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2007 DIGILAW 474 (MP)

Mangilal v. Vishnu Patidar

2007-04-24

N.K.MODY

body2007
ORDER 1. Being aggrieved by the award dated 9.3.2004 passed by Commissioner for Workmen Compensation, Labour Court in Case No. 5/ 2000 whereby in a case of fracture of right leg, the learned Court below has awarded a sum of Rs. 82,765/- along with interest @ 6% per annum the present appeal has been filed. 2. Learned counsel for appellant submits that accident took place on 3.1.1999 while section 4-A of the Workmen Compensation Act was amended with effect from 15.9.1995 according to which appellant is entitled for interest @ 12% per annum. It is submitted that learned Court below committed error in awarding the interest @ 6% per annum. 3. Learned counsel for respondent No. 2 submits that undisputedly after the amendment, the appellant is entitled for interest @ 12% per annum but Insurance Company cannot be held liable for payment of amount of interest. For this contention, reliance is placed on a decision in the matter of P.J. Narayan v. Union of India and others [(2006) 5 sec 2000] wherein it was held that -- "Statutory liability under Workmen's Compensation Act, 1923 is on the employer and not on the insurer. Hence the insurance company stipulating in the insurance policy that it would be liable for compensation under the Workmen's Compensation Act and in the absence of statute, it could not be forced by the Courts to undertake the liability for interest also." Reliance was also placed on a decision of apex Court in the matter of New India Assurance Company v. Harshadbhai reported in [ 2006 (5) SCC 192 ] wherein the Hon. apex Court observed as under: "In Workmen's Compensation Act, there are no provisions corresponding to those in the Motor Vehicles Act, insisting on the insurer covering the entire liability arising out of an award towards compensation to a third party arising out of a motor accident. Neither in the Act nor in any other there is any provision which stands in the way of an Insurance Company and the insured entering into a contract confining the obligation of the Insurance Company to indemnify to a particular head or to a particular amount when it relates to a claim for compensation to a third party arising under the Workmen's Compensation Act. Therefore, the obligation of the Insurance Company clearly stands limited and the relevant proviso providing for exclusion of liability for interest or penalty has to be given effect to. The entitlement of the claimant under the Workmen's Compensation Act is to claim the compensation from the employer. As between the employer and the insurer, the rights and obligations would depend upon the terms of the insurance contract. Construing the contract involved here it is clear that the insurer has specifically excluded any liability for interest or penalty under the Workmen's Compensation Act and confined its liability to indemnify the employer only against the amount of compensation ordered to be paid under the Workmen's Compensation Act." 4. Learned counsel for appellant submits that from perusal of the policy, it is evident that there was no clause in the policy that Insurance Company shall not be liable for payment of compensation. Apart from this, it is submitted that no appeal has been filed by the Insurance Company. 5. Since as per the law, the liability of Insurance Company is for payment of compensation and there is no clause in the policy which includes the liability of payment of interest, therefore, so far as additional liability of interest is concerned, it is the respondent No.1 who shall pay to the appellant. Since the learned Court below has awarded 6% only which is against the law, therefore, this part of the order is modified to the extent that appellant shall be entitled for interest @ 12% per annum which shall be payable by the respondent No. 1. 6. With the aforesaid modification, the appeal stands disposed of.