Himachal Pradesh High Court
New India Assurance Co. Ltd. vs Jagdish Ram And Anr. on 26 July, 2005
Equivalent citations: IV(2005)ACC726, 2007ACJ806
Author: Surjit Singh
Bench: Surjit Singh
JUDGMENT Surjit Singh, J.
1. Appellant New India Assurance Co. Ltd. is aggrieved by the judgment dated 31.3.1997 of the Commissioner for Workmen's Compensation, Kandaghat whereby a sum of Rs. 94,780 on account of compensation, another sum of Rs. 47,360 on account of penalty and Rs. 5,680 on account of interest have been ordered to be paid by the appellant to respondent Jagdish Ram, hereinafter called 'the claimant'.
2. Respondent-claimant Jagdish Ram was employed as driver by the respondent Joginder Singh to drive his truck No. HP 07-1529. The truck was insured with the appellant for covering risk of the driver and other employees. The truck met with an accident on 20.4.1994, when it was being driven by claimant Jagdish Ram. He sustained injuries including fracture of a leg resulting in permanent disability to the extent of 30 per cent. No compensation was paid to the claimant by the insured or the insurer within one month time prescribed under the Workmen's Compensation Act. The claimant then filed a petition claiming compensation along with penalty and interest. He stated that he used to be paid Rs. 1,000 per month as salary and in addition to that he was paid Rs. 40 per day for food and other expenses.
3. The respondent Joginder Singh, the owner of the truck admitted that the accident had taken place and the claimant had sustained injuries resulting in permanent disability, as alleged in the petition. He also admitted that the claimant was paid salary at the rate of Rs. 1,000 per month but denied that he was paid daily allowance at the rate of Rs. 40. It was stated that the rate of daily allowance was Rs. 25 only. The insurance company, i.e., the present appellant raised a number of preliminary objections. It was alleged that the claimant was driving the vehicle without holding a valid and effective driving licence, there were no valid documents in respect of the vehicle, there was collusion between the claimant and the owner of the truck and there was no privity of contract between the claimant and the insurer. The Commissioner for Workmen's Compensation, after recording the evidence of the parties, held that the claimant received an injury resulting in permanent disability to the extent of 30 per cent and was entitled to compensation. A sum of Rs. 94,780 was held to be payable on account of compensation. The appellant and the insured were also held liable to pay Rs. 47,360 on account of penalty, because of their failure to pay the compensation within the prescribed time limit. Interest was also ordered to be paid at the rate of 6 per cent and the amount was worked at Rs. 5,680. It was further ordered that all the three amounts shall be payable by the appellant. Direction was given to the appellant to pay the money within 30 days. It was ordered that in case the money was not paid within 30 days, the appellant would be liable to pay interest from the date of the accident to the date of the deposit of the money.
4. Appellant's grievance is that though the disability was only to the extent of 30 per cent, the Commissioner has awarded compensation at the rate applicable for 100 per cent loss of earning capacity without returning a finding that 30 per cent disability has resulted in total loss of earning capacity. It is also alleged that the order of awarding penalty and making the appellant liable to pay the same is contrary to the settled law. Also, it is alleged that penal interest has been awarded, which is not permissible.
5. When the matter was taken up for hearing on 15.7.2005, the learned Counsel representing the respondents argued that the appeal was not maintainable, inasmuch as no substantial question of law was involved within the meaning of Section 30 of the Workmen's Compensation Act. The court made a poser to the learned Counsel that the admission of the appeal itself implied that the court was satisfied that some substantial question of law was involved, though such question had not been formulated and was it the requirement of law that the question must be formulated at the time of the admission of the appeal and if it is not formulated whether the appeal cannot be heard. He sought time to search for the law. The matter was then adjourned to 25.7.2005. On that day it was conceded that matter could be heard on merits, provided some question of law, even though not formulated, was involved. It was partly heard on that day. The case was adjourned to this day because the parties sought time to answer another query raised by the court, viz., if the disability is not total but the nature of the job of the workman is such that he cannot do that work, should he not be granted compensation treating his case to be of total loss of earning capacity. The arguments have concluded today.
6. The learned Counsel representing the appellant raised the following points:
(a) The Commissioner has assessed the compensation at the rate applicable to the cases of total loss of earning capacity without recording the finding that the disability has resulted in total loss of earning capacity.
(b) The order imposing penalty upon the appellant is illegal and contrary to the settled law on the point.
(c) The order regarding payment of penal interest is illegal.
7. As regards first point, no doubt the Commissioner for Workmen's Compensation, without recording in his order as to what is the extent of loss of earning capacity, has adopted the measure fixed for award of compensation for total loss of earning capacity, but this court, while sitting in appeal, by referring to the evidence on record can examine and determine the question as to what is the extent of loss of earning capacity due to 30 per cent permanent disability of one of the legs. The claimant examined the doctor, who has assessed the extent of disability. The doctor is Mukand Lal, Assistant Professor, Orthopaedic Surgeon, Department of Orthopaedic Surgery, I.G.M.C., Shimla. The witness stated that though the disability is partial to the extent of 30 per cent only, but on account of this disability the claimant cannot drive any vehicle for the whole of his life. That means, the disability has resulted in total loss of earning capacity of the claimant, from the occupation of driver. Admittedly the claimant was a driver, by occupation, when the accident took place. So it is held that the partial permanent disability has resulted in the total loss of earning capacity and hence no fault can be found with the quantum of compensation awarded to the claimant by the Commissioner. A Division Bench of this Court in Mast Ram v. State of Himachal Pradesh , while dealing with a case of a coolie who sustained 20 per cent permanent disability held that though the disability was only 20 per cent, it had affected his earning capacity completely and awarded him compensation accordingly.
8. Now coming to the next point urged by the appellant, the Hon'ble Supreme Court in Ved Prakash Garg v. Premi Devi , has held that the penalty is not the part of legal liability of the employer to compensate his employee for the injury sustained by him in the course of employment and as the insurer, who is under contractual obligation to indemnify the employer for his legal liability, is not liable to pay the amount of penalty. In view of this authority of the Hon'ble Supreme Court, the contention of the appellant that the order of the Commissioner directing the appellant to pay the amount of penalty is illegal, is accepted and it is held that the employer, i.e., Joginder Singh (the owner of the truck), respondent No. 2, is liable to pay the amount of penalty, as imposed by the Commissioner and not the present appellant.
9. The order of the Commissioner for the payment of interest on the aggregate amount of compensation, penalty and interest from the date of the application to the date of deposit of the said amount, if the said amount is not deposited within 30 days from the date of the order is illegal on the face of it. The Commissioner has already awarded interest at the rate of 6 per cent per annum on the amount of the compensation from the date of the application to the date of his judgment. Therefore, awarding interest on the sum total of the compensation money, penalty and on the amount of interest again from the date of application is illegal.
10. In view of above stated position, the appeal is partly accepted and the judgment of the Commissioner is modified in the following terms:
The amount of penalty shall be paid by the insured and not by the insurer. The interest in the event of failure to deposit the compensation money within 30 days time from the date of passing of the judgment of the Commissioner shall be payable not from the date of filing of the application, as ordered by the Commissioner, but from the date of the said judgment to the date of the deposit of the compensation money.
The appeal stands disposed of accordingly.