National Insurance Co. Ltd. vs Shri Chhotu Ram & Others
1999 Latest Caselaw 1086 Del

ORDER

Dr. M.K. Sharma, J.

1. The present appeal has been preferred by the appellants being aggrieved by the order dated 23.9.1996 passed by the Commissioner, Workmen's Compensation, Delhi in case No. WCD-102/1992 whereby the Commissioner has awarded compensation of a sum of Rs. 88,548/- together with penal compensation amounting to 50% of the compensation i.e. Rs. 44,274/- and interest at 6% per annum on the principal amount from the date of the petition in favour of the respondents.

2. The respondents namely Shri Chhotu Ram and Smt. Saroj Devi filed a petition before the Commissioner, Workmen's Compensation contending inter alia that the deceased - Mahabir Singh was employed with Shri Devender Singh, respondent No. 3 as driver and he used to drive the Matador bearing No. DL-IL-4009 and was getting salary of Rs. 2,200/- per month besides Rs. 20/- per day as daily allowance. The vehicle of respondent No. 3 was insured with the appellant during the period having a valid policy. It was also stated that on 4.9.1992 while the deceased, Mahabir Singh was on duty and was driving the aforesaid matador, he met with an accident due to the mechanical defect in the vehicle and thereby sustained injuries on his body and died on 16.9.1995 due to the said injury. It is stated that the claimants were dependent on the aforesaid deceased for finance at the time of his death, and that at the time of his bath the age of the deceased was 22 years. The claimants claimed Rs. 1,58,346.40 as compensation and Rs. 22,000/- as medical expense and interest @ 18% per annum pendentelite and future on the aforesaid amount from the date of the application.

3. The aforesaid petition was contested by the appellant as also by respondent No.3 herein and on the pleadings of the parties following issues were framed by the Commissioner, Workmen's Compensation:-

(1) What amount of compensation the petitioners are entitled for?

(2) Relief.

4. Shri Chhotu Ram, one of the claimants filed an affidavit by way of evidence and he was cross-examined by the appellant as also by respondent No. 3. On perusal of the pleadings, record and arguments of the parties the Commissioner proceeded to dispose of the matter and by his judgment and order dated 23.9.1996 fixed the liability to pay the compensation at a sum of Rs. 88,548/-. In addition the Commissioner also directed to pay to the claimants 50% of the compensation amount which comes to Rs. 44,274/-. He also fixed the liability on the appellant i.e. the Insurance Company to pay interest @ 6% per annum from the date of petition till the date the actual payment is deposited.

5. Being aggrieved by the aforesaid award the Insurance Company filed the aforesaid appeal on which I have heard the counsel appearing for the insurance company as also counsel appearing for respondents 1 & 2.

6. It was submitted by the counsel appearing for the appellant that the Commissioner was not justified in directing the insurance company to make payment of the awarded amount. He submitted that the insurance company could at best be liable to pay the compensation awarded but could not be made liable to pay the penalty and interest. He submitted that the Commissioner erred in law in awarding penalty and interest as against the insurance company. In support of his submission he relied upon the terms and conditions of the insurance policy, in terms of which according to him the insurance company are liable to pay the principal amount only and could not have been called upon to pay the penalty and interest as provided under the Workmen's Compensation Act. In support on his contention the counsel also relied upon the ratio of the decision in V. P. Garg Vs. Premi Devi & Others; reported in 1997(2) ACC 250. Counsel appearing for the respondent however, submitted that as per the terms and conditions of the policy there was no restriction imposed regarding payment of compensation or the limit.

According to him under the terms of the policy the appellant was liable to pay the entire compensation fixed by the Commissioner, Workmen's Compensation including that of interest as also the penalty.

7. In the light of the aforesaid submissions I have considered the record as also the conditions of the policy relied upon. Although the appellant has challenged the findings of the Commissioner, Workmen's Compensation in respect of issue No. 1,. I find no merit in the aforesaid submissions. In this connection it would be appropriate to make some reference to the findings of the Commissioner Workmen's Compensation in respect of issue No. 1. In answering the aforesaid issue he held that the entitlement of the claimants to the compensation could not be disputed by the appellant as also by respondent No. 3 and that the respondent No. 3 admitted that his vehicle in question was insured with the appellant on the relevant date i.e. 4.9.1992 and that the deceased was under his employment. Therefore, the findings of the Tribunal that on the principle of vicarious liability the appellant on behalf of respondent No. 3 was liable to pay the compensation for a sum calculated at Rs. 88,548/- is found to be justified and valid. It is also found on record that respondent No. 3 had duly insured his vehicle with the appellant and the said fact has not been denied by the appellant at any stage. In the light of the aforesaid findings arrived at by the Commissioner which could not be disputed by the appellant, the amount fixed as compensation is required to be paid by the appellant being vicariously liable to pay the amount on behalf of respondent No. 3.

8. The next question that arises for my consideration and which was vehemently argued by the counsel for the appellant that in any case the appellant could not have been made liable to pay the penalty and interest as assessed by the Commissioner Workmen's Compensation. The issue, therefore, that arises for consideration at this stage is whether the insurance company could be made liable to make good not only the principal amount but also the interest and the penalty levied thereon. The aforesaid issue, in my considered opinion is no longer res integra in view of the authoritative decision of the Supreme Court in Ved Prakash Garg (supra). The Supreme Court in the aforesaid decision, after considering the various provisions of the Workmen's Compensation Act as also the Motor Vehicles Act has specifically held that when an employee suffers form a motor accident injury while on duty on the motor vehicle belonging to the insured employer, the claim for compensation payable under the Compensation Act alongwith interest thereon, in any, as imposed by the ommissioner under Sections 3 and \4A(3)(a) of the Compensation Act will have to be made good by the Insurance Company jointly with the insured employer. It was also held that so far as the amount of penalty imposed on the insured employer under contingencies contemplated by Section 4A(3)(b) is concerned as that is on account of personal fault of the insured not backed up by any justifiable cause, the insurance company cannot be made liable to reimburse that part of the penalty amount imposed on the employer. In the context thereof it, was held that since the employer is responsible for his own fault and negligence and therefore, he has to bear the entire burden of the said penalty amount with proportionate interest thereon if imposed by the Workmen's Commissioner.

9. Thus in the light of the aforesaid decision given by the Supreme Court and following the ratio laid down therein it is ordered that the appellant is liable to make payment of the principal amount as fixed herein at Rs. 88,548/o and also for the interest as awarded on the said amount from the date of the application till the date of payment at 6% per annum. It is further held that the appellant shall not be held liable to pay the penal compensation amount of 50% of the aforesaid compensation which comes to Rs. 44,274/- and the proportionate interest on the said amount, and the same shall be liable to be paid by respondent No.3.

10. With the aforesaid modification in the order passed by the Commissioner, Workmen's Compensation the appeal stands allowed to the aforesaid extent only but without any cost. Decree sheet be drawn up in terms of this order.