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Karnataka High Court · body

2011 DIGILAW 312 (KAR)

United India Insurance Co. Ltd. v. Sri. Nanjunda Swamy

2011-03-17

A.N.VENUGOPALA GOWDA

body2011
JUDGMENT The jurisdiction of the Commissioner under the Workmen’s Compensation Act, 1927 (for short ‘the Act’) to set aside an exparte Award, is in question, in this writ petition, which arises out of an order dated 03.04.2009 passed in CWC Misc.1/2008 by the Labour Officer & Commissioner for Workmen’s Compensation, Chickmagalur (for short ‘the Commissioner’) 2. 1st respondent filed a claim petition (WCA/F:41/2007) before the Commissioner to Award compensation for the death of his son Puneeth, on account of the fatal injury sustained during the course of employment with the 2nd respondent. The 2nd respondent had obtained Workmen’s Compensation (General) Policy from the petitioner for the period from 24.12.2005 to 23.12.2006. The accident in question occurred on 14.06.2006. A notice of the said claim petition was issued to the petitioner-insurer and the 2nd respondent. An award for Rs.4,52,760/- with interest was passed on 26.04.2007. The employer and the insurer were directed to deposit the Award amount. 3. On 27.10.2007, the petitioner filed a Misc.Petition (Misc.Appl.No.01/2008) under O.IX R.13 CPC read with R.42 of the Karnataka Workmen’s Compensation Rules, 1966 (for short ‘the Rules’) seeking to set-aside the aforesaid exparte Award and permit it to contest the case on merit by stating that, the notice of the petition was received by its Branch Office at Madikeri, whose administration is governed by the Mysore Divisional Office and the Branch had to contest the claim through the Divisional Office at Mysore, which in turn had to contest the case through Shimoga Divisional Office and there was series of correspondence between the Branch Office and the Divisional Office and due to delay in postal transit and official correspondence, it could not appear at the appropriate stage and the absence is un-international and due to bonafide reasons. It has also stated that, its liability is only to the extent of Rs.1,29,263/- which amount has been deposited. An application under S.5 of the Limitation Act, 1963 was filed to condone the delay. The Misc.Petition and the I.A. for condonation of delay was opposed by the 1st respondent. The Commissioner rejected the Misc. Application. Aggrieved, the insurer has filed this writ petition. 4. Sri. An application under S.5 of the Limitation Act, 1963 was filed to condone the delay. The Misc.Petition and the I.A. for condonation of delay was opposed by the 1st respondent. The Commissioner rejected the Misc. Application. Aggrieved, the insurer has filed this writ petition. 4. Sri. B.C. Seetharama Rao, learned counsel appearing for the petitioner contended that, provisions under Order IX of Code of Civil Procedure, 1908 (for short ‘CPC’) apply to the proceedings before the Commissioner in view of R.42 of the Rules and the Award passed on 26.4.07 being an exparte Award, the refusal to consider the Misc. Petition filed seeking to set aside the exparte Award, on the misconception that, a review of the Award has been sought, is wholly illegal. He further contended, this is a case of non-exercise of the jurisdiction expressly conferred on the Com missioner and the rejection being on account of the misdirection, treating the application as one for review of the award, the error committed being manifest, interference is called for. 5. Sri. K. Venkate Gowda and Sri. Sampat, Learned Counsel appearing for respondents, on the other hand contended that, the award and also the order passed by the Commissioner, being appellable under S.30 of the Act, the writ petition is not maintainable. 6. As the legal question involved in general in nature with regard to the jurisdiction of the Commissioner, on my request, Sri Ashok Harnahalli, learned Advocate General, appeared as Amicus Curiae. Learned Amicus Curiae stated that, the State has made the Rules to carry out the purpose of the Act. Part V, having within it, Rules 19 to 43, provides the procedure to be followed by the Commissioner in the disposal of the cases under the Act. He pointed out that, the procedure to be followed by the Commissioner has been regulated by the Rules. R.42 is with regard to the applicability of certain provisions of CPC to the proceedings under the Act. Order IX being one of them, an application to set-aside an exparte Award can be filed under O.IX R.13 CPC. 7. I have perused the impugned order and the award. The Commissioner by making a reference to the decision in the case of Oriental Insurance Co. Ltd. Vs. Kala Devi and Others, reported in 1998 (3) LLJ 133 (Suppl), summarily rejected the Misc. Petition. . 8. 7. I have perused the impugned order and the award. The Commissioner by making a reference to the decision in the case of Oriental Insurance Co. Ltd. Vs. Kala Devi and Others, reported in 1998 (3) LLJ 133 (Suppl), summarily rejected the Misc. Petition. . 8. S.32 of the Act empowers the State Government to make Rules to carry out the purpose of the Act. Clause (c) of Sub-Section (1) reads thus: “for prescribing the procedure to be followed by Commissioner in the disposal of cases under this Act and by the parties in such cases.” 9. In exercise of the powers conferred by Sub-section (1) of S.32 of the Act, the Government of Karnataka has enacted the Karnataka Workmen’s Compensation Rules, 1966, which has come into force with effect from 18.11.1968. R.42 reads thus: “42. Certain provisions of Code of Civil Procedure, 1908, to apply:- Save as otherwise expressly provided in the Act or these rules, the following provisions of the First Schedule to the Code of Civil Procedure, 1908, namely, those contained in Order V, Rules 9 to 30; Order VII, Rules 9 to 18; Order IX; Order XIII; Order XVI; Order XVII and Order XXIII, Rules 1 to 3, shall apply to proceedings before Commissioners, in so far as they may be applicable thereto: Provided that,- (a) for the purpose of facilitating the application of the said provisions, the Commissioner may construe them with such alterations not affecting the substance as may be necessary or proper to adopt them to the matter before him; (b) the Commissioner may, for sufficient reasons proceed otherwise than in accordance with the said provisions, if he is satisfied that the interest of the parties will not thereby be prejudiced”. 10. Undeniably, the Award passed on 26.04.2007 by the Commissioner is an exparte Award. The Misc.Petition filed by the petitioner was to set-aside the said Award. By wrongly construing the prayer in the Misc.Petition, as one for review of the Award and deriving support from the decision in the case of Kala Devi (supra), the Misc. Petition has been dismissed summarily. 11. The Act and the Rules, more particularly, the provisions noticed supra, enable the Commissioner to invoke certain powers under the CPC as vested in a Civil Court while trying the suit. 12. In Grindlays Bank Ltd. Vs. Petition has been dismissed summarily. 11. The Act and the Rules, more particularly, the provisions noticed supra, enable the Commissioner to invoke certain powers under the CPC as vested in a Civil Court while trying the suit. 12. In Grindlays Bank Ltd. Vs. Central Government Industrial Tribunal and Others, reported in 1981 SCC (L & S) 309, the difference between the procedural review and review on merits has been highlighted and it has been held as follows: “Furthermore, different considerations arise on review. The expression “review” is used in the two distinct senses, namely (1) a procedural review which is either inherent or implied in a court or Tribunal to set aside a palpably erroneous order passed under a misapprehension by it, and (2) a review on merits when the error sought to be corrected is one of law and is apparent on the face of the record. It is in the latter sense that the court in Patel Narshi Thakershi case – (1971) 3 SCC 844 , held that no review lies on merits unless a statute specifically provides for it. Obviously when a review is sought due to a procedural defect, the inadvertent error committed by the Tribunal must be corrected ex debito justitiae to prevent the abuse of its process, and such power inheres in every court or Tribunal”. (Emphasis supplied by me) It has been further held that, once it is established that the respondents in the dispute were prevented from appearing at the hearing due to sufficient cause, it follows that, the matter must be reheard and decided again. 13. In Kapra Mazdoor Ekta Union v. Birla Cotton Spinning and Weaving Mills Ltd., & Another, reported in (2005) 13 SCC 777 , with regard to procedural review belonging to a different category, it has been held as follows: “19. xxxx ……….. I such a review, the court or quasi-judicial authority having jurisdiction to adjudicate proceeds to do so, but in doing so commits (sic ascertains whether it has committed) a procedural illegality with goes to the root of the matter and invalidates the proceeding itself, and consequently the order passed therein. xxxx ……….. I such a review, the court or quasi-judicial authority having jurisdiction to adjudicate proceeds to do so, but in doing so commits (sic ascertains whether it has committed) a procedural illegality with goes to the root of the matter and invalidates the proceeding itself, and consequently the order passed therein. Case where a decision is rendered by the court or quasi-judicial authority without notice to the opposite party or under a mistaken impression that the notice had been served upon the opposite party, or where a matter is taken up for hearing and decision on a date other than the date fixed for its hearing, are some illustrative cases in which the power of procedural review may be invoked. In such a case the party seeking review or recall of the order does not have to substantiate the ground that the order passed suffers from an error apparent on the face of the record or any other ground which may justify review. He has to establish that the procedure followed by the court or the quasi-judicial authority suffered from such illegality that it vitiated the proceeding and invalidated the order made therein, inasmuch as the opposite party concerned was not heard for no fault of his, or that the matter was heard and decided on a date other than the one fixed for hearing of the matter which he could not attend for no fault of his. In such cases, therefore, the matter has to be reheard in accordance with law without going into the merit of the order passed. The order passed is liable to be recalled and reviewed not because it is found to be erroneous, but because it was passed in a proceeding which was itself vitiated by an error of procedure or mistake which went to the root of the matter and invalidated the entire proceeding”. (Emphasis supplied by me) 14. The trite that, the party against whom the Award is to be made, due opportunity to defend has to be given, is a matter of procedure. When the claim has to be decided objectively by the Commissioner, he has to follow the procedure mandated under the Act and Rules. The Act and the Rules indicate the powers & procedure of Commissioners and the applicability of certain provisions of CPC. When the claim has to be decided objectively by the Commissioner, he has to follow the procedure mandated under the Act and Rules. The Act and the Rules indicate the powers & procedure of Commissioners and the applicability of certain provisions of CPC. The Commissioner can proceed exparte only in case the party to the proceeding despite service of notice failed to attend without showing sufficient cause. In Grindlays Bank Ltd., (supra), the Apex Court has held that, the power to proceed exparte carries with it, the power to enquire whether or not there was sufficient cause for the absence of the party at the hearing and incase the party was able to show sufficient cause for non-appearance on the date the court had proceeded exparte, to recall the Award. 15. The parties to the claim before the Commissioner, if aggrieved by an award or order passed, have more than one remedy. As far as the respondents are concerned, as regards setting aside of an exparte Award, they can file an application for setting aside the exparte Award or file an appeal under S.30(1) of the Act. As far as the claimant is concerned, if the claim petition has been dismissed for non-prosecution, he can seek setting aside of the order and restoration of the claim or prefer an appeal under S.30(1). The first proviso under Sub Section (1) of S.30 makes it clear that, no appeal shall lie against any order unless a substantial question of law is involved in the appeal. 16. In the case of Bhanu Kumar Jain Vs. Archana Kumar and Another – (2005) 1 SCC 787 ) the Apex Court with regard to the options available to an aggrieved party has held as follows: “26. When an ex parte decree is passed, the defendant (apart from filing a review petition and a suit for setting aside the ex parte decree on the ground of fraud) has two clear options, one, to file an appeal and another to file an application for setting aside the order in terms of Order 9 Rule 13 of the Code. When an ex parte decree is passed, the defendant (apart from filing a review petition and a suit for setting aside the ex parte decree on the ground of fraud) has two clear options, one, to file an appeal and another to file an application for setting aside the order in terms of Order 9 Rule 13 of the Code. He can take recourse to both the proceedings simultaneously but in the event the appeal is dismissed as a result whereof the ex parte decree passed by the Trial Court merges with the order passed by the Appellate Court, having regard to Explanation appended to Order 9 Rule 13 of the Code a petition under Order 9 Rule 13 would not be maintainable. However, Explanation I appended to the said provision does not suggest that the converse is also true. (Emphasis supplied by me) 17. In M/s. Praveen Industries & Others Vs. Banawar Singh – 1990 (3) Kar. L.J. 197, the material facts were; an application was filed before the Commissioner claiming compensation in respect of employment injury and the same was allowed. The employer filed an application under R.41 (must be R.42) to set-aside the Award on the ground that, no notice had been served. The application was rejected upholding the objection of the workman that, notice had been served on the employer and there was no justification for the employer not to have appeared before the Authority. The said order was questioned by filing an appeal under O.43 R.1 CPC. Maintainability of the appeal having been raised by the registry, taking note of the submission that, the appeal is maintainable, it was held as follows: “As could be seen from Rule 41, only certain specified provisions of the Code of Civil Procedure are made applicable to the proceedings under the Workmen’s Compensation Act. Order IX of CPC is one of them. Therefore, certainly an application for setting aside an exparte order could be filed under Order IX CPC before the Workmen’s Compensation Authority”. (Emphasis supplied by me) 18. In National Insurance Co. Ltd., rep. by its Manager, Bangalore Vs. Smt. Huligemma and Another – 2005 (3) Kar. L.J. 411, son of 1st respondent died during the course and out of employment in the establishment of 2nd respondent. 1st respondent filed claim petition before the Commissioner, who passed an award in favour of the claimant. In National Insurance Co. Ltd., rep. by its Manager, Bangalore Vs. Smt. Huligemma and Another – 2005 (3) Kar. L.J. 411, son of 1st respondent died during the course and out of employment in the establishment of 2nd respondent. 1st respondent filed claim petition before the Commissioner, who passed an award in favour of the claimant. The petitioner-insurance company, thereafter, filed petition under O.IX R.13 CPC to set-aside the award on the ground that, the Divisional Manager was not served with notice as he was not made party in the claim petition before the Commissioner. The said petition was rejected by the Commissioner. The order was questioned by filing a writ petition. Considering the rival contentions and decision in the case of M/s. Praveen Industries (supra), it was held that, the petitioner is certainly entitled to file an application under O.IX R.13 CPC before the Commissioner for setting aside an exparte order. It was noticed that the order passed by the Commissioner though is cryptic, but the application has been rejected on merits and not on the ground of jurisdiction and an appeal could be preferred, the writ petition was dismissed. 19. In Oriental Insurance Co. Ltd. Vs. Kum.Kamala Normo Mestha & Others – W.P.No.14006/2006 (decided on 28.07.2005), a claim application was filed before the Commissioner seeking compensation from the insurance company, which was served with the notice, but remained absent. The Commissioner, after enquiry, passed an Award. The Insurance Company filed an application under O.IX R.13 CPC read with R.42 of the Rules, for setting aside the exparte award. The same was rejected on the ground that, the application filed under O.IX R.13 CPC is not maintainable and the Commissioner has no jurisdiction to review the earlier order passed by him. The order when questioned, it has been held as follows: “The question, for consideration in this writ petition is whether to recall an exparte order passed by the Commissioner for Workmen’s Compensation, an application under Order IX Rule 133 CPC r/w. Rule 42 of the Rules is maintainable or not. This Court has held that such an application is maintainable under the statute. In that view of the matter, the order passed by the Commissioner holding that the application is not maintainable and that he has no power to review the order is erroneous. This Court has held that such an application is maintainable under the statute. In that view of the matter, the order passed by the Commissioner holding that the application is not maintainable and that he has no power to review the order is erroneous. The applicant before the Commissioner is not asking to review the order, but they are seeking to recall his order on the ground that it is an exparte order passed behind them and showing sufficient cause for their absence on the day the order came to be passed. Therefore, the request is not for review. It is for setting aside an exparte order. Such an application is maintainable and the Commissioner committed a serious error in holding that such an application is not maintainable”. (Emphasis supplied by me) 20. From the provisions noticed supra, making the provisions of CPC applicable to the proceedings under the Act before the Commissioner, the Misc.Application to set-aside an exparte Award is certainly maintainable. In ordering otherwise, the Commissioner has railed to exercise the jurisdiction vested in him. 21. The Commissioner, without noticing the statutory provisions, more particularly, those noticed supra, by making a reference to the decision, (Kala Devi) which has no application, has passed the impugned order. It is true that, the aggrieved party can question the Award by filing an appeal under S.30(1) of the Act, if a substantial question of law is involved. Since the Award dated 26.04.2007 is an exparte Award, there being an option to file an application under O.IX R.13 CPC, for setting-aside the Award, the aggrieved party can avail the said remedy also. 22. It is trite that, writ jurisdiction can be invoked not against the decision of the subordinate court, tribunal or authority but it is against the decision-making process. In the decision-making process, if the court, tribunal or authority deciding the case, has ignored or has misconstrued the provisions of the relevant Act or misunderstood the scope of its jurisdiction, the remedy under the writ jurisdiction can be invoked to set right such errors and prevent gross injustice to the party complaining. In the decision-making process, if the court, tribunal or authority deciding the case, has ignored or has misconstrued the provisions of the relevant Act or misunderstood the scope of its jurisdiction, the remedy under the writ jurisdiction can be invoked to set right such errors and prevent gross injustice to the party complaining. Interference with the orders of the subordinate courts and tribunals in the writ jurisdiction is limited in case where: (1) there is an error manifest and apparent on the face of the proceedings such as when it is based on clear misreading or utter disregard of the provisions of law, and (2) a grave injustice or gross failure of justice has occasioned thereby. 23. In the instant case, the Commissioner did not consider the factual aspects. By merely placing reliance on the decision in the case of Kala Devi (supra), held that the Misc. Application is not maintainable. The question considered in the case of Kala Devi is, whether the Commissioner under the Act has the power of review. Noticing the provisions of the Act of not providing for a review even by implication and sub-rule (2) of R.32 of the Workmen’s Compensation Rules, 1924 prohibiting the review by the Commissioner, it was held that, the Commissioner under the Act has no power to review. 24. Reliance on a decision without looking into the factual background of the case is clearly impermissible. It is well settled position of law that, a decision is a precedent on its own facts. Each case presents its own features. It is not everything said, while giving judgment that constitutes a precedent. The only thing in a Judge’s decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from its ratio decidendi. What is essence in a decision is its ratio and not every observation found therein nor what logically flows from the various observations made in the judgment. The enunciation of the reasons or principle on which a question before a Court has been decided is alone binding as a precedent. The Judgment in the case of Kala Devi, has been rendered merely by having regard to the fact situation obtaining therein, which was not unfortunately noticed by the Commissioner and he thus misapplied the said decision, to hold that the Misc. The Judgment in the case of Kala Devi, has been rendered merely by having regard to the fact situation obtaining therein, which was not unfortunately noticed by the Commissioner and he thus misapplied the said decision, to hold that the Misc. Application is not maintainable. Misdirection adopted by the Commissioner is apparent. 25. Since the Misc. Application is maintainable, the Commissioner has to consider the same on its merit and pass order. In the result, the writ petition is allowed and the impugned order is quashed. The Commissioner is directed to consider the Misc. Application filed by the petitioner, keeping in view the observations made supra and in accordance with law. The parties to appear before the Commissioner on 06.04.2011 at 3.00 p.m. and receive further orders. The Commissioner is directed to decide the matter with utmost expedition and at any event, within a period of three months from the date of first appearance of the parties. Registry to send a copy of this order to the Principal Secretary, Department of Labour, Government of Karnataka, who is hereby directed to immediately send a copy of the Order to all the Commissioners under the Act, in Karnataka, for guidance. Before parting, I thankfully acknowledge the valuable assistance rendered by the learned Amicus Curiae.