Madras High Court
The Oriental Insurance Company Ltd vs D.Sivasankar on 31 January, 2014
Author: R.Mahadevan
Bench: R.Mahadevan
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 31.01.2014 CORAM THE HONOURABLE MR. JUSTICE R.MAHADEVAN C.M.A. NO.2690 OF 2011 AND M.P.NO.1 OF 2011 The Oriental Insurance Company Ltd., First Floor, No.115, Prakasam Salai, Chennai 600 108. .. Appellant Versus 1.D.Sivasankar 2.R.Veeramani Gem Granites, No.78, Cathedral Road, Chennai 600 086. .. Respondents PRAYER : Civil Miscellaneous Appeal filed under Section 30 of the Workmen's Compensation Act, 1923, against the judgment and decree in W.C.No.260 of 2006 dated 11.01.2011 on the file of the Commissioner for Workmen's Compensation, (Deputy Commissioner of Labour-I), Teynampet, Chennai 600 006. For Appellant : Mr.R.Sivakumar For Respondent-1 : Mr.M.Sridhar For Respondent-2 : Mr.M.R.Dharanichander * * * * * J U D G M E N T
This Civil Miscellaneous Appeal is filed against the order dated 11.01.2011 passed in W.C.No.260 of 2006 by the Deputy Commissioner of Labour-I (Commissioner for Workmens Compensation), Teynampet, Chennai-600006.
2. The claim was filed before the Deputy Commissioner of Labour-I for Rs.1,51,508.95/- under the Workmen Compensation Act. The Deputy Commissioner of Labour-I awarded a compensation of Rs.58,394/-. Aggrieved by the same, the present appeal has been preferred.
3. The claim was filed by the first respondent for the injury sustained by him during the course of his employment with the second respondent. The first respondent claimed to have been working from 1997 onwards and that he was a permanent employee, working as a Helper with a monthly pay of Rs.3,650/-. On 26.12.2005 at about 9.00A.M., the first respondent along with one Venkatesan, who was employed as an Operator were shifting granite stone weighing about 50 Kgs, and due to the weight of the granite stone, he lost his balance and the granite stone fell on his left hand and as a result, he sustained grievous injuries on the middle and ring fingers of the left hand. He was administered 16 and 17 sutures on the middle and ring fingers respectively by the Chettinad Hospital, where he was treated as an outpatient and later he received treatment from the Government Peripheral Hospital, K.K.Nagar, Chennai - 600 078. The first respondent claimed to be permanently disabled by 15% and as a result lost 17% of earning capacity.
4. The second respondent filed a counter mainly claiming that the injuries are superficial without fracture, that first respondent has not produced any documents to prove the loss in earning capacity, that the first respondent is covered by a GPA unnamed Insurance Policy with the Oriental Insurance and despite request the first respondent has not come forward to lodge the claim form and that the first respondent has calculated the loss in earning capacity at 19% while the disability was only 15% and therefore sought for dismissal of the claim petition.
5. The appellant, who was impleaded on 02.03.2007 contented that no notice of claim was issued to them, that the Insurance Policy being a Group Personal Accident Policy would not cover the claim under the Workmen Compensation Act and therefore questioned the jurisdiction of the Commissioner to entertain the application for compensation. The appellant also call upon the first respondent to prove the other contentions raised by him regarding injury, employment and salary.
6. After considering the oral as well as the documentary evidence furnished, the Deputy Commissioner of Labour-I, partly allowed the claim with a direction to pay Rs.58,394/- within 30 days and upon failure to pay 12% interest from the date of claim till actual payment. Aggrieved with, the present appeal has been filed by the Appellant.
7. Heard the learned counsels for the appellant and the respondents and perused the records.
8. The learned counsel for the appellant painstakingly argued that the Group Personal Accident Insurance Policy would not cover the injury suffered by the first respondent and that the Tribunal ought not to have awarded the compensation against the appellant. The learned counsel also contended that unless the Insurance policy specifically empowers a claim under Workmen Compensation Act, the policy cannot be invoked. The learned counsel also assailed the order of the Commissioner contending that the first respondent has not proved the existence of employeremployee relationship to sustain the claim under Section 3 of the Workmen Compensation Act. In support of his contention, the learned counsel relied upon the judgments reported in 2005 ACJ 409 [NATIONAL INSURANCE CO. LTD., vs. V.PRABHU DAS AND ANOTHER], 2010 ACJ 775 [MANAGEMENT, JOTHI CALENDERING MILLS vs. PERUMAL AND ANOTHER] and 2013 ACJ 649 [NATIONAL INSURANCE CO. LTD. AND ANOTHER vs. LAILA AND OTHERS] to show that unless the policy specifically covers any claim under Workmens Compensation Act, no direction can be issued to the appellant to make the payment.
9. On the contrary, the learned counsel for the first respondent contended that in view of the fact, that the policy was valid and binding on the appellant at the time of injury, there is nothing illegal in the orders passed by the Commissioner warranting interference of this Court.
10. The learned counsel for the second respondent contended that the name of the first respondent is very much available in the list of employees covered by the Policy and that as per the terms of the Policy, the cover of the workmen is Rs.1,00,000/- and since the award is less than the maximum, the appellant is liable to satisfy the claim. The learned counsel also placing reliance upon the judgment of this Court in C.M.A.(MD) No.265 of 2004, contended that even third parties can seek compensation under the Workmen Compensation Act and even in cases not covered under the Workmen Compensation Act, the Commissioner can very well direct the Insurance Company to pay the award. The learned counsel also relied upon the judgment reported in 2000 ACJ 1359 [RAMJI PORTE AND OTHERS vs. PREMABAI PATEL AND OTHERS] and contended that insurers liability is not limited to provisions of the Workmens Compensation Act and hence sought the dismissal of the appeal.
11. The Deputy Commissioner of Labour-I has given findings regarding employment, Salary, injury and disability. Considering the above, this Court had framed the substantial question of law touching only upon the insurance coverage.
12. The Two Substantial Question of Laws framed by this Court are:
"1.Whether the Commissioner for workmen Compensation can pass an award against the Insurer with whom the employer has entered into a contract of Insurance for indemnifying the employer against any liability towards the workman in case of accident?
2. Whether there is no policy by which the Insured has agreed to indemnify the employer against liability under Workmens Compensation Act and the employer has got only Group Personal Accident Policy, whether the Commissioner shall have the power to pass an award against the insured on a claim made under the Workmens Compensation Act?"
12.1. First Substantial Question of Law:
(a). As stated earlier, it has been clearly established that the first respondent is a workmen under the second respondent. It is also not in dispute that the Insurance Policy contains the list of employees of the second respondent in which the name of the first respondent is found as serial No.83.
(b). Section 3 of the Workmens Compensation Act (Now called as the Employees Compensation Act, 1923):
"3. Employers liability for compensation.-(1) If personal injury is caused to an employee by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter:
Provided that the employer shall not be so liable-
(a) in respect of any injury which does not result in the total or partial disablement of the employee for a period exceeding three days;
(b) in respect of any injury, not resulting in death, or permanent total disablement, caused by an accident which is directly attributable to."
Schedule II of the Act also provides the list of persons who are included in the definition of workmen.
(c). The very purpose for the enactment of Workmens Compensation Act was to pave way for compensation to the workmen for injury by accident. It is a social welfare legislation just like the Motor Vehicles Act. In the judgment relied upon by the second respondent in C.M.A.(MD)No.265 of 2004, after considering various judgments on the issue whether an insurer can be fastened with a claim under Workmen Compensation Act, this Court held in affirmative.
"28. It is significant to make a mention that liability to pay compensation under the Workmen's Compensation Act is in the nature of torts. It does not result from any neglect or any default on the part of an individual. The compensation is for the injury caused, i.e something to replace the actual loss suffered. It is in the nature of Insurance Company to a workman against certain risks of accident. The scheme of the Act is not for compensating the workman in lieu of wages, in the considered opinion of this Court.
29. No wonder, even in cases not covered under Section 14 of the Workmen's Compensation Act, the Commissioner/Tribunal can validly direct the insurer to pay compensation awarded to the workman."
(d). The ratio is squarely applicable to the facts of this case. To sustain a claim, one has to prove that he was an employee at the time of accident and that the accident occurred during the course of employment. A person who suffers any injury during the course of employment can approach either the Tribunal under the Motor Vehicles Act or the Commissioner under the Workmen Compensation Act. But under the Motor Vehicles Act, the accident must have occurred due to the use of a motor vehicle. In other cases, a claim will lie under the Workmen Compensation Act in the absence of Employees State Insurance.
(e). As the first respondent has suffered an injury during the course of employment, he has rightly approached the Commissioner. The concept of Insurance is to indemnify the insured or the beneficiaries of the policy against the claims. Technicalities cannot be invoked to defeat the claim of the Workmen. As rightly held by the Commissioner, the judgment in 2005 ACJ 409 [NATIONAL INSURANCE CO. LTD., vs. V.PRABHU DAS AND ANOTHER] relied upon by the appellant is not applicable to the present case as the claim therein was above the amount covered under the Policy. The award is below the maximum cap.
(f). With regard to the judgment reported in 2010 ACJ 775 [MANAGEMENT, JOTHI CALENDERING MILLS vs. PERUMAL AND ANOTHER], the facts are completely different. It is a case, where the claim was raised by the employee under the Workmen Compensation Act when the employee was covered under ESI Act. It was neither pleaded nor any documentary evidence was produced to show that the employee was covered under the ESI Act.
(g). The judgment reported in 2013 ACJ 649 [NATIONAL INSURANCE CO. LTD. AND ANOTHER vs. LAILA AND OTHERS] is also not applicable to the present facts of the case as the first respondent has proved beyond doubts that he is an employee falling under Section 3 of the Workmens Compensation Act and as stated his name is also found in the list of employees.
(h). Hence for the aforesaid reasons, this Court is of the view that the Commissioner is empowered to pass an award against the insurer in a claim under the Workmens Compensation Act.
12.2. Second Substantial Question of Law:
(a). The Insurance Policy certainly covers the first respondent. The policy is on one accident one claim basis. It is captioned as GPA-Unnamed Insurance Policy. The Risk Group is mentioned as Normal Risk. There is no restriction in the policy produced before me to show that the policy does not cover any claim under the Workmen Compensation Act. The only restriction that could be seen in the policy produced is the liability cannot exceed Rs.1,00,000/- per worker. Accident is an unforeseen event resulting in injury simpliciter or Grievous or death. It is very clear from the policy that it covers any single claim arising out of accident. There cannot be any contract restricting the jurisdiction of a Forum when by law, a person is entitled to approach a particular Forum. In view of the above and the findings of this Court regarding the first Substantial question of law, the policy is wide enough to cover a liability under the Workmen Compensation Act.
(b). Though none of the respondents have questioned the period of calculation of interest in the award, this Court cannot shut its eyes to the error apparent on the face of the record.
(c). Section 4-A of the Workmens Compensation Act deals with Compensation to be paid when due and penalty for default.
Section 4-A (3) reads as follows:
(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 per cent 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; and"
Hence, the appellant is bound to pay interest on default.
13. The Hon'ble Division Bench of this Court in the judgment reported in 2010 (2) TNMAC 80 [N.GANESAN vs. THILAGAVATHI] following the decision of the Hon'ble Apex Court reported in 1976 (1) SCC 289 [PRATAP NARAIN SINGH DEO vs. SHRINIVAS SABATA] and 2000 ACJ 5 [KERALA STATE ELECTRICITY BOARD vs. VALSALA, K.], held that the word falls due occurring under section 4-A of the Workmens Compensation Act means that interest for compensation amount would accrue 30 days after the date of accident and not from the date of quantification/orders passed by the commissioner for Workmens Compensation. Therefore, the direction of Deputy Commissioner of Labour-I to pay interest only if the amount is not deposited within 30 days from the date of order is unsustainable. The first respondent is entitled to interest from the 31st day of the accident i.e from 26.01.2006.
14. In the result, the Civil Miscellaneous Appeal is dismissed with the above directions. No costs. Consequently, connected miscellaneous petition is closed.
31.01.2014 Index : Yes Internet : Yes sri R.MAHADEVAN, J.
sri To
1.The Deputy Commissioner of Labour-I, (Commissioner for Workmen's Compensation), Teynampet, Chennai 600 006.
2.The Section Officer, V.R.Section, High Court of Madras, Chennai 600 104.
PRE-DELIVERY JUDGMENT IN C.M.A. NO.2690 OF 2011 31.01.2014