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2010 DIGILAW 217 (KAR)

National Insurance Company Ltd v. Anil

2010-02-18

H.G.RAMESH

body2010
Judgment :- Huluvadi G. Ramesh, J. These two appeals are by the insurer challenging the award passed by the Commissioner for a Workmen’s awarding compensation of Rs.1,57,572/-and Rs.1,72,992/-in Claim Nos.86 and 86 of 2006, respectively, on the ground that the award passed by the Commissioner for Workmen’s Compensation to two of the employees who sustained injuries while removing the cylinders due to fire mischief and that has been challenged. 2. According to the submission of the Learned counsel for the insurer the award so passed under the head fidelity guarantee for four employees for which premium is collected is not attracted in the case on hand and there is no separate premium being paid towards the employment injuries. Accordingly sought for setting aside the award passed stating that insurer is liable to pay compensation for the above act. 3. Heard the arguments of the Counsel for the respective parties. 4. As per the facts, on 23-3-2006 as per the direction of the employer while the workmen were keeping the gas cylinders in order, due to the negligent act, cylinder fell on one Siddappa who was a coolie working therein and has caused injuries to his head wherein he was treated at Naik Nursing Home, Bijapur and also cylinder fell on one Anil on his shoulder and right leg and even though he had spent Rs.20,00/-towards medical expenses there was grievous injuries. Both Anil and Siddappa filed the claim petitions. 5. The matter was contested by the insurance company and also the owner by filing statement of objections. The Commissioner for Workmen’s Compensation while awarding compensation held that the workmen suffered injuries and under the head fidelity guarantee, there is coverage for four persons and ordered that the insurer is liable to pay compensation. As against the said order, appellant preferred these appeals on various grounds. 6. According to the Learned Counsel for the appellant/insurer, the policy defines fidelity guarantee which covers four employees. It is seen, in respect of the injuries sustained by workmen or the employees it is only against the pecuniary loss which the insurer would sustain due to the act of fraud or dishonesty. In view of the same, the claimants would not be entitled to claim compensation from the insurer. It is seen, in respect of the injuries sustained by workmen or the employees it is only against the pecuniary loss which the insurer would sustain due to the act of fraud or dishonesty. In view of the same, the claimants would not be entitled to claim compensation from the insurer. There is no separate premium being paid for the injuries sustained by them, the premium so collected on other heads do not cover the liability and the Commissioner for Workmen’s Compensation ordered the insurer to pay the compensation. 7. The Learned Counsel for the appellant/insurer taking me through the policy clause submitted that the insurer is not liable to pay the compensation as ordered by the Commissioner for Workmen’s Compensation. 8. Per contra, Learned Counsel for the insured submitted that there is no illegality committed by the Commissioner for Workmen’s Compensation in fastening liability on the insurer on the ground that as per the cover note issued it provides for LP Gas Traders combined policy. The very reading of the same denotes that it covers all types of risks to the extent of the amount insured including employment injuries and consequential injuries sustained by the employees. Under Clause 7 of Fidelity Guarantee it is covered for the four employees which also covers the negligent act for which the employer is made liable due to the dishonest act which also refers to the negligence on the part of the workmen. Ultimately, if workmen suffers injuries the liability will be on the insurer to pay compensation for the employment injury in so far as there is insurance coverage and premium is being paid on that. Accordingly, referring to the provisions in the England regarding Employers Liability, personal accident and combined policies, contended that the combined policy refers to the coverage of the risk for which insurer would be liable, that would be made good by way of indemnification by the insurer. 9. In the light of the arguments advanced, the point that arises for consideration is whether the premium collected by the appellant/insurer would also cover the compensation that has been awarded due to the injury sustained by the workmen during the course of employment? 10. 9. In the light of the arguments advanced, the point that arises for consideration is whether the premium collected by the appellant/insurer would also cover the compensation that has been awarded due to the injury sustained by the workmen during the course of employment? 10. The Commissioner for Workmen’s Compensation incorporating S1.No.7 namely Fidelity Guarantee coverage for four employees has opined that in view of the premium being paid for four employees the compensation has to be paid by the insurance company as the case on hand refers to four of the employees who are covered under the insurance. Accordingly, saddled liability on the insurance company. 11. Section 5 of the Fidelity Guarantee provides as under: “The company will indemnify the insured against all direct pecuniary loss which the insured shall sustain by any act of fraud or dishonesty committed by any employee of the insured named in the schedule in the course of his/her employment during the period of insurance and after the resignation, dismissal, retirement or death of an employees.” It also provided for certain exceptions. What is being noticed is that the dishonesty committed by the employee for which if any loss is caused to the employer then that has to be made good by the insurer. The word dishonesty refers to as per the dictionary meaning that an intention to cause wrongful gain to one person or wrongful loss to other person or dishonest intention refers to unlawful act done. 12. In the case on hand, while the workers/employees as per the direction of the insured when they were keeping the cylinder in order, due to their un lawful act or negligent act, the cylinder fell on the two of the workers. The accident was due to dishonest act on the part of the workmen when the cylinder fell on the two of the employees, ultimately, the injuries are sustained by them for which the employer would be made liable for the employment injuries sustained by the workmen. Ultimately, it is due to dishonest act on the part of the employees which resulted in liability to make payment for the employment injuries sustained by the workmen. Ultimately, it is due to dishonest act on the part of the employees which resulted in liability to make payment for the employment injuries sustained by the workmen. When the workmen have filed the claim petition seeking for compensation for the employment injuries sustained by them in the course of employment, then necessarily due to the dishonest act of the workmen such injuries are caused to them for which under the Workmen’s Compensation Act, workmen are entitled for the compensation. Their negligence act also covers under unlawful acts. When the injury is suffered by the workmen during the course of employment for which the insurer will be made liable to make payment for which there is indemnification. If that is due to the negligent act on the part of the workmen ultimately. It can be treated as dishonest act in not taking care while discharging duties for which the liability coverage is also provided under S1.No.7 namely Fidelity Guarantee for four employees. Here two of the employees have sustained injuries in the course of employment due to the negligent act and premium being collected by the insurer, as such, only on the technical ground that there is no insurance coverage the appeal has been preferred to disown the liability. The context in which the combined policy is issued like comprehensive policy provides for wide coverage and interpretation that has to be made keeping in view of the nature of injuries, types of contingencies covered in the policy including the one which is mentioned under the head for which they have covered. Even if the combined policy is obtained by the insurer necessarily it is the insurance company liable to make payment as per the interpretation that is sought to be made while interpreting Fidelity Guarantee under S1.No.7 which covers the issue. Hence, both the appeals are dismissed. The amount in deposit shall be transferred to the Commissioner for Workmen’s; compensation for disbursement.