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2001 DIGILAW 301 (MP)

NEW INDIA ASSURANCE CO. LTD. v. FATAMABAI

2001-04-03

R.D.VYAS, SHAMBHOO SINGH

body2001
SHAMBHOO SINGH, J. ( 1 ) THIS letters patent appeal is directed against the judgment and order dated December 2, 1997 passed by learned single Judge of this court in Misc. Appeal No. 250 of 1996. ( 2 ) THE facts of the case, in brief, are that kasam Mansuri, the husband of the claimant/respondent was employed as cleaner (Khalasi) by the non-applicant No. 1, the driver and son of the non-applicant No. 2, Jakir hussain, the owner of the truck bearing registration No. MPU 6433 on the salary of Rs. 600. 00 per month. On September 13, 1986 the deceased was helping the driver Jakir Hussain in loading cement bags in Vikram Cement factory situated at village Khore, Tehsil Javad, district Mandsaur. The deceased Kasam mansuri demanded amount of his wages as well as allowance for the period from April 1986 to september 13, 1986 which were outstanding against him. On account of this there ensued quarrel between Jakir Hussain and deceased kasam Mansuri. Jakir Hussain inflicted tummy-blows on his abdomen and throttled him as a result of which he died. Jakir Hussain was prosecuted for the offence under Section 302 i. P. C. and was convicted by the Sessions court. The claimant filed claim case seeking compensation under, the Workmen's compensation Act, 1923 (for short the Act)alleging that the death of Kasam Mansuri took place in the motor accident arising out of and in the course of his employment. The respondents resisted the claim. The learned commissioner held that the deceased died in the motor accident arising out of and in the course of employment and awarded compensation of Rs. 53,128. 00 and directed the insurance company to deposit this amount within one month from the date of the order failing which it shall have to pay interest at the rate of 6 per cent per annum from the date of accident till deposit and also pay Rs. 23,000. 00 as penalty. The non-applicant Insurance company filed M. A. No. 250796. 00 and directed the insurance company to deposit this amount within one month from the date of the order failing which it shall have to pay interest at the rate of 6 per cent per annum from the date of accident till deposit and also pay Rs. 23,000. 00 as penalty. The non-applicant Insurance company filed M. A. No. 250796. The Hon. single Judge of this Court, after hearing counsel for both sides, confirmed the finding of the commissioner that the deceased died in the motor accident arising out of and in the course of his employment and maintained the compensation amount also the order directing that if compensation was not paid within 30 days from the date of the order, the appellant insurance Company shall pay penalty. He reduced the amount of penalty to Rs. 10,000. 00. Hence this L. P. A. by the non-applicant Insurance Company. ( 3 ) SHRI H. G. Shukla, learned counsel for the Appellant, submitted that the commissioner as well as the Hon'ble single judge, fell in error in directing the appellant insurance Company to pay penalty. This order is against the pronouncement of the Supreme court in case of Ved Prakash Garg v. Premi devi and others AIR 1997 SC 3854 : 1997 (8)scc 1 : 1998-I-LLJ-363. On the other hand shri Kemkar, learned counsel for the respondent- claimant supported the impugned order passed by the Hon'ole single Judge. He contended that the penalty was not imposed under Section 4-A of the Act. This condition was put by the Commissioner so that the amount of compensation may be paid immediately. The decision of the Apex Court in case of Ved Prakash Garg (supra) is not applicable to this case. ( 4 ) IN this case, the controversy is centered round Section 4 of the Act. We, therefore, quote Section 4-A of the Act below :-"4-A Compensation to be paid when due and penalty for default- (1) Compensation under Section 4 shall be paid 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 based on the extent of liability which he accepts, and such payment shall be deposited with the Commissioner or made to the workman, as the case may be, without prejudice to the right of the workman 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 may direct that, in addition to the amount of the 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, a further sum not exceeding fifty percent of such amount shall be recovered from the employer by way of penalty. " ( 5 ) THE plain reading of this Section makes it clear that the liability of payment of compensation to the claimant is on the employer and if he does not make payment in accordance with the provisions of Section 4-A of the Act, he will be liable to pay penalty as may be imposed by the Commissioner. The amount of compensation under Section 4-A of the Act has to be paid as soon as it falls due. In case, where the employer accepts his liability to some extent, then he is under an obligation to make provisional payment based on the extent of liability which he accepts to the claimant directly or to deposit the same in the office of the Commissioner. But, where the employer does not accept his liability to pay compensation, then he is not required to make payment. Under such situation his liability to make payment would arise on adjudication of the matter. Their Lordships of the Supreme court in Ved Prakash Garg's case (supra)observed, 1998-I-LLJ-363 at 9. 368:"12. . . . . . . . It is obvious that such an obligation of the employer would not arise under Section 4-A sub-Section (2) if he totally disputes his liability to pay on grounds like the injured person being not his employee or that the accident was caused to him at a time when he was not in the course of employment or that the accident caused to him did not arise out of his employment. If such disputes are raised by the employer then his obligation to make provisional payment under sub-section (2) of Section 4-A would not arise and his liability would depend upon the final adjudication by the workmen's Compensation Commissioner at the end of the trial. If such disputes are raised by the employer then his obligation to make provisional payment under sub-section (2) of Section 4-A would not arise and his liability would depend upon the final adjudication by the workmen's Compensation Commissioner at the end of the trial. In that light when sub-section (3) of Section 4-A is seen it becomes obvious that once the compensation due under the Act becomes ascertained either provisionally under sub-section (2) or finally on adjudication by the Commissioner and if the employer does not pay the same within one month from the date it thus falls due, the Commissioner can direct under sub-clause (a) of Section 4-A (3) interest at the rate provided therein and also penalty as contemplated by sub clause (b) thereof. " ( 6 ) ABOUT interest, it was held that it is not imposed by way of penalty, therefore, the insurer is liable to pay compensation. Their lordships held that the liability of paying compensation is on the employer and if he makes default in payment of the compensation and penalty is imposed, it will have to be paid by him not by the insurer. Insurer reimburses the amount of compensation paid by employer to his employee. In view of this, the Insurance company is liable to reimburse the employer the compensation amount and interest thereof. If compensation amount is not paid within one month, and the Commissioner, after giving reasonable opportunity to the employer to show cause, takes the view that there is no justification for such delay on the part of the employer, he may impose penalty up to 50% of the principal compensation amount. As penalty is imposed under Section 4-A (3) (b) on account of personal fault of the employer, therefore, insurer cannot be made liable to reimburse the penalty amount. This penalty is imposed because of the fault and negligence of the employer and, therefore, he is to bear entire burden of this penalty amount with proportionate interest thereof. ( 7 ) IN the case in hand, the learned commissioner directed the Insurance company to pay compensation of Rs. 53,128. 00 within one month from the date of the order i. e. February 28, 1996, failing which it shall pay rs. 20,000/- as penalty, along with interest, at the rate of 6% per annum. ( 7 ) IN the case in hand, the learned commissioner directed the Insurance company to pay compensation of Rs. 53,128. 00 within one month from the date of the order i. e. February 28, 1996, failing which it shall pay rs. 20,000/- as penalty, along with interest, at the rate of 6% per annum. In our opinion, the learned Commissioner committed error in directing the Insurance Company to pay penalty of Rs. 20,000. 00 with interest as the liability of payment of compensation was on the employer and not on the Insurance Company. ( 8 ) IN our opinion, the Hon'ble single judge of this Court committed error in holding that the order of the Commissioner directing the Insurance Company to pay the penalty amount is correct. ( 9 ) IN the result, the appeal is allowed in part. The impugned order passed in M. A. No. 250796 is modified to the extent that the penalty amount of Rs. 10,0007- (as reduced by Hon. single Judge), shall be paid with interest at the rate of 6% per annum from the date of filing of claim application by the employee respondent/ non-applicant No. 3 Hasan Mohd. and not by the appellant non-applicant Insurance company. With this modification, the order passed in M. A. No. 250796 is confirmed. No order as to costs. .