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Rajasthan High Court · body

2005 DIGILAW 2403 (RAJ)

Oriental Insurance Company v. Gobari

2005-09-09

AJAY RASTOGI, V.K.BALI

body2005
Judgment Ajay Rastogi, J.-The Insurer has preferred this special appeal against Award dated 18.03.1991 passed by Commissioner, Tonk under Workmen Compensation Act, 1923, (“the Act”) in WCF Case No. 3/1990, which was upheld by learned Single Judge vide Judgment dated 07.04.1999 dismissing Civil Misc. Appeal No. 287/1992 filed by appellant (insurer). 2. Dependents of the deceased filed claim petition under the Act stating inter alia that Govind Bhil who was 22 years of age and employed as driver by Habib Khan (respondent No. 4) met with an accident during his employment while driving jeep RPE 6156, which collided with Truck (RRY 1040) on 312.1989 causing his death. The Commissioner after taking note of material on record, awarded Rs. 88,548/-as compensation under the Act to claimants alongwith interest 6% per annum and penalty to the tune of 50% of compensation, vide Award dated 18.03.1991 as per which liability to pay entire amount of compensation was fixed on the insurer. The insurer preferred appeal against the Award before learned Single Judge, though not assailing the determination of compensation amount but raising an objection about the liability imposed upon insurer with regard to penalty amounting to 50% of total compensation determined. Learned Single Judge after taking note of decision cited at the bar dismissed appeal of Insurer vide order dated 07.04.1999. Hence, this special appeal. 3. Shri Tripurari Sharma, Counsel for Insurer urged that the liability imposed upon Insurer to pay penalty under the impugned Award is not legally sustainable as it is against provisions of Section 4-A (3) (b) of the Act, which reads as under:-“4-A. Compensation to be paid when due and penalty for default - .(3) Whereany employer is in default in paying the compensation due under this Act within 1 month from the date it fell due, the Commissioner shall - .(b) if in, his opinion, there is no justification for the delay, direct that the employer shall, in addition to the amount of the arrears and interest thereon, pay a further sum not exceeding fifty per cent of such amount by way of penalty: Provided that an order for the payment of penalty shall not be passed under Clause (b) without giving a reasonable opportunity to the employer to show cause why it should not be passed.” .4. In support of his contention, Shri Sharma placed reliance upon decision of Apex Court in Ved Prakash Garg vs. Premi Devi, 1998 (1) TAC (SC) 215, which has also not been considered by learned Single Judge. .5. None appeared for claimants (respondents). 6. Shri Praveen Jain, Counsel for respondent No. 4 (insured) has urged that once the vehicle was insured and due intimation was sent to the Insurer about accident immediately without any loss of time, liability thus was on the Insurer to make payment of compensation under the Act without any further delay and when the delay has been made by the Insurer, it is liable to pay penalty and no error has been committed by learned Single Judge in rejecting the appeal. .7. It has come on record that total amount of compensation awarded was paid to the claimants in terms of order dated 210.1992 of learned Single Judge, and the impugned compensation stands fully complied with by the Insurer. .8. We have considered rival contentions of the parties and perused material on record. 9. Section 4-A of the Act provides compensation to be paid when due, and penalty for default, and if not paid within time stipulated, interest can also be awarded. According to Sub-section (3) to Section 4-A of the Act, if in the opinion of the Commissioner there is no justification coming forth on record for the delay in payment of compensation when due to the claimants, then in addition to the amount of arrears and interest thereon, the Commissioner can direct to pay a further sum not exceeding fifty per cent of such amount, by way of penalty. 10. The only controversy which has been raised in present appeal, is as to whether the Insurer is liable to pay penalty imposed by the Commissioner under impugned Award and affirmed by learned Single Judge in terms of Section 4-A (3) (b) of the Act in facts situation of the case. In other words, the issue is as to whether penalty imposed can be recovered either by Insurer or the employer (insured) in terms of Section 4-A(3)(b) of the Act. 11. The Apex Court in Vedprakash Garg vs. Premi Devi (Supra), in the context of penalty observed:-“... In other words, the issue is as to whether penalty imposed can be recovered either by Insurer or the employer (insured) in terms of Section 4-A(3)(b) of the Act. 11. The Apex Court in Vedprakash Garg vs. Premi Devi (Supra), in the context of penalty observed:-“... But similar consequence will not follow in case where additional amount is added to the principal amount of compensation by way of penalty to be levied on the employer under circumstances contemplated by Section 4-A (3) (b) of the Compensation Act after issuing show cause notice to the employer concerned, who will have reasonable opportunity to show cause why on account of some justification on his part for the delay in payment of the compensation amount he is not liable for this penalty. However, if ultimately 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 insured employer and because of his unjustified delay and due to his own personal fault he is held responsible for the delay, then the penalty would be imposed on him. That would add a further sum upto 50% on the principal amount by any of penalty to be made good by the defaulting employer.” (14 Para ) 12. It is true that the Apex Court held that so far as amount of penalty imposed on the insured employer under 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 Company cannot be made liable to reimburse that part of the penalty amount imposed under the impugned Award. 13. Be that as it may, the burden was on the Insurer to show that no intimation was sent and there was complete fault on the part of insured employer in complying with provisions for making payment towards compensation under the Act. That apart, there is further burden laid upon the Insurer to justify as to whether any additional premium was received from insured employer under its policy to cover all liabilities incurred by the insured under the Act. Thus, it was for the Insurer to show that as per contractual coverage of liability, it was not liable to meet all liability under the Act. Thus, it was for the Insurer to show that as per contractual coverage of liability, it was not liable to meet all liability under the Act. In present case, no such material has been placed either by insured employer or insurer-in the absence of which the insurer cannot be said to be justified in only submitting that penalty could not have been covered so as to be charged from insurer under Section 4-A (3)(b) of the Act. Contrarily, despite the plea taken by Insured employer in his reply to claim petition that all liability to meet the claim under the Act is upon the Insurer and not upon him and that claim form duly filled up was sent to the Insurer, the Insurer failed to place any documentary evidence on record to substantiate its case so as to exclude its liability to pay penalty under Section 4-A (3)(b) of the Act. 14. Consequently, this special appeal fails and is hereby dismissed. No order as to costs.