Karnataka High Court
Shri.Motilal S/O Danappa Rathod vs Kumar S/O Somasing Rathod And Anr on 28 January, 2025
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NC: 2025:KHC-K:610
MFA No. 201851 of 2018
C/W MFA No. 202366 of 2018
MFA No. 202367 of 2018
AND 2 OTHERS
IN THE HIGH COURT OF KARNATAKA,
KALABURAGI BENCH
DATED THIS THE 28TH DAY OF JANUARY, 2025
BEFORE
THE HON'BLE MR. JUSTICE C M JOSHI
MISCL. FIRST APPEAL NO.201851 OF 2018
C/W
MISCL. FIRST APPEAL NO.202366 OF 2018
MISCL. FIRST APPEAL NO.202367 OF 2018
MFA CROSS OBJ. NO.200008 OF 2019
MFA CROSS OBJ. NO.200009 OF 2019 (WC)
IN MFA NO.201851/2018:
BETWEEN:
1. TARABAI W/O ASHOK CHAVAN,
AGE: 30 YEARS, OCC: H.H.WORK,
Digitally
signed by
LUCYGRACE
2. AJIT S/O ASHOK CHAVAN,
LUCYGRACE Date:
2025.02.10
10:44:13 -
AGE: 16 YEARS, OCC: STUDENT,
0800
3. AMIT S/O ASHOK CHAVAN,
AGE: 18 YEARS, OCC: STUDENT,
4. JALABAI W/O DEVALU CHAVAN,
AGE: 64 YEARS, OCC: NIL,
ALL R/O BEENA R. RATHOD YASMIN MANZIL,
NEAR SHANMUKHSWAMY MATH,
GOLGUMBAZ ROAD, VIJAYAPUR-586 101.
...APPELLANTS
(BY SRI. BABU H. METAGUDDA, ADVOCATE)
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NC: 2025:KHC-K:610
MFA No. 201851 of 2018
C/W MFA No. 202366 of 2018
MFA No. 202367 of 2018
AND 2 OTHERS
AND:
1. MOTILAL S/O DANAPPA RATAHOD,
AGE: 42 YEARS, OCC: BUSINESS,
R/O 1611/4, ORDA CANDOLIM BARDEZ,
GOA, DIST. NORTH GOA, GOA-403 515.
2. THE BRANCH MANAGER,
UNITED INDIA INSURANCE CO. LTD.,
S.S. FRONT ROAD, VIJAYAPUR-586 101.
...RESPONDENTS
(BY SRI. S.S. MAMADAPUR, ADV. FOR R1;
SRI. MANVENDRA REDDY, ADV. FOR R2)
THIS MFA IS FILED UNDER SECTION 30(1) OF THE
EMPLOYEES COMPENSATION ACT, PRAYING TO ALLOW THE
APPEAL AND MODIFY THE JUDGMENT AND AWARD DATED
27.06.2018 PASSED IN E.C.A.NO.238/2014 BY THE III ADDL.
SENIOR CIVIL JUDGE AND BEFORE THE COMMISSIONER FOR
EMPLOYEES COMPENSATION AT VIJAYAPUR AND ENHANCE THE
COMPENSATION FROM RS.8,25,400/- WITH 12% INTEREST
TO RS.15,00,000/- WITH 12% INTEREST;) ALLOW THIS
APPEAL AND DIRECT THE RESPONDENT NO.2 INSURANCE
COMPANY TO PAY THE ENTIRE INTEREST FROM THE DATE OF
ACCIDENT TO DATE OF DEPOSIT.
IN MFA NO.202366/2018:
BETWEEN:
THE BRANCH MANAGER,
UNITED INDIA INSURANCE CO. LTD.,
S.S. FRONT ROAD, VIJAYAPUR,
NOW THROUGH ITS
DIVISIONAL MANAGER.
...APPELLANT
(BY SRI. MANVENDRA REDDY, ADVOCATE)
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NC: 2025:KHC-K:610
MFA No. 201851 of 2018
C/W MFA No. 202366 of 2018
MFA No. 202367 of 2018
AND 2 OTHERS
AND:
1. TARABAI W/O ASHOK CHAVAN,
AGE: 30 YEARS, OCC: HOUSEHOLD WORK,
2. AJIT S/O ASHOK CHAVAN,
AGE: 16 YEARS, OCC: STUDENT,
3. AMIT S/O ASHOK CHAVAN,
AGE: 18 YEARS, OCC: STUDENT,
4. JALABAI W/O DEVALU CHAVAN,
AGE: 64 YEARS, OCC:NIL,
RESPONDENT NO.2 IS MINOR,
R/BY THE NATURAL MOTHER
M/G PETITIONER NO.1 SMT. TARABAI,
ALL R/O BEENA R. RATHOD,
YASMIN MANZIL,
NEAR SHANMUKHSWAMY MATH,
GOLGUMBAZ ROAD, VIJAYAPUR-586 101.
5. MOTILAL S/O DANAPPA RATHOD,
AGE: 41 YEARS, OCC: BUSINESS,
R/O 1611/4, ORDA CANDOLIM, BARDEZ,
GOA, DIST. NORTH GOA, GOA-403 515,
(EMPLOYER OF DECEASED/ OWNER OF
SWARAZ MAZDA TIPPER NO.GA-03/K-9705).
...RESPONDENTS
(BY SRI. BABU H. METAGUDDA, ADV. FOR R1, R3 & R4;
R2 IS MINOR, R/P BY R1;
SRI. S.S. MAMADAPUR, ADV. FOR R5)
THIS MFA IS FILED UNDER SECTION 30(1) OF THE
EMPLOYEES COMPENSATION ACT, PRAYING TO SET ASIDE THE
JUDGMENT AND AWARD DATED 27.06.2018 PASSED BY THE
III ADDL. SENIOR CIVIL JUDGE AND COMMISSIONER FOR
EMPLOYEES COMPENSATION ACT, VIJAYAPUR IN ECA
NO.238/2014 BY ALLOWING THE APPEAL AS PRAYED FOR.
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NC: 2025:KHC-K:610
MFA No. 201851 of 2018
C/W MFA No. 202366 of 2018
MFA No. 202367 of 2018
AND 2 OTHERS
IN MFA NO. 202367/2018:
BETWEEN:
THE BRANCH MANAGER,
UNITED INDIA INSURANCE CO. LTD.,
S.S. FRONT ROAD, VIJAYAPUR,
NOW THROUGH ITS
DIVISIONAL MANAGER.
...APPELLANT
(BY SRI. MANVENDRA REDDY, ADVOCATE)
AND:
1. KUMAR S/O SOMASINGH RATHOD,
AGE: 32 YEARS, OCC: CLEANER,
R/O C/O ANIL RATHOD, BENDIGERE GALLI,
GOLAGUMBAZ ROAD,
VIJAYAPUR-586 101.
2. MOTILAL S/O DANAPPA RATHOD,
AGE: 41 YEARS, OCC: BUSINESS,
R/O 1611/4, ORDA CANDOLIM, BARDEZ,
GOA, DIST. NORTH GOA, GOA-403 515.
(EMPLOYER OF DECEASED/ OWNER OF
SWARAZ MAZDA TIPPER NO.GA-03/K-9705).
...RESPONDENTS
(BY SRI. S.S. MAMADAPUR, ADV. FOR R2;
R1-SERVED, BUT UN-REPRESENTED)
THIS MFA IS FILED UNDER SECTION 30(1) OF THE
EMPLOYEES COMPENSATION ACT, PRAYING TO SET ASIDE THE
JUDGMENT AND AWARD DATED 27.06.2018 PASSED BY THE
III ADDITIONAL SENIOR CIVIL JUDGE AND COMMISSIONER
FOR EMPLOYEES COMPENSATION ACT, VIJAYAPUR, IN ECA
NO.239/2014, BY ALLOWING THE APPEAL AS PRAYED FOR.
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NC: 2025:KHC-K:610
MFA No. 201851 of 2018
C/W MFA No. 202366 of 2018
MFA No. 202367 of 2018
AND 2 OTHERS
IN MFA CROB NO.200008/2019:
BETWEEN:
SHRI MOTILAL S/O DANAPPA RATHOD,
AGED ABOUT 43 YEARS, OCC: BUSINESS,
R/O 1611/4, ORDA CANDOLIM, BARDEZ,
GOA, DIST. NORTH GOA, GOA-403 515.
...CROSS OBJECTOR
(BY SRI. S.S. MAMADAPUR, ADVOCATE)
AND:
1. SMT. TARABAI W/O ASHOK CHAVAN,
AGED ABOUT 31 YEARS, OCC: HOUSEWIFE,
2. AJIT S/O ASHOK CHAVAN,
AGED ABOUT 17 YEARS, OCC: STUDENT,
3. AMIT S/O ASHOK CHAVAN,
AGED ABOUT 19 YEARS, OCC: STUDENT,
PETITIONERS 1 & 2 ARE MINORS,
REP. BY THEIR NATURAL MOTHER
M/G PETITIONER -1, SMT. TARABAI,
4. SMT. JALABAI W/O DEVALU CHAVAN,
AGED ABOUT 65 YEARS, OCC: NIL,
ALL ARE R/O BEENA R. RATHOD, YASMIN MANZIL,
NEAR SHANMUKHSWAMY MATH,
GOLGUMBAZ ROAD, VIJAYAPUR-586 101.
5. THE BRANCH MANAGER,
UNITED INDIA INSURANCE CO. LTD.,
S.S. FRONT ROAD, VIJAYAPUR-586 101.
...RESPONDENTS
(BY SRI. BABU H. METAGUDDA, ADV. FOR R1 TO R4;
SRI. MANVENDRA REDDY, ADV. FOR R5)
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NC: 2025:KHC-K:610
MFA No. 201851 of 2018
C/W MFA No. 202366 of 2018
MFA No. 202367 of 2018
AND 2 OTHERS
THIS MFA CROB IS FILED UNDER ORDER 41 RULE 22 OF
THE CODE OF CIVIL PROCEDURE, PRAYING TO SET ASIDE THE
JUDGMENT AND AWARD DATED 27.06.2018 PASSED BY THE
HON'BLE III ADDL. SENIOR CIVIL JUDGE AND COMMISSIONER
FOR EMPLOYEES COMPENSATION, VIJAYAPUR IN ECA
NO.238/2014 TO THE EXTENT IT HOLDS APPELLANT LIABLE TO
PAY THE INTEREST ON COMPENSATION.
IN MFA CROB NO.200009/2019:
BETWEEN:
SHRI. MOTILAL S/O DANAPPA RATHOD,
AGED ABOUT 43 YEARS, OCC: BUSINESS,
R/O 1611/4, ORDA CANDOLIM, BARDEZ,
GOA, DIST. NORTH GOA, GOA-403 515.
...CROSS OBJECTOR
(BY SRI. S.S. MAMADAPUR, ADVOCATE)
AND:
1. KUMAR S/O SOMASING RATHOD,
AGED ABOUT 33 YEARS, OCC: CLEANER,
R/O C/O ANIL RATHOD, BENDIGERI GALLI,
GOLGUMBAZ ROAD, VIJAYAPUR.
2. THE BRANCH MANAGER,
UNITED INDIA INSURANCE CO. LTD.,
S.S. FRONT ROAD, VIJAYAPUR-586 101.
...RESPONDENTS
(BY SRI. MANVENDRA REDDY, ADV. FOR R2)
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NC: 2025:KHC-K:610
MFA No. 201851 of 2018
C/W MFA No. 202366 of 2018
MFA No. 202367 of 2018
AND 2 OTHERS
THIS MFA CROB IS FILED UNDER ORDER 41 RULE 22 OF
THE CODE OF CIVIL PROCEDURE, PRAYING TO SET ASIDE THE
JUDGMENT AND AWARD DATED 27.06.2018 PASSEED BY THE
HON'BLE III ADDL. SENIOR CIVIL JUDGE AND COMMISSIONER
FOR EMPLOYEES COMPENSATION, VIJAYPUR, IN ECA
NO.239/2014 TO THE EXTENT IT HOLDS THE APPELLANT
LIABLE TO PAY INTEREST ON THE AWARD FROM THE DATE OF
ACCIDENT TILL THE DATE OF AWARD.
THE THREE APPEALS AND TWO MFA CROSS OBJECTIONS
COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS
DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE C M JOSHI
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE C M JOSHI) These appeals arise out of the common judgment and awards dated 27.06.2018 passed in ECA Nos.238/2014 and 239/2014 by the learned III Additional Senior Civil Judge and Commissioner for Employees Compensation, Vijayapura (hereinafter referred to as 'the Commissioner' for short). Being aggrieved by the said common judgment, the petitioners in ECA No.238/2014 -8- NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS have filed MFA No.201851/2018; Respondent No.2- Insurance Company has filed MFA No.202366/2018 and respondent No.1-owner has filed MFA Crob No.200008/2019. Similarly, being aggrieved by the said judgment, the Insurance Company in ECA No.239/2014 has filed MFA No.202367/2018 and the owner has filed MFA Crob No.200009/2019.
2. For the sake of convenience, the parties would be referred to as per their ranking before the Tribunal.
3. The factual matrix of the case in short, is as below:
The petitioners in ECA No.238/2014 are the dependents of one Ashok Chavan, who died in the accident. The petitioner - Kumar in ECA No.239/2014 is the injured, who is the cleaner of the vehicle involved in the said accident.
The deceased Ashok Chavan and the injured-Kumar were working as driver and cleaner in mini tipper lorry -9- NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS bearing No.GA-03/K-9705, which is owned by respondent No.1-Motilal. On 08.07.2013, when the said lorry loaded with stones was proceeding from Kasarwada to Gurium in Goa, an Ashok Layland Truck bearing No.MH-07/X-0963 came from opposite direction and collided with the mini tipper lorry. In the said accident, Ashok Chavan died on the spot and Kumar, having suffered injuries, was shifted to the hospital at Goa and thereafter, he took treatment at Kerudi Hospital, Bagalkot. Therefore, the dependants of Ashok Chavan and the injured Kumar filed claim petitions against the owner and insurer of the tipper lorry bearing No.GA-03/K-9705, seeking compensation under the provisions of the Employee's Compensation Act, 1923 (for short 'E.C. Act').
4. On service of notice, the owner and insurer of the mini tipper lorry appeared and filed their written statements. The owner admitted that the deceased Ashok Chavan and injured Kumar were employees under him, but denied the quantum of the salary claimed by the
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NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS petitioners. He contended that the deceased and the injured were being paid a salary of Rs.8,000/- per month and the vehicle had valid insurance, the insurer is liable to pay the compensation.
5. The Insurance Company, who was arrayed as respondent No.2 before the Commissioner admitted the coverage of the policy, but it was contended that driver Ashok Chavan was not having valid driving licence and the one furnished by respondent No.1-owner and the petitioners i.e., bearing No.MH-01-2003/63414 is a fake one. In fact, the said driving licence belongs to one Swapnil Akre. Apart from these contentions, certain other grounds were also raised by it.
6. The learned Commissioner framed appropriate issues; clubbed both the petitions and recorded common evidence. Petitioner No.1 in ECA No.238/2014 was examined as PW.1 and EXs.P1 to P9 were marked in their evidence. The petitioner in ECA 239/2014 was examined as PW.2 and Exs.P10 to P17 were marked in his evidence.
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NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS Respondent No.1 was examined as RW.1 and an official of respondent No.2 was examined as RW.2. Exs.R1 to R7 were marked on their behalf.
7. After hearing both the sides, learned Commissioner held that, the petitioners in ECA No.238/2014 claiming compensation for the death of Ashok Chavan are entitled for a compensation of 8,25,400/- by holding the monthly wages of the deceased at Rs.8,000/-; the petitioner in ECA No.239/2014 is entitled for a compensation of Rs.52,300/-. The insurance company was saddled to pay the compensation amount, but the interest was ordered to be paid by the owner of the vehicle.
8. Being aggrieved by the above findings, the present appeals are filed.
9. In MFA Nos.202366/2018 and 202367/2018, common substantial question of law has been framed as below:
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NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS "Whether the Commissioner under the Employees Compensation Act, is justified in fastening the liability on the appellant - insurance company, though the owner and driver of the vehicle colluded together and produced the fake driving licence by playing fraud?"
10. In MFA Crob Nos.200008/2019 and 200009/2019, common substantial question of law has been framed as below:
Whether the Commissioner is justified in fastening the interest portion of the liability on the owner of the vehicle?
11. In MFA No.201851/2018, no substantial question of law would arise for consideration. The petitioners are contending that the wages of the deceased considered by the Commissioner at Rs.8,000/- per month is not proper. It is worth to note that the notification issued by the Central Government under Section 4 (1B) of the E.C. Act declares the wages to be Rs.8,000/- per month. In a catena of decisions, this Court as well as the
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NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS various other High Courts have held that in the absence of any cogent evidence, the wages notified by the Central Government are to be accepted. In the case on hand also, the admitted wages by the owner of the vehicle, who is employer is Rs.8,000/- per month. Therefore, a question of fact having determined by the Commissioner, is not available to be questioned before this Court. As such, the appeal in MFA No.201851/2018 filed by the petitioners in ECA No.238/2014 is bereft of any merits and is liable to be dismissed.
12. So far as the substantial question of law raised in the appeals filed by the Insurance Company i.e., MFA Nos.202366/2018 and 202367/2018 is concerned, it is necessary to note that the Insurance Company contends that the driving licence of deceased Ashok Chavan was a fake one. It is necessary to note that the registration certificate of the vehicle driven by deceased Ashok Chavan, owned by respondent No.1 and insured by respondent No.2 is produced at Ex.R2. It shows the
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NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS unladen weight of the vehicle to be 3800 Kgs. Therefore, the required licence to drive the said vehicle was an LMV lilcence. The judgment of the Apex Court in the case of Mukund Dewangan vs. Oriental Insurance Company Limited1 lays down that there is no necessity of obtaining a licnece for transport vehicle in case the unladen weight of the vehicle is less than 7500 Kgs.
13. A perusal of Ex.R4, which is produced by the owner of the vehicle shows that deceased Ashok Chavan had valid driving licence bearing No.KA28 20120015946 and it was valid to drive a transport vehicle from 25.10.2012 to 31.05.2031. Therefore, the said driving licence was sufficient for the purpose of compliance of terms and conditions of the policy. It may be true that, the petitioners had not furnished the said licence to the Insurance Company. It may also be true that the driving licence produced at Ex.R1, standing in the name of Ashok Chavan was informed by RTO, Mumbai to be a fake one as 1 AIR 2017 (SC) 3668
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NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS per the documents produced by the Insurance Company at Exs.R6 and R7. Obviously, these documents show that the licence bearing No.MH01/2003/63414 to be in the name of one Swapnil Akre. Under these circumstances, it is immaterial whether the driving licence produced by the petitioners was true or fake. Ex.R4 fully covered the requirement of the policy and therefore, there cannot be any ground of collusion of the owner of the vehicle and the petitioners. It is not necessary to enter into the discussion about the fake driving licence, as Ex.R4 has greater value than Exs.R6 and R7, which are not proved as required under law. This aspect is precisely observed by the learned Commissioner in para 16 of the impugned judgment. Consequently, the substantial question of law raised in these appeals is answered in the affirmative.
14. Regarding the substantial question of law raised in MFA Crob Nos.200008/2019 and 200009/2019 concerning the interest is concerned, the Apex Court in two of its judgment has clarified the matter. The Apex
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NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS Court, in NEW INDIA ASSURANCE CO. LTD. V. HARSHADBHAI AMRUTBHAI MODHIYA2 has held as below.
"4. However, therein a proviso has been added which reads as under:
"Provided that the insurance granted hereunder is not extended to include:
(i) any interest and/or penalty imposed on the insured on account of his/her failure to comply with the requirements laid down under the WC Act, 1923, and
(ii) any compensation payable on account of occupational diseases listed in Part 'C' of Schedule III of the WC Act, 1923."
XXXXXXXXXX
19. As indicated hereinbefore, a contract of insurance is governed by the provisions of the Insurance Act. Unless the said contract is governed by the provisions of a statute, the parties are free to enter into a contract as for their own volition. The Act does not contain a provision like Section 147 of the Motor Vehicles Act. Where a statute does not provide for a compulsory insurance or the extent thereof, it will bear repetition to state that the parties are free to 2 (2006) 5 SCC 192
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NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS choose their own terms of contract. In that view of the matter, contracting out, so far as reimbursement of amount of interest is concerned, in our opinion, is not prohibited by a statute.
20. The views taken by us find support from a recent judgment of this Court in P.J. Narayan v. Union of India [(2006) 5 SCC 200] wherein it was held:
"This writ petition is for the purposes of directing the insurance company to delete the clause in the insurance policy which provides that in cases of compensation under the Workmen's Compensation Act, 1923, the insurance company will not be liable to pay interest. We see no substance in the writ petition. There is no statutory liability on the insurance company. The statutory liability under the Workmen's Compensation Act is on the employer. An insurance is a matter of contract between the insurance company and the insured. It is always open to the insurance company to refuse to insure. Similarly, they are entitled to provide by contract that they will not take on liability for interest. In the absence of any statute to that effect, insurance companies cannot be forced by courts to take on liabilities which they do not want
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NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS to take on. The writ petition is dismissed. No order as to costs.
XXXXXXXXXXXXXX
24. Section 17 of the Workmen's Compensation Act voids only a contract or agreement whereby a workman relinquishes any right of compensation from the employer for personal injury arising out of or in the course of the employment and insofar as it purports to remove or reduce the liability of any person to pay compensation under the Act. As my learned Brother has noticed, in the Workmen's Compensation Act, there are no provisions corresponding to those in the Motor Vehicles Act, insisting on the insurer covering the entire liability arising out of an award towards compensation to a third party arising out of a motor accident. It is not brought to our notice that there is any other law enacted which stands in the way of an insurance company and the insured entering into a contract confining the obligation of the insurance company to indemnify to a particular head or to a particular amount when it relates to a claim for compensation to a third party arising under the Workmen's Compensation Act. In this situation, the obligation of the insurance company clearly stands limited and the relevant proviso
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NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS providing for exclusion of liability for interest or penalty has to be given effect to. Unlike the scheme of the Motor Vehicles Act the Workmen's Compensation Act does not confer a right on the claimant for compensation under that Act to claim the payment of compensation in its entirety from the insurer himself. The entitlement of the claimant under the Workmen's Compensation Act is to claim the compensation from the employer. As between the employer and the insurer, the rights and obligations would depend upon the terms of the insurance contract. Construing the contract involved here it is clear that the insurer has specifically excluded any liability for interest or penalty under the Workmen's Compensation Act and confined its liability to indemnify the employer only against the amount of compensation ordered to be paid under the Workmen's Compensation Act. The High Court was, therefore, not correct in holding that the appellant Insurance Company, is also liable to pay the interest on the amount of compensation awarded by the Commissioner. The workman has to recover it from the employer.
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21. For the reasons aforementioned, the impugned judgment cannot be sustained. It is set
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NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS aside accordingly. The appeal is allowed. The appellant is not liable for the interest. However, we make it clear that the employer shall be liable to pay the amount of interest to the claimant. In the facts and circumstances of the case, there shall be no order as to costs."
15. Later, in the decision of KAMLA CHATURVEDI V. NATIONAL INSURANCE CO.,3 the Apex Court had the occasion to clarify the proposition laid as below.
"8. In New India Assurance Co. Vs Harshadbhai case, [(2006) 5 SCC 192] Ved Prakash Garg case [ (1997) 8 SCC 1] was distinguished on facts. It was observed that in the said case the Court was not concerned with a case where an accident had occurred by use of motor vehicle in respect whereof the contract of insurance will be governed by the provisions of the Motor Vehicles Act, 1988 (in short "the MV Act"):
19. ... a contract of insurance is governed by the provisions of the Insurance Act [, 1938 (in short 'the Insurance Act')]. Unless the said contract is governed by the provisions of a statute, the parties are free to enter into a contract as [per] their own volition. The Act 3 (2009) 1 SCC 487
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NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS does not contain a provision like Section 147 of the Motor Vehicles Act. Where a statute does not provide for a compulsory insurance or the extent thereof, ... the parties are free to choose their own terms of contract. In that view of the matter, contracting out, so far as [the] reimbursement of amount of interest is concerned, ... is not prohibited by a statute." This position has been reiterated in P.J. Narayan v. Union of India [(2006) 5 SCC 200]. In the instant case the position is different. The accident in question arose on account of vehicular accident and the provisions of the MV Act are clearly applicable. We have gone through the policy of insurance and we find that no such exception as was the case in New India Assurance Co. Vs Harshadbhai case [(2006) 5 SCC 192] was stipulated in the policy of insurance. Therefore, the Insurance Company is liable to pay the interest."
16. Therefore, when the matter stood distinguished, the liability to pay the interest would be governed by the terms and conditions in the policy. In the case one hand, the policy at Ex.R6 would show that it is a motor vehicle policy and there is no such clause, which would absolve the Insurance Company from paying the
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NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS interest on the compensation amount. Therefore, the cross objections filed by the owner of the vehicle deserve to be allowed and he cannot be saddled with the interest. Accordingly, the substantial question of law raised in these cross objections is answered in the negative, holding that the Insurance Company is liable to pay the interest portion also.
17. In the result, I pass the following:
ORDER
(i) MFA No.201851/2018 filed by the petitioners and MFA Nos.202366/2018 and 202367/2018 filed by the Insurance Company are hereby dismissed.
(ii) MFA Crob Nos.200008/2019 and 200009/2019 are allowed. Consequently, the Insurance Company is held liable to pay the interest portion also and to that extent, the judgment of the Commissioner stands modified.
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NC: 2025:KHC-K:610 MFA No. 201851 of 2018 C/W MFA No. 202366 of 2018 MFA No. 202367 of 2018 AND 2 OTHERS
(iii) The amount deposited before this Court, if any, is ordered to be transmitted to the Commissioner.
Sd/-
(C M JOSHI) JUDGE LG List No.: 1 Sl No.: 56