M/S New India Assurance Company ... vs Yadav Rama Gagare & Others
2016 Latest Caselaw 776 Bom

                                                                          37fa382-95.odt
                IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                           BENCH AT AURANGABAD
                             FIRST APPEAL NO. 382 OF 1995




                                                                           
          M/s New India Assurance Co. Ltd. ..                   Appellant
          Having its Regd. & Head Office 




                                                   
          at New India Assurance Building, 
          87, M.G. Road, For Mumbai 400 
          001, Branch office at Sangamner, 
          Dist. Ahmednagar and Divisional 




                                                  
          Office at Adalat Road, 
          Aurangabad 431 005
          Through  its Divisional Manager.

          VERSUS




                                            
    1. Mr. Yadav Rama Gagare, Major,
                               
       Labour, r/o Mandve, Tq. 
       Sangamner,  Dist. Ahmednagar.
                              
    2. Mr. Shivaji s/o Kisan Gunjal,
       Major, Occu: business, R/o 
       Pravara Transport,
       Sangamner, Dist. Ahmednagar.
      


    3. Mr. Vithal s/o Keshav Kashid,                    ...       Respondents
   



       Major, Occu: Driver, Wadgaon, 
       Pan, Tq. Shrirampur, District: 
       Aahmednagar





    4. Mrs. Gangubai Yadav Gajare, 
       Major, Occu: Household r/o 
       Mandve, Tq. Sangamner,  Dist. 
       Ahmednagar.





    Mr. V. N. Upadhye, Advocate for appellant
    Mr. S. K. Shinde, Advocate for respondents 2 and 3,
    Mr. S. L. Bhapkar, Advocate for respondents 1 and 4

                                     CORAM   :  V. K. JADHAV,  J.

DATE : 21st March, 2016

ORAL JUDGMENT :

1. Being aggrieved by the judgment and order dated

37fa382-95.odt 29.07.1995 passed by the learned Commissioner for

Workmen's Compensation & Judge, 1st Labour Court,

Ahmednagar, in Application (WC) No.70/1992, the Insurer/

original Opponent No.3 has preferred this appeal only to

the extent that learned Commissioner for Workmen's

Compensation & Judge, 1st Labour Court, Ahmednagar has

imposed penalty on the Insurer as provided under Section

4-A(3) of the Workmen's Compensation Act.

2. Brief facts giving rise to the present appeal are as

follows:

i. Deceased Bhaskar was in employment of respondent

No.2 as a cleaner, since two years immediately

preceding the incident, on truck bearing MWA 5619.

Respondent No.2/original opponent No.1 was owner of

the said vehicle/truck and respondent No.3/Original

Opponent No.2 was driver on the said truck. On

22.04.1992, under the instructions of respondent

No.2, respondent No.3 driver took the said truck in

an agricultural field for loading sugarcane.

Deceased Bhaskar had also accompanied the truck as a

part of his duty. In the field, respondent No.3

driver instructed the deceased Bhaskar to look into

machine of the truck and while doing so, right hand

37fa382-95.odt of deceased Bhaskar got entangled in the belt and

the belt also stuck to his chest. He had sustained

sever injuries and thereafter succumbed to the same.

ii. The claimants/respondent Nos. 1 to 4 herein, being

legal representatives/dependents, approached the

Commissioner for Workmen's Compensation & Judge, 1 st

Labour Court, Ahmednagar for grant of compensation

under the relevant provisions of the Workmen's

Compensation Act. The claimants also claimed

compensation alongwith interest besides the penalty

for not depositing the compensation amount within

stipulated time. The learned Commissioner for

Workmen's Compensation & Judge, 1st Labour Court, by

its impugned judgment and order dated 29.07.1995,

allowed the said application and thereby directed

opponent No.3/Insurer to deposit Rs.67,200/- by way

of compensation alongwith interest @ 6% per annum

and further directed to pay Rs.7,000/- by way of

penalty under section 4-A(3) of the Workmen's

Compensation Act. Hence this appeal by the

appellant/Insurer to the extent of imposing penalty.

3. The learned counsel for the appellant/ Insurer

submits that though the appellant Insurer is liable to

37fa382-95.odt meet the claim of compensation along-with interest, the

appellant Insurer is not liable to pay additional amount

by way of penalty imposed on it. The learned counsel

submits that in the year 1995 itself, the appellant

Insurer has deposited the amount of compensation

alongwith interest before the Labour Court and preferred

this appeal so far as imposition of penalty on the

appellant Insurer is concerned. The learned counsel

submits that it would be the liability of Insured/

employer alone and that appellant Insurer is not liable

to pay the same.

4. The learned counsel for the appellant, in order to

substantiate his submission, placed reliance on the

decision of the Hon'ble Supreme Court in the case of Ved

Prakash Garg V. Premi Devi & ors. reported in (1998)ACJ 1.

5. Learned counsel for respondent Nos. 2 and 3, Owner

and Driver respectively, submits that the vehicle

involved in the incident was validly insured with the

appellant Insurer covering the date of accident and as

the amount of compensation has not been deposited within

a month from the date of accident, the appellant Insurer

is liable to pay amount of penalty. The learned counsel

submits that the appellant Insurer stands in the shoes of

37fa382-95.odt the Insured employer and thus liable to pay the amount

of compensation alongwith interest and penalty.

6. The learned counsel for respondent Nos. 2 and 3, in

order to substantiate his contention, placed reliance on

the decision of the Hon'ble Supreme Court in the case of

Khirod Nayak Vs. Commissioner for Workmen, reported in

ACC 1991 2 441.

7. I have also heard learned counsel for the

respondent Nos.1 and 4/claimants.

8. In the case in hand, dependents of deceased

Bhaskar approached to the Commissioner for Workmen's

Compensation & Judge, Labour Court claiming compensation

under the relevant provisions of the Workmen's

Compensation Act, 1923 alongwith interest on the said

amount besides the penalty for not depositing the amount

within the stipulated time. Accordingly, the learned

Commissioner for Workmen's Compensation & Judge, Labour

Court has issued notice to the respondents i.e.

Employer/owner, Driver and Insurer of the vehicle

involved in the incident. It appears from the record

that the respondents employer and driver remained

absent though served with the summons of the Court.

However, the appellant Insurer has appeared before the

37fa382-95.odt court and contested the application on various counts

including statutory defence of breach of terms and

conditions of the policy. The appellant Insurer has

contested the said application for compensation on the

ground that the Insurance company is not liable to pay

the amount of compensation on account of breach of terms

of policy.

9. So far as respondent No.1 employer is concerned,

he has not even denied the entitlement of claimants/

dependents for the compensation. Thus, the compensation

as required to be paid by the employer on account of

death of the workman arising out of and in the course of

employment fallen due within one month from the date of

accident. The employer has not contested the application

filed under the provisions of the Workmen's Compensation

Act before the Commissioner for Workmen's Compensation &

Judge, Labour Court. Since the appellant Insurer has

raised certain grounds, including the ground of breach of

terms and conditions of policy, it can be said that the

amount of compensation under the Workmen's Compensation

Act fallen due only after adjudication of the matter by

the Commissioner for Workmen's Compensation & Judge,

Labour Court.

37fa382-95.odt

10. In case of Ved Praksh Garg (supra) relied on by

the learned counsel for the appellant, the Hon'ble

Supreme Court has observed that the Insurance company

will have to make good the claim of interest. In view of

conjoint operation of section 4A, sub section 3

additional amount of compensation by way of penalty is

required to be paid by the insured employer. It is

further observed by the Hon'ble Supreme Court that the

Insurer would not remain liable to reimburse the said

claim and it would be liability of Insured employer

alone.

11. Section 4A of the Workmen's Compensation Act

does not contain any provision when employer denies

liability of compensation in toto. If liability is

denied by the employer, then the liability to pay

compensation falls due after adjudication of the matter

by the Labour Court or by the Commissioner for Workmen's

Compensation as the case may be. However, if the

liability is not denied, then there is no justification

in delaying the payment of compensation and thus, the

employer is liable to pay penalty within the meaning of

section 4-A(3) of the Workmen's Compensation Act. In

view of this, the appeal is required to be partly allowed

by setting aside the order passed by the Commissioner for

37fa382-95.odt Workmen's Compensation and Judge, 1st Labour Court,

Ahmednagar to the extent of directing the appellant

Insurer to pay penalty as provided under section 4-A(3)

of the Workmen's compensation Act. Accordingly, I

proceed to pass following order:

O R D E R

i. The first appeal is hereby partly allowed.

ii. Judgment and order dated 29.07.1995 passed by the

Commissioner for Workmen's Compensation and Judge,

1st Labour Court, Ahmednagar in Application (WC)

No.70 of 1992 is hereby quashed and set aside to the

extent of directing the appellant Insurer to pay

Rs.7000/- by way of penalty under section 4-A(3) of

the Workmen's Compensation Act.

iii. Original Opponent No.1 Employer Shivaji Kisan

Gunjal shall pay Rs.7000/- by way of penalty under

section 4-A(3) of the Workmen's Compensation Act.

iv. Rest of the judgment and order passed by the

learned the Commissioner for Workmen's Compensation

and Judge, 1st Labour Court, Ahmednagar in

Application (WC) No.70 of 1992 dated 29.07.1995

directing Opponent No.3/ Insurance company to

37fa382-95.odt deposit an amount of Rs.67,200/- by way of

compensation alongwith interest @ 6% per annum

from 01.06.1992 till the date of that order is

confirmed.

v. First appeal is accordingly disposed of.

vi. In the circumstances there shall be no order as to

costs.

                                ig                ( V. K. JADHAV, J. )
    JPC