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1997 DIGILAW 333 (PAT)

National Insurance Company Limited v. Moti Lal Modi

1997-04-25

P.K.DEB

body1997
Judgment P.K.Deb, J. 1. This appeal has been preferred under Sec. 30 or the Workmens Compensation Act, 1923 (the Act) against the order dated September 26, 1989 passed by the Presiding Officer Labour Court, Bokaro Steel City in W.C. Case No. 14 of 1986. 2. At the very outset, it must be stated that in the cause title of the memorandum of appeal, the appeal has been valued at Rs. 39,357.60 only which has been granted by the impugned order towards compensation, but at the time of pressing the appeal in the hearing stage, Mr. P.C. Roy, appearing for and on behalf of the appellant has not contested the compensation amount rather he is contesting regarding interest and the amount of penalty imposed only. Mr. Jai Prakash, appearing for and on behalf of respondent No. 2 had raised objection at the very out-set that the appellant has got no authority to challenge the interest and penalty portion when no appeal has been preferred against the same. There is some force in the submission of Mr. Jai Prakash, but from the grounds of appeal it appears that the main ground of appeal had been taken with regard to the imposition of penalty under Sec. 4-A of the Act. When the appeal has been preferred against the order of the appellate Court and when the question of Court fee is not there as it is only a miscellaneous appeal as per the rule, I feel that such technical irregularity on the part of the appellant may not debar him from pressing the point regarding imposition of interest and penalty on the appellant in the appeal. 3. Sec. 4-A(3) of the Act provides in the following manner: - "Where any employer is in default in paying the compensation due under this Act within one month from the date it tell due , the Commissioner may direct that, in addition to the amount of arrears, simple interest at the rate of six per cent per annum on the amount due together with, if in the opinion of the Commissioner there is no justification for the delay, further sum not exceeding fifty per cent of such amount shall be recovered from the employer by way of penalty." 4. Mr. Roys submission is that the penalty, was imposed without any notice to the Insurance Company. Mr. Roys submission is that the penalty, was imposed without any notice to the Insurance Company. It was never made known to the Insurance Company by the owner of the truck regarding the accident. In that view of the matter, title Insurance Company cannot be bound to. pay penalty or the interest as per Section 4-A of the Act, but this plea was never taken by the Insurance Company while filing objection before the Presiding Officer, Labour Court, Bokaro Steel City. The matter of compensation was first initiated before the Commissioner and before the Commissioner also, the Insurance Company was made party and after the Objection was filed, then the matter was referred to the Presiding Officer, Labour Court, Bokaro for adjudication. There also the Insurance Company filed objection but nowhere any objection has been raised regarding the penalty and interest. In the written statement, opposite party No. 2 appellant, took only three objections which may be enumerated hereinbelow: - "(1) That the applicant has got no cause of action against the answering O.P. No. 2 (2) That the present case is not maintainable as it is not in proper form. (3) That your petitioner has been unnecessarily impleaded in this case and as such the name of the O.P.No. 2 i.e. N.I.Co. Ltd. should be expunged from the case. (4) That it is further submitted by your petitioner that the coverage of the risk undertaken by the Insurance Company is a contract between the O.P.No.l (employer/owner) and submit i.e. O.P. No. 2 but the said contract has nothing to do with the Workmens Compensation Act, according to which it is the payment of compensation and Insurance Company under no circumstance, can be dragged in this case." Paragraphs 5 arid 6 of the written statement relates to non relationship of the master and servant between the applicant and opposite-Party No. 2. Thus from the records, it is clear that the Insurance Company i.e. opposite party No. 2 in the original claim case had never taken any objection that the accident was never known to them and same had not been acknowledged by the owner i.e. opposite-party No. 1 respondent No. 2. Thus from the records, it is clear that the Insurance Company i.e. opposite party No. 2 in the original claim case had never taken any objection that the accident was never known to them and same had not been acknowledged by the owner i.e. opposite-party No. 1 respondent No. 2. Even after getting notice the Insurance Company for saving itself from penalty or interest had not taken any steps to make payment rather they were going to contest the case of non-indemnifying the owner which by this time is settled principle of law that if the truck was insured then the owner is to be indemnified by the Insurance Company. Mr. Roy has referred to the judgment of Jammu and Kashmir High Court in the case of Vijay Ram V/s. Janak Ram, 1981 ACJ 84 , wherein it was held that when the employer or the Insurance Company had not been given notice properly then for delayed payment, no penalty can be imposed. The present case does not fall within the similar category of the facts of the case reported. 5. In the case of S.D. Sharma V/s. Ramesh Mahakud and Anr. 1993 ACJ 385, the Orissa High Court held that conduct of employer for failure to pay compensation on due date has to be examined before attaching stigma of bad conduct of default and the employer should get opportunity to explain his conduct. Reliance was put by the Orissa High Court in the case of Hindustan Steel Limited V/s. State of Orissa AIR 1970 SC 253 . 6. Here the notice was given by the Commissioner and then Insurance Company filed objection before the Commissioner but still no payment was made within the due date. So the case referred to above has got no bearing in the present case. In the case of Himachal Pradesh High Court in Dromati Devi V/s. Sohan Singh and Ors., (1996-III-LLJ (Suppl.)-850), wherein it was held that interest and penalty can be imposed on the employer when he failed to make payment on the ground that the same has to be paid by the Insurance Company but without giving any information to the Insurance Company when he took the only plea before the Commissioner that liability of payment of compensation is to be indemnified by the Insurance Company. In that context it was held that the owner could have deposited the compensation amount and tried for indemnifying the same but without doing so, he had only maintained that the compensation should be paid by the Insurance Company and as such it was held by the Himachal Pradesh High Court that the interest and the penalty cannot be imposed on the Insurance Company. I respectfully differ from the decision of the Himachal Pradesh High Court. In the present case, both the owner and the Insurance Company were given notice and both of them had appeared. The Insurance Company when made their appearance and the owner shifted his burden to Insurance Company for indemnification legally, then Insurance Company could have deposited the amount and then contest regarding indemnification to avoid penalty and interest. But without doing so, the Insurance Company fully knowing about its liability raised objection that it was not liable to indemnify owner although the factory was insured with them at the relevant time. In that way, the Insurance Company cannot plead for the benefit of non-payment of the amount of compensation within the due date. If it would have been the case that there was no notice to the Insurance Company then the legal inference would have been otherwise, but in the present case, such sort of plea is not there rather the Insurance Company was denying its liability. When after notice also, the Insurance Company failed to deposit the amount of compensation and started contesting the whole liability, then the legal consequence must be borne by the Insurance Company and none else when the deceased was admittedly in service at the relevant time. 7. In view of the discussions made above, I do not find any defect in the order passed by the learned Court below and, hence, the appeal is dismissed having no force but without costs.