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Gauhati High Court · body

2007 DIGILAW 125 (GAU)

Oriental Insurance Co. Ltd. v. Sukhen Debnath

2007-02-07

RANJAN GOGOI

body2007
1. Both these appeals having raised common questions of law on more or less identical facts were heard together and are being answered by this common judgment and order. 2. Before adverting to the facts of the cases under consideration and the necessary discussions that will have to follow it may be apposite to notice herein the common questions of law that arises in the two appeals under consideration. The first question is with regard to the power of the Commissioner, Workmen Compensation, to determine the loss of earning capacity at 100%, following permanent disablement which is partial, in the event such partial disablement renders the victim unable to sustain his previous employment. The second question of law is with regard to the liability of the Insurer to pay interest on such compensation as may be awarded by the learned Commissioner. 3. MFA(WC) 4 of 1999 arises out of a claim case registered and numbered as T.S.(WC) 19 of 1997 in the Workmen's Compensation Court. In an accident involving the claimant in that case which occurred on 31.1.1997 the claimant suffered multiple fractures on the left leg. He was certified by a disability certificate dated 25.6.1998 to be permanently disabled but to the extent of 25%. The learned Commissioner, Workmen Compensation, by judgment and order dated 23.12.1998 took the view that, as the claimant was employed as a driver of a heavy vehicle, though the disability suffered by him had been certified to be to the extent of 25%, in fact, on account of such disability the claimant was unable to sustain his previous employment and therefore his loss of earning capacity should be taken to be 100%. On that basis an amount of Rs. 2,51,904 has been awarded as compensation along with interest at the rate of 12% per annum from the date of the accident. The amount has been directed to be satisfied by the Insurance Company which is in appeal before this Court. MFA(WC) No. 5 of 1999 similarly arises out of a proceeding registered and numbered as T.S.(WC) No. 24 of 1998. The accident in question occurred on 13.8.1997 leaving the claimant who was an Assistant -cum-Cleaner of a Truck, with injuries on his left leg which had become shorter by 2 ½ inches. MFA(WC) No. 5 of 1999 similarly arises out of a proceeding registered and numbered as T.S.(WC) No. 24 of 1998. The accident in question occurred on 13.8.1997 leaving the claimant who was an Assistant -cum-Cleaner of a Truck, with injuries on his left leg which had become shorter by 2 ½ inches. The learned Commissioner taking the same view as in the earlier case held that the disablement of the claimant, though partial, had resulted in 100% loss of earning capacity as he was unable to sustain the previous employment. On that basis compensation of Rs. 2,71,656/- along with interest at the rate of 12% per annum from the date of the accident has been awarded by the judgment and award dated 5.2.1999 by the learned Commissioner. As the compensation and interest thereon has been made payable by the Insurance Company the appeal in question has been filed. 4. I have heard Mr. S. M. Ali, learned counsel appearing for the appellants in both the appeals and Mr. S. Deb and Mr. P.K. Pal, learned counsels appearing for the respondents-claimants in the two appeals under consideration. 5. Under the provisions of the Workmen's Compensation Act, 1923, 'partial disablement' and 'total disablement' are defined expressions. The definitions as contained in Sections 2(g) and 2(1) of the Act being relevant may be reproduced herein. S. Deb and Mr. P.K. Pal, learned counsels appearing for the respondents-claimants in the two appeals under consideration. 5. Under the provisions of the Workmen's Compensation Act, 1923, 'partial disablement' and 'total disablement' are defined expressions. The definitions as contained in Sections 2(g) and 2(1) of the Act being relevant may be reproduced herein. "2(g) "partial disablement" means, where the disablement is of a temporary nature, such disablement as reduces the earning capacity of a workman in any employment in which he was engaged at the time of the accident resulting in the disablement, and, where the disablement is of a permanent nature, such disablement as reduces his earning capacity in every employment which he was capable of undertaking at that time : provided that every injury specified [in Part II of Schedule I] shall be deemed to result in permanent partial disablement; 2(1) "total disablement" means such disablement, whether of a temporary or permanent nature, as incapacitates a workman for all work which he was capable of performing at the time of the accident resulting in such disablement: [Provided that permanent total disablement shall be deemed to result from every injury specified in Part I Schedule I or from any combination of injuries specified in Part II thereof where the aggregate percentage of the loss of earning capacity, as specified in the said Part II against those injuries, amounts to one hundred per cent or more ;]" 6. Section 4 of the Act provides the mode of determination of compensation. Under section 4(b) in case of permanent total disablement compensation equal to 60% of the monthly wages of the injured workman multiplied by the relevant factor, as*prescribed, or an amount of Rs. 90,000, whichever is more, is payable. Section 4 of the Act provides the mode of determination of compensation. Under section 4(b) in case of permanent total disablement compensation equal to 60% of the monthly wages of the injured workman multiplied by the relevant factor, as*prescribed, or an amount of Rs. 90,000, whichever is more, is payable. In case of permanent partial disablement, section 4(c) of the Act provides that in the event of any of the injuries specified in Part II of Schedule I to the Act the compensation amount should be such percentage of the compensation payable in case of permanent total disablement which is equal to the loss of earning capacity as specified for the injury by Part-II of Schedule-I. In case of non-scheduled injuries the compensation should be equal to the percentage of compensation payable in case of permanent total disablement as is proportionate to the loss of earning capacity permanently caused by the injury in question which earning capacity is to be assessed by a qualified medical practitioner. 7. Having noticed the definitions of partial and permanent disablement as contained in the Act and the provisions of section 4 dealing with the manner of computation of the compensation amount the first question that has arisen in these appeals, namely, whether a permanent partial disablement can lead to 100% loss of earning capacity needs to be addressed. The above question does pose a potent issue inasmuch as in the given facts of a case while disablement may be partial, yet on account of such disablement the victim may be unable to sustain his previous employment or secure any meaningful employment. In such a situation, would it be authorized by the provisions of the Act to grant compensation on the basis that though disablement has been partial the loss of earning capacity is complete ? 8. The view taken by the Apex Court in the case of Pratap Narain Singh Deo v. Srinivas Sabata and Another, (1976) 1 SCC 289 , on which much reliance has been placed by the learned counsels for the claimants-respondents, on a plain reading, may appear to be capable of providing an answer to the question posed in the affirmative. In Pratap Narain Singh Deo (supra) the injuries suffered by the claimant was amputation of the left arm above the elbow. In Pratap Narain Singh Deo (supra) the injuries suffered by the claimant was amputation of the left arm above the elbow. On behalf of the party resisting the claim an argument was advanced that the said injury is covered by Item No. 3 of Part II of Schedule I and, therefore, compensation is to be computed by following the provisions contained in section 4(c) of the Act. On behalf of the claimant the contention advanced was that because of the said injury the claimant was unable to sustain his previous employment, i.e., that of a carpenter and that his prospects of earning a livelihood as a carpenter were also non­existent. The learned Commissioner, Workmen's Compensation who adjudicated the claim in the first instance, took the view that as the injured workman was a carpenter by profession and he had lost all prospects of working as a carpenter because of the loss of the left limb, his loss of earning capacity should be assessed at 100%. The above view of the learned Commissioner received the approval of the Apex Court. Relying on the aforesaid judgment of the Apex Court reported in Pratap Narain Singh Deo (supra) several High Courts in the country have taken a similar view. In particular, reference may be made to the similar views of the Andhra Pradesh High Court in the cases of National Insurance Co. Ltd. v. Mohd. Saleem Khan and Others, (1993) 1 ACJ 181; Oriental Insurance Co. Ltd. v. Koti Koti Ready and Another, (2001) 1 ACJ 244 and Lingampalli Rajan (deceased) through LRs v. Colliery Manager, Morgan's Pit, Singareni Collieries Co. Ltd., (2001) 1 ACJ 350. The similar views of the Karnataka High Court are to be found in the judgments in the cases of K.P. Hanumantha Gowda and Another v. Devaraju and Another, (1996) 1 ACJ 102 and in United India Insurance Co. Ltd. and Another v. Boregowda, (2000) II ACJ 1255. The Hon'ble High Court of Madhya Pradesh has also taken a similar view in the judgment in the case of Shankarlal v. General Manager, Central Railway, Bombay V.T. and Another, (1990) II ACJ 1028. Ltd. and Another v. Boregowda, (2000) II ACJ 1255. The Hon'ble High Court of Madhya Pradesh has also taken a similar view in the judgment in the case of Shankarlal v. General Manager, Central Railway, Bombay V.T. and Another, (1990) II ACJ 1028. Citing the aforesaid decisions the learned counsels for the respondent-claimants in these appeals have vehemently contended that in the face of the decision of the Apex Court in Pratap Narain Singh Deo (supra) and the views of the several High Courts, as noted above, this court should unhesitatingly take a similar view which will entail dismissal of the appeals. 9. The court in its quest to find out as to whether the views of the Apex Court in Pratap Narain Singh Deo (supra) have been subsequently understood as laying down any general principle of law made every endeavour to go through the huge catalogue of cases on the point decided after Pratap Narain Singh Deo (supra). The result of the exercise undertaken appears to have borne fruit as in the case of Amar Nath Singh v. Continental Constructions Ltd., New Delhi, (2001) 10 SCC 760 , the Apex Court has held that "the decision in Pratap Narain Singh Deo (supra) turned on its own facts, therefore, the principles therein cannot be extended to the present case". What logically follows from the aforesaid observation of the Apex Court in Amar Nath Singh (supra) is that it will not be correct for this court to hold that it is a general proposition of law that whenever partial disablement results in the workman losing his former employment, loss of earning capacity has necessarily to be assessed at 100% while working out the compensation package. Such a consequence though possible in the given facts of the case need not, however, follow as an invariable rule. This, in the opinion of the court, would be the correct position in law as on date. All would depend on the facts of a given case and the kind of evidence that is brought before the Workmen's Compensation Court for adjudication of the claims made before it. 10. In the present cases, evidence was led by the workmen claimants to the effect that because of the injuries sustained they had lost their employment as a Driver and an Assistant-cum-Cleaner, respectively, as their services were dispensed with by their respective employers. 10. In the present cases, evidence was led by the workmen claimants to the effect that because of the injuries sustained they had lost their employment as a Driver and an Assistant-cum-Cleaner, respectively, as their services were dispensed with by their respective employers. No evidence was, however, led by the workmen to show that they were not gainfully employed at all or that in spite of their best efforts they could not secure any employment in their earlier trade. Evidence was also not led before the learned Workmen's Commissioner, particularly in the claim case giving rise to MFA(WC) No. 5/1999 as to the extent of physical disability duly certified by the competent authority. That apart, the disability certificate exhibited in the proceeding out of which MFA (WC) No. 4/99 has arisen was valid for a period of three years. In such circumstances, I am of the view that the learned Commissioner ought not to have assessed the earning capacity at 100% merely because the workmen before it were unable to sustain their previous employment. Such a satisfaction or finding could have been reached if some other relevant evidence and materials were available before the learned Commissioner, which, however, were not forthcoming. Furthermore, assessment of loss of earning capacity under section 4(c)(2) i.e. in case of non-Scheduled injuries has to be worked out on the basis of medical evidence. This is an exercise that the learned Commissioner had not undertaken. 11. For the aforesaid reasons I am of the view that it would be just and correct to cause a remand of the present cases to the learned Workmen's Compensation Court for a fresh adjudication to be completed as expeditiously as possible and in any case within six months from the date of receipt of this order and the connected records. 12. The question of liability of the Insurance Company to pay interest on the awarded sum would naturally lose much significance in view of the remand order that this court has passed. However, in view of certain conflicting decisions on this point and the resultant confusion in the minds of the primary adjudicating authorities the court is of the view that the correct position in law, as perceived by the court, needs to be spelt out in the larger interest of administration of justice. 13. However, in view of certain conflicting decisions on this point and the resultant confusion in the minds of the primary adjudicating authorities the court is of the view that the correct position in law, as perceived by the court, needs to be spelt out in the larger interest of administration of justice. 13. Under the Workmen's Compensation Act an employer need not statutorily be covered by an insurance to indemnify himself against claims arising under the Act. This is in distinction to the provisions of the Motor Vehicles Act which require the owner of a motor, vehicle to ply a vehicle on the road only after the same is covered by a statutory insurance. Unlike the Motor Vehicles Act the primary obligation to satisfy a claim under the Workmen's Compensation Act is on the employer; only on failure of the employer the liability of the Insurance Company arises. Such liability, however, arises from the contract of insurance entered into by the Insurer and the employer and not by operation of the Statute as in the case of a liability under the Motor Vehicles Act. It may so happen that a claim for compensation under the Workmen's Compensation Act arises out of an accident involving a motor vehicle, as in the present cases. In such cases the liability of the Insurer to pay the compensation amount, as may be assessed, arises not from the provisions of the Workmen's Compensation Act but such liability stems from the contract of Insurance between the Employer and the Insurer in terms of the statutory coverage mandated by section 147 of the Motor Vehicles Act, which must extend to claims that may be made against the employer under the Workmen's Compensation Act on account of death or bodily injuries suffered by a workman in the course of or arising out of his employment in connection with a motor vehicle. While the Apex Court in the case of Ved Prakash Garg v. Premi Devi and Others, (1997) 8 SCC 1 , appears to have laid down that the statutory liability of the Insurer under the Motor Vehicles Act to indemnify the employer against claims made under the Workmen's Compensation Act would also extend to payment of interest, two subsequent decisions of the Apex Court that have come in the meantime must be noticed. The first is the decision in the case of P.J. Narayan v. Union of India and Others, (2006) 5 SCC 200 and the second is the case of New India Assurance Co. Ltd. v. Harshadbhai Amrutbhai Modhiya and Another, (2006) 5 SCC 192 . In both the aforesaid decisions the Apex Court has taken the view that in the absence of any statutory provision in the Workmen's Compensation Act requiring compulsory insurance or the extent thereof, the liability of the Insurer, in so far as interest is concerned, will be governed by the terms of the contract. The following observation of the Apex Court as contained in paragraph 19 of the decision in New India Assurance Co. Ltd. (supra) would amply sum up the situation. "19. As indicated hereinbefore, a contract of insurance is governed by the provisions of the Insurance Act. Unless the said contract is governed by the provisions of a statute, the parties are free to enter into a contract as for their own volition. The Act does not contain a provision like section 147 of the Motor Vehicles Act. Where a statute does not provide for a compulsory insurance or the extent thereof, it will bear repetition to state that the parties are free to choose their own terms of contract. In that view of the matter, contracting out, so far as reimbursement of amount of interest is concerned, in-our opinion, is not prohibited by a statute." 14. Though in the aforesaid judgment the Apex Court after noticing the judgment in Ved Prakash Garg (supra) has observed that in the case in hand it was not concerned with an accident that had occurred on account of the use of a motor vehicle, yet a careful analysis of the two subsequent judgments of the Apex Court would seem to lead to the conclusion that the correct position, as on date, with regard to liability of the Insurer for payment of interest would be that if such a risk is specifically excluded by the contract of insurance the liability of the Insurer to pay interest will not arise. Such liability will, therefore, depend on the specific terms of the Insurance policy. The above has also been the view of another Single Bench of this court in a proceeding registered and numbered as W.P.(C) No. 440 of 2005 (National Insurance Co. Ltd. v. Shri Kanai Dasgupta and Others). 15. Such liability will, therefore, depend on the specific terms of the Insurance policy. The above has also been the view of another Single Bench of this court in a proceeding registered and numbered as W.P.(C) No. 440 of 2005 (National Insurance Co. Ltd. v. Shri Kanai Dasgupta and Others). 15. In view of the discussion that has preceded, the judgments and awards dated 23.12.1998 and 5.2.1999, impugned in the present appeals, are hereby set aside and the matters are remanded for a de novo adjudication by the learned Tribunal on the basis of such fresh evidence as may be adduced by the parties. Such de novo adjudication shall be completed by the learned Commissioner, Workmen's Compensation, as already stated, within a period of six months from the date of receipt of a copy of this order and the connected records. 16. Consequently, both the appeals shall stand allowed to the extent indicated above. 17. Office to transmit a copy of this order along with the Lower Court records to the Commissioner, Workmen's Compensation, West Tripura, Agartala forthwith and without any delay.