Himachal Pradesh High Court
Date Of Decision: 23.07.2024 vs Reliance General Insurance on 23 July, 2024
Author: Jyotsna Rewal Dua
Bench: Jyotsna Rewal Dua
2024:HHC:5912 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA FAO No.463 of 2019 Date of decision: 23.07.2024 .
Sunny Shopta. ...Appellant.
Versus
Reliance General Insurance
Company Ltd. and Ors. ...Respondents.
Coram:
Ms. Justice Jyotsna Rewal Dua, Judge.
Whether approved for reporting?1 For the petitioners : Mr. Deepak Gupta and Ms. Meera Devi, Advocates.
For the respondents : Mr. Chandan Gupta, Advocate, for respondent No.1.
Mr. Ajay Kumar, Advocate, for respondents No.2 and 3.
Jyotsna Rewal Dua, Judge Feeling aggrieved against being directed to satisfy the entire awarded compensation amount inclusive of interest and penalty, the employer has preferred the present appeal.
2. Facts.
2(i). A petition under Section 14 of the Employees Compensation Act, 1923 (for short 'the Act') was instituted 1 Whether reporters of Local Papers may be allowed to see the judgment? Yes ::: Downloaded on - 26/07/2024 20:34:29 :::CIS -2- by respondents No. 2 and 3 before the learned Commissioner. The claimants prayed for compensation of .
Rs.20,00,000/- along with interest and penalty. The compensation claim was made on account of the death of Sh.
Sanjeev Kumar (husband of respondent No. 2 and father of minor respondent No.3). The claimants pleaded that the deceased, Sh. Sanjeev Kumar, was in the employment of the appellant; He was engaged as a cleaner on a Bolero Pickup vehicle bearing registration No. HP63C-0759; The vehicle met with an accident on 28.06.2014, resulting in Sh. Sanjeev Kumar's death. The claimants asserted that Sh. Sanjeev Kumar had died during the course of his employment with the appellant. He was being paid Rs. 10,000/- per month as wages along with daily expenses of Rs. 100/-.
2(ii). The appellant, in its reply to the claim petition, admitted the employment of the deceased as a cleaner in the Bolero Pickup vehicle and his death caused during the course of employment. According to the appellant, Sh.
Sanjeev Kumar (deceased) was being paid monthly wages of Rs.6,000/- along with daily expenses of Rs.100/-. The appellant's stand was that the vehicle was duly insured with ::: Downloaded on - 26/07/2024 20:34:29 :::CIS -3- respondent No.1-insurance company, and therefore, the liability to pay the compensation amount, if any, was to be .
borne by the insurer.
2(iii). Respondent No. 1-insurer, denied the employee-
employer relationship between the deceased and the appellant. The contention was put forth that the vehicle was being driven in violation of the conditions of the insurance policy. Respondent No. 1 also projected that the appellant (owner) had not deposited the premium for covering the liability towards the risk of the cleaner. Therefore, it denied its liability to indemnify the appellant for the compensation on account of the death of Sh. Sanjeev Kumar in the accident.
2(iv). On considering the case material and the evidence produced by the parties, the learned Commissioner restricted the assessment of monthly wages of the deceased at Rs.8,000/-, in view of the maximum limit of wages prescribed under Section 4(i)(b) of the Act. The age of the deceased at the time of the accident was taken as 29 years, and accordingly, applying the relevant factor of 209.92 as per the Schedule of the Act, the compensation amount was ::: Downloaded on - 26/07/2024 20:34:29 :::CIS -4- calculated as Rs. 8,39,680/-. The claimants (respondents No.2 and 3) were held entitled to a compensation amount of .
Rs. 8,39,680/- along with interest at 12% per annum w.e.f.
28.07.2014, i.e., one month after the date of the accident. A penalty of 20% was also awarded in favor of the claimants.
The liability to pay the compensation amount along with interest and penalty was fastened upon the owner of the r to vehicle, the appellant under the award dated 25.07.2019.
Feeling aggrieved by the imposition of liability upon him for discharging the compensation assessed to be paid to the claimants, the appellant-owner of the vehicle has come up in the instant appeal.
3. Submissions.
3(i). Learned counsel for the appellant submitted that:
In the unfortunate accident, the driver of the vehicle, Dawa Negi, had also lost his life; Relying upon the insurance policy, Ex.PX, the learned Commissioner had fastened the liability upon the insurer to satisfy the awarded compensation amount payable to the claimants in the driver's case. However, the liability to satisfy the award ::: Downloaded on - 26/07/2024 20:34:29 :::CIS -5- passed in the case of the cleaner has been fastened upon the owner of the vehicle; This was an erroneous approach as the .
same insurance policy was involved in both the claim cases.
Learned counsel inviting attention to the insurance policy, Ex.PX, submitted that the risk liability for both the driver and the cleaner of the vehicle is covered under the insurance policy. Therefore, it is respondent No.1, who should rhave been held liable for paying the compensation amount awarded in favor of the claimants.
Further, submission of the learned counsel is that the appellant-owner was not liable to pay the penalty to the claimant; It was the insurer, who should have been held responsible to pay the penalty. For making this submission, reference was made to Ved Prakash Garg vs. Premi Devi & Ors.2.
3(ii). Learned counsel for respondent No.1 defended the impugned award.
4. Consideration.
2(1997) 8 SCC 1 ::: Downloaded on - 26/07/2024 20:34:29 :::CIS -6- 4(i) Liability for satisfying the compensation amount and the interest.
.
Discussion on this point revolves around the insurance policy, Ex.PX. In terms of the insurance policy, the Legal Carrying Capacity ('LCC') of the vehicle in question, including the driver, was three. In terms of the premium schedule, Rs.50/- were paid on account of legal liability for the paid driver. Insurance policy, Ex.PX, further incorporates that "The policy wordings with detailed terms, conditions and exclusions are available on our website www.reliancegeneral.co.in" and further that "Subject to Reliance GI Endorsement Numbers printed herein/attached here to IMT 28, IMT 20".
Learned counsel for the appellant has placed on record IMT 28 pertaining to legal liability to pay driver and/or conductor and/or cleaner employed with the operation of insured vehicle. Relevant portion thereof reads as under:-
IMT.28. Legal liability to paid driver and/or conductor and/or cleaner employed in connection with the operation of insured vehicle (For all Classes of vehicles.) ::: Downloaded on - 26/07/2024 20:34:29 :::CIS -7- In consideration of an additional premium of Rs. 50/- notwithstanding anything to the contrary contained in the policy it is hereby understood and agreed that the insurer shall indemnify the insured against the .
insured's legal liability under the Workmen's Compensation Act, 1923 , the Fatal Accidents Act, 1855 or at Common Law and subsequent amendments of these Acts prior to the date of this Endorsement in respect of personal injury to any paid driver and/or conductor and/or cleaner whilst engaged in the service of the insured in such occupation in connection with the vehicle insured herein and will in addition be responsible for all costs and expenses incurred with its written consent. Provided always that (1) this Endorsement does not indemnify the insured in respect of any liability in cases where the insured holds or subsequently effects with any insurer or group of insurers a Policy of Insurance in respect of liability as herein defined for insured's general employees;
(2) the insured shall take reasonable precautions to prevent accidents and shall comply with all statutory obligations;
*(3) the insured shall keep record of the name of each paid driver conductor cleaner or persons employed in loading and/or unloading and the amount of wages and salaries and other earnings paid to such employees and shall at all times allow the insurer to inspect such records on demand.
(4) in the event of the Policy being cancelled at the request of the insured no refund of the premium paid in respect of this Endorsement will be allowed. Subject otherwise to the terms conditions limitations and exceptions of the Policy except so far as necessary to meet the requirements of the Motor Vehicles Act, 1988.
*In case of Private cars/ motorised two wheelers (not used for hire or reward) delete this para.
::: Downloaded on - 26/07/2024 20:34:29 :::CIS -8-The applicability of above IMT.28 has not been disputed by the learned counsel for the insurer. A perusal of .
the above provisions of IMT 28 makes it clear that the premium paid towards the driver also covers the risk liability towards conductor and/or cleaner. It is the admitted case of the insurer that there were only two persons in the vehicle in question when it met with the accident, and as a consequence, both of them lost their lives. One was the driver-Dawa Negi and the other was the cleaner/the predecessor of the present claimants. Liability to satisfy the awarded amount in case of death of the driver, has admittedly been fastened upon the insurer. The liability in terms of the insurance policy, Ex.PX, for satisfying the compensation amount and the interest awarded to the claimants/legal representatives/dependents of cleaner in the instant case, thus, must necessarily be borne by the insurer.
Held accordingly.
4. Liability to discharge awarded penalty amount
- Learned Commissioner has imposed penalty charges at ::: Downloaded on - 26/07/2024 20:34:29 :::CIS -9- 20% of the award amount, and the liability to discharge this amount has been fastened upon the appellant.
.
4(i). Learned counsel for the appellant placing reliance upon Ved Prakash Garg's case2 urged that it is the insurer which has to bear the liability for satisfying the penalty determined by the learned Commissioner.
4(ii). I do not find any merit in the above contention.
Section 4-A of the Act, pertaining to compensation to be paid and the penalty for default under the Act, came up for consideration before the Hon'ble Apex Court in Ved Prakash Garg's case2. The Hon'ble Apex Court considered the relevant provisions of the Act as well as the provisions of the Motor Vehicles Act. The principles as culled out from the decision in Ved Prakash Garg's case2 by the Hon'ble Bombay High Court (Aurangabad) in Muley Brother Pvt. Ltd., Aurangabad & Ors. vs. Samindarabai Karbhari Dandge & Ors.3 are as under:-
"11. The Apex Court considered the relevant provisions of the said Act as well as the provisions of the Motor Vehicles Act, 1988 and in particular section 147 thereof. After 3 First Appeal No.1030 of 2007 decided on 25.06.2008 ::: Downloaded on - 26/07/2024 20:34:29 :::CIS -10- considering the relevant statutory provisions, the Apex Court held that--
.
(a) The liability to pay compensation under the said Act of 1923 gets foisted on the employer provided it is shown that the workman concerned suffered from personal injury, fatal or otherwise, by any motor accident arising out of and in the course of his employment. Such an accident is also covered by the statutory coverage contemplated by section 147 of the said Act of 1988.
(b) In case of such accident, the liability to pay interest on the principal amount of compensation under section 4-A (3)(a) remains part and parcel of the Statutory liability of the insurer of the vehicle. The imposition of interest on the principal amount of compensation payable under the said Act of 1923 partakes the character of the legal liability of the insured-employer to pay compensation amount with due interest as imposed by the learned Commissioner.
Therefore, principal amount of compensation as well as the interest made payable thereon on a claim petition filed under the said Act of 1923 would remain part and parcel of the legal liability of the insurer.
::: Downloaded on - 26/07/2024 20:34:29 :::CIS -11-(c) In so far as penalty payable under section 4-A(3)(b) of the said Act of 1923 is concerned, it cannot be said that it .
automatically flows from the main liability incurred by the insured employer under the said Act of 1923 and the penalty amount imposed upon the insured employer would get out of the sweep of the 'liability incurred' under the proviso (c) to section 147(1) of the said Act of 1988.
(d) In certain contingencies the Commissioner is justified in directing payment of interest not only from the date of adjudication (date of Award) but also from the date of accident concerned and such an order passed by the Commissioner would remain perfectly justified."
In view of the above and in the given facts, the insurer cannot be held liable to pay the penalty amount. The penalty payable under Section 4-A(3)(b) of the Act does not automatically flow from the main liability incurred by the insured employer under the Act. Learned Commissioner did not err in imposing the liability to satisfy the penalty amount upon the owner-appellant. Held accordingly.
::: Downloaded on - 26/07/2024 20:34:29 :::CIS -12-5. In the net result, the impugned award is modified to the extent indicated above. The liability to pay .
compensation amount of Rs.8,39,680/- along with interest @ 12% per annum w.e.f. 28.07.2014 is fastened upon respondent No.1. The remaining part of the award shall remain as it is.
This appeal is disposed of in the above terms.
Pending miscellaneous application(s), if any, shall also stand disposed of.
Jyotsna Rewal Dua 23 July, 2024 rd Judge (Pardeep) ::: Downloaded on - 26/07/2024 20:34:29 :::CIS