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2003 DIGILAW 165 (KER)

New India Assurance Co. Ltd. v. Eldos

2003-02-28

K.A.ABDUL GAFOOR, K.THANKAPPAN

body2003
1. The Judgment of the Court was delivered by Abdul Gafoor, J.- The insurer has come up with this appeal mainly pointing out two aspects: (i) the insurer ought not to have been mulcted with the liability in the light of the contract which excludes payment of interest on the compensation amount as per the schedule to the policy and (ii) the compensation awarded is far greater when compared to the injury sustained. 2. The first among these two contentions really involves a substantial question of law whereas the latter does not. Therefore, in this appeal under S.30 of the Workmen's Compensation Act, 1923 (hereinafter referred to as "the Act" ), the first aspect alone need be examined. 3. The liability to pay interest arises out of S.4A of the Act which was introduced as per the Workmen's Compensation (Amendment) Act, 1959. The schedule to Ext. M-1 policy clearly indicates that the liability in terms of the said Amendment Act is undertaken by the insurer. But at the same time, a proviso is added in the said schedule that liability on account of failure on the part of the insured to comply with the requirement laid down under the Act shall not be fastened on the insurer. 4. It is in evidence that Ext. A-9 notice was issued by the workman concerned demanding payment of compensation not only on the employer, but also on the insurer. Ext. A-10 is the acknowledgement card. But the date thereof is not clear from the Order of the Commissioner for workmen's compensation or from the appendix to the order. There was an evasive statement in the written statement of the insurer that no intimation had been served on the insurer. Inspite of production of Exts. A-9 and A-10 by the workman, nobody was examined from the side of the appellant insurer. There-fore, it has to be taken that Ext. A-9 has been received as duly acknowledged in Ext. A-10. The contention regarding the interest payable by the insurer has to be dealt with in the light of the facts proved on the basis of this evidence. 5. True, there is a clause excluding payment of interest, but the schedule to Ext. M-1 indicates that the liability in terms of the Amendment Act, 1959 which includes interest is undertaken in the policy. The liability of the insurer is to indemnify the employer. 5. True, there is a clause excluding payment of interest, but the schedule to Ext. M-1 indicates that the liability in terms of the Amendment Act, 1959 which includes interest is undertaken in the policy. The liability of the insurer is to indemnify the employer. In other words, the liability of the employer has to be undertaken by the insurer. Insurers come under public sector. They undertake the liability to ensure payment to the workman concerned. There may be situations when the employer may be unable to pay it. Therefore, on the basis of a valid policy, it is a public duty conferred on them even though they indulge in commercial venture. When Ext. A-9 had been served on the appellant, the appellant, being a public sector undertaking engaged in the business of ensuring payment of compensation to the injured workmen, ought to have collected the necessary materials from the injured workman concerned to discharge its liability. There is no case for the appellant, either in the written statement or in the evidence adduced that they collected such details which was obligatory on the part of a public sector insurance undertaking like the appellant who had by contract undertaken to discharge the liability of the insured-employer to pay compensation to the injured workman. 6. When Ext. A-9 had been thus issued and duly acknowledged by Ext. 10, any interest payable from that date cannot be avoided even going by the terms of the policy. Therefore, we are of the view that the insurer is liable for the interest payable from the date of notice. The notice was sent earlier than the filing of the application. As per the impugned order, payment of interest from the date of application alone is ordered. Therefore, the appeal, reveals no ground for interference. The appeal is dismissed. No costs.