. To that extent, such penalty amount as imposed upon the insured employer would get out of the sweep of the term 'liability incurred' by the insured employer as contemplated by the proviso to Section 147(1)(b) of the M.V. Act as well as by the terms of the insurance policy found in provisos (b) and (c) to sub-section (1) of section II thereof."
In coming to this decision the Apex Court also referred to the decision of Rajasthan High Court rendered in United India Insurance Co. Ltd. Vs. Roop Kanwar & Ors (1991 ACJ 74). The said judgment was referred by the learned Single Judge of this Court and the appeal has not been decided till then. While considering the case of Roop Kanwar, the Supreme Court observed as under:-
"In the case of United India Insurance Co. Ltd. V. Roop Kanwar, 1971 ACJ 74 (Rajasthan), a learned Single Judge of the Rajasthan High Court had to consider a situation where on payment of additional premium the insurance company had agreed in the light of Endorsement No.16 of the policy to cover all liabilities incurred by the insured under Compensation Act. In view of this contractual coverage of liability the insurance company in that case was held liable to meet the claim for penalty and interest as imposed upon the insured under Section 4-A(3)of the Compensation Act. This (Downloaded on 05/06/2021 at 03:24:49 PM) (4 of 7) [CMA-1604/2004] judgment proceeded on its own facts and was concerned with a situation convers to the one as was examined by the Karnataka High Court in Oriental Insurance Co. Ltd. V. Raju, 1994 ACJ 191 (Karnataka). In the case decided by Karnataka High Court, as seen earlier, there was an express exclusion of such liability of the insurance company. In the aforesaid case decided by the Rajasthan High Court there was an express inclusion of such liability for the insurance company which had taken additional premium."
It is on the anvil of the aforesaid observation made by the Supreme Court distinguishing the judgment rendered by the learned Single Judge of this Court in Roop Kanwar's case (supra), the Division Bench has dismissed the special appeal filed against the judgment of learned Single Judge and upheld the liability of the Insurance Company to indemnify the employer of the entire sum payable with penalty including the penalty levied for delayed payment of compensation.
The Supreme Court having decided in legal liability in respect of compensation payable under the Workmen's Compensation Act that is to say the principal amount of compensation interest paid thereon and any other payment which become payable under the Workmen's Compensation Act towards the penalty leviable thereunder on account of default of the employer is not a part of legal liability to uphold the right of parties to contract in respect of the liability which has accrued to be indemnified by the insurance company. The parties can agree to exclude any part of the liability from the insurance like taking other additional liability arising under the Workmen's Compensation Act though it may not fall in the ambit of the legal liability. The Roop Kanwar's case has been decided by Division Bench on the basis of finding recorded by the Hon'ble Supreme Court, while distinguishing the Roop Kanwar's case in laying down the principle, that in case decided by the Rajasthan High Court there was an express inclusion of such liability including for insurance company which had taken additional premium. Thus, what liability actually the insurance company is liable to indemnify the insured depend on the obligation taken under the policy of insurance. In all cases, therefore, it becomes necessary to look at the relevant clause (Downloaded on 05/06/2021 at 03:24:49 PM) (5 of 7) [CMA-1604/2004] of the insurance policy which provides a clue to the liability undertaken by the insurance company, and the liability excluded out of contract of insurance.
On principle, we do not find any dichotomy in any of the judgments above referred and noticed by learned Single Judge in all cases, ultimately it depended on the interpretation of the relevant clause of the insurance policy determining the scope of the liability undertaken by the insurance company for indemnifying the insured. This question was discussed in detail by Division Bench of this Court in Vilas Devi's case (supra) referring to Roop Kanwar's case and the observations of the Supreme Court noticed by us above, this Court said that :-
"The above passage is clear in its indication that case was distinguished on assumption that "there was express inclusion of such liability for the insurance company which had taken additional premium."
With this distinction in mind the Court has referred to IMT-18 of the insurance policy which was in consideration in Vilas Devi's case. The Court said that:-
"From clause IMT-18 it is apparent that the insurer has undertaken on payment of additional premium only 'legal liability' arising under the Compensation Act and no more."
The matter was again considered by the Division Bench in National Insurance Company Ltd. Vs. Smt. Nema & Ors - D.B. Civil Special Appeal No.47/2002 decided on 25th April, 2003 which is an unreported judgment of this Court. The relevant condition in the Insurance Policy which was before the Division Bench was IMT 17 which read as under:-
"In consideration of the payment of an additional premium it is hereby understood and agreed that notwithstanding anything contained herein to the controversy the Company shall indemnify the Insured against his legal liability under the workmen's Compensation Act, 1923 and subsequent amendment of the Act prior to the date of the Endorsement, the Fatal Accidents Act, 1855 or at common Law in respect of personal injury to any paid driver or cleaner or persons employed in loading/ or unloading but in any case not exceeding seven in number including driver and cleaner (Downloaded on 05/06/2021 at 03:24:49 PM) (6 of 7) [CMA-1604/2004] whilst engaged in the service of the Insured in such occupation in connection with the goods carrying commercial vehicle and will in addition be responsible for the costs and expenses incurred with its written consent."
Considering the above claim, it was held that what has been accepted by the Insurance Company is its legal liability under the Workmen's Compensation Act.
The insurance policy in the present case on record of the Commissioner under the Workmen's Compensation Act shows that liability undertaken in respect of Workmen's Compensation Act has been in identical terms referred to in Smt. Nema's case, also under IMT 17, viz. legal liability to persons in connection with operation and maintaining or unloading of goods carrier commercial vehicles.
In view thereof, it must be held that the insurance company cannot be held liable to indemnify the owner of the vehicle in respect of penalty payable on default of timely payment of compensation which does not fall within the ambit of 'legal liability' in view of the decision rendered in Ved Prakash's case by the Supreme Court.
Consequently, the appeal of the insurance company to the extent it joins issue on its liability towards penalty leviable under Workmen's Compensation Act is concerned is allowed and to that extent the directions of the Commissioner, Workmen's Compensation that insurance company is liable for the penalty levied under the Workmen's Compensation Act is quashed. There shall be no orders as to costs."
7. After taking into account the precedent law cited by counsel for the appellant, this Court is of the opinion that once the employer was a party to the litigation and notices were issued and served on him, then the same shall be treated to be sufficient in Section 4-A (3)(b) of the Workmen's Compensation Act, 1923.
This Court after perusing the precedent law finds that in the (Downloaded on 05/06/2021 at 03:24:49 PM) (7 of 7) [CMA-1604/2004] peculiar facts and circumstance the issue of extra premium, though, is similar to another precedent law, but that does not clearly reflect that extra-premium was taken by the Insurance Company for the purpose of indemnifying Insurance Company from the liability of penalty. The precedent law of Smt. Sira Kanwar (supra) is absolutely applicable in the present case and, thus, there is no doubt that the penalty is to be borne by the employer. Hence, no interference for interference is made out.
The appeal, thus, is dismissed.
(DR. PUSHPENDRA SINGH BHATI),J 73-Sanjay (Downloaded on 05/06/2021 at 03:24:49 PM) Powered by TCPDF (www.tcpdf.org)