Andhra HC (Pre-Telangana)
United India Insurance Company Ltd. vs Shaik Alimuddin And Anr. on 22 September, 1994
Equivalent citations: 1994(3)ALT321, [1995(70)FLR631], (1995)ILLJ488AP
JUDGMENT N.D. Patnaik, J.
1. This appeal is filed against the order of the Commissioner for Workmen's Compensation, Hyderabad dated 31-7-1992 in W.C. No. 60/91. That application was filed by the 1st respondent herein claiming compensation for the death of his son Saleem Aleem Shaik, Cleaner of a lorry No. ABT 5301, together with penalty and interest, That was filed against Sri Shaik Mahmood, the owner of the lorry, who is the 2nd respondent in this appeal and the United India Insurance Co. Ltd., who is the appellant. The learned Commissioner for Workmen's Compensation, passed the order awarding compensation of Rs. 73,132.80 paise together with penalty of 50% and interest at 6% and costs. Aggrieved by that the appellant who is the 2nd respondent before the Commissioner for Workmen's Compensation field this appeal contending that the Commissioner has no territorial jurisdiction to entertain the application and to pass the order, since the accident took place at Bombay.
2. Before considering the contentions of the appellant, I will refer to the preliminary objection taken by the contesting 1st respondent in the appeal that the appeal is not maintainable on the ground that the amount awarded was not deposited.
3. Section 30(1) of the Workmen's Compensation Act reads :
30(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 of otherwise of disallowing a claim in full or in part of a lump sum :
(aa) an order awarding interest or penalty under Section 4-A
(b)..........
(c).........
(d)..........
(e).........
The third proviso to the said sub-section reads :
"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.
4. The appellant has deposited before the Commissioner, the amount of compensation of Rs. 73,132.80 at the time of filling the appeal; but did not deposit the penalty and interest. The contention of the learned counsel for the respondent is that the appellant had not deposited the entire amount as ordered by the Commissioner as such there is no compliance with the aforesaid proviso to Sub-section (1) of Section 30 of the Act and so the appeal is not maintainable. On the other hand, the learned Counsel for the appellant contended that the Insurance Company end not pay the penalty and interest and therefore the amount was not deposited and that there is no force in the contention of the learned Counsel for the respondent that the appeal is not maintainable.
5. In support of this contention, the learned Counsel for appellant railed upon some decisions. A Division Bench of the Karnataka High Court in a case reported in Kap Steel Ltd. v. R. Sasikala, 1990 II CLR 325, held that "depositing of the amount of interest or penalty imposed under Section 4-A of the Act in addition to the compensation awarded or otherwise is not a condition for preferring an appeal under Section 30(1) of the Act". Reference was also made to a decision of the learned single Judge of the Orissa High Court in Oriental Fire & General Insurance Company v. Matias Burla, 1986 ACJ 732 Orissa, to the effect that the provision in Section 4-A for levying penalty and interest can be invoked only against the employer but not again the insurer. He has also referred to a decision of the Division Bench of the Karnataka High Court in Oriental Insurance Co. Ltd. v. Jevaramma, 1989 I CLR 228 in which it is held that the Insurance Company is liable to meet only the compensation payable for the risk covered and not the penalty.
6. In the case reported in Oriental Insurance Co. Ltd. v. Hasmat Khatoon, 1989 ACJ 862 Delhi, the Delhi High Court held that the Insurance Company is not liable to pay interest and penalty, but is liable to pay only the compensation.
7. Reference was also made to the decision in National Insurance Company v. Mohd. Mujataba Khan, 1993 II CLR 29, which was rendered by me, in which I have held that the Insurance Company is not liable to pay interest, following the decision of this Court in C.M.A. 338/82 dated 6th September, 1989, rendered by Jagannadha Raju, J., in that C.M.A. 338/82 it was held :
"the Insurance Company has undertaken to indemnify the employer only to the extent of the statutory liability that was incurred as per law. But if the employer does not deposit the compensation as on the date of the accident and he was ordered to pay the interest, the Insurance Company, therefore, is not liable to pay the interest."
8. The learned Counsel for the respondent has referred to the decision of a Division Bench of the Orissa High Court in Koili Bewa v. Akshaya K. Mishra, 1994 II CLR 477 in which it is held that the Insurer also while preferring an appeal under Section 30 of the Act, has to comply with the requirement of the aforesaid proviso.
9. In the case reported in United India Insurance Co. v. Kashimsab & Anr., 1993 II CLR 328 it was held that "since the insurer has not filed the certificate along with the appeal of having deposited the compensation amount awarded by the Commissioner, the appeal is not maintainable."
10. The decisions which are referred to above, cited by the learned Counsel for the respondent, have considered the question whether the Insurance Company can file an appeal without depositing the compensation awarded by the Commissioner and held that the Insurance Company is liable to deposit the compensation, in compliance with the third proviso to Section 30(1) of the Act; but the question whether the Insurance Company is liable to deposit the compensation and interest also a warded under Section 4-A was not considered in the said decisions.
11. As stated above, the Insurance Company has deposited the compensation but did not deposit the penalty and interest. The decision of the Division Bench of the Karnataka High Court in Kap Steel Ltd. (supra) referred to, his considered this question and held that the Insurance Company need not deposit the penalty and interest to the time of filing of the appeal as required by the third proviso.
12. Learned Counsel for the respondent has also pointed out that clause (a) to Section 30(1) of the Act deals with an appeal against an order awarding compensation and clause (aa) deals with an order awarding interest or penalty under Section 4-A and therefore contended that if the Insurance Company is aggrieved by an order of the Commissioner awarding interest or penalty under Section 4-A and wants to file an appeal against the order under Clause (aa) and that amount has also to be deposited. But the third proviso to Section 30(1) reads 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. Clause (aa) was inserted by the Amending Act 8 of 1959 with effect from 1-6-1959. But in the third proviso there is no amendment with regard to an appeal under clause (aa) also that the said amount has to be deposited with Commissioner. Since the third proviso reads that the deposit has to be made of the compensation awarded under Clause (a) when an appeal is field, I am unable to agree with the contention of the learned counsel for the respondent that the Insurance Company has to deposit the penalty and interest also which is awarded under Clause (aa). I agree with the view expressed by the Division Bench in Kap Steel Ltd. (supra), and hold that the Insurance Company is not liable to deposit the penalty and interest also at the time of filing the appeal. I therefore, overrule the objection of the learned Counsel for the respondent that the appeal is not maintainable for non-compliance of the third proviso to Section 30(1) of the Act.
13. I will now deal with the merits of the appeal. The contention of the learned Counsel for the appellant is the since the accident took place in Bombay, the Commissioner for Workmen's Compensation, Hyderabad, had no jurisdiction to entertain the application and award compensation :
13-A Section 21(1) of the said Act reads :
"Where any matter is under this Act to be done by or before a Commissioner, the same shall, subject to the provisions of this Act and to any rules made thereunder, be done by or before (a Commissioner) for the area in which the accident took place which resulted in the injury :
Provided that where the workman is the master of a ship or a seaman, any such matter may be done by or before (a Commissioner) for the area in which the owner or agent of the ship resides or carries on business.
Sub-section (2) reads :
"If a Commissioner is satisfied that any matter arising out of any proceedings pending before him can be more conveniently dealt with by any other Commissioner, whether in the same state or not, he may, subject to rules made under this Act, order such matter to be transferred to such other Commissioner either for report or for disposal, and if he does so shall forthwith transmit to such other Commissioner all documents relevant for the decision of such matter and, where the matter is transferred for disposal, shall also transmit in the prescribed manner any money remaining in his hands or invested by him for the benefit of any party to the proceedings".
The learned Counsel for the appellant has also referred to Rule 41 of the Rules framed under the Workmen's Compensation Act, which reads that -
"Save as otherwise expressly provided in the Act or these rules the following provisions of the First Schedule to the Code of Civil Procedure, 1908, namely, those contained in Order V, Rules 9 to 13 and 15 to 30; Order X; Order XII, Rules 3 to 10; and Order XVI, Rules 2 to 21; Order XVII; and Order XXIII, Rules 1 and 2, shall apply to proceedings before Commissioner, in so far as they may be applicable thereto".
He pointed that Section 19 CPC which deals with suits for compensation for wrongs to person or movables provides that if the wrong was done within the local limits of the jurisdiction of one Court and the defendant resides, or carries on business, or personally works for gain, within the local limits of the jurisdiction of another Court, the suit may be instituted at the option of the plaintiff in either of the said Courts' is not applicable to proceedings before the Commissioner.
14. The learned Counsel for the respondent contended that the objection regarding lack of jurisdiction was not taken at the enquiry before the Commissioner for Workmen's Compensation and therefore, it is not open to the appellant to raise that objection in the appeal. Though notice was served on the appellant Insurance Company in the enquiry before the Commissioner and the record shows that an advocate offered to appear, ultimately nobody had appeared for the Insurance Company and no counter was filed and therefore the matter was decided exparte.
15. The learned Counsel for the respondent further contended that the provisions of the Motor Vehicles Act have to be read into the provisions of the Workmen's Compensation Act because the liability of the Insurance Company arises only under the Motor Vehicles Act. He had referred to Section 143 of the Motor Vehicles Act, 1988 which says that the provisions of that Chapter shall also apply in relation to any claim for compensation in respect of death or permanent disablement of any person under the Workmen's Compensation Act, 1923 resulting from an accident of the nature referred to in Sub-section (1) of Section 140 and for that purpose, the said provisions shall, with necessary modifications, be deemed to form part of that Act. He further contended that under Section 149 of the Motor Vehicles Act, the defences open to an Insurance Company are enumerated and since the lack of jurisdiction is not one of the said defences, it is not open to the Insurance Company to take that defence. He has further contended that when such an objection cannot be taken in the enquiry before the Commissioner, the same objection cannot be taken in the appeal also. He has relied upon a Division Bench decision of the Kerala High Court reported in United India Fire and General Insurance Co. Ltd. v. P. M. Ishammal, 1979 ACJ 448 Kerala. That case proceeded ex parte against the insurer and as it failed to raise the plea of jurisdiction before the Workmen's Compensation Commissioner, it was held that the Commissioner was competent to pass an award making the insurer liable for compensation. But the learned Counsel for the appellant had distinguished this decision on the ground that no jurisdictional facts need be proved in this case as admittedly, the accident took place in Bombay and it is a case of inherent lack of jurisdiction. The Judgment of the Kerala High Courts reads :
"Presumably the 3rd opposite party had not contest that party should not be made liable because the jurisdictional facts mentioned in Section 14 do not exist. It is a settled rule of law that where there is no lack of inherent jurisdiction in a Court or Tribunal and jurisdiction is conditional on the existence of certain facts, lack of jurisdiction on account of non-existence of jurisdictional facts out in the first instance be placed before the Tribunal or the Court as the case may be".
He therefore contended that since on the facts mentioned in the petition itself the Commissioner, Hyderabad had no jurisdiction, there are no further facts to be provided to oust the jurisdiction of the Commissioner at Hyderabad, and so even though such a contention is not taken at the enquiry stage, it can be urged in the appeal.
16. In the decision reported in M.P. State Road Transport Corporation v. Dashrath Singh, 1992 II CLR 1041, a learned Judge of the Madhya Pradesh High Court had held :
"Section 21 deals with the venue of proceedings and transfer, which is a self-contained provision dealing with territorial jurisdiction as to the place of suing and entertaining the applications for compensation which is in derogation with the general provisions contains in Sections 20 and 21 of the Civil Procedure Code. In view of Sub-section (1) of Section 21 is cannot be disputed that the Commissioner, Indore, was having no competence to entertain the proceedings as the accident giving rise to the proceedings arose outside the area over which the Commissioner, Indore had no jurisdiction. The Commissioner, Indore, could have dealt with the proceedings only on transfer to him in accordance with and in the manner provided in Sub-section (2) of Section 21".
It is therefore clear that since the accident took place at Bombay, the Commissioner for Workmen's Compensation at Hyderabad, does not have any jurisdiction to entertain the application and since there is lack of inherent jurisdiction even if the objection is not taken before the lower Tribunal, that contention can be raised in the appeal. The learned Counsel for the appellant had also pointed that similar provision is made in Section 166(2) of the Motor Vehicles Act, viz.
"Every application under Sub-section (1) shall be made to the Claims Tribunal having jurisdiction over the area in which the accident occurred, and shall be in such form and shall contain such particular as may be prescribed".
17. Therefore, when once the Commissioner at Hyderabad, does not have jurisdiction, the order passed by him awarding compensation penalty and interest is liable to be set aside and is accordingly set aside.
18. By an interim order dated 29-4-1994 in C.M.P. No. 4499/94, the 1st respondent in the appeal, was permitted to withdraw half the amount of compensation deposited by the Insurance Company, on furnishing security. If he had withdrawn the said amount, the same shall be redeposited before the Commissioner for Workmen's Compensation, within four weeks' from today. On such redeposit being made, the appellant-Insurance Company shall be entitled to withdraw the same.