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Himachal Pradesh High Court · body

2009 DIGILAW 399 (HP)

NATIONAL INSURANCE COMPANY LTD v. SURJIT SINGH

2009-05-01

KULDIP SINGH

body2009
JUDGMENT Kuldip Singh, J.-This judgment shall dispose of FAO No. 220 of 2004 and FAO No. 214 of 2004, both having arisen from the order dated 31.3.2004 passed by the Commissioner, Workmen’s Compensation in case No.2 of 2001. FAO No.220 of 2004 has been filed by the insurer of truck No. HP-36-1837 for setting-aside the impugned award whereas FAO No. 214 of 2004 has been filed by the claimant for enhancement. The facts in the judgment are given from FAO No. 220 of 2004. 2. The facts, in brief, are that respondent No.1 Surjit Singh had filed petition claiming Rs.6,00,000/- along with 18% interest on account of 75% permanent disability suffered by him in an accident while driving truck No.HP-36-1837 on 14.10.1999 at about 9.00 p.m. near Ghanoli, District Ropar. The truck was owned by respondent No.2 Dilbag Singh and was insured by the appellant National Insurance Company. The case was reported vide rapat No.11 dated 15.10.1999. The petitioner was working as driver with respondent No.2 on the ill-fated truck at Rs.3000/- per month salary. The respondent No.1 sustained fractures in both the legs and has amputation of his right leg. The respondent No.1 had spent Rs. 2,00,000/- on his treatment. The disability of the respondent No.1 is 100% in relation to his earning capacity. 3. The respondent No.2 had filed reply and admitted that respondent No.1 was working with respondent No.2 as driver on truck No.HP-36-1837 in the year, 1999 on Rs.3000/- salary. The respondent No.2 admitted remaining contents of the petition and prayed for acceptance of the petition. The insurer contested the petition and took preliminary objections that the respondent No.1 was not holding valid and effective driving licence at the time of accident, as such, the insurer is not liable to pay any compensation. The vehicle was not insured. The respondent No.1 did not suffer injuries during the course of employment. The petition seems to be collusive with respondent No.2 , an objection of limitation was also taken. On merits, the insurer denied that respondent No.1 suffered injuries during the course of employment and ultimately prayer was made for dismissal of the petition. 4. The respondent No.1 filed rejoinder to the reply of insurer and submitted that claimant was holding valid driving licence which was valid upto 12.2.2001. The truck was insured from 22.6.1999 to 21.6.2000, disability of respondent No.1 had been assessed 90% by Medical Board. 4. The respondent No.1 filed rejoinder to the reply of insurer and submitted that claimant was holding valid driving licence which was valid upto 12.2.2001. The truck was insured from 22.6.1999 to 21.6.2000, disability of respondent No.1 had been assessed 90% by Medical Board. On merits, respondent No.1 denied the stand of insurer. FAO No. 214 of 2004 was admitted on 8.7.2004 without any reference to substantial questions of law but in the grounds of appeal, the following substantial questions of law have been framed:- 1. Whether the figure of income is to be taken as per the amended Act at the rate of Rs.4,000/- per month in view of the fact that case now stand decided after coming into force the amendment and as it has not been done by the Commissioner, amount awarded is liable to be enhanced? 2. Whether in view of the disability suffered by the claimant appellant, non-grant of expenses of helper by taking average life span, Commissioner below committed grave illegalities and irregularities and thus amount is liable to be enhanced? 2-A. Whether claimant is entitled for the amount of medicine & travelling spent by him? 3. Whether grant of interest at the rate of 6% per annum that too from the date of petition is bad in the eyes of law as interest is liable to be paid to the appellant at the rate of 9% per annum from the date of accident? 4. Whether non-grant of penalty for the amount not depositing in 30 days vitiated the award to that extent and penalty is liable to be ordered to be paid to the appellant and thus, amount of award is liable to be enhanced? 5. FAO No. 220 of 2004 was admitted on 5.3.2005 without reference to substantial questions of law but alongwith the appeal, the following substantial questions of law have been framed:- 1. Whether the award of the Commissioner suffers from illegality and is unsustainable in the absence of necessary issues and findings regarding employer-employee relationship? 2. Whether the Commissioner can assess the compensation by taking the monthly income other than the one prescribed under the Act? Or in other words whether the provisions of the WC Act 1923 as applicable on the date of accident i.e. 14.10.99, before the amendment of the Act, are inapplicable in the present case? 3. 2. Whether the Commissioner can assess the compensation by taking the monthly income other than the one prescribed under the Act? Or in other words whether the provisions of the WC Act 1923 as applicable on the date of accident i.e. 14.10.99, before the amendment of the Act, are inapplicable in the present case? 3. Whether the findings of the Commissioner with regard to collusion are erroneous? 4. Whether the Ld. Commissioner was justified in imposing the interest and penalty on award amount upon the insurance company in the absence of any contract or statutory provision empowering him to do so? In view of admission order dated 8.7.2004 and 5.3.2005 in FAO No. 214 of 2004 and FAO No. 220 of 2004, respectively, the above appeals were heard on aforesaid substantial questions of law. 6. I have heard Mr. Deepak Bhasin, Advocate learned counsel for insurance company, Mr. Ajay Sharma, Advocate, learned counsel for injured claimant in both the appeals and Mr. Sanjeev Bhushan, Advocate, learned counsel for owner of truck in FAO No. 220 of 2004. The counsel representing the insurer has submitted that Commissioner has mis-construed and mis-interpreted the material on record. The accident did not take place during the course of employment of injured with the owner of truck. The accident took place on 14.10.1999, therefore, entitlement of the injured, if any, would be in accordance with the Workmen’s Compensation Act, 1923 (for short ‘Act’) as on 14.10.1999 and not as per amendment carried out in the Act after 14.10.1999. The Commissioner while awarding compensation has applied Act with amendment carried out after 14.10.1999. The insurer has been wrongly burdened with interest and penalty. The learned counsel appearing on behalf of the injured while supporting the impugned order has submitted that the Commissioner has erred in not granting expenses of helper to the injured keeping in view of his disability. The injured is also entitled to amount of medicines and travelling expenses. The interest awarded is on the lower side and for less period. The injured is entitled to penalty also. 7. In FAO No. 220 of 2004 the insurer has filed an application under Section 151 C.P.C. dated 15.12.2008 for taking on record and reading in evidence a copy of statement of Surjit Singh respondent No.1 which was made by him before Commissioner. The said application was allowed on 24.4.2009. The injured is entitled to penalty also. 7. In FAO No. 220 of 2004 the insurer has filed an application under Section 151 C.P.C. dated 15.12.2008 for taking on record and reading in evidence a copy of statement of Surjit Singh respondent No.1 which was made by him before Commissioner. The said application was allowed on 24.4.2009. The statement of PW-1 Surjit Singh was taken on record with the direction that same would be read in evidence while considering the appeal on merits. FAO No. 220 of 8. The substantial questions of law No.1 and 3 which go to the root of the case are taken up first for consideration. The learned counsel for the insurer has submitted that the petition filed by respondent No.1 is collusive inasmuch as respondent No.1 is the son and respondent No.2 is the father of respondent No.1. It has been submitted that there was no relationship of master and servant between respondent No.2 and respondent No.1. The accident did not take place during the course of employment. The claim petition has been filed by respondent No.1 in collusion with respondent No.2 and therefore, respondent No.1 is not entitled to any amount of compensation. The issue of employee and employer relationship was not framed, nor findings to this effect were given, therefore, impugned order is not sustainable. 9. PW-1 Surjit Singh has stated that he was driver of truck No.HP-36-1837 since 1995 which was owned by Dilbag Singh. They were residing separately. On 14.10.1999 he had driving licence. The truck met with an accident on 14.10.1999 at 9.00 p.m. when he was driving the truck. The report to this effect was made at Police Post, Ghanoli on 15.10.1999, respondent No.2 was the owner of the truck which was insured with the insurer. He sustained injuries in the accident, his one leg was amputed on the spot and the second leg was injured seriously. He got his treatment at PGI, Chandigarh. He spent about Rs.1,50,000/- on medicines. He had been visiting PGI Chandigarh after discharge every month and on such visits he had incurred Rs. 30,000/-. He cannot move out. On his treatment, his wife had sold her jewellery. He has two children. In cross-examination, he has stated that truck was owned by his father. The driving licence was issued to him from Hoshiarpur in the year 1989-90. 30,000/-. He cannot move out. On his treatment, his wife had sold her jewellery. He has two children. In cross-examination, he has stated that truck was owned by his father. The driving licence was issued to him from Hoshiarpur in the year 1989-90. He denied that he was not driver on the truck. PW-3 Parkash Singh has proved rapat No.11 dated 15.10.1999 Ex.PW-3/A. RW-1 Manmohan Singh, Secretary, Gram Panchayat, Dhaliara, has stated that Surjit was residing in House No.12. In cross-examination, he has stated that Surjit and Dilbag were residing separately. Surjit Singh was residing in House No.12 and Dilbag was residing in House No.11. 10. RW-2 Dilbag Singh has stated that he purchased truck No.HP-36-1837 in the year, 1996. He denied that Surjit used to drive truck as owner, he used to drive truck as driver. In cross-examination, he has stated that he used to pay wages to Surjit. He submitted claim of the vehicle which was paid to him after verification of driving licence. Ex.RW-1/A is the copy of order dated 18.5.2001 of District Consumer Disputes Redressal Forum, Kangra at Dharamshala in case C.C. No. 480 of 2000 filed by Capt. Dilbag Singh against National Insurance Company. The perusal of order dated 18.5.2001 indicates that in the complaint, the stand of Dilbag Singh was that Surjit Singh was driving the truck No.HP-36-1837 on 14.10.1999. The Insurance Company in that complaint did not take the stand that Surjit Singh was not the driver of the truck. The objection of the Insurance Company was regarding the validity of the licence. In other words, the Insurance Company impliedly admitted that Surjit Singh was driving the truck but their objection was that he was not holding a valid and effective driving licence. The District Forum rejected the stand of the Insurance Company and awarded compensation amounting to Rs.1,90,000/- under various heads along with interest in favour of Dilbag Singh and against insurer. In appeal, H.P. State Consumer Disputes Redressal Commission vide order dated 20.11.2001 Ex.RW-1/B upheld the decision dated 18.5.2001 of District Consumer Forum but the quantum of compensation was reduced to Rs.1,25,000/- under different heads. The perusal of Ex.RW-1/B shows that before the H.P. State Consumer Disputes Redressal Commission also the Insurance Company had submitted that driving licence of Surjit Singh who was driving the ill-fated truck was got verified by the Surveyor. The perusal of Ex.RW-1/B shows that before the H.P. State Consumer Disputes Redressal Commission also the Insurance Company had submitted that driving licence of Surjit Singh who was driving the ill-fated truck was got verified by the Surveyor. Thus, in the beginning the stand of the Insurance Company was not that Surjit Singh was not the driver on the truck. The Insurance Company in the proceedings under the Act had taken the stand that Surjit Singh was not the driver on the truck under the respondent No.2. The ownership of the truck in favour of respondent No.2 was never disputed by the Insurance Company. Surjit Singh is married having children and it cannot be assumed that he was driving the truck of his father without any consideration or he was not being paid wages. Therefore, it can be safely assumed that on the date of accident, Surjit Singh was driving truck No.HP-36-1837 owned by respondent No.2 in the capacity of driver. There is no dispute that in the accident Surjit Singh sustained injuries. The truck was insured with the insurer on the date of accident. The issue No.1 of entitlement for compensation is a broader issue. It covers the controversy of employee and employer relationship. The parties knew each other case. It has caused no prejudice to any party. The findings on issue No.1 by Commissioner started with the admitted case of the parties that on the direction of Dilbag Singh injured as driver was driving the truck. Therefore, necessary findings on employee and employer relationship were recorded by Commissioner. 11. The plea of collusion of insurer is on the ground of relationship of respondent No.1 with respondent No.2. There is no bar in law that a son cannot be in the employment of his father as driver. In absence of evidence, such plea creates some suspicion but suspicion in itself is not a proof. In the present case, it has been proved as a fact that respondent No.1 was working as driver with respondent No.2 on truck No.HP-36-1837 at the time of the accident, the Insurance Company never denied the engagement of respondent No.1 as driver on truck No.HP-36-1837 when the proceedings were started by respondent No.2 against the Insurance Company under the Consumer’s Protection Act, 1985 as noticed above. In these circumstances, there is no collusion in between respondent No.1 and respondent No.2. In these circumstances, there is no collusion in between respondent No.1 and respondent No.2. No fault can be found with the findings recorded by the Commissioner in coming to the conclusion that accident took place during the course of employment of respondent No.1 with respondent No.2 on truck No.HP-36- 1837 while he was working as driver and there is no collusion in between respondent No.1 and respondent No.2 in filing the petition. The substantial questions of law No. 1 and 3 are decided against the appellant. 12. In so far as substantial question of law No.2 is concerned, the grievance of the learned counsel for the insurer is that the learned Commissioner has taken income of respondent No.1 Rs.3000/-per month and thereafter, calculated the amount of compensation. Explanation –II to Clause (b) of sub section 1 of Section 4 was amended on 8.12.2000 and before amendment the aforesaid Explanation –II was as follows:- “Explanation. II – where monthly wages of a workman exceed 2000 rupees, his monthly wages for the purposes of clause (a) and (b) shall be deemed to be 2000/- rupees only.” 13. The accident took place on 14.10.1999. On that date, as per Explanation-II of the Act, the wages of respondent No.1 could not be taken more than Rs.2000/- per month for calculating the compensation. The Commissioner took the wages of respondent No.1 Rs.3000/- per month in the impugned order. Therefore, to this extent, the impugned order is not sustainable. The appellant has not questioned the factor (except 211.79 instead 212), percentage of wages applied by Commissioner for calculating the compensation. Hence, the amount of compensation comes to Rs. 211.79 x 2000 x 60/100 = Rs. 2, 54,148.00. The substantial question of law No. 2 is accordingly answered in favour of appellant in FAO No.220 of 2004. 14. The learned counsel for the insurer has submitted that Commissioner has wrongly imposed interest and penalty on the insurer. The liability of payment of penalty under Section 4 A is on the employer but insurer is liable to pay the interest in case compensation is not paid when it fell due. The Supreme Court in Ved Prakash Garg Vs. Premi Devi and others (1997) 8 SCC 1 and in L.R. Ferro Alloys Ltd. Vs. The liability of payment of penalty under Section 4 A is on the employer but insurer is liable to pay the interest in case compensation is not paid when it fell due. The Supreme Court in Ved Prakash Garg Vs. Premi Devi and others (1997) 8 SCC 1 and in L.R. Ferro Alloys Ltd. Vs. Mahavir Mahto and another (2002) 9 SCC 450 has held that amount of compensation and interest is to be paid by insurer and penalty by owner. In the present case, admittedly, the compensation was not paid within one month when it fell due as per sub Section 3 of Section 4 (a), hence respondent No.2 and appellant are liable to pay compensation and interest on the amount of compensation, however, respondent No.2 is liable to pay penalty and to this extent, the impugned award is liable to be modified. FAO No.214 of 2004 15. The learned counsel for the injured has submitted that income of the injured is to be taken at Rs.4000/- per month in view of the amendment carried in the Act. The accident took place on 14.10.1999 and on that date for purpose of calculation of compensation, the maximum income of the injured could be taken Rs.2000/- per month. In view of the findings recorded on substantial question No.1 in FAO No.220 of 2004, the substantial question of law No.1 is decided against the injured. 16. The claim petition under the Act is to be decided in accordance with the Act. The amount of compensation is to be calculated as per Section 4 of the Act. Clause (c) of sub section 1 of Section 2 defines compensation which means compensation as provided for by the Act. In other words, only that compensation can be granted under the Act for which provision is made in the Act. The learned counsel for the injured has not pointed out any provision from the Act in order to claim expenses of helper, medicines under the Act. Therefore, injured is not entitled to compensation for the helper and expenses of medicines. The substantial questions of law No.2 and 2-A are decided against the injured. 17. The Commissioner has awarded interest in the impugned order at the rate of 6% per annum from the date of filing of the petition. Therefore, injured is not entitled to compensation for the helper and expenses of medicines. The substantial questions of law No.2 and 2-A are decided against the injured. 17. The Commissioner has awarded interest in the impugned order at the rate of 6% per annum from the date of filing of the petition. In substantial question of law No.3, interest at the rate of 9% per annum on the amount of compensation from the date of accident has been claimed by the injured. Sub Section 3 of the Act provides that where an employer is in default in paying the compensation due under the Act within one month from the date it fell due, the Commissioner shall direct the payment of simple interest. The Supreme Court in Pratap Narain Singh Deo Vs. Shrinivas Sabata and another, AIR 1976, S.C. 222, has held “the employer therefore became liable to pay the compensation as soon as the aforesaid personal injury was caused to the workman by the accident which admittedly arose out of and in the course of the employment.” In that case, the workman was injured on 6.7.1968. In view of Pratap Narain Singh Deo and sub section 3 of Section 4 A of the Act, in case compensation is not paid within one month from the date of accident, then employer is liable to pay interest. The accident took place on 14.10.1999, respondent No.2 employer of respondent No.1 or insurer did not pay compensation to respondent No.1 within one month from the date of accident and even thereafter, therefore, respondent No.2 and insurer of the truck are liable to pay interest to respondent No.1 on the amount of compensation from 14.11.1999 onwards at the rate of 9% per annum. The substantial question of law No.3 is accordingly decided. 18. The liability to pay the amount of compensation and interest was of the respondent No.2 and of the insurer. They failed to pay the amount of compensation and interest as per Act, therefore, according to Clause (b) of sub section 3 of Section 4 A of the Act, respondent No.2 is liable to pay penalty to respondent No.1 on the amount of compensation and interest. They failed to pay the amount of compensation and interest as per Act, therefore, according to Clause (b) of sub section 3 of Section 4 A of the Act, respondent No.2 is liable to pay penalty to respondent No.1 on the amount of compensation and interest. The respondent No.2 has not shown any reason for not paying the amount of compensation and interest to the respondent No.1 within the statutory time or within reasonable time, his only plea was that it was the liability of the insurer to pay compensation to respondent No.1. But liability of the insurer to pay compensation to respondent No.1 would not absolve respondent No.2. The insurer in view of contract with respondent No.2 and Act was liable to pay the amount of compensation and interest. The nonpayment of amount of compensation and interest attracts penalty under the Act which is to be paid by the employer. Therefore, keeping in view the facts and circumstances of the case, in my opinion, respondent No.2 is liable to pay 25% penalty on the amount of compensation which comes to Rs. 63,537/- within a period of two months from the date of judgment, failing which, respondent No.2 shall also be liable to pay interest at the rate of 9% on the amount of penalty till payment. The substantial question of law No.4 is decided in favour of the injured. 19. No other point was urged. 20. In view of the above discussion, both the appeals being FAO No. 220 of 2004 and FAO No.214 of 2004 are partly allowed and order dated 31.3.2004 passed by the Commissioner, Workmen’s Compensation Act (Sub Divisional Magistrate), Dehra, District Kangra, in case No. 2 of 2001 is modified and an award of Rs.2,54,148/- is passed in favour of injured – Surjit Singh and against the employer Dilbag Singh as well as insurer – National Insurance Company Ltd. along with simple interest at the rate of 9% per annum w.e.f. 14.11.1999 on Rs.2,54,148/- till payment. The insurer – National Insurance Company shall pay the whole of the amount of compensation along with interest to injured Surjit Singh. The employer Dilbag Singh on amount of Rs.2,54,148/- shall pay 25% penalty i.e., Rs.63,537/- to injured Surjit Singh within two months, failing which on Rs. 63,537/- interest at the rate of 9% shall also be payable by the employer Dilbag Singh to injured Surjit Singh till payment. The employer Dilbag Singh on amount of Rs.2,54,148/- shall pay 25% penalty i.e., Rs.63,537/- to injured Surjit Singh within two months, failing which on Rs. 63,537/- interest at the rate of 9% shall also be payable by the employer Dilbag Singh to injured Surjit Singh till payment. No costs. 21. Before parting with the judgment, it has come to my notice that two pages of the statement of PW-1 Surjit Singh were missing from the file of Commissioner. It appears the Insurance Company had taken certified copy of statement of PW-1 Surjit Singh and a copy thereof was placed on record in FAO No. 220 of 2004. As per index of record of file No.2 of 2001 of the Commissioner, the file has pagination from 1 to 406, the statements are from pages 49 to 68. The statement of PW-1 Surjit Singh is on pages 51 to 53. On the file page number has been marked on the front side of the page and no page number has been marked on reverse side of the page but while doing pagination of the file, the reverse side of the page has been counted as an independent page. In FAO No.220 of 2004 a copy of statement of PW-1 Surjit Singh has been taken on record and in running pages it is in five pages whereas in the Commissioner file in running pages, the statement of PW-1 Surjit Singh is in three pages. In other words, two pages of the statement of PW-1 Surjit Singh are missing from the file of the Commissioner. It is a very serious matter how two pages from the statement of PW-1 Surjit Singh were taken out from the file. The Commissioner below within two months from the date of receipt of certified copy of this judgment shall complete the inquiry and fix the responsibility how two pages of the statement of PW-1 Surjit Singh were taken out from the file. After the inquiry, appropriate action shall be initiated against the defaulting official. Such inquiry shall be completed by the Commissioner and Commissioner shall submit action taken report to this Court within two months from the date of receipt of case file No.2 of 2001. After the inquiry, appropriate action shall be initiated against the defaulting official. Such inquiry shall be completed by the Commissioner and Commissioner shall submit action taken report to this Court within two months from the date of receipt of case file No.2 of 2001. The Registry is directed to immediately transmit the record of case file No.2 of 2001 to Commissioner along with certified copy of the judgment as well as attested photocopy of the statement of PW-1 Surjit Singh which was taken on record on 24.4.2009 in FAO No. 220 of 2004.