Research › Search › Judgment

Rajasthan High Court · body

2004 DIGILAW 156 (RAJ)

Oriental Insurance Co. Ltd. v. Kaki Bai

2004-02-03

RAJESH BALIA, SUNIL KUMAR GARG

body2004
JUDGMENT 1. - This is an old matter and concerns the liability of insurance company to indemnify the employer in respect of awarding compensation under Workmen's Compensation Act. 1923 arid a claim made by the mother of dereased Kishore Kumar S/o Tulshi Das, who was employed on the vehicle.An award of Rs.74,872.80 p. as compensation was made in favour of 5 the claimant by the Workmen's Compensation Commissioner on 27th July, 1992 in Claim Case No. 79/89. The death was caused in an accident on 27.7.83. The deceased was employed as Driver on vehicle Truck No. DIG 5894. 2. In addition to compensation, a penalty of 20% and interest @12% 1c) per annum was awarded to the claimant for delayed payment of compensation. Since the vehicle was insured with the appellant company, Workmen's Compensation Commissioner held the insurance company liable to pay the entire sum including the amount awarded by way of penalty for default in making the payment in time and interest for delayed payment of cot dispensation under the Workmen's Compensation Act.Before the Workmen's Compensation Commissioner it was admitted that vehicle was jointly owned by non-claimants, Kishore Kumar S/o Tulshi Das and Manoj Kumar S/o Chunni Lal. whose residential addresses were shown to be where the respondents have been served in the case pending before the Workmen's Compensation Commissioner, Udaipur. 3. Aggrieved with the aforesaid award, the appellant filed an appeal 5 denying its liability to indemnify the owner of the vehicle. The said appeal was dismissed in limine by the learned Single Judge on 19.10.92, following the decision of this Court in Madan Gopal & Ors. v. Anandi Lal & Ors., 1972 RJC 210 laying down the liability of the insurance company commensuration with the liability of the employer even for the payment of to interest and penalty in view of Sections 13 and 19 of the Workmen's Compensation Act, 1923. 4. Against the said judgment, this appeal was preferred in 1994. While the respondent No. 2 Kishore Kumar has long since been served, the service on respondent No. 3, Manoj Kumar s/o Chunni Lal is awaited so far. By order dated 20.11.2002, the Court directed to effect the service of notice on Manoj Kumar at the address shown in the claims case and another notice may be sent to the counsel representing both the owners of the vehicle. By order dated 20.11.2002, the Court directed to effect the service of notice on Manoj Kumar at the address shown in the claims case and another notice may be sent to the counsel representing both the owners of the vehicle. Learned counsel has refused to accept the notice because his client has not turned Up. 5. In the facts and circumstances of the case, it is apparent that notice has been served on the counsel and in response to his call his client has not turned up. The information about this appeal has reached the said Manoj Kumar. Otherwise also, the interest of owners is wholly represented by the joint owner Kishore Kumar, who has been served in this case but who has preferred not to appear so far. In the facts and circumstances, we deem it just and proper to consider the service on counsel for respondents No. 2 and 3 appearing before the Workmen's Compensation Commissioner, who has declined to accept notice in spite of directions of the Court as sufficient on the respondent No. 3 also and also for the reason as stated above the respondent No. 2 duly represents the joint interest of respondents No. 2 and 3. 6. The controversy now stands settled with the decision of Supreme Court in Ved Prakash Garg v. Premi Devi, 1998 1 ACJ P-1 (SC) wherein it has been laid down that the Insurance Company is liable to indemnify theemployer in respect of legal liability. The legal liability extends to interest for delayed payment of compensation, but insurer's liability does not extend to liability incurred by the employer for payment of penalty on account of his own default, unless the additional premium is charged to undertake that liability also. 7. The case was followed in a Bench decision of this Court, of which one of us was party, in Oriental Insurance Co. Ltd. v. Vilas Devi & Ors., 2001 ACJ 950 after considering the earlier decision of this Court in United India Insurance Co. Ltd. v. Roop Kanwar, 1991 ACJ 74 (Rajasthan) and distinguished it and concluded that what is meant by 'legal liability' stands now concluded by the decision of Supreme Court in Ved Prakash's case (supra). Ltd. v. Vilas Devi & Ors., 2001 ACJ 950 after considering the earlier decision of this Court in United India Insurance Co. Ltd. v. Roop Kanwar, 1991 ACJ 74 (Rajasthan) and distinguished it and concluded that what is meant by 'legal liability' stands now concluded by the decision of Supreme Court in Ved Prakash's case (supra). The principle stated in Ved Prakash's case (supra) was as under: "On the aforesaid interpretation of these two statutory schemes, therefore, the conclusion becomes inevitable that when an employee suffers from a motor accident injury while on duty on the motor vehicle belonging to the insured employer, the claim for compensation payable under Compensation Act alongwith interest thereon if any, as imposed by the Commissioner, under Sections 3 and 4-A(3)(a) of the Compensation Act will have to be made good by the insurance company jointly with 1 the insured employer. But so far as the amount of penalty imposed on the insured employer contingencies contemplated by section 4-A(3)(b) is concerned as that is on account of personal fault of the insured not backed up by any justifiable cause, the insurance s company cannot be made liable to reimburse that part of the penalty amount imposed on the employer. The latter because of his own fault and negligence will have to bear the entire burden of the said penalty amount with proportionate interest thereon, if imposed by the Workmen's Commissioner". 8. In view of the aforesaid, this appeal must partly succeed. There is no indication anywhere on record that additional premium was paid by the employer to the Insurance Company for indemnifying him for the liability for penalty. 9. Therefore, following the aforesaid two decisions referred to above, it 15 must be held that insurance company is not liable in respect of liability arising out of award of penalty for delayed payment on account of default committed by the employer, respondents No. 2 and 3, in paying the compensation in time. 9. Therefore, following the aforesaid two decisions referred to above, it 15 must be held that insurance company is not liable in respect of liability arising out of award of penalty for delayed payment on account of default committed by the employer, respondents No. 2 and 3, in paying the compensation in time. However, the Insurance Company shall be liable for interest awarded on the compensation amount until the date of actual Payment.Accordingly, this appeal is partly allowed.Before parting with the decision, we make it clear that if the Insurance Company has already made full payment of the amount, the amount shall not be recovered from the claimants, but the Insurance Company shall be free to recover the same from the insured.There shall be no order as to costs.Appeal Partly Allowed. *******