Karnataka High Court
Smt. Shanthamma And Others vs Smt. Kamalamma And Another on 11 February, 1992
Equivalent citations: I(1993)ACC251, 1993ACJ453, [1994]79COMPCAS86(KAR), [1992(65)FLR60], ILR1992KAR1258, 1992(2)KARLJ642
Author: N. Venkatachala
Bench: N. Venkatachala
JUDGMENT N. Venkatachala, J.
1. The short question which arises for our consideration in this appeal is whether the sum not exceeding 50% of the amount of compensation which could be recovered from the employer by way of penalty for default in paying that amount of compensation due under the Workmen's Compensation Act, 1923 (for short, "the Act"), is the liability arising under the Act for which insurance coverage is compulsory under section 95 of the Motor Vehicles Act, 1939 (for short, "the M.V. Act").
2. Material facts which have given rise to the said question are briefly these : Respondent No. 2, the New India Assurance Co. Ltd., has issued an insurance policy under section 95 of the M.V. Act, 1939, covering the liability for death or personal injury of the driver of the autorickshaw with registration No. CAM 1326 in favour of the owner of that autorickshaw, respondent No. 1, herein. While respondent No. 1 had employed one Kuppuswamy as a driver of that autorickshaw, there occurred an accident on August 14/15, 1987, in the course of driving of that autorickshaw, a motor vehicle and, as a result of that accident, the said driver who had suffered bodily injuries succumbed to them. The appellants who were the legal representatives of the deceased driver made a claim application under section 22 of the Act before the Workmen's Compensation and Labour Officer, Bangalore, claiming compensation for the driver's death against respondent No. 1, owner of the vehicle for driving of which the deceased had been employed as also the insurance company-respondent No. 2 who had, by issue of an insurance policy, covered the risk of life of the driver, the employee of respondent No. 1.
3. The Workmen's Compensation and Labour Officer awarded a sum of Rs. 75,824 liable to be paid under section 3 of the Act and computed under section 4 of the Act. He ordered payment of interest on the said amount of compensation at 6% per annum and made it liable to be paid by respondents Nos. 1 and 2, the owner of the vehicle and the insurer. Besides, he awarded a sum constituting 25% of the amount of compensation liable to be paid by respondents Nos. 1 and 2 to be paid as penalty by respondent No. 1 only. That penalty was made payable under section 4A of the Act. The appellants in the present appeal who were the claimants before the Workmen's Compensation and Labour Officer have questioned his order in so far as it has not made respondent No. 2, the insurer, liable for the penalty ordered to be recovered from the owner of the vehicle, respondent No. 1. This is how the aforesaid question has come up for consideration.
4. The argument of learned counsel for the appellants is that the liability arising under the Act respecting which the insurance policy has been issued by respondent No. 2 under section 95 of the M.V. Act, is a liability which shall include not only the amount of compensation liable to be paid for the employee's death or injury under section 3 of the Act and computed under section 4 of the Act, but also the amount not exceeding 50% of the compensation recoverable as penalty under section 4A(3) of the Act.
5. No doubt, the argument, on its face, looks attractive. But, we find it to be without substance for the reasons we shall presently state. Issuance of a policy under section 95 of the M.V. Act, by the insurer has to cover the liability arising under the Act because of proviso (1) to sub-section (1) of section 95 of the M.V. Act. But, the question is whether the liability which is so covered by the insurance policy could be regarded as one which includes the amount up to 50% of compensation which could be recovered from the owner as penalty for default in payment of compensation under section 4A(3) of the Act. The employer's liability for compensation for the employee's death or bodily injury arises under section 3 of the Act and the same falls due as computed under section 4 thereof. Section 4A of the Act which refers to the compensation liable to be paid under the Act as also the amount up to 50% of the compensation recoverable as penalty from the employer reads thus :
"4A. Compensation to be paid when due and penalty for default. -
(1) Compensation under section 4 shall be paid as soon as it falls due.
(2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and, such payment shall be deposited with the Commissioner or made to the workman, as the case may be, without prejudice to the right of the workman to make any further claim.
(3) Where any employer is in default is paying the compensation due under this Act, within one month from the date it fell due, the Commissioner may direct that, in addition to the amount of the arrears, simple interest at the rate of six per cent. per annum on the amount due together with, if in the opinion of the Commissioner there is no justification for delay, a further sum not exceeding fifty per cent. of such amount, shall be recovered from the employer by way of penalty".
6. Sub-sections (1) and (2) of section 4A refer to the liability for compensation payable under the Act by the employer and which has fallen due thereunder. The opening words used in sub-section (3) which enable the Commissioner to recover up to 50% of the amount of compensation by way of penalty from the employer, to wit, "where any employer is in default in paying the compensation due under this Act" do not leave any scope for doubting that amount due as compensation under the Act is one thing and the amount recoverable in default of non-payment of that compensation as penalty, as is provided for in the latter portion of that sub-section, is altogether different. Therefore, the argument of learned counsel for the appellants that the liability under the Act for which compulsory policy is taken should cover not only the amount of compensation due under the Act but also the additional sum which could be recovered by way of penalty from the employer for his default in the amount of compensation cannot be accepted and it has to be held that the word "liability", used with reference to the Act (the Workmen's Compensation Act, 1923) in section 95 of the M.V. Act, excludes from it the sum not exceeding 50 per cent. which could be recovered by the Commissioner from the employer for default in payment of compensation payable under the Act by way of penalty as provided for under sub-section (3) of the Act.
7. Hence, this appeal fails and is dismissed without being admitted.