Bombay High Court
National Insurance Co. Ltd., Thr Its ... vs Shaikh Hasina Sharfuddin And Ors on 5 March, 2021
Equivalent citations: AIRONLINE 2021 BOM 295
Author: M.G. Sewlikar
Bench: M.G. Sewlikar
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IN THE HIGH COURT OF JUDICATURE OF BOMBAY
BENCH AT AURANGABAD
FIRST APPEAL NO. 1124 OF 2020
National Insurance Co. Ltd. Appellant
Versus
Shaikh Hasina Sharfuddin & others Respondents
Mr. V.R. Mundada, Advocate for the appellant.
Mr. Vikrant Valse, Advocate holding for Mr. T.M. Venjane, Advocate for
respondent No. 1.
Mr. V.D. Hon, Senior Counsel instructed by Mr. Ashwin V. Hon,
Advocate for respondent No. 2.
CORAM : M.G. Sewlikar, J.
RESERVED ON : 18th February, 2021.
PRONOUNCED ON : 5th March, 2021.
PER COURT :
1. Heard both the sides at admission stage.
2. This appeal is preferred by original Respondent No. 4, the insurance company, under section 30 of the Employee's Compensation Act, against the judgement and order passed by the learned Commissioner, Latur, in Application (W. C. A.) No. 14/2014 whereby the application was partly allowed.
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3. Facts giving rise to this appeal can be stated in brief as under:-
The original Applicant, Respondent No. 1 herein, is the wife of the deceased Sharfuddin Shaikh. The deceased Sharfuddin Shaikh was working as a labour with Respondents No. 2 to 4. He was getting salary of Rs. 15,000/- per month. Respondent No. 1 had issued a tender for the construction of washrooms. Respondent No. 3 filled the tender. Since Respondent No. 3 had qduoted minimum price, contract was issued to respondent No. 3. The deceased was engaged on the construction of washroom as a labour. When the deceased was working on the site of construction, a wall collapsed over the deceased, as a result of which, the deceased died on the spot. The deceased was shifted to Sasoon Hospital, Pune but was declared dead. Post-mortem was conducted and the incident was reported to the police station. The original Applicant-respondent No. 1 herein learned that the original respondents No. 2 and 3 had insured the workers working on the site of construction. Therefore, compensation was claimed from the Respondents. Respondents refused to pay the compensation, therefore, the Appellant has preferred this claim. ::: Uploaded on - 05/03/2021 ::: Downloaded on - 06/03/2021 00:10:02 ::: -3-
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4. Respondent No. 2 herein Municipal Corporation filed its written statement at Exhibit CA - 4. It has contended that Respondent No. 3 herein was allotted the work of construction of washrooms. Responndent No. 2 was informed about taking workmens compensation policy. The deceased worked for 2 - 3 days. The deceased was getting daily wages of Rs. 158.33/-. Since Respondent No. 2 was allotted the work of construction of washroom, respondent No. 1 is not liable to pay compensation to the Applicant/ Respondent No. 1.
5. Respondents No. 3 and 4 filed their written statement at Exhibit CB-3. They contended that respondent No. 3 was executing the work through daily labourers. They had appointed one Shri Dhotre, the labour contractor, to supply the labour. Therefore, they were unaware about the deceased working at the site of the construction. The incident occurred because of the negligence of labour contractor. Therefore, they are not liable to pay compensation to the Applicant.
6. Respondent No. 4 (the Appellant herein) filed its written statement at Exhibit CD - 5. Respondent No. 4 contended that the ::: Uploaded on - 05/03/2021 ::: Downloaded on - 06/03/2021 00:10:02 ::: -4- fa1124.20.odt deceased was working under the employment of respondent No. 3. There was no employer-employee relationship between respondent No. 4 and the deceased. Therefore, the insurance company is not liable to pay compensation to the Applicant/Respondent No. 1.
7. The learned Commissioner framed issues below Exhibit O-7. The learned Commissioner hold that the deceased died of an injury in an accident happened on the 21 st May, 2013, arising out of and in the course of his employment with Respondents No. 2 and 3. He further held that the age of the deceased at the time of the accident was 50 years and he was drawing wages of Rs. 6,500/- per month. Accordingly, he awarded compensation of Rs. 4,97,543/- with interest at the rate of 12% per annum with 50% penalty. Respondents No. 2 to 4 were held jointly and severally liable to pay the amount of compensation. This order is impugned in this appeal.
8. Heard Shri Mundada, learned counsel for the Appellant, learned counsel Shri Valse holding for Shri Venjane, learned counsel for Respondent No. 1 and Shri Hon, learned senior counsel for Respondent No. 2.
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9. Learned counsel Shri Mundada argued that the Municipal Corporation had given the contract to Respondent No. 3. It is an admitted position that Respondent No. 3 allotted the work to Respondent No. 4 and respondent No. 4 engaged one Dhotre and the said Dhotre engaged the deceased as a labourer. It is, thus, clear that the contractor had engaged sub-contractor and the sub-contractor had engaged another labour contractor for the execution of the work. The insurance company had insured the labourers engaged by the contractor/Respondent No. 3 herein and not the labourers engaged by sub-contractor or the labour contractor. Therefore, insurance company is not liable to pay any compensation to the deceased. He further contended that policy of insurance shows that it contained a clause that the insurance company will not be liable to pay any interest or penalty. He submitted that since by agreement the parties had agreed that insurance company will not be liable to pay interest or penalty, the liability to pay interest or penalty cannot be fastened on the insurance company. He, therefore, prayed for allowing the appeal.
10. Learned senior counsel Shri Hon and learned counsel Shri Valse submitted that the insurance company had covered the ::: Uploaded on - 05/03/2021 ::: Downloaded on - 06/03/2021 00:10:02 ::: -6- fa1124.20.odt labourers working on the site. Therefore, the insurance company cannot avoid its liability contending that it had insured only the labourers engaged by the contractor. They further submitted that the insurance company cannot make any agreement contrary to the statutory provisions. They submitted that the learned Commissioner committed no mistake in fastening the liability on the insurance company. Appeal therefore deserves to be dismissed with heavy cost.
11. Following points arise for determination the case:-
i) whether the insurance company had insured only the labourers of the contractor/Respondent No. 3 or had insured the labourers working at the site of construction?
ii) Whether the insurance company can avoid the liability to pay interest or penalty?
My answer to the above points with the reasons in support of them are as under:-
i) The labourers working at the site of construction.
ii) In the negative. ::: Uploaded on - 05/03/2021 ::: Downloaded on - 06/03/2021 00:10:02 ::: -7- fa1124.20.odt REASONS
12. All the facts involved in this appeal are admitted by the parties. It is not in dispute that Municipal Corporation had allotted the work of construction of washrooms to the contractor and the contractor allotted the work to respondent No. 3 in the trial Court and respondent No. 3 engaged labour contractor and the said labour contractors had engaged the deceased. It is also not in dispute that the deceased died at the site of construction of washrooms due to collapse of a wall.
13. For deciding whether the insurance policy covered only the labourers engaged by the contractor or the labourers working at the site, the terms of the policy will have be looked into. Policy has been produced below Exhibit CD-11 in the record of the trial Court.
The said policy shows that all types of civil work in PMC area was covered by the insurance company. This clearly shows that the insurance company had covered all kinds of work that will be carried out in the PMC area during the period of insurance. It does not say that only the workers/labourers working on the Pay Roll of the contractor were insured. Learned counsel Shri Mundada argued that ::: Uploaded on - 05/03/2021 ::: Downloaded on - 06/03/2021 00:10:02 ::: -8- fa1124.20.odt policy at Exhibit CD-10 clearly indicates that only workers of the contractor/Respondent No. 3 herein were insured by the insurance company. Shri Mundada argued that in the policy the term 'employee' is defined as a person who is in direct employment but does not include any person employed under a contractor or sub-contractor of the insured unless specifically shown as covered in the schedule and by an endorsement. He argued that since the deceased was engaged by subcontractor, he is not covered under the policy. This argument has no substance. Exhibit CD-10 only shows that one skilled and unskilled labourers were insured. Exhibit CD-10 further shows that all types of civil work in PMC area were covered by the policy. It does not say that only the labourers working on the Pay Roll of the contractor were insured by the insurance company. Thus, the policy makes it explicitly clear that the work of all kinds in the area of the PMC were insured by the insurance company. Therefore, the learned Commissioner did not commit any error in fastening the liability on the insurance company. As indicated above, the policy specifically covers all type of civil work in PMC area. Policy at Exhibit CD-11 also specifically mentions that the policy is for all types of civil work in PMC area. This clearly indicates that the policy covers two unskilled and one skilled labour of all type of work in PMC area. Therefore, ::: Uploaded on - 05/03/2021 ::: Downloaded on - 06/03/2021 00:10:02 ::: -9- fa1124.20.odt since the deceased died while carrying out the work assigned to the contractor (Respondent No. 3 in the record of the trial Court), the insurance company is liable to pay compensation to the deceased as the deceased gets covered under the policy.
14. The next point that arises for consideration is whether insurance company can avoid its liability to pay interest and compensation on account of delay in payment of compensation to the Applicant on the ground that there is a clause in the policy to the effect that the insurance company will not be liable for payment of interest or penalty on account of delayed payment of compensation. The policy contains an exclusion clause that the insurance company shall not be liable for interest and/or penalty imposed on the insured under any law or otherwise. In terms of Section 4A of the Employees Compensation Act, the employer is liable to pay interest at the rate of 12% per annum on the amount of compensation and penalty to the extent of 50% of the amount of compensation payable, if the employer commits delay in payment of compensation. It is a statutory liability. Insurance company cannot make an agreement contrary to the statutory provisions. Employees Compensation Act is a beneficial legislation for the benefit of the employees. Insurance company ::: Uploaded on - 05/03/2021 ::: Downloaded on - 06/03/2021 00:10:02 :::
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fa1124.20.odt cannot make any contract detrimental to the interest of the beneficiary i.e. the employees. Such an agreement would be opposed to public policy and, therefore, such a clause absolving the insurance company to pay the interest or the penalty for the late payment cannot be enforced. Therefore, submission of the learned counsel in this respect cannot be accepted.
15. Thus, for the reasons given above, it cannot be said that the learned Commissioner committed any error in fastening the liability on the insurance company. In this view the matter, no substantial qduestion of law is raised in the appeal. Appeal is, therefore, devoid of any substance. The appeal is, therefore, dismissed with costs.
16. All pending civil applications stand disposed of.
( M. G. SEWLIKAR ) JUDGE dyb/d ::: Uploaded on - 05/03/2021 ::: Downloaded on - 06/03/2021 00:10:02 :::