Bombay High Court

Navneet Sadashiv Tembhurnikar vs Mohmmad Anwar Khan Mohammad Abbas ... on 22 June, 2017

Bench: Dr. Shalini Phansalkar-Joshi

2206 FA  35/2008                              1                        Judgment


        IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
                 NAGPUR BENCH AT NAGPUR.



                         FIRST APPEAL NO. 35/2008 


Navneet S/o Sadashiv Tembhurnikar,
Aged about 36 years, Occu: Driver 
(presently - nil),
R/o. Dhargaon, Distt. Bhandara.                         APPELLANT


                                .....VERSUS.....


1]     Mohmmad Anwar Khan S/o 
       Mohammad Abbas Khan,
       since deceased through his L.Rs.

1-i]   Rizwana Begam wd/o Mohmmad 
       Anwar Khan,
       Aged about 32 years, Occu: Housewife,

1-ii] Mohd. Illays s/o Mohmmad Anwar Khan,
      Aged about 7 years, Occu: Student,

1-iii] Fatima d/o Mohmmad Anwar Khan,
       Aged about 5 years, Occu: Student,

       All are R/o. Bhaurao Nagar, Near
       V.M.V. College, Wardhaman Nagar,
       Nagpur.

2]     The United Insurance Co. Ltd.,
       Through its Branch Office at
       Nagpur, through Branch Manager,
       Mount Road, Sadar, Nagpur,
       Distt. Nagpur.                                    RESPONDE NTS
                                                                     



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 2206 FA  35/2008                                  2                         Judgment




       Shri S.N. Sarodiya, counsel for appellant.
       Shri M.M. Kalar, counsel for respondent no.2.
       None for respondent nos.1(i) to 1(iii).


                  CORAM  : DR. SMT. SHALINI PHANSALKAR-JOSHI, J.

                DATE     : JUNE 22, 2017.


ORAL JUDGMENT :

The only short issue raised for consideration in this

appeal is whether the insurance company will be liable to meet the

claim for compensation, along with interest, as imposed on the

insurance company's employer by the Worksmen's Compensation

Commissioner under the Worksmen's Compensation Act

(hereinafter will be referred to as "Act" for convenience) on the

reading of Section 3 and Section 4-A sub section 3(a) of the Act.

2] This question is raised for determination by the

appellant, who is the original claimant, in view of the judgment and

order dated 27/04/2006 passed by Worksmen's Compensation

Commissioner under Section 4(1)(b) of the Act in application

(WCA) No. 5/2003, thereby holding respondent no.1, the employer

alone liable to pay the interest on the amount of compensation

2206 FA 35/2008 3 Judgment

arrived at by the Commissioner to the tune of Rs.4,47,944/- at the

rate of 12% per annum from the date of cause of action till date

depositing the said amount in the court.

3] According to learned counsel for appellant though

while arriving at this finding, the Commissioner under the Act, has

relied upon two judgments, one is that of Hon'ble Supreme Court in

the case of New India Assurance Co. Ltd. -Vs- Shiv Singh and

another, 2000(2) TAC 618 and another of our own High Court in

New India Assurance Co. Ltd. -Vs- Mohd. Yusuf Inamuddin

Pirijade and others, 2004(3) TAC 227; it is submitted that the

Commissioner has ignored the judgment of the Hon'ble Apex Court

in the case of Ved Prakash Garg -Vs- Premi Devi and others,

(1997) 8 Supreme Court Cases 1, wherein there is detailed

discussion as to how the insurance company will also liable to pay

the interest on the amount of compensation, along with the

employer. It is also submitted that there is decision of our own High

Court also in United Insurance Co. Ltd. -Vs- Sarsabai Kishanrao

Sontakke and others, 2006(5) Mh.L.J. 630 and of the Hon'ble

Supreme Court in Kamla Chaturvedi -Vs- National Insurance

2206 FA 35/2008 4 Judgment

Company and others, 2009(3) Mh.L.J. 521 holding that insurance

company is jointly and severally liable along with employer to pay

the interest on the amount of compensation though it will not be

liable to pay the penalty on the said amount.

4] Now, in order to decide this legal issue, it would be

necessary to consider the observations of the Hon'ble Supreme

Court in the abovesaid case of Ved Prakash Garg -Vs- Premi Devi

(supra). The similar issue was raised in the said case also and while

deciding the same, the Hon'ble Supreme Court, after considering

various provisions under Section 147 of the Motor Vehicles Act and

Section 4-A (3)(a) of the Act, was pleased to hold in para no.14 as

follows :-

"14. On a conjoint operation of the relevant schemes of the aforesaid twin Acts, in our view, there is no escape from the conclusion that the insurance companies will be liable to make good not only the principal amounts of compensation payable by insured employers but also interest thereon, if ordered by the Commissioner to be paid by the insured employers. Reason for this conclusion is obvious. As we have noted earlier the liability to pay compensation under the Workmen's Compensation Act gets foisted on the employer provided it is shown that the workman concerned suffered from personal injury, fatal or otherwise, by any motor accident arising out of and in

2206 FA 35/2008 5 Judgment

the course of his employment. such an accident is also covered by the statutory coverage contemplated by Section 147 of the Motor Vehicles Act read with the identical provisions under the very contracts of insurance reflected by the Policy which would made the insurance company liable to cover all such claims for compensation for which statutory liability is imposed on the employer under Section 3 read with Section 4-A of the Compensation Act. All these provisions represent a well-

knit scheme for computing the statutory liability of the employers in cases of such accidents to their workmen. As we have seen earlier while discussing the scheme of Section 4-A of the Compensation Act the legislative intent is clearly discernible that once compensation falls due and within one month it is not paid by the employer then as per Section 4-A(3)(a) interest at the permissible rate gets added to the said principal amount of compensation as the claimants would stand deprived of their legally due compensation for a period beyond one month which is statutorily granted to the employer concerned to make good his liability for the benefit of the claimants whose bread-winner might have either been seriously injured or might have lost his life. Thus so far as interest is concerned it is almost automatic once default, on the part of the employer in paying the compensation due, takes place beyond the permissible limit of one month. No element of penalty is involved therein. It is a statutory elongation of the liability of the employer to make good the principal amount of compensation within permissible time limit during which interest may not run but otherwise liability of paying interest on delayed compensation will ipso facto follows. Even though the Commissioner under these circumstances can impose a further liability on the employer under circumstances and within limits contemplated by Section 4-A(3)(a) still the liability to pay interest on the principal amount under the said provision remains a part and parcel of the statutory liability which is legally liable to be discharged by the insured employer. Consequently such imposition of interest on the principal amount would certainly partake

2206 FA 35/2008 6 Judgment

the character of the legal liability of the insured employer to pay the compensation amount with due interest as imposed upon him under the Compensation Act. Thus the principal amount as well as the interest made payable thereon would remain part and parcel of the legal liability of the insured to be discharged under the Compensation Act and not dehors it. It, therefore, cannot be said by the insurance company that when it is statutorily and even contractually liable to reimburse the employer qua his statutory liability to pay compensation to the claimants in case of such motor accidents to his workmen, the interest on the principal amount which almost automatically gets foisted upon him once the compensation amount is not paid within one month from the date it fell due, would not be a part f the insured liability of the employer. No question of justification by the insured employer for the delay in such circumstances would arise for consideration. It is of course true that one month's period as contemplated under section 4-A(3) may start running for the purpose of attracting interest under sub-clause (a) thereof in case where provisional payment becomes due. But when the employer does not accept his liability as a whole under circumstances enumerated by us earlier then section 4-A(2) would not get attracted and one month's period would start running from the date on which due compensation payable by the employer is adjudicated upon by the Commissioner and in either case the Commissioner would be justified in directing payment of interest in such contingencies not only from the date of the award but also from the date of the accident concerned. Such an order passed by the Commissioner would remain perfectly justified on the scheme of Section 4-A(3)(a) of the Compensation Act." (Emphasis supplied).

5] Thus, in this authority it is conclusively held by the

Hon'ble Supreme Court that liability to pay the interest is part and

2206 FA 35/2008 7 Judgment

parcel of the legal liability to pay compensation and it gets

automatically fastened upon the employer on his default in payment

of compensation within one month from the date it falls due,

without any penalty and if such an accident is covered by statutory

coverage contemplated by Section 147 of the Motor Vehicles Act,

read with identical provisions under the very contract of insurance

reflected by the policy which would make company liable to cover

such claims for compensation, the statutory liability is imposed on

the employer under Section 3 read with Section 4-A of the Act, and

therefore, when the employee suffers the accident while on duty,

the claim for compensation payable under the Act along with

interest thereon, as imposed by the Commissioner under Sections 3

and 4-A(3)(a) of the Act will have to be made good by the

insurance company jointly with the insurance employer.

6] Relying on this judgment, this court has also in the case

of United Insurance Co. Ltd. -Vs- Sarsabai, referred above, has

held that liability covered by insurance company though does not

extent to payment of penalty, it definitely extends to pay interest on

the amount of compensation, awarded by the Commissioner.

 2206 FA  35/2008                                    8                          Judgment




7]              In the decision of  Kamla Chaturvedi  also relied upon

by learned counsel for appellant in para no.6 relying on the above

decision of Ved Prakash Garg -Vs- Premi Devi (supra), it was held

that, "The insurance company is liable to pay not only principal

amount of compensation payable by the insurer employer but also

interest thereon, if ordered by the Commissioner to be paid to the

insured employee".

8] Though learned counsel for respondents has in this

appeal relied on the authority of National Insurance Co. Ltd. -Vs-

Kanai Dasgupta and others, 2006(111) FLR 350, wherein Single

Judge of Guwahati High Court, Agartala Bench, was pleased to hold

that "Insurer has no statutory liability to pay interest on the amount

of compensation", in view of the legal position upheld by the Hon'ble