Karnataka High Court
Nationa Insurance Co Ltd vs Smt Lakshmamma on 25 June, 2025
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NC: 2025:KHC:22135
MFA No. 6682 of 2016
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 25TH DAY OF JUNE, 2025
BEFORE
THE HON'BLE MR JUSTICE UMESH M ADIGA
MISCELLANEOUS FIRST APPEAL NO. 6682 OF 2016 (WC)
BETWEEN:
NATIONAL INSURANCE CO. LTD.,
CHICKMAGALUR BRANCH,
THROUGH ITS REGIONAL OFFICE
SUBHARAM COMPLEX,
M G ROAD,
BANGALORE - 560 001.
REP BY ITS MANAGER
...APPELLANT
(BY SRI. SEETHA RAMA RAO B C., ADVOCATE)
AND:
1. SMT LAKSHMAMMA
Digitally signed by KORLAHALLI
BHARATHIDEVIKRISHNACHARYA
Location: HIGH COURT OF
AGED ABOUT 35 YEARS,
KARNATAKA
W/O LATE SRINIVAS,
RESIDING AT
NANDI HOSAHALLI VILLAGE,
TARIKERE TALUK,
CHICKMAGALUR DISTRICT
2. MR SUNIL
AGED ABOUT 17 YEARS,
S/O LATE SRINIVAS,
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NC: 2025:KHC:22135
MFA No. 6682 of 2016
HC-KAR
MINOR
REP MOTHER THE FIRST RESPONDENT
HEREIN
RESIDING AT
NANDI HOSAHALLI VILLAGE,
TARIKERE TALUK,
CHICKMAGALUR DISTRICT.
3. CHI SANTHOSH
AGED ABOUT 15 YEARS,
S/O LATE SRINIVAS,
MINOR
REP MOTHER THE FIRST RESPONDENT
HEREIN
RESIDING AT
NANDI HOSAHALLI VILLAGE,
TARIKERE TALUK,
CHICKMAGALUR DISTRICT.
4. THE PROPRIETOR/SECRETARY
BLUE MOUTAIN ESTATE
EAST KUMARI DIVISION,
SANTHAVERI POST,
TARIKERE TALUK,
CHICKMAGALUR DISTRICT.
...RESPONDENTS
(BY SRI.JEEVAN K., ADVOCATE FOR R-2,
SRI. SACHIN B S., ADVOCATE FOR R-4)
THIS MFA IS FILED U/S 30(1) OF W.C. ACT AGAINST
THE JUDGMENT AND AWARD DATED 24.06.2016 PASSED
IN ECA.NO.12/2014 ON THE FILE OF THE SENIOR CIVIL
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NC: 2025:KHC:22135
MFA No. 6682 of 2016
HC-KAR
JUDGE AND PRINCIPAL, JMFC, TARIKERE, ALLOWING THE
CLAIM PETITION FOR COMPENSATION.
THIS APPEAL, COMING ON FOR FINAL HEARING, THIS
DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE UMESH M ADIGA
ORAL JUDGMENT
This appeal is filed by the insurer - respondent No.2, against the Judgment and order passed by the learned Senior Civil Judge and M.A.M.A.C.T, Tarikere, as well as the Commissioner under the Workmens' Compensation Act (for short `Commissioner'), in ECA No.12/2014.
2. The parties are referred to as per their rankings before the ECA proceedings.
3. Brief facts of the case are that deceased Srinivas was an employee and working as a Supervisor with respondent No.1. On 16.12.2008 around 09.30 a.m. when he was on duty in the Coffee Estate, due to pressure of work, stress and strain he had a severe heart attack; immediately he was taken to hospital, wherein he was declared as -4- NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR brought dead. Deceased died during the course of employment. He was aged about 36 years at the time of his death. He was drawing a salary of Rs.3,000/- per month. Claimants are his wife and children. They filed claim petition under the provisions of Workmens' Compensation Act.
4. Respondent No.1 is employer admitted that deceased Srinivas was working as a Supervisor under Respondent No. 1 and that he was drawing the wages as per the Minimum Wages Act. The death of Srinivas due to heart attack is also not in dispute. According to contentions of the respondent, since the respondent company had purchased the policy of insurance covering the risk of its employees, Respondent No.2- insurance company is liable to pay the compensation.
5. The Insurer-Respondent No.2 in its written statement denied the contents of the claim petition. It has admitted the policy of insurance and contended that its liability is restricted to terms and conditions of policy of -5- NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR insurance. With these reasons, it prayed to dismiss the claim petition against respondent No.2.
6. The Commissioner framed necessary issues based on the rival contentions of the parties.
7. The claimants to prove their case, examined claimant No. 1 as PW1 and got marked exhibits Ex.P1 to Ex.P5. Respondent No.1 examined RW1 and Respondent No.2 examined RW2. Respondents marked two documents Ex.R1 and Ex.R2. After hearing both the parties and appreciating the materials available on record, the Commissioner held that there exists `employer' and `employee' relationship between deceased and respondent No.1 and assessed the income of the deceased at Rs.3,000/- per month and his age as 36 years and applied factor as 194.64 and awarded compensation of Rs.97,320/-. In the operative portion of the certified copy of the impugned award, it was mentioned as Rs.1,45,980 but in the original award it was corrected as Rs.97,320/-. -6-
NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR The Commissioner directed the respondent to pay interest at the rate of 9% per annum and further directed to pay Rs.48,660/- (50% of the compensation amount) as penalty to the State Government.
8. Being aggrieved by the said award, insurer- respondent No.2 preferred this appeal on the grounds mentioned in the appeal memorandum.
9. This appeal was admitted to consider the following substantial questions of law:
"(i) Whether the Tribunal is justified in awarding total compensation of Rs.1,45,980/- with interest of 9% p.a., when the employee died during the natural cause of heart attack, which was not due to the employment during the course of employment?
(ii) Whether the Tribunal is justified in directing the appellant to pay entire compensation, penalty of 50% and interest thereon by ignoring the pleadings, evidence of the appellant and contents of the policy marked at Ex.R-1 in the facts and circumstances of the present case?"-7-
NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR
10. I have heard the arguments of learned counsel appearing for the appellant as well as respondent Nos.2 and
4.
11. The learned counsel for the appellant argued in line with the contentions raised in the appeal memo. He contended that as per the policy of insurance, risk covered in respect of a Supervisor is only for Rs.1,600/- per month and not for Rs.3,000/-. Under those circumstances, the Commissioner ought to have apportioned the liability between respondents No.1 and respondent No.2 to pay the compensation to the claimants. He further contended that as per the policy of insurance, insurer is not liable to pay penalty as well as interest for the delay in payment of compensation and hence respondent-insurer is not liable to pay the penalty as awarded by the Commissioner. He also contended that death was not arising out of and in the course of employment. Hence, respondent is not liable to pay the compensation.
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NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR
12. Learned counsel for respondent/employer supports the impugned judgment. He further submits that Commissioner rightly fastened the liability on the insurer and it is in accordance with law. Hence, prayed to dismiss the appeal.
13. Learned counsel for claimant seeks for enhancement of compensation. He submits that there are arithmetical errors in the impugned order. Rate of interest awarded is not in accordance with law. Hence, prayed to correct the same.
14. Undisputedly, deceased was an employee of respondent No.1 and he died due to massive heart attack during the course of employment. Respondent No.1 has not challenged the impugned order passed by the Commissioner.
15. Substantial Question of Law No.1 - First contention of learned counsel for appellant is that death was not arising out of and during course of employment. No reasons assigned in this regard by the Commissioner. Deceased was a supervisor in a coffee estate. Hence, -9- NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR question of stress and strain resulting in heart attack is not probable. He might be suffering from some severe heart ailments and that resulted in his death. Hence, respondents are not liable to pay compensation.
16. The said submission is not tenable. Employer has not disputed it. He is fit person to say about the pressure of work on the deceased. Respondent No.2 is not competent to deny the same. The degree of stress and individual endures and their ability to bear or sustain such stress is inherently dependent upon their genetic predisposition and individual physical and mental capacity. There can be no fixed or straight jacket formula to assess this aspect uniformly. The extent of stress experienced prior to the incident must ordinarily be established through medical or supporting factual evidence; however, such evidence may not always be available or within the knowledge or perception of the claimants. They may be unaware of nature of work of the deceased and the stress and strain he was under. An employee also may not discuss these facts either with the employer or with his own family members, as employment is
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NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR essential for his survival and maintenance of family members.
17. In the present case, having regard to the overall facts and circumstances, it cannot be ruled out or disbelieved that the deceased suffered a heart attack due to stress and pressure arising out of nature of his employment.
18. Ex.R1 shows that the labourers working in the said concern whose risk was covered under the policy was one hundred. There might be more labourers than stated in the Ex.R-1, since it was a seasonal employment. Extracting of work, managing and supervising of labourers is normally a difficult task, which is seen in day-to-day life. These facts indicate that deceased must be under stress of work.
19. Claimants are the wife and minor children of the deceased. They may be unaware of nature of work, stress experienced by deceased. It appears that there was no history of heart disease in the service records of the deceased. It is not the case of either parties. The deceased was aged about 36 years at the time of his death. Under
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NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR these circumstances, it cannot be believed that it was a natural death without any nexus to his employment.
20. Hence, contention of appellant that there was no nexus between death and employment is not tenable. Accordingly, I answer substantial question of law No.1 against appellant.
21. Substantial question of Law No.2: It is not in dispute that respondent No.1 purchased workman insurance policy from respondent No.2. The policy of insurance has been produced by the insurer at Ex.R-1, which covers the risk of two supervisors along with other employees. As per Ex.R-1 employer declared salary of two Supervisors together as ₹38,400/- and each one of them gets ₹19,200/-. It indicates that each supervisor would get salary of ₹1,600/- per month. The terms of the policy mentioned in Ex.R-1 read as under:
"Workmens' Compensation Act, 1923 and subsequent amendments of the said Act prior to the date of issue of the policy provided that the insurance granted hereunder is not extended to include
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NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR
(i) any interest and/or penalty imposed on the insured on account of his/her/their failure to comply with the requirements laid down under Workmens' Compensation Act, 1923 and
(ii) any compensation payable on account of accusations, diseases, listed in part `C' of the Schedule III of the Workmens' Compensation Act."
22. PW1 is the widow of deceased Srinivas and in her evidence she has stated about the age of the deceased and his earnings as ₹3,000/- per month. In her cross examination, it was suggested that the deceased was drawing a salary as per the Workmens' Compensation Act, but amount of actual salary paid to him was not suggested. PW-1 being the wife of deceased employee, might have had knowledge of husband's salary. The onus lies on respondent No.1 to produce records to prove that the deceased was paid less wages than Rs.3,000/- per month. There was no hurdle to produce it by the respondent No.1. Even it has not disputed the said findings. Hence, Commissioner has rightly accepted the evidence of PW-1 and has held that wages of Srinivas was Rs.3,000/-p.m. I do not find any reason to interfere with the same.
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23. Undisputedly employer paid the premium by declaring wages of a supervisor as Rs.1,600/- per month. Hence, the insurer is liable to pay compensation to that extent. The remaining amount shall be paid by the employer. The insurer cannot be directed to pay entire amount of compensation when wages determined by the Commissioner are in excess of wages declared by the employer and paid premium calculating on that basis.
24. As discussed above, the risk of the deceased was covered to an extent of salary declared by an employer i.e. Rs.1,600/- per month and the compensation was calculated taking his salary as Rs.3,000/- per month. Hence, compensation calculated in excess of Rs.1,600/- salary shall be payable by the employer i.e. respondent No.1. Similarly, as per the terms of policy, as stated supra insurer is not liable to pay the penalty, which was imposed by the Commissioner. Learned counsel for claimants contend that there is arithmetical mistake in calculation of the compensation by the Commissioner. He submits that income of the deceased was taken as Rs.3,000/- per month and it
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NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR shall be multiplied by the factor 194.64. As per Section 4 of the Workmen's Compensation Act, 1923, 50% of the income/wages has to be deducted. If that is the case, the amount of compensation shall be Rs.1,500x194.64 =Rs.2,91,960/-. But the Commissioner awarded sum of Rs.97,320/-. He further contend that the Tribunal directed the employer to pay 50% of the compensation amount as penalty. However, Labour Commissioner directed the respondents to credit the said amount of Rs.48,660/- to the State Government, which is contrary to the Section 4(A) (3) of Workmen's Compensation Act. The Commissioner ought to have directed respondents to pay the said sum to the claimants. He also contended that the said fact of penalty of Rs.48,660/- was not in the original award (certified copy of which is served on the parties) and it was added subsequently. He further contends that Labour Commissioner ought to have awarded interest @ 12% per annum as per Section 4 of the (Act). But he awarded interest @ 9% per annum, which is also incorrect. Therefore, prayed to correct
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NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR the said orders in accordance with law. The said submission is tenable.
25. Section 4A reads as under:
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 shall be deposited with the Commissioner or made to the employee as the case may be, without prejudice to the right of the employee to make any further claim.
(3) Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner shall
(a) direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve percent, per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government, by notification in the Official Gazette, on the amount due;
(b) if, in his opinion, there is no justification for the delay, direct that the employer shall, in addition to the amount of the arrears and interest thereon, pay a further sum not exceeding fifty per cent of such amount by way of penalty.
26. The said proviso is very clear and its interpretation is not required. The incident took place on
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NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR 16.12.2008. The fact of death of Srinivas was known to respondent No.1, since the incident had taken place within the premises of respondent No.1. Looking at the objections filed by respondent No.1, it has not disputed the wages, which was drawn by the deceased. As per Section 4(A) Sub- Section (2) of the (Act), employer ought to have calculated the compensation and deposited the same within 30 days from the date of incident. Undisputedly, respondent No.1 did not deposit the said amount within that period. It is defaulter. Therefore, it is liable to pay penalty and interest @ 12% per annum as stated under Section 4(A) referred above and it was payable to claimants and not to Government. Therefore, directions of the Commissioner that respondents shall deposit the said amount to the State Government is not in accordance with law. Similarly, awarding of the interest @ 9% is also not in terms of the law.
27. The claimants were entitled for compensation of Rs.1,500x194.64=Rs.2,91,960/- and not Rs.97,320/- as calculated by the Commissioner.
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28. It is true that the claimants should have filed an application before the Commissioner for correcting the said mistakes in the award they have failed to do so. Even they have not filed any appeal against the said orders. However, it is pertinent to note that the said fact is not in dispute. It is a mistake apparent on the face of record. Therefore, directing them to approach the commissioner for correction of it after lapse of nearly 10 years is not justifiable. This Court exercising the power and jurisdiction available under Order 41 Rule 22 and Order 21 Rule 30 of the CPC corrects the said mistake to meet the ends of justice.
29. As already discussed above, respondent No.2 is liable to pay the compensation as per the terms of the policy wherein salary was declared as `1,600/- per month. 50% of the same has to be deducted and multiplied by the relevant factor, i.e. Rs.800x2x194.64=Rs.1,55,712/-. The remaining amount of compensation as well as penalty shall be paid by respondent No.1- employer. The respondent No.1 is liable to pay the interest on the said amount after 30 days from the date of incident i.e. 16.12.2008 till its realization.
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NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR Accordingly, substantial question of law No.2 is answered in favour of appellant and proceed to pass the following:
ORDER i. The appeal is allowed in part.
ii. The impugned award passed by Senior Civil Judge and Commissioner, Tarikeri under the Act dated 24.06.2016 in ECA.No.12/2024 is modified.
iii. The claimants are entitled for compensation of Rs.2,91,960/- and penalty of Rs.1,45,980/- with interest @ 12% p.a from 17.01.2009 (30 days after the incident) till its realization.
iv. Out of the above said amount respondent No.2 - insurer is liable to pay `1,55,712/- with proportionate interest on the said amount as held above.
v. Whatever the amount deposited by the appellant - insurer shall be transmitted to the
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NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR Court of Senior Civil Judge for Workmen's Compensation Act, Tarikere.
Sd/-
(UMESH M ADIGA) JUDGE SBN List No.: 1 Sl No.: 15
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NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR IN THE HIGH COURT OF KARNATAKA AT BENGALURU [NATIONA INSURANCE CO LTD VS. SMT LAKSHMAMMA AND OTHERS] 01.07.2025 (VIDEO CONFERENCING / PHYSICAL HEARING) CORAM: HON'BLE MR JUSTICE UMESH M ADIGA ORAL ORDER ON 'BEING SPOKEN TO' Learned counsel for the appellant has filed a memo for correction in the operative portion of the judgment dated 25.06.2025 passed in this appeal in clause (iv) in respect of the interest payable by the appellant/insurer.
While correcting the judgment, it is found that as per the law laid down by Hon'ble Apex Court in the case of New India Assurance Company Ltd. vs. Harshadbhai Amrutbhai Modhiya1, the interest cannot be fastened on the insurer if the contract of insurance is contrary to the said fact. In this case, it is also noted in the above paragraphs that the insurer is not liable to pay the interest. Therefore, 1 MANU/SC/8127/2006
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NC: 2025:KHC:22135 MFA No. 6682 of 2016 HC-KAR the order dated 25.06.2025 passed in this appeal requires modification.
Accordingly, clause (iv) of the operative portion of the judgment shall be read as below:
(iv) The appellant/insurer is liable to pay Rs.1,55,712/-
out of Rs.2,91,960/- awarded by the Labour Commissioner and the remaining amount of compensation, including penalty and interest, shall be payable by the respondent No.1- employer.
Sd/-
(UMESH M ADIGA) JUDGE AMA List No.: 1 Sl No.: 1