Rajasthan High Court - Jaipur
United India Insurance Co. vs Shahjad Khan And Ors. on 14 January, 1998
Equivalent citations: 2000ACJ54, (1998)IILLJ744RAJ, 1998(2)WLC205, 1998(1)WLN16
ORDER Amaresh Ku. Singh, J.
1. Heard the learned counsel for the parties.
This appeal has been filed under Section 30 of the Workmen s Compensation Act, 1923 against the order dated November 23, 1993 passed by the Commissioner, Workmen's Compensation Act, Sirohi in W.C. Case No. 22/1992. By the aforesaid order, the Commissioner made an award of Rs. 87,980/- and further awarded penalty @ 15% and interest on the principal amount.
2. The facts of the case may be briefly summarised as below:
Respondent Shahjad Khan, -- Yusuf and Latif filed a claim against the petitioner United India Insurance Company Limited, Divisional Office, Jodhpur and Menrab Khan (Respondent No. 5). Respondents No. 1 to 4 prayed that a compensation of Rs. 87,980/- be awarded alongwith 15% penalty and 18% interest on the amount of compensation. According to the averments made in their application dated April 23, 1991, Nasir Khan s/o Shahjad Khan was in the employment of Mehrab Khan (Respondent No. 5) as a driver. He used to drive truck No. RJW 4221 belonging to the Respondent No. 5. On November 7, 1990 Nasir Khan was working as a driver on the above mentioned truck. He took the truck to the Belka Mines, with the object of unloading the truck at the yard. Because of the dislocation of soil, the truck fell in the pit. Nasir Khan received serious injuries and on account of the injuries received by him, he expired. On the date of his death he was getting salary @ Rs. 1,200/- per month. The truck, which Nasir Khan was driving belong to Mehrab Khan (Respondent No. 5) and the appellant United India Insurance Company had insured the truck and a policy of insurance was in force during the period from November 14, 1989 to November 13, 1990. The age of Nasir Khan on the date of his death was 23 and half years as his date of birth was June 6, 1967. The Respondent No. 1 is the father of Nasir Khan. Respondent No. 2 is the mother of Nasir Khan and Respondents No. 3 and 4, both are the sons of Shahjad Khan.
3. Mehrab Khan (Respondent No. 5) submitted his reply on December 8, 1992. In his reply Mehrab Khan admitted the claim.
4. On June 26, 1991 an application was submitted on behalf of non-applicant No. 2 (the petitioner) in which it was prayed that the claim should be dismissed and in the alternative it was prayed that the required information and copies of documents be supplied to the non-applicant No. 2 so that a reply may be filed. A copy of this application was given to the applicants-Respondents No. 1 to 4. Their reply was filed on September 18, 1991. The Commissioner fixed October 23, 1991 for arguments of the parties. On October 23, 1991 a prayer was made on behalf of non-applicant No. 2 for adjournment and the Commissioner fixed November 13, 1991. On November 13, 1991 the case was adjourned to December 18, 1991. On that day, the case was again adjourned to January 15, 1992. Some more adjournments were granted and ultimately the case came to be fixed on December 8, 1992. On that day, the counsel for non applicant No. 2 was not present. Reply was filed on behalf of non-applicant No. 1. The Commissioner on that day directed that the case be heard ex-parte against non-applicant No. 2 and adjourned the case to December 15, 1992.
5. On December .15, 1992 nobody appeared on behalf of the non- applicant No. 1. The Commissioner, therefore gave an order to the effect that the case be heard ex-parte against the non-applicant No. 1 also and fixed December 23, 1992. On December 23, 1992, an application was submitted on behalf of the non-applicant No. 2 to set-aside the order dated December 8, 1992. The reply to the application was filed on January 15, 1993 and after hearing the arguments the Commissioner rejected the application of the non- applicant No. 2 vide order dated April 30, 1993 and fixed May 14, 1993 for the evidence of the applicants Respondents No. 1 to 4. The evidence of the applicants was recorded, arguments were heard and case was finally disposed of vide order dated November 23, 1993.
6. Feeling aggrieved by the order dated November 23, 1993 passed by the Commissioner, Workmen's Compensation Act, Sirohi, this appeal has been filed u/S 30 of the Workmen s Compensation Act, 1923.
7. During arguments, the learned counsel, for the appellant gave up the request for setting aside the whole of the award. He submitted that according to the observations made by the Hon'ble Supreme Court in Ved Prakash Garg v. Premi Devi and Ors. (1998-I-LLJ-363), the Insurance Company is liable to pay the principal amount of premises as well as the interest but no penalty is payable by the Insurance Company. He has therefore, prayed that the appeal should be allowed to the extent of penalty awarded by the Commissioner by the impugned order.
8. In Ved Prakash Garg v. Premi Devi and Ors. (supra) at page 371 of the report the Hon'ble Supreme Court observed:
"Thus so far as interest is concerned it is almost automatic once default, on the part of the employer in paying the compensation due, takes place beyond the permissible limit of one month. No element of penalty is involved therein. It is a statutory elongation of the liability of the employer to make good the principal amount of compensation within permissible time limit during which interest may not run but otherwise liability of paying interest on delayed compensation will ipso facto follow. Even though the Commissioner under these circumstances can impose a further liability on the employer under circumstances and within limits contemplated by Section 4A(3)(a) still the liability to pay interest on the principal amount under the said provision remains a part and parcel of the statutory liability which is legally liable to be discharged by the insured employer. Consequently such imposition of interest on the principal amount would certainly partake the character of the legal liability of the insured employer to pay the compensation amount with due interest as imposed upon him under the Compensation Act. Thus the principal amount as well as the interest made payable thereon would remain part and insured to be discharged under the Compensation Act and not dehors it. It, therefore, cannot be said by the insurance company that when it is statutorily and even contractually liable to reimburse the employer qua his statutory and even contractually liable to reimburse the employer qua his statutory liability to pay compensation to the claimants in case of such motor accidents to his workmen, the interest on the principal amount which almost automatically gets foisted upon him once the compensation amount is not paid within one month from the date it tell due, would not be part of the insured liability of the employer. No question of justification by the insured employer for the delay in such circumstances would arise for consideration."
9. In light of above observations, it must be held that the petitioner Insurance Company is liable to pay the interest on the amount of compensation.
10. So far as the penalty is concerned, in Ved Prakash Garg v. Premi Devi and Ors. (supra), at page 372 of the report the Hon'ble Supreme Court observed:
"But similar consequence will not follow in 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 4A(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. However, if ultimately, the Commissioner after giving reasonable opportunity to the employer to show cause takes the view that there is no justification for such delay on the part of the insured employer and because of his unjustified delay and due to his own personal fault he is held responsible for the delay, then the penalty would get imposed on him. That would add a further sum upto 50% on the principal amount by way of penalty to be made good by the defaulting employer. 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 Workmen's 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 Motor Vehicles Act as well as by the terms of the Insurance Policy found in provisos (b) and (c) to Sub-section (1) of Section 11 thereof. On the aforesaid interpretation of these two statutory schemes, therefore, the conclusion becomes inevitable that when an employee suffers from a motor accident injury while on duty on the motor vehicle belonging to the insured employer, the claim for compensation payable under the Compensation Act alongwith interest thereon, if any as imposed by the Commissioners under Section 3 and 4A(3)(a) of the Compensation Act will have to be made good by the Insurance Company jointly with the insured employer. But so far as the amount of penalty imposed on the insured employer under contingencies contemplated by Section 4A(3)(b) is concerned as that is on account of personal fault of the insured not backed up by any justifiable cause, the Insurance Company cannot be made liable to reimburse that part of the penalty amount imposed on the employer. The latter because of his own fault and negligence will have to bear the entire burden of the said penalty amount with proportionate interest thereon if imposed by the Workmen's Compensation Commissioner."
11. In view of above observations, the submission that the petitioner Insurance Company is not liable to pay the penalty appears to be well founded.
12. For the reasons mentioned above, the appeal is partly allowed. So far as the amount of compensation and interest is concerned, the order dated November 23, 1993 passed by the Commissioner is maintained. So far as the imposition of penalty @ 15%, imposed by the Commissioner is concerned, the impugned order passed by the Commissioner is modified to the extent that the penalty would not by payable by the petitioner Insurance Company and would be payable by the non-petitioner No. 5 only.
This appeal is decided accordingly.