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2000 DIGILAW 203 (MP)

BISESAR v. GOVIND OIL MILL

2000-02-29

A.K.MISHRA

body2000
MISHRA, J. ( 1 ) MISC. Appeal No. 186 of 1994 has been filed against the order dated 10. 1. 1994 passed in Case No. 8 of 1990 by Commissioner for Workmen's Compensation. A sum of Rs. 10,500 was ordered to be paid to Bisesar, or else the interest at the rate of 6 per cent per annum would be recoverable, over the said amount. Misc. Appeal No. 211 of 1994 has been filed by Bisesar on the ground that penalty and interest ought to have been ordered to be paid as per the provisions of section 4 of the Workmen's Compensation Act. Bisesar, who is appellant in Misc. Appeal no. 211 of 1994, had filed claim petition before the Commissioner for Workmen's compensation, Rajnandgaon under the provisions of Workmen's Compensation act. Deceased Dasru, the father of appellant in Misc. Appeal No. 211 of 1994 was working as a coolie in Govind Oil Mill, rajnandgaon. On 10. 10. 1979 in the night hours while deceased Dasru was on duty in the said oil mill, he died an accidental death. At the time of accident, deceased was aged about 30 years and was receiving the salary of Rs. 450 per month, Govind oil Mill was insured with National Insurance Co. Ltd. , Rajnandgaon. A sum of rs. 21,000 was claimed along with interest and penalty. ( 2 ) GOVIND Oil Mill, the non-applicant no. 1 in M. A. No. 211 of 1994 contended in the reply that claim petition was filed belatedly and the same was dismissed in default of appearance. However, it was held that deceased was a workman and he died during the course of employment. The liability was held to be that of the insurer to pay the compensation. ( 3 ) THE insurer National Insurance Co. Ltd. also filed its reply and contended that intimation of the accident was given to the insurer with respect to the death of Dasru. Insurance company further contended that govind Oil Mill was insured with respect to Dasru for the period between 20. 7. 1979 and 19. 7. 1980 and premium of Rs. 228 was paid to it. The insurance company could be held liable only to the extent of its proportionate liability. ( 4 ) COMMISSIONER for Workmen's Compensation framed as many as nine issues. It was held that deceased Dasru was earning Rs. 450 per month. 7. 1979 and 19. 7. 1980 and premium of Rs. 228 was paid to it. The insurance company could be held liable only to the extent of its proportionate liability. ( 4 ) COMMISSIONER for Workmen's Compensation framed as many as nine issues. It was held that deceased Dasru was earning Rs. 450 per month. The Commissioner held the insurance company as well as the owner of Govind Oil Mill jointly and severally responsible to indemnify the claimant bisesar. The award of Rs. 21,000 was passed. It was further held that insurer shall pay half of the amount and remaining half amount shall be paid by the owner of the Govind Oil Mill. It was ordered to be deposited within a period of one month, failing which it was also ordered that the amount would carry interest at the rate of 6 per cent per annum. ( 5 ) THE owner has now come in the appeal No. 186 of 1994 on the ground that insurer ought to have been directed to pay the entire compensation, not half of it, whereas the Appeal No. 211 of 1994 has been filed by claimant Bisesar for interest and penalty from the date of accident till realisation of the payment. ( 6 ) IT may be seen that law with respect to payment of interest and penalty has been settled in the case of Ramcharan v. Karyapalan Yantri, Lok Nirman Vibhag, 1991 ACJ 1065 (MP), this court considered the payment of interest and penalty. In this case it was held that the award which could be passed by the Commissioner could be not merely for compensation provided in the Schedule of the Act but for interest and penalty also. Indeed, the Commissioner was required to pass a just award to settle fully the claim preferred to discharge its own statutory duty contemplated under sections 4-A, 19 and 22 of the Act. Reliance was further placed on the decision of this court in the matter of Divisional Engineer, M. P. Electricity board v. Mantobai, 1989 ACJ 498 (MP), wherein it was held that the liability contemplated under section 4-A, of payment of interest and penalty was indefeasible despite the use of the word 'may' in subsection (3) thereof. Reliance was further placed on the decision of this court in the matter of Divisional Engineer, M. P. Electricity board v. Mantobai, 1989 ACJ 498 (MP), wherein it was held that the liability contemplated under section 4-A, of payment of interest and penalty was indefeasible despite the use of the word 'may' in subsection (3) thereof. ( 7 ) IN the case of Ved Prakash Garg v. Premi Devi, 1998 ACJ 1 (SC), Hon'ble apex Court has considered the question of payment of interest and penalty. It was held by the Supreme Court that insurance company will not only be liable to pay the principal amount of compensation but also the interest thereon, if any, imposed by the commissioner under sections 3 and 4-A (3) (a) of the Workmen's Compensation act. It cannot be said by the insurance company that when it is statutorily and contractually liable to reimburse the employer qua his statutory liability to pay compensation to the claimants, the interest on the principal amount which almost automatically gets foisted upon him once the compensation amount is not paid within one month from the date, it fell due. Thus the principal amount as well as interest made payable thereon is part and parcel of the legal liability of the insured to pay the compensation. ( 8 ) IT was further held by the Supreme court in that very matter of Ved Prakash, 1998 ACJ 1 (SC), that it is of course true that one month's period as contemplated under section 4-A (3) may start running for the purpose of attracting interest under sub-clause (a) thereof in case where provisional payment has to be made by the insured employer as per section 4-A (2) of the Workmen's Compensation Act from the date such provisional payment becomes due. But when the employer does not accept his liability as a whole then section 4-A (2) would not get attracted. But when the employer does not accept his liability as a whole then section 4-A (2) would not get attracted. Supreme court in para 9 of the judgment in the case of Ved Prakash (supra) has considered the amended section 4-A (3) as also the said unamended provision and it was held that there was clear distinction made by the legislature applied at the relevant time between the imposition of penalty by way of further sum not exceeding fifty per cent of the compensation amount and the imposition of interest on the amount of compensation found payable when it is not paid within the requisite time as and when it fell due. It was further held that once the compensation fell due, it should be paid within one month, and no question of distinction in the circumstances, shall arise for consideration for any delay. It was further held by the Supreme Court that when the employer does not accept his liability as a whole then section 4-A (2) would not get attracted and one month's period would start running from the date on which due compensation payable by the employer is adjudicated upon by the Commissioner and in either case the Commissioner would be justified in directing payment of interest in such contingencies not only from the date of award but also from the date of accident concerned. Such an order passed by the commissioner would remain perfectly justified on the scheme of section 4-A (3) (a) of the Compensation Act. ( 9 ) THUS in the present case though the liability was admitted by the owner but still the owner has failed to discharge the liability, hence from the date of accident dated 10. 10. 1979, interest at the rate of 6 per cent per annum ought to have been ordered to be paid with respect to the death of Dasru, on the sum of Rs. 21,000 determined by the Commissioner for workmen's Compensation. ( 10 ) IT may further be seen that question of penalty was also considered by the Supreme Court in the said decision of Ved prakash, 1998 ACJ 1 (SC), and it was laid down that the liability to pay penalty is upon the owner and it cannot be fastened on the insurance company, as it is the personal fault of the owner. Not backed-up by justifiable cause, the insurance company could not be made liable to reimburse the penalty amount imposed on the employer. The insured owner will have to bear the entire burden of the said penalty amount with proportionate interest thereon, imposed by the Commissioner for Workmen's Compensation. ( 11 ) IN the present case, the penalty has not been imposed by the Commissioner for Workmen's Compensation. It is a case where fifty per cent penalty ought to have been imposed, i. e. , Rs. 10,500 ought to have been paid by Govind Oil Mill, to the claimant. It is ordered that claimant is entitled to get penalty of Rs. 10,500 from govind Oil Mill. Insurance company will have no liability to pay any sum towards penalty. The interest is not being imposed on the penalty amount as the penalty was not awarded by the Commissioner for workmen's Compensation. ( 12 ) WITH respect to the appeal filed by the insured owner it may be seen that the insurance company did not lead any evidence in order to show that its liability was proportionate and was not liable to reimburse fully. However, in view of the admitted position the owner and the insurance company to indemnify with respect to the amount of compensation and Tribunal has also recorded the finding that liability is joint and several to reimburse the amount of compensation and only thereafter in the concluding para it was ordered that 50 per cent amount should be paid by the owner and remaining 50 per cent by the insurance company. However, in view of the finding recorded by the Commissioner for Workmen's Compensation that the liability was joint and several and the insurance company has not challenged that finding, it is directed that amount of Rs. 21,000 shall be paid by the insured owner and the insurer jointly and severally along with interest at the rate of 6 per cent per annum from the date of accident, i. e. , 10. 10. 79. The appeal which is filed by the owner is allowed to the extent indicated above. 21,000 shall be paid by the insured owner and the insurer jointly and severally along with interest at the rate of 6 per cent per annum from the date of accident, i. e. , 10. 10. 79. The appeal which is filed by the owner is allowed to the extent indicated above. ( 13 ) IN the result, the Appeal No. 211 of 1994 filed by the claimant with respect to the award of interest and penalty is allowed and so far as the appeal filed by the insured owner, i. e. , M. A. No. 186 of 1994 is concerned, insurance company and the insured owner, both are liable to pay the amount of compensation, jointly and severally with interest at the rate of 6 per cent per annum from the date of accident till the realisation of the amount. Thus the claimant is held entitled to receive the sum of Rs. 21,000 along with interest at the rate of 6 per cent per annum from the date of accident, i. e. , 10. 10. 79 within a period of two months. Penalty without interest will be paid by the owner. Parties to bear their own costs. Orders accordingly. .