New India Assurance Co. Ltd. vs Mohan Bhanudas Bansode And Ors.
2005 Latest Caselaw 682 Bom

JUDGMENT

D.S. Zoting, J.

1. Heard Shri V. N. Upadhye, Advocate for the appellant and Shri B. R. Warma, Advocate for the respondents.

2. This is an appeal preferred by the original respondent No. 2 against the judgment and award passed by Commissioner, Workmen's Compensation and Civil Judge (Senior Division), Parbhani in F. A. No. 8 of 1996 dated 2-5-1998 imposing penalty of Rs. 83,013.75 Ps. and interest at the rate of 12% p.a. and making the appellant liable for payment, in addition to this amount, the compensation of Rs. 1,66,027.50 Ps.

3. The facts relevant for decision of this appeal may be briefly stated as under:

One Balu Mohan Bansode, who was admittedly in the employment of respondent No. 3, died in a vehicle accident that had taken place on 11-5-1996. The respondents Nos. 1 and 2 (original petitioner Nos. 1 and 2) are the parents of Balu. Balu Mohan Bansode was serving as a driver. He was getting in all Rs. 1500/- p.m. and Rs. 600/- towards Bhatta from respondent No. 3. On 11-5-1996, he was driving the said vehicle. As per the directions of respondent No. 3, he was coming from Majalgaon to Manwat. However near Ramnagar Tanda, an unknown truck gave dash to the said jeep as a result of which, Balu sustained injuries and died on the spot. The said accident occurred out of and during the course of employment. Balu was 22 years old. The vehicle was insured with the Insurance Company i.e. original respondent No. 2 (present appellant).

4. The respondent No. 3 has not disputed occurrence of the accident. But he has denied his liability to pay the compensation to the parents of the deceased though he has admitted that Balu was engaged by him as a driver on his vehicle. It is also not disputed that the accident has occurred during the course of employment resulting in the death of Balu in the said accident. He submits that he had no knowledge of the accident and so, he could not be imposed with the penalty.

5. The Insurance Company resisted the claim of the respondents Nos. 1 and 2 by filing written statement. It is denied that Balu was a regular worker and under the employment of respondent No. 3. He accidently met with the driver of respondent No. 3 and requested him to give lift. He insisted the said driver to allow him to drive the vehicle. He started driving the vehicle and met with an accident.

6. With these rival contentions, all the parties led evidence. On appreciation of the evidence, the Court below negatived the contentions raised by the Insurance Company and upheld the case of respondents Nos. 1 and 2 i.e. parents of deceased Balu that Balu died during the course of his employment with present respondent No. 3. The Court has worked out the amount of compensation as per Section 4-A of the Workmen's Compensation Act read with Schedule IV of the said Act to the tune of Rs. 1,66,027.50 Ps. It is urged on behalf of the appellant that the employer has not deposited the amount of compensation within a period of one month from the date when it fell due and as such, as per clause (b) of sub-section (3) of Section 4-A of the Act, the Court awarded interest at the rate of 12 % p.a. on the amount of compensation and directed to pay penalty at 50% of the amount of the compensation. The vehicle was insured with the present appellant and so, the employer as well as the insurance company were held jointly and severally liable to pay the amount of compensation with interest as well as the penalty. Aggrieved by the said judgment and award, the insurance company has preferred this appeal.

7. I have heard the arguments advanced by the counsel for both the parties. Shri Upadhye, learned counsel for the insurance company submits that the insurance policy does not disclose any term or condition of contract of insurance in relation to the liability to pay interest or penalty under Workmen's Compensation Act, 1923 which has a different setting and purpose known to the normal insurance law embodied in the contract between the parties and as such, the insurance company is not liable to pay the interest and the penalty. Thus he has not disputed the liability of insurance company to pay the amount of compensation. However, according to him, the insurance company is not liable to pay the interest and the penalty. As against this, the learned counsel for the respondents submits that the insurance company is liable to pay the amount of compensation with interest and penalty, as imposed by the Commissioner, Workmen's Compensation.

8. In view of arguments advanced by both the parties, following points arise for my consideration :

1. Whether the Insurance Company is liable to pay interest on the amount of compensation?

2. Whether the Insurance Company is liable to pay penalty under the provisions of the Workmen's Compensation Act?

9. The controversy involved in the present appeal is covered by the decision of the Supreme Court in the case of Ved Prakash Garg v. Premi Devi and Ors., . In the said case, it is held that the insurance company, so far as the question of penalty is concerned, would not be liable under the provisions of the Workmen's Compensation Act. However, the liability in respect of interest would be burdened on the insurance company as also on the employer. The same view has been reiterated in the subsequent decision of the Supreme Court in the case of Kashibhai Rambhai Patel v. Shahabhai Somabhai Parmar and Ors., . In view of this well settled principle laid down by the Supreme Court, point No. 1 pertaining to the liability of the insurance company to pay interest on the amount of compensation will have to be answered in the affirmative whereas the second point pertaining to penalty will have to be answered in the negative.

10. In the result, the award passed by the Commissioner, Workmen's Compensation needs to be modified. The order directing the original respondents to pay an amount of Rs. 1,66,027.50 Ps. with interest thereon at the rate of 12% p.a. stands confirmed. However, the order directing to pay penalty to the tune of Rs. 83,013.75 Ps. is set aside to the extent of liability of the insurance company (original respondent No. 2 only) and, therefore, the said clause of the order is modified as under :

"The original respondent No. 1 Bhimashankar Bapurao Bhute do pay the penalty to the tune of Rs. 83,013.75 Ps."

Decree be drawn accordingly. Considering the peculiar facts and circumstances, there shall be no order as to costs.