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2023 DIGILAW 43 (AP)

Bajaj Allianz Gen. Ins. Com. Ltd. v. K. Demudu

2023-01-04

TARLADA RAJASEKHAR RAO

body2023
JUDGMENT : The first respondent herein who is claimant in W.C.No31 of 2011 filed a claim petition seeking the compensation of Rs.4,00,000/- (Rupees four lakhs only) under Section 4 of the Workmen Compensation Act, before the Authority under Workmen’s Compensation Act, Visakhapatnam and Deputy Commission of Labour Visakhapatnam. 2. As per the averments in the claim petition, the claimant climbed the electric pole No.54/45/1 situated at Gopalapatnam, Visakhapatnam, and accidentally fallen from the electric pole due to electric shock, resultantly the claimant sustained fracture of left forearm radius and left hip and also sustained injuries all over the body. Initially he was shifted to private hospital, Gopalpatnam and later he was shifted to K.G.H., Visakhapatnam, for better treatment and accident was reported in Gopalpatnam Police Station on 01.03.2006 on which date the accident was occurred and the disability was assessed by the District Medical Board, Visakhapatnam, to an extent of 40% which is permanent in nature. The said claim application was filed in delay and a delay condone petition was filed and the same was condoned and main case was taken up by the Commissioner on to the file. 3. The general denial was made by the employer. It is asserted and contended by the employer/opposite party no.1 that the insurer/opposite party no.3 to pay any compensation to the claimant and he is not at all responsible for any payment of compensation to the claimant. 4. The insurance company who is arrayed as Opposite Party No.3 filed counter affidavit and denied all the averments made in the claim petition and also contended that there is a delay in filing the petition is 1608 days and not 1150 days. Opposite Party No.3 further contended that the policy provided is a Group Personal Accidental Policy where the sum insured amount shown against the name of the claimant is Rs.1,00,000/- (Rupees one lakh only) only and if any amount in excess to the said amount that the opposite party no.1& 2 are liable to pay to the claimant, as the policy is not a workmen compensation policy but a Group Personal Accidental Policy, which is limited to Rs.1,00,000/- only. 5. On the above said contentions, the Commissioner has framed 4 issues and the 4th issue is relevant for the purpose of this appeal is that “what amount of compensation, the applicant is entitled to receive and who has to pay”. 5. On the above said contentions, the Commissioner has framed 4 issues and the 4th issue is relevant for the purpose of this appeal is that “what amount of compensation, the applicant is entitled to receive and who has to pay”. After the annunciation of both oral and documentary evidence adduced by both the parties, the Commissioner has directed to pay an amount of Rs.1,19,098/- (Rupees one lakh nineteen thousand and ninety eight only) by fixing the liability jointly and severally against the insured and insurer. 6. Aggrieved by the said order, the present appeal came to be filed by the Insurance Company who is opposite party No.3 before the Commissioner. On the following grounds: that the Commissioner grossly erred in not looking into section 14 of the Workmen Compensation Act, which clarifies that the insurer’s direct role comes into play only when the insured turns insolvent and further contended that the Workmen Compensation Act is not applicable and the insurer is liable to pay compensation to the third party by virtue of Section 149 of Motor Vehicle Act under the policy the insurance company is liable only to reimburse to the insured. He relied on the judgment in a case United India Fire and General Insurance Company Limited vs. Joseph Mariam and another for the proposition of application of Section-14 of the Workmen Compensation Act. 7. The learned counsel for the Claimant would rely on the judgment in Branch Manager, Oriental Bank of Commerce, Karimnagar Vs. Shaik. Madar and others, 2010 (1) ALD 90 , the appellate court shall ordinarily not to interfere with the finding of the fact of the authority unless any substantial question of law is involved. In the said case, it is the contention of the employer that the deceased is a private electrician attended to repair of sign boards of appellant bank at their branch for Rs.150/- and Rs.300/- per day respectively while attending the work, the deceased died on spot due to short circuit and the claimants therein has filed claim application and the contention of the appellant bank is that there is no relationship of employer and employee between the deceased and the appellant bank. The learned Judge of composite High Court of Andhra Pradesh at Hyderabad held that a perusal of the amended provisions of the workmen under section-2 (1)(n) and also schedule II(1) has held that the claimants therein comes under the workmen of the employer and directed the insurance company to pay the compensation and he also relied on another judgment in New India Assurance Company, Gudiwada Vs. Mandava Krishna Kumari and others, 2012 (4) ALD 266 wherein the said judgment, the Insurance Company filed appeal on the ground that the Commissioner was not justified in invoking minimum wages for fixing the income of the deceased. Further the Commissioner has awarded the compensation to the claimants therein basing upon the Minimum Wages Act. However, the appeal was dismissed by the court upholding the finding of the Commissioner and also he relied on another judgment in Oriental Insurance Company Limited, Hyderabad Vs. K. Karuna and another, 2012 (2) ALD 1 for the proposition that insurance company cannot be absquatulate of its liability to pay compensation on the ground that the death of deceased was not on account of any accident. Though the said judgments are not applicable to the present facts of the case. 8. The contention of the appellant/opposite party no.3 is that the insurance company is liable to pay the compensation to the claimant only if the insured become insolvent. 9. Though the said judgments are not applicable to the present facts of the case. 8. The contention of the appellant/opposite party no.3 is that the insurance company is liable to pay the compensation to the claimant only if the insured become insolvent. 9. Under Section-14 of the Workmen Compensation Act, it relates to insolvency claims, the relevant provision is hereby extracted : Section-14 (1) Where any employer has entered into a contract with any insurers in respect of any liability under this Act to any workman, then in the event of the employer becoming insolvent or making a composition or scheme of arrangement with his creditors or, if the employer is a company, in the event of the company having commenced to be wound up, the rights of the employer against the insurers as respects that liability shall, notwithstanding anything in any law for the time being in force relating to insolvency or the winding up of companies, be transferred to and vest in the workman, and upon any such transfer the insurers shall have the same rights and remedies and be subject to the same liabilities as if they were the employer, so, however, that the insurers shall not be under any greater liability to the workman than they would have been under to the employer. 10. As per the said provision the insurer shall be liable to pay the compensation if the insured becomes insolvent or in the event of windup the company. After careful consideration and analysis of the section, the insurance company is liable to pay the compensation, if the employer is declared as insolvent or and the company wind up. This situation is not compatible to the present case as contemplated by Section-14 of the Workmen Compensation Act. 11. In order to answer the contentions raised by the insurance company this court relies on the judgment in New India Assurance Company Limited Vs. Harshadbhai Amrutbhai Modhiya and Another, 2006 (5) SCC 192 for better appreciation, this court feels appropriate to extract relevant paragraphs from the judgments: 14. By reason of the provisions of the Act, an employer is not statutorily liable to enter into a contract of insurance. Where, however, a contract of insurance is entered into by and between the employer and the insurer, the insurer shall be liable to indemnify the employer. By reason of the provisions of the Act, an employer is not statutorily liable to enter into a contract of insurance. Where, however, a contract of insurance is entered into by and between the employer and the insurer, the insurer shall be liable to indemnify the employer. The insurer, however, unlike under the provisions of the Motor Vehicles Act does not have a statutory liability. Section 17 of the Act does not provide for any restriction in the matter of contracting out by the employer vis-a-vis the insurer. 15. The terms of a contract of insurance would depend upon the volition of the parties. A contract of insurance is governed by the provisions of the Insurance Act. In terms of the provisions of the Insurance Act, an insured is bound to pay premium which is to be calculated in the manner provided for therein. With a view to minimize his liability, an employer can contract out so as to make the insurer not liable as regards indemnifying him in relation to certain matters which do not strictly arise out of the mandatory provisions of any statute. Contracting out, as regards payment of interest by an employer, therefore, is not prohibited in law. 12. As rightly contested by the counsel for the appellant though the policy copy was not filed by the insurance company, it is asserted in the counter affidavit that the policy is taken for Rs.1,00,000/- and it is a Group Personal Accident Policy. Learned counsel for the appellant would submit that the policy does not cover the claim made under the Workmen Compensation Act. Therefore, the insurance company was not liable for the sum which was payable under the Workmen Compensation Act, but however, he fairly considered that the Insurance Company had issued a Group Personal Accident Policy covering the present claimant in the establishment and liability arose only in favour of the insured employer. The claimant was covered by the group personal accident policy under which the insurer was liable to make payment to an extent of Rs.1,00,000/- in respect of the accident/injuries suffered by the employee in the employment of the employers who are arrayed as Respondent-2 and 3 herein. 13. The liability of the Insurance Company to pay under that policy cannot be disputed. 13. The liability of the Insurance Company to pay under that policy cannot be disputed. The insurance company issues different types of policies including the one under the provisions of the Workmen Compensation Act, is not a defence to absquatulate/runaway itself from paying under the miscellaneous group insurance as in the instant case. The technical defence, which was raised by the appellant herein, this court cannot countenance as per the policy obtained by the employer. Admittedly, the policy is a Group Personal Accident Policy and which is obtained for Rs.1,00,000/- and therefore the insurance company is liable to satisfy the award to an extent of Rs.1,00,000/- as per the policy. 14. The Commissioner has allowed the claim application fixing the liability jointly and severally and directed the insured and insurer to pay/deposit an amount of Rs.1,19,098 to the claimant. As per the policy the insurer is liable to pay an amount of Rs.1,00,000/- rest of the amount of Rs.19,098/- shall be payable by the insured to the workmen. 15. Hence, the appeal is allowed partly and the claimant is entitled to receive an amount of Rs.1,00,000/- out of the deposited amount and the rest of the amount shall be deposited by the employer and therefore employer is directed to deposit the balance amount of Rs.19,098/- within a period of three weeks from the date of receipt of the order failing which the claimant is entitled for interest @12 % per annum. Miscellaneous Petitions pending, if any, shall stand closed.