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2018 DIGILAW 598 (ORI)

Divisional Manager, New India Assurance Co. Ltd. v. Kalabati Nayak

2018-06-19

B.R.SARANGI, VINEET SARAN

body2018
JUDGMENT DR. B.R. SARANGI, J. - This intra-Court appeal has been filed by the insurer challenging the order dated 05.12.1994 passed in M.A. No. 565 of 1994, by which the learned Single Judge has not been inclined to admit the appeal and has left open to the appellant to file an application before the Workmen’s Compensation Commissioner for reconsideration of the order regarding payment of the penalty with the further direction that if such an application is filed, the Commissioner will dispose it of in accordance with law after giving opportunity of hearing to the claimants. 2. The factual matrix of the case, in hand, is that respondent no.2 was a sub-contractor under the contractor respondent no.3, who had been assigned some contract work in the project by the Deputy Chief Engineer, South Eastern Railway-respondent no.4. The deceased Jagadish Chandra Nayak was employed as workman-cum-supervisor by the sub-contractor to supervise the work. In course of his employment, he died by sustaining injury. Therefore, brothers of the deceased, namely, Pitambar Nayak and Subash Chandra Nayak filed a petition under the provisions of Workmen’s Compensation Act before the Commissioner for Workmen’s Compensation and Deputy Labour Commissioner, Jeypore for payment of compensation for death of their brother stating inter alia that the deceased while working in the worksite slipped from the bridge at a height of 200 feet and fell on the ground sustaining injury. Consequently, he died on the way to Rayagada hospital. A lump sum amount of compensation was claimed by them from the principal employer, the contractor and the sub-contractor. The said petition was registered as W.C. Case No. 17 of 1994 and the Commissioner, vide order dated 27.11.1993, issued notices to respondents no.2, 3 and 4, who are contractor, subcontractor and the principal to file required information in prescribed Form-2 and to deposit the compensation money within thirty days in the event of their admitting liability. In the said order it was also indicated that the applicants being major brothers of the deceased, they did not come within the definition of dependants and hence they could not have claimed compensation. But on the next date the Commissioner passed an order for issue of notice to the appellant requiring him to file written statement. In the said order it was also indicated that the applicants being major brothers of the deceased, they did not come within the definition of dependants and hence they could not have claimed compensation. But on the next date the Commissioner passed an order for issue of notice to the appellant requiring him to file written statement. The order was passed on 18.04.1994 and the case was posted to 03.05.1994 for filing written statement by the appellant and respondent no.4 and also framing of issues and hearing. On account of non-appearance of the appellant and respondent no.4, the Commissioner framed two issues and closed the case after examining one witness on behalf of the claimants and posted the case for final order to 30.05.1994. Since the judgment was not ready on that date, the Commissioner pronounced the judgment on 16.06.1994 directing the appellant to deposit a sum of Rs.90,088/- by way of bank draft within thirty days from the date of order and in default to pay penalty to the tune of Rs.10,000/- and interest at the rate of 6% per annum. The Commissioner also indicated in the order that the compensation fell due on 11.10.1990. 3. Being aggrieved by the said ex parte judgment, the appellant preferred Misc. Appeal No. 565 of 1994 and the learned Single Judge, before whom it came up, upon hearing was not inclined to admit the appeal on the ground that no substantial point of law raised in the light of Section 30 of the Workmen’s Compensation Act and dismissed the appeal. 4. Mr. M. Sinha, learned counsel for the appellant Insurance Company contended that under the terms of the policy, the liability for interest or penalty could not be saddled on the Insurance Company. To substantiate his contention, he has relied upon the judgment dated 15.05.2018 of this Court rendered in A.H.O. No. 49 of 1997 (The Regional Manager, Oriental Insurance Company v. Smt. Basanti Moharana and another). He further contended that in view of the judgment of the Full Bench of this Court rendered in Divisional Manager, New India Assurance Co. Ltd. v. Biswanath Barman, 1997 ACJ 78 the appellant is not liable to pay penalty. 5. He further contended that in view of the judgment of the Full Bench of this Court rendered in Divisional Manager, New India Assurance Co. Ltd. v. Biswanath Barman, 1997 ACJ 78 the appellant is not liable to pay penalty. 5. On perusal of the judgment rendered in Smt. Basanti Moharana (supra), it appears that this Court, by referring to the Full Bench judgment in Biswanath Barman (supra), in paragraphs 5 and 6 has held as follows: “5. The Full Bench of this Court in paragraph 15 of the judgment rendered in Biswanath Barman mentioned supra has categorically observed as follows:- “15. Thus, the above decisions, which have been cited before us in support of the contention that insurance company is liable to pay interest and penalty, are based mainly on insurance policy. We are of the opinion, as stated earlier, that if the insurance police which is governed by the Indian Contract Act does not provide for payment of interest and penalty by the insurance company, the Court cannot take the view that the word ‘employer’ in Section 4-A(3) of the Act would include ‘insurer’ as it would amount to substituting the word ‘employer’ by the word ‘insurer’ in subSection (3) of Section 4-A of the Act.” The policy of the insurance company was placed before us for consideration, in which it has been clearly mentioned that interest is payable to the insurer. In terms of the law laid down by this Court in Biswanath Barman (supra), the insurance company is liable to pay the principal amount and interest, but not the penalty. Therefore, in view of the meaning attached to the word ‘employer’ mentioned in sub-Section (3) of Section 4-A of the Workmen’s Compensation Act, the insurance company may not be liable for interest and penalty under the said Act, but as per the policy itself, which is governed by the Indian Contract Act, the insurance company is liable to pay interest which forms part of the condition of the policy. 6. In view of the aforesaid facts and circumstances, the judgment dated 28.11.1997 passed by the learned Single Judge in M.A. No. 515 of 1994 directing to pay penalty and interest is modified to the extent that the insurance company is liable to pay interest and not penalty in terms of the policy itself.” 6. 6. In view of the aforesaid facts and circumstances, the judgment dated 28.11.1997 passed by the learned Single Judge in M.A. No. 515 of 1994 directing to pay penalty and interest is modified to the extent that the insurance company is liable to pay interest and not penalty in terms of the policy itself.” 6. On perusal of the impugned order we find that the learned Single Judge, while not inclined to admit the appeal, granted liberty to the appellant to file an application before the Workmen’s Compensation Commissioner for reconsideration of the order regarding payment of penalty and further directed that if such an application was filed the Commissioner would dispose it of in accordance with law after giving opportunity of hearing to the claimants. But no useful purpose can be served, as the matter has already been decided, as discussed above. As such, the law on the context having been decided, no question of further consideration by the Workmen’s Compensation Commissioner with regard to payment of penalty by the Insurance Company is required to be adjudicated. Therefore, the impugned order of the learned Single Judge is modified to the extent that the appellant Insurance Company is liable to pay interest only but not penalty in terms of the policy itself. 7. The appeal is accordingly allowed in part. No order to costs. Appeal allowed in part.