Andhra HC (Pre-Telangana)
Gangireddy Venkateswara Rao vs Divisional Manager, New India ... on 24 November, 1997
Equivalent citations: 1999ACJ262, 1998(2)ALD9, 1998(1)ALT383
Author: A.S. Bhate
Bench: A.S. Bhate
ORDER S. Parvatha Rao, J.
1. Letters Patent Appeal Nos.184 of 1995 and 58 of 1996 have been preferred by the applicants for workmen compensation questioning the stay of execution of the orders passed in their favour in W-C.Nos.64 and 47 of 1994 both dated 6-4-1995 by the Commissioner for Workmen's Compensation and Deputy Commissioner of Labour, Guntur Region, Guntur, pending CM A Nos.1563 and 1564 of 1995 preferred by the insurer, which is the 1st Respondent in these Letters Patent Appeals.
2. When these LPAs. came up before us for admission, the learned Counsel for the appellants in the LPAs., i.e., applicants, stated that the CMAs. were preferred without depositing the compensation amount and consequently without a certificate by the Commissioner as required under the 3rd proviso to Section 30(i) of the Workmen's Compensation Act, 1923 ('the Act') for short) and, therefore, the appeals themselves were not maintainable. The learned Counsel for the appellants also submitted that several High Courts have taken the view that no appeal under Section 30(1) of the Act can be validly preferred by the insurer without depositing the compensation amount and filing a certificate of the Commissioner to that effect along with the memorandum of appeal. We, therefore, directed the CMAs. to be posted along with LPAs. for final disposal as the learned Counsel on both sides agreed for the final disposal of the CMAs. themselves as the question raised is a pure question of law. That is how these LPAs. and CMAs. are being disposed of together.
3. The 3rd proviso to Section 30(1) of the Act is in emphatic language beginning with a negative as follows :-
"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."
The question that arises, therefore, is whether the present CMAS., would lie when they were not accompanied by a certificate stipulated under the 3rd proviso even though they are preferred by the Insurance Company and not by the employer.
4. The learned Counsel for the Insurance Company i.e., the appellant in the CMAs,, and 1st Respondent in the LPAs., contends that the 3rd proviso is attracted only when an employee (sic employer) prefers an appeal and not the insurer. It is not in dispute that in the present appeals the quantum of compensation is questioned and, therefore, it is under Clause (a) of sub-section (1) of Section 30 of the Act.
5. In Mahendra Kumar v. Real Fab, Autonngar, 1996 (2) ALD 475 we have held that "the requirement that the memorandum of appeal should be accompanied by a certificate specified therein is a mandatory requirement and, in view of the emphatic negative language of the proviso, an appeal by an employer under the said Clause (a) by presenting a memorandum of appeal unaccompanied by such a certificate will be incompetent." In that view of the matter, we have held that the CMA preferred by the employer under Clause (a) was incompetent. In that case, that was brought to our notice in a Letters Patent Appeal questioning the order of a learned single Judge making absolute the interim stay pending that CMA. In view of the objection raised as regards the maintainability of that CMA, the learned Counsel on both sides agreed that the CMA itself should be posted for final hearing along with the LPA as in the present cases. We may also note that in Gokak Mills v. Commissioner for Workmen's Compensation, 1994 ACT 1099, a Division Bench of the Karnataka High Court has held that the 3rd proviso to sub-section (1) of Section 30 of the Act is not violative of Article 14 of the Constitution of India and, while holding so, observed as follows :-
"So far as the present provision is concerned, it has to be kept in view that the Workmen's Compensation Act is a beneficial legislation. The dependants of the workman who suffers fatal injury or the workman who gets a grave physical injury in the course of employment are entitled to go to the Commissioner for Workmen's Compensation for claiming adequate and proper amount of compensation as laid down by the Schedule to the Act. Underthese circumstances, once the Commissioner adjudicates and awards compensation payable by the employer, if the latter's right to appeal is made subject to the fetter of depositing of the amount, it cannot be said that the right of appeal has become illusory or arbitrary. It is now well settled that the appeal is the creation of statute and it is open to the Legislature to give a fettered right of appeal or unfettered right of appeal as the legislative policy requires in the given set of circumstances for catering which the statute is enacted."
6. In New India Assurance Co. Ltd., v. K. Appa Rao, one of us (S. Parvatha Kao, J.,) held that the Insurance Company can be made a party in the proceedings before the Commissioner by the workman himself and that it was open to the workman to recover the compensation directly from the insurer. Full Bench decisions of Madhya Pradesh High Court in National Insurance Co. Ltd, v. Prembai, 1987 ACJ 278 and the Kerala High Court in United India Insurance Co. Ltd., v. Vasudevan, 1989 (2) LLJ 220 have also been relied as supporting that view and that the Commissioner in a proceeding under Section 22 of the Act could direct the insurer to pay the compensation even in the absence of the employer being adjudged an insolvent as required under Section 14(1) of the Act.
7. It is, therefore, obvious that the insurer steps into the place of the employer when heprefers an appeal against the order of the Commissioner directing him to pay the compensation. He would be preferring it as employer because he steps into the shoes of the employer and consequently the insurer is attracted by the 3rd proviso to Section 30(1) of the Act. The language of that proviso is a wee bit confusing because at one place the expression "employer" is used and at another place "appellant" is used - it begins saying "provided further that no appeal by an employer under Clause (a) shall lie ..." and it ends saying "... a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against". It is well settled that the liability of the insurer is coextensive and coterminus with that of the insured i.e., the employer herein, and the insurer cannot question the order awarding compensation by raising grounds which are not open to the employer so far as the quantum of compensation is concerned. The question whether the insurer can question the quantum of compensation awarded to a workman by preferring an appeal is another one, which we are not answering in these cases. Considering that the intendment in requiring the entire amount payable under the order appealed against to be deposited is to see that the fruits of the order are not denied or delayed and are assured, and considering the fact that the Act itself is a beneficial legislation we are of the view that the insurer cannot be placed in a different position than that of the insured i.e., the employer, in matters like this. We are, therefore, inclined to take the view that "an employer" and "the appellant" are used interchangeably for the purposes of the 3rd proviso. This is not doing violence to the language of the 3rd proviso; on the other hand, it is ironing the ruck created by the dual expressions used i.e., 'employer' at one place and 'appellant' at another, by a process of interpretation to further the object and intendment of the Legislature in enacting the 3rd proviso in accordance with the well established principles of interpretation. We are supported in this view by the Division Bench decisions of the High Courts of Mysore, Kerala, Karnataka and Orissa.
8. In MR. Mishrikoti v. M.H. Asoti, 1973 ACJ 105 a Division Bench of the High Court ofMysore held as follows :-
"In the aforesaid proviso (the 3rd proviso), the term 'employer' is used in contradistinction to the injured workman or the dependent of a deceased workman, who had made an application for compensation and who can also appeal from an order of the Commissioner if he fed s aggrieved by such order. The intention of the Legislature in enacting that proviso appears to be that the injured workman or the dependent of a deceased workman who has been awarded compensation by the Commissioner, should not be put to any difficulty in realising such amount of compensation on account of any recalcitrance of the employer or on account of the vicissitudes of his (the employer's) financial position after he prefers an appeal. This object of the Legislature will be defeated, if we accept the interpretation put forward by Mr. Joshi and hold that the proviso is applicable only to an appellant who admits that he was such employer and not to an appellant who disputes the finding by the Commissioner that he was such employer."
In that case the appellant contended that he was not an employer and, therefore, he was not required to comply with the 3rd proviso. In New India Assurance Co. v, M. Jayarama Naik, 1982 ACJ 3 the question directly arose whether the 3rd proviso was attracted to an insurer preferring an appeal. A Division Bench of the Kerala High Court held in that case as follows :-
"We are not in this case concerned with the question as to whether, the insurer can, because the liability of the insured is statutorily passed on to the insurer, defend the proceedings before the Commissioner, Tribunal or Court as the case may be, by advancing such grounds as are available to the insured and whether the insurance company can on such grounds available to the insured-employer prefer an appeal against the award of compensation. Without deciding that question, we will assume, that it is possible. But then the insurer is only stepping into the shoes of the insured, the employer, and the defence is not qua insurer but in the name of the insured and in his place. An appeal preferred cm such grounds, if successful, will jeopardise the employee's right to recover the compensation from the employer also. What the insurer seeks in such an appeal is that the insured may be found to be not liable to pay the compensation, and consequently, the insurer also may be held to be not liable. The primary relief sought for is the first mentioned relief and the other relief is consequent to the grant of that relief. Hence, such an appeal is preferred by the insurer for and on behalf of the employer and in his stead, though the aim of the insurer is to exonerate his own liability. What the insured cannot do by himself, viz., filing of an appeal without complying with the requirements of the third proviso to Section 30 of the Act, cannot be done by another on his behalf. So the third proviso to Section 30 of the Act governs such appeals."
The Division Bench agreed with a similar view expressed by a learned single Judge of the Orissa High Court in Central Engineering Corporation v. Dorai Raj, 1958-65 ACJ 19. The question also directly arose before the Kamataka High Court in United India Insurance Co. Ltd., v. Kashimsab, . A Division Bench of the Karnataka High Court reviewed the case law in that regard and held as follows :
"Referring to the construction of the word 'employer' as found in the third proviso, we are of the view that we must construct the said proviso such as to give effect to the scope and object of the Act. In other words, we must construct that proviso with a view to advancing cause of justice and not to defeat it. The Supreme Court in a recent decision in A.A. Haja Muniuddin v. Indian Railways, 1993 ACJ 235 (SC), has held in Para 5 as follows :-
'A view which advances cause of justice must be preferred to the one which defeats it. When an indigent person approaches the Tribunal for compensation for the wrong done to him, the Tribunal cannot refuse to exercise jurisdiction merely because he does not have the means to pay the fee. The ends ofjustice require that the Tribunal should follow the procedure laid down in Order 33 of the Code to do justice.' Thus, following the ruling of the Supreme Court in the above case, to construct the proviso 3 to Section 30(1) of the Act, we should not confine to the literal meaning of the Act, but, on the other hand, we must hold, having regard to the object of the proviso and the fact that the insurer could be adjudged as if a judgment debtor under the decree, that in a case where an appeal is filed by the insurer challenging the judgment and award of compensation in favour of the workman, it cannot be entertained unless it is accompanied by a certificate by the Commi ssioner to the effect that the appellant has deposited with him the amount payable under the order appealed against, or otherwise, the very object of the proviso would be defeated."
The Division Bench also referred to the following observations of a Division Bench of the Bombay High Court in G.R. Sane v. D.S. Sonavane and Co., AIR 1946 Bom. 110 :
"The deposit as well as the certificate evidencing the deposit is a condition precedent. This condition seems to be incorporated to give relief to dependents of persons who are in humble station of life and the compensation should be quickly available to supply their needs."
Similar view was echoed by the Calcutta High Court in B.P. Nandy v. General Manager, East India Railway, . In Koili Bewa v. Akshaya K. Mishra, a Division Bench of the Onssa High Court agreed with the view taken by the Kerala High Court in Ne\v India Assurance Co. 's case, 1982 ACJ 3. B.L. Hansaria, CJ (as the learned Judge then was) speaking for the Division Bench of the Orissa High Court finally held as follows after referring to the various decisions "From what has been stated above, it is clear that the insurer is really making a grievance on behalf of the insured (the employer), because it is the latter who is principally liable under the Act and the former has only to indemnify him, what was stated by the Kerala High Court in this regard that the insurer steps into the shoes of the insured has much to commend. Appeal bang available to an aggrieved person, and the employer being the real aggrieved person, we are inclined to think that the proviso has used the word 'employer' for this reason.
We say with respect that what the learned single Judge of this Court stated in Manorama Sahu's case, 1993 ACT 930 (Orissa), about the right of appeal being impeded by requiring the insurer to deposit the amount, which impediment, according to the learned single Judge, is not permitted to be placed by Section 30 of the Act, is not fully correct inasmuch as the right has really been conferred on the person aggrieved and the person aggrieved is really the employer who has been required by the proviso to make the deposit, and so, the is no question of any impediment being placed on the right of appeal as conferred by Section 30 of theAct. To repeat, the appeal, though filed by the insurer, has to be taken in reality as on behalf of the insured, i.e., the employer. The intention behind the proviso being not to put the right of the claimant following the order of the Commissioner in jeopardy. We are of the view that the insurer has also to deposit the amount while preferring the appeal. We have taken this view also because, on deposit being made, in appropriate cases the Court may order for withdrawal of the deposited amount by the claimant(s) to take care of hardship, which would not be possible if the appellant were not to deposit the amount."
9. We are, therefore, of the view that even when the insurer prefers an appeal under Section 30(1)(a) of the Act, the memorandum of appeal has to be accompanied by a certificate of the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against. In the absence of such a certificate, which we hold is required by the 3rd proviso to Section 30(1) of the Act, the appeal under Clause (aP preferred by the insurer does not lie and is liable to be rejected on that ground.
10. In the result, we have to hold that C.M.A.Nos. 1563 and 1564 of 1995 are incompetent as the 3rd proviso to Section 30(1) of the Act ohas not been complied with by the appellants. They are, therefore, dismissed. Consequently, L.P.A.Nos. 184 of 1995 and 58 of 1996 have become infructuous and they are also dismissed accordingly. No costs.