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Gauhati High Court · body

2010 DIGILAW 455 (GAU)

United India Insurance Co. Ltd. v. Biakthuami

2010-06-29

B.D.AGARWAL

body2010
JUDGMENT B.D. Agarwal, J. 1. This appeal is directed against the judgment and order dated 1.10.2008 passed by the learned Commissioner under Workmen's Compensation Act at Aizawl in W.C. Case No. 8 of 2007. By this impugned judgment the Commissioner has awarded a sum of Rs. 4,33,820 along with interest at the rate of 12 per cent from the date of accident, i.e., from 12.5.2007 in favour of the claimant-respondent No. 1. Being aggrieved by the award the insurance company of the offending vehicle has filed this appeal under section 30 of the Workmen's Compensation Act, 1923. 2. Heard the argument of Mr. A.R. Malhotra, learned counsel for the insurance company, and that of Mr. S.N. Meitei, the learned counsel for the respondent No. 1-claimant. Respondent No. 2 is the father of the deceased and also the owner of the offending vehicle and during the pendency of the appeal the said person died. Be that as it may, on an application filed by the appellant under Order 22, rule 4 (4) of the Civil Procedure Code, 1908, this court vide order dated 8.2.2010 passed in CM. Appln. No. 133 of 2009, it has been held that there was no necessity to add the legal heirs of respondent No. 2, since he did not contest the case before the Commissioner. The respondent No. 3 is New India Assurance Co. Ltd. This insurance company was impleaded in the claim application since the oil products were insured with this company and during the course of hearing the said insurance company was also struck off from the list of the opposite party by the Commissioner. Despite that as an abundant caution respondent No. 3 was impleaded in this appeal, but they have not appeared to contest the appeal. 3. During the course of hearing of this appeal, a suspicion had developed in the mind of the court regarding genuineness of the driving licence of the deceased and as such D.T.Os. of Kolasib and Aizawl Districts were summoned and their depositions were recorded as court witnesses, in exercise of powers conferred upon the appellate court under Order 41, rule 27 of the Civil Procedure Code. of Kolasib and Aizawl Districts were summoned and their depositions were recorded as court witnesses, in exercise of powers conferred upon the appellate court under Order 41, rule 27 of the Civil Procedure Code. These court witnesses also produced driving licence of the deceased which shows manipulation of date of birth of the deceased in the photocopy of the driving licence produced by the claimant in the Tribunal and this aspect will be discussed in this judgment at a later stage. 4. Mr. S.N. Meitei, learned counsel for respondent No. 1, submitted that the appeal should be dismissed in limine inasmuch as the appellant has failed to formulate substantial questions of law, as required under section 30 of the Workmen's Compensation Act. Whether formulation of substantial questions of law in an appeal filed by the insurance company (insurer) is mandatory or directory will be discussed later in this judgment. However, for efficacious disposal of this appeal the following substantial questions of law are framed by me: (i) Whether the impugned judgment suffers from perversity on the issue of 'collusion' between the claimant and the owner of the vehicle? (ii) Whether the impugned award of the learned Commissioner, Workmen's Compensation, Aizawl regarding the impugned judgment suffers for not appreciating the insurer's plea that claimant's documents were not genuine? (iii) Whether the impugned judgment suffers from perverse finding regarding employer-employee relationship of the deceased with the owner of the vehicle and also about his age and income? (iv) Whether awarding of interest from the date of accident is also sustainable in law? 5. Before proceeding to discuss the legal issues it would be just and proper to give a summary of the facts, giving rise to filing of the claimants' application for compensation and the challenge of the award by the insurance company, which are as follows: 5.1. Respondent No. 1, namely, Kap-kima was the owner of the oil tanker/lorry under registration No. MZ 01-D 1004. The deceased Vanlalsanga was the son of owner of the vehicle and claimant is the mother of the deceased. In other words, the claimant, owner and son are from the same family and, at the relevant time, they were living together. It may also be stated that the deceased was a bachelor. 5.2. The deceased Vanlalsanga was the son of owner of the vehicle and claimant is the mother of the deceased. In other words, the claimant, owner and son are from the same family and, at the relevant time, they were living together. It may also be stated that the deceased was a bachelor. 5.2. As per the documents and evidence given before the Commissioner, the date of birth of the deceased was 18.5.1982 and he was employed in the oil tanker as second driver. Admittedly, on 12.5.2007 the oil tanker was driven by another driver, namely, Lalpianga, and the oil tanker was carrying petrol from Silchar to Lawngtlai, and on the way it rolled down from the main road and fell in a gorge at a depth of 160 ft from the road and the son of the claimant died on the spot. However, the driver and the cleaner of the oil tanker survived, but they were not examined before the Commissioner. 5.3. The owner of the oil tanker, who was also the father of the deceased, was impleaded as one of the opposite parties in the case and no written statement was filed by the owner. However, the owner appeared before the Commissioner to give evidence in favour of the claimant and he was examined as witness No. 2. In fact the claim proceeded ex parte against the owner of the vehicle. The only other witness before the Tribunal was the claimant. In other words, neither the actual driver of oil tanker nor the cleaner was examined by the claimant to relate as to how the accident took place or to prove that the deceased was also travelling in the oil tanker in the capacity of second driver. 6. The insurer of the oil tanker, i.e., the appellant contested the case raising all the issues, like collusion between the owner of the vehicle and the claimant, authenticity of the documents filed by the claimant and during cross-examination of the claimant's witnesses, issues regarding the age and income of the deceased and non-production of his driving licence were also raised. 7. 7. After hearing the learned counsel for the parties, the learned Commissioner for Workmen's Compensation ('the Commissioner') held that the deceased was travelling in the oil tanker as its second driver and also relying upon the age certificate, the amount was calculated and awarded compensation as per the relevant Schedule under Workmen's Compensation Act. 8. Although a specific plea was raised regarding collusion between the owner of the vehicle and the claimant, neither any issue was framed nor has any finding been rendered in this regard. 9. Before I proceed to answer the substantial questions of the law involved in this case it is also desirable to examine the contours of section 30 of the Workmen's Compensation Act, particularly in the light of rights and limitations of an insurance company (insurer) to challenge an award. For ready reference section 30 is extracted below in extenso: 30. 9. Before I proceed to answer the substantial questions of the law involved in this case it is also desirable to examine the contours of section 30 of the Workmen's Compensation Act, particularly in the light of rights and limitations of an insurance company (insurer) to challenge an award. For ready reference section 30 is extracted below in extenso: 30. Appeals.--(1) An appeal shall lie to the High Court from the following orders of a Commissioner, namely-- (a) an order awarding as compensation a lump sum whether by way of redemption of a half-monthly payment or otherwise or disallowing a claim in full or in part for a lump sum; (aa) an order awarding interest or penalty under section 4A; (b) an order refusing to allow redemption of a half-monthly payment; (c) an order providing for distribution of compensation among the dependants of a deceased workman, or disallowing any claim of a person alleging himself to be such dependant; (d) an order allowing or disallowing any claim for the amount of an indemnity under the provisions of sub-section (2) of section 12; or (e) an order refusing to register a memorandum of agreement or registering the same or providing for the registration of the same subject to conditions: Provided that no appeal shall lie against any order unless a substantial question of law is involved in the appeal, and in the case of an order other than an order such as is referred to in clause (b), unless the amount in dispute in the appeal is not less than three hundred rupees: Provided further that no appeal shall lie in any case in which the parties have agreed to abide by the decision of the Commissioner, or in which the order of the Commissioner gives effect to an agreement come to by the parties: Provided further that no appeal by an employer under clause (a) shall lie unless the memorandum of appeal is accompanied by a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against. (2) The period of limitation for an appeal under this section shall be sixty days. (3) The provisions of section 5 of the Limitation Act, 1963 (36 of 1963) shall be applicable to appeals under this section. 10. (2) The period of limitation for an appeal under this section shall be sixty days. (3) The provisions of section 5 of the Limitation Act, 1963 (36 of 1963) shall be applicable to appeals under this section. 10. The Workmen's Compensation Act, inter alia, defines 'employer' but there is no definition of 'insurer'. Section 3 of the Workmen's Compensation Act deals with liability of the employers for payment of compensation to their workmen for sustaining injuries arising out of and in course of their employment. At the same time law nowhere mandates taking out of an insurance policy by the employer to cover the risk of its employees. In this way, it is the primary liability of the employer to pay compensation. However, the employers may contract out their liability and only when such recourse is taken by employers the insurance companies (insurers) are involved in the award passed under the Workmen's Compensation Act. This view can be gathered from the judgment of the Hon'ble Supreme Court rendered in the case of New India Assurance Co. Ltd. v. Harshadbhai Amrutbhai Modhiya, 2006 ACJ 1699 (SC) and P.J, Narayan v. Union of India, 2004 ACJ 452 (SC). 11. Since the present case has arisen out of a motor vehicle accident, the legal scenario is a little different. Under section 146 of the Motor Vehicles Act, 1988, it is mandatory for vehicle owner to obtain a policy of insurance to cover the risk of passengers, employees of the vehicle and third party liabilities. Section 147 lays down coverage of the policy. However, proviso to section 147 (1)has restricted the liability of insurance company in respect of the employees of the motor vehicles to the extent the liability is arising under the Workmen's Compensation Act, 1923. In other words, the proviso is an exception to the general rule that the policy shall cover the risk of death or bodily injury of any person or classes of persons as specified in the policy. In the case of Ramashray Singh v. New India Assurance Co. In other words, the proviso is an exception to the general rule that the policy shall cover the risk of death or bodily injury of any person or classes of persons as specified in the policy. In the case of Ramashray Singh v. New India Assurance Co. Ltd., 2003 ACJ 1550 (SC), the Hon'ble Supreme Court has held that a statutory policy, taken under section 146 (1) of the Motor Vehicles Act, does not necessarily cover the liability of the employees of the motor vehicle unless the owner of the vehicle enters into an agreement to cover the risk of other employees, whose risk has not been covered under the statutory policy. 12. Chapter X of the Motor Vehicles Act deals with no fault liability of the owner of the vehicle. Section 143 of the Act extends the application of this Chapter to the claims for compensation in respect of death or permanent disablement of any person under Workmen's Compensation Act. In the case of Gottumukkala Appala Narasimha Raju v. National Insurance Co. Ltd., 2007 ACJ 1025(SC), their Lordships have observed that the statutory duty to indemnify the insured by the insurer arises by virtue of section 143 of the Motor Vehicles Act. At the same time, it has also been held that section 143 of the Motor Vehicles Act has limited applicability, so far as the provisions of Workmen's Compensation Act are concerned. Their Lordships have further observed that the applicability of the provisions of the Motor Vehicles Act shall, therefore, be confined to Chapter X thereof for the purpose of a proceeding initiated under Workmen's Compensation Act. 13. Section 143 of the Motor Vehicles Act falls under Chapter X and Chapter XI deals with statutory insurance of the risk of third parties. Section 147 deals with requirements for insurance policy and limit of liability of the insurer. Similarly, section 149 of Chapter XI mandates that insurers have to satisfy the awards and sub-section (2) of section 149 of the Motor Vehicles Act has prescribed limited grounds to challenge an award by insurance companies. 14. In the case of National Insurance Co. Ltd. v. Mastan, 2006 ACJ 528 (SC), the Apex Court has laid down the law with regard to applicability of section 149 (2) of the Motor Vehicles Act, in appeals filed under section 30 of the Workmen's Compensation Act. 14. In the case of National Insurance Co. Ltd. v. Mastan, 2006 ACJ 528 (SC), the Apex Court has laid down the law with regard to applicability of section 149 (2) of the Motor Vehicles Act, in appeals filed under section 30 of the Workmen's Compensation Act. Relevant observations of the Apex Court are hereby quoted below: (13) Applicability of the provisions of the 1988 Act in a proceeding under the 1923 Act is confined to a matter coming within the purview of Chapter X only. It cannot be stretched any further. (17) It is beyond any doubt or dispute that in a proceeding where the right of the insurer to raise a defence is limited in terms of sub-section (2) of section 149, an appeal preferred by it against an award of the Motor Accidents Claims Tribunal must only be confined or limited to same extent. But once a leave has been granted to the insurer to contest the claim on any ground as envisaged in section 170 of the 1988 Act, an appeal shall also be maintainable as a matter of right, wherein the High Court can go into all contentions. The Full Bench of Karnataka High Court, in our opinion, committed a serious error in relying upon the judgments of this court, in terms whereof the right of appeal of insurance company has been held to be limited, inasmuch as in those decisions this court was considering a situation where sub-section (2) of section 149 was attracted. (18) Section 143 of the 1988 Act limits its applicability to the 1923 Act in a case where the liability arises despite the fact that the accident might have taken place without any fault on the part of the driver of the vehicle or others in control thereof. Under the 1923 Act also, as noticed hereinbefore, a workman is entitled to compensation even if no negligence is proved against the owner or any other person in charge of the vehicle. It is, thus, not possible to extend the applicability of section 143 of the 1988 Act to include Chapter XI thereof to a claim under the 1923 Act. (19) Right of appeal is a creature of statute. The scope and ambit of an appeal in terms of section 30 of the 1923 Act and section 173 of the 1988 Act are distinct and different. They arise under different situations. (19) Right of appeal is a creature of statute. The scope and ambit of an appeal in terms of section 30 of the 1923 Act and section 173 of the 1988 Act are distinct and different. They arise under different situations. In a case falling under the 1923 Act, negligence on the part of the owner may not be required to be proved. Therein what is required to be proved is that the workman suffered injuries or died in course of employment. The amount of compensation would be determined having regard to the nature of injuries suffered by the worker and other factors as specified in the Act. The findings of fact arrived at by the Commissioner for Workmen's Compensation are final and binding. Subject to the limitations contained in section 30 of the 1923 Act, an appeal would be maintainable before the High Court; but to put the insurer to further disadvantages would lead to an incongruous situation. 15. The above apart, the theory that the 'insurer' steps into the shoes of 'insured' to indemnify all his liabilities to the employees under Workmen's Compensation Act, arising from a motor vehicle accident, can be distinguished in view of the ratio of law laid down by the Hon'ble Supreme Court in the case of Ved Prakash Garg v. Premi Devi, 1998 ACJ 1 (SC). In the said case the question posed before the Apex Court was as to whether an insurance company can also be held liable to pay interest on the principal amount of compensation as well as penalty, if any, imposed on the insured (employer) under section 4-A (3) of the Workmen's Compensation Act. The Hon'ble Supreme Court held that interest upon the principal amount of compensation is a statutory elongation of the liability of the employer and as such the insurer is also liable to pay the same along with principal amount of compensation. However, the Hon'ble Supreme Court distinguished the liability of the insurer to pay penalty qua the employer. In this way, the Apex Court placed the 'insurer' on a different footing. This authority has been approved in the case of L.R. Ferror Alloys Ltd. v. Mahavir Mahto, 2001 ACJ 645 (SC). 16. In the case of Oriental Insurance Co. However, the Hon'ble Supreme Court distinguished the liability of the insurer to pay penalty qua the employer. In this way, the Apex Court placed the 'insurer' on a different footing. This authority has been approved in the case of L.R. Ferror Alloys Ltd. v. Mahavir Mahto, 2001 ACJ 645 (SC). 16. In the case of Oriental Insurance Co. Ltd. v. Umesh Nath, 2006 ACJ 2348 (Gauhati), the question raised before this court was whether an insurance company is statutorily liable to deposit the amount of compensation and obtain a certificate from the Commissioner to the effect as a precondition to file an appeal under section 30 of Workmen's Compensation Act. This precondition has been prescribed in third proviso to section 30. Discussing various authorities, including the judgments taking divergent views, this court has held that conflict of interest of 'employer' and 'insurer' is visible under the law and, as such, 'employer' and 'insurer' are two different entities. Exempting the insurance company from statutory deposit of the compensation amount before filing appeal, his Lordship has further held that the general perception that the insurer always and invariably steps into the shoes of the insured (employer) does not appear to be correct and, therefore, the 'employer' shall not include the term 'insurer' in the third proviso to section 30 of the Workmen's Compensation Act. In my considered opinion, the aforesaid proposition of law is equally applicable to the first proviso to section 30, i.e., existence of substantial questions of law, in appeals filed by insurance companies. I am also of the view that had the legislature intended to put 'insurer' at par with 'employer' it would have certainly made it clear in the law. However, the Workmen's Compensation Act, and more particularly section 30, is stoically silent to place both the 'employer' and 'insurer' at the same level. Hence, I hold that prerequisites of section 30 cannot automatically be made applicable to the appeals filed by the insurance companies. 17. However, the Workmen's Compensation Act, and more particularly section 30, is stoically silent to place both the 'employer' and 'insurer' at the same level. Hence, I hold that prerequisites of section 30 cannot automatically be made applicable to the appeals filed by the insurance companies. 17. From the aforesaid authorities and discussion it emerges that--(i) insurance companies can raise all the grounds that can be agitated by employer while filing appeals under section 30 of the Workmen's Compensation Act; (ii) the limitations in the form of statutory grounds prescribed under section 149 (2) of the Motor Vehicles Act, for preferring appeals by insurance companies, are not applicable to appeals filed by the insurer under section 30 of the Workmen's Compensation Act; and (iii) first proviso to section 30 (1) of the Workmen's Compensation Act that an appeal is maintainable only if it involves substantial questions of law is not mandatory if the appeal is filed by an insurance company (insurer). Precisely, I hold that prescription of law under section 30 of the Workmen's Compensation Act that an award of the Commissioner can be challenged only on substantial questions of law is not literally applicable to the appeals of the insurance companies. 18. In the light of the aforesaid legal position, I now proceed to examine the merit of the appeal vis-a-vis legality and correctness of the impugned judgment and order. Collusion: 19. As noted earlier, while contesting claim application before the Commissioner the insurance company had specifically pleaded that there was strong possibility of collusion between the applicant and the owner of the offending vehicle in order to defraud the insurer. Despite this specific plea no issue in this regard was framed nor has any answer to this defence plea been given in the impugned judgment, even impliedly. 20. Mr. Malhotra, learned counsel for the appellant, submitted that since the deceased was a bachelor and living with his parents it was remotely possible for the father (being the owner of the vehicle) to engage his son as a paid driver in his own vehicle. 20. Mr. Malhotra, learned counsel for the appellant, submitted that since the deceased was a bachelor and living with his parents it was remotely possible for the father (being the owner of the vehicle) to engage his son as a paid driver in his own vehicle. Learned counsel also submitted that had the deceased maintained a separate entity the owner would have certainly contested the claim to defend his liability, inasmuch as it is the primary duty of the employer under Workmen's Compensation Act to pay compensation to his employees or their legal heirs, if the accident arises in the course of employment. However, instead of contesting the claim the owner readily appeared as a witness of the claimant and deposed that he had engaged his son in the oil tanker as second driver by paying salary of Rs. 4,000 per month. 21. Referring to the judgment of the Hon'ble Apex Court rendered in the case of Gottumukkala,2007 AD 1025 (SC), the learned counsel submitted that under such circumstances the Tribunal ought to have dismissed the claim application. In the aforesaid case, the wife of the deceased was the owner of the vehicle and she had pleaded that her husband was engaged by her brother as a driver in the vehicle and as such she was not in collusion with the claimant for getting compensation. The plea of the claimant and the owner was rejected by the Hon'ble Supreme Court with the following observations: (23) In our considered opinion, it is wholly absurd to suggest that the husband would be 'workman' of his wife in absence of any specific contract. We have no doubt in our mind that only for the purpose of proceeding under 1923 Act, the appellants have concocted the story of husband and wife living separately. If they have been living separately in view of certain disputes, the question of husband being a 'workman' under her appears to be a far-fetched one. (24) Technically, it may be possible that the husband is employed under the wife, but, while arriving at a conclusion that when a dispute has been raised by other side, the overall situation should have been taken into consideration. The fact, which speaks for itself, shows that the owner of the tractor joined hands with the claimant for laying a claim only against the insurer. The claim was not bona fide. 22. Mr. The fact, which speaks for itself, shows that the owner of the tractor joined hands with the claimant for laying a claim only against the insurer. The claim was not bona fide. 22. Mr. Meitei, learned counsel for the respondent No. 1, submitted that facts and circumstances of the Gottumukkala case, 2007 ACJ 1025 (SC), were different from the present case and as such the ratio of the said decision may not be applicable. However, in my opinion, the case in hand is stronger and better to invoke the theory of 'collusion' inasmuch as the deceased was a bachelor and admittedly he was living with his parents. Besides this, neither the claimant (mother) nor the owner of the oil tanker (father) produced any evidence before the Commissioner that their son was formally appointed as a paid driver nor any document of payment of salary was produced. Hence, I hold that it is a clear case of 'collusion'. Besides this, the claimant also did not produce the driver of the oil tanker and their cleaner in the Tribunal to prove their stand that the deceased was a paid employee. Authenticity of documents: 23. In the first blush of hearing of the case itself, I had developed a suspicion about the genuineness of the claim and smelt of collusion and fabrication of evidence by the claimant for illegal gain. Accordingly, the concerned DTOs were also summoned and examined as court witnesses to ascertain the genuineness of the driving licence of the deceased and to confirm his date of birth. The DTOs have deposed that initially the driving licence was obtained from the office of the DTO, Aizawl in January 2002 and subsequently got it transferred to Kolasib. No plausible explanation is forthcoming from the claimant's witnesses as to why the deceased had got his driving licence transferred from Aizawl to Kolasib. Although there were certain irregularities in issuing the duplicate licence but the fact remains that the original licence was a genuine one. Be that as it may, both the DTOs have deposed that as per their records the deceased had declared his date of birth as 18.5.1974, however, the copy of the driving licence produced in the court discloses the date of birth of the deceased as 18.5.1982. During the course of hearing of the appeal Mr. Be that as it may, both the DTOs have deposed that as per their records the deceased had declared his date of birth as 18.5.1974, however, the copy of the driving licence produced in the court discloses the date of birth of the deceased as 18.5.1982. During the course of hearing of the appeal Mr. Meitei, learned counsel for the respondent, also produced the duplicate driving licence issued from the office of the DTO, Kolasib and fairly admitted that the date of birth was tampered with and instead of 18.5.1974 the date of birth was changed to 18.5.1982. Not only that, claimant had also submitted a birth certificate issued from the office of the Registrar of Births and Deaths, Mizoram to show that the deceased was born on 18.5.1982. Admittedly, this certificate was obtained after the accident and I have no hesitation to hold that the birth certificate must have been obtained showing a false date of birth only to get an inflated compensation. In this way, the claimant had produced fabricated documents before the Commissioner in order to get an inflated compensation. On this ground also the claimant is not entitled to any compensation. 24. In view of my findings that both the claimant and the owner of the vehicle had hatched a conspiracy to get compensation by showing their son as an employee of the oil tanker, coupled with the fact that the claimant had also obtained fraudulent birth certificate and had also tampered with the original driving licence she is not entitled to any compensation. 25. In view of the aforesaid findings against the respondent No. 1, I do not deem it necessary to deliberate on other issues. 26. In the result, appeal stands allowed. The impugned award is hereby set aside. Although I have held that the respondent-claimant is not entitled to any amount of compensation she has already been paid a sum of Rs. 50,000 on the principle of no fault liability. Taking a lenient view I refrain from directing the respondent No. 1 to refund the said money to the insurance company. On the same ground, I also refrain from imposing costs of this appeal in favour of the appellant. 50,000 on the principle of no fault liability. Taking a lenient view I refrain from directing the respondent No. 1 to refund the said money to the insurance company. On the same ground, I also refrain from imposing costs of this appeal in favour of the appellant. However, learned Commissioner, Workmen's Compensation, Aizawl is directed to take appropriate action against the claimant-respondent No. 1, namely, Biakthuami and her husband Kapkima in accordance with section 195 of the Code of Criminal Procedure, 1973, vested upon him by virtue of section 23 of the Workmen's Compensation Act, 1923 for filing claim application in collusion with her husband and giving false evidence on the basis of fabricated documents. Registry is directed to return the LCR with a copy of this judgment to the court below. On receipt of the records the learned Commissioner, Workmen's Compensation, Aizawl shall do the needful, including release of balance amount of the award to the insurance company. Appeal allowed.