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2012 DIGILAW 550 (KER)

National Insurance Co Ltd v. Laila

2012-06-18

K.VINOD CHANDRAN, THOTTATHIL B.RADHAKRISHNAN

body2012
JUDGMENT Thottathil B.Radhakrishnan, J. 1. These appeals are against an award passed under the Workmen's Compensation Act, 1923, for short, 'WC Act'. The owners of a premises (Kalyanamandapam) and the insurer from whom they had taken a policy of insurance are the appellants. 2.Going by the material facts disclosed by the pleadings and the evidence on record, it is not disputed by the owners that one Firoz, engaged to clean the windows, doors etc., in the course of preparation of painting works of the premises fell down from a height while working and died in the course of his such engagement. His parents, widow and son made the claim. The commissioner found employer-employee relationship and held that there was a valid insurance cover. Accordingly, the impugned award was passed directing the insurer to indemnify the owners and requiring the owners to pay the interest component under Section 4(A) of the WC Act. 3.The insurer's appeal is on the ground that liability under the WC Act is not covered by the public liability policy (for non-industrial risks) issued by it and evidenced by Ext.B1. The owners appeal against the direction to pay the interest component. 4.Insurer's learned counsel argued that "injury to any person under a contract of employment or apprenticeship with the Insured when such injury arises out of the execution of such contract" is excluded/exempted as per Clause 8.15 in Ext.B1. The scope of indemnity as per Clause 4.1 of Ext. P1 extends only to liabilities that the insured may incur on account of actions of his/their employees and the provisions do not provide indemnity cover for any liability that the insured may incur qua any employee or apprentice, it is argued. 5. Learned senior counsel for the owners argued that the interpretation placed by the court below on the provisions of Ext.B1 policy is one that cannot be said to be wholly unavailable on a true construction of clauses 4.1 and 8.15 thereof and that therefore, the insurer's appeal fails. He further argued that the owners' appeal is to be allowed directing the insurer to pay the interest component also. 6.On behalf of the claimants, their learned counsel pointed out that the liability of the insurer cannot be wiped off; however that, at any rate, the liability has to be satisfied by either the insurer or the owners. He further argued that the owners' appeal is to be allowed directing the insurer to pay the interest component also. 6.On behalf of the claimants, their learned counsel pointed out that the liability of the insurer cannot be wiped off; however that, at any rate, the liability has to be satisfied by either the insurer or the owners. 7.The owners, as already noted, had engaged late Firoz to work in cleaning doors, windows etc. in the course of the painting operations for the upkeep of their premises, a marriage hall. The jural relationship between the owners of that premises and Firoz is one that makes the owners, the employer of Firoz for the purpose of such employment in terms of the definition of the term "employer" in S.2(1)(e) of the WC Act. 8. Ext.B1 is a Public Liability Policy. It clearly stipulates that "injury to any person under a contract of employment or apprenticeship with the Insured when such injury arises out of the execution of such contract" is exempted as per clause 8.15 thereof. Such a policy is governed by the provisions of the Public Liability Insurance Act, 1991, hereinafter called the 'PLI Act'. Section 3 of that Act casts liability to give relief in certain cases on principle of "no fault". Sub-section (1) of that section provides that where death or injury to any person (other than a workman) or damage to any property has resulted from an accident, the owner shall be liable to give such relief, as is specified in the schedule, for such death, injury or damage. The phrase "(other than workman)" in that sub-section is explained through the Explanation, which, inter alia, states that for the purpose of section 3, 'workman' has the same meaning as in the WC Act. This means that a 'workman' as defined in WC Act, stands excluded from the operation and ambit of the PLI Act. Section 4 of the PLI Act makes it obligatory on the owner of such premises to take insurance policies to cover liability arising under the PLI Act. As already noticed, the liabilities under that Act do not take within their sweep, the liability under the WC Act. We notice this statutory distinction to understand Ext.B1 policy in the context of the statute laws governing the field in relation to which that policy has been issued. 9. As already noticed, the liabilities under that Act do not take within their sweep, the liability under the WC Act. We notice this statutory distinction to understand Ext.B1 policy in the context of the statute laws governing the field in relation to which that policy has been issued. 9. Reverting to Ext.B1 Policy, as rightly argued on behalf of the insurer, clause 8.15 thereof excludes the insurer's liability for any injury to any person under a contract of employment or apprenticeship with the insured when such injury arises out of the execution of such contract. The concept "contract of employment" takes within its sweep all types of employments. This includes casual employment, regular employment, temporary employment, permanent employment, daily rated employment etc. Therefore, a plain reading of clause 8.15 of Ext.B1 categorically shows that liability to pay compensation for injury to any person under a contract of employment; whatever be the terms of the contract employment, including its period; is excluded from the liability taken by the insurer in terms of Ext.B1. Clause 4.1 has nothing to do with the matter of interpretation of the exemption clause contained in Clause 8.15. The impugned order mulcting the insurer with liability does not, hence, stand. The Commissioner has, therefore, committed error in law in the matter of interpreting Ext.B1 policy document. 10. If the insurer is not liable, it goes without saying that the owners of the premises, who are the employers, on the facts of the case in hand, have to pay the compensation as fixed by the Commissioner. That would also carry the liability to pay statutory interest. That has already been fixed on the employers. We need not, therefore, vacate the particular finding against the owners as regards liability to pay interest, as ordered by the commissioner. In the result, these appeals are ordered vacating the impugned award and ordering that the claim petition, namely, W.C.No.33 of 2006, will stand allowed directing opposite parties 1 to 4 therein to pay, jointly and severally, to the applicants an amount of Rs.4,08,601/- with 12% interest thereon from the date of accident, namely, 22.12.2004. it is recorded that it was ordered on 24.1.2011 that the interest component be released and the principal amount be kept in fixed deposit. it is recorded that it was ordered on 24.1.2011 that the interest component be released and the principal amount be kept in fixed deposit. The commissioner will take note of that interim order also, in ensuring that the entire amount due in terms of this judgment is made available to the applicants. Having regard to the issues raised, the parties are directed to suffer their respective costs.