Oriental Insurance Company Ltd vs Bibi Nagma & Ors
2010 Latest Caselaw 182 Del

                                                   UNREPORTABLE

*      IN THE HIGH COURT OF DELHI AT NEW DELHI


                           FAO No.327/2008

                               Date of Decision: January 14, 2010


       ORIENTAL INSURANCE COMPANY LTD      .... Appellant
                    Through Mr. Tarkeshwar Nath, Advocate

                      versus


       BIBI NAGMA & ORS                ..... Respondents
                     Through Mr. Naresh M Sinha, Advocate
                     for respondents No.1 & 2.
                     Mr. Gaurang Kanth, Ms. Biji Rakesh
                     and Ms. Jyoti Dastidar, Advocates
                     for respondent No.3.
                     Mr. Narain Bhatia, Advocate
                     for respondent No.4.

       CORAM:
       HON'BLE MISS JUSTICE REKHA SHARMA

1.     Whether the reporters of local papers may be allowed to see the
       judgment? No
2.     To be referred to the reporter or not? No
3.     Whether the judgment should be reported in the „Digest‟? No

REKHA SHARMA, J. (ORAL)

One Tabrej Alam was working as a labourer with respondent

No.3, namely, M/s. Delhi Power Company Limited through respondent

No.4 - M/s. Pranav Nirman who was a contractor engaged by

respondent No.3. On September 24, 1998 at 2.30 a.m. while the said

Tabrej Alam was sleeping along with other labourers beside a wall of

the Delhi Power Company Limited which was newly built at Village

Gamri, the wall collapsed resulting in his death. His widow Bibi

Nagma and his minor son Master Ramjan @ Mithoo filed a claim

before the Commissioner under the Workmen‟s Compensation

Act, 1923. By an order dated January 22, 2008, the Commissioner

held the claimants entitled to compensation amounting to

Rs.2,01,532/- along with interest @ 12% per annum with effect from

October 24, 1998 till realization.

The appellant in the present appeal, namely, the Oriental

Insurance Company Limited admitted before the Commissioner that

the contractor M/s Pranav Nirman had taken an insurance policy from

it under the Workmen‟s Compensation Act in respect of the workmen

engaged by it in the construction activity. Based on the admission so

made, the appellant was directed to indemnify the insured under the

admitted terms of the policy. Ignoring the fact that the appellant was

held liable to pay the awarded amount owing to its admission, it

preferred an appeal in this Court against the order dated

January 22, 2008 which was disposed of by an order dated

May 22, 2008. A perusal of the order of May 22, 2008 goes to show

that the appellant in the appeal before this Court resiled from its

earlier stand that the contractor had taken the insurance policy from

it and instead stated that it was the Delhi Power Company Limited

which had taken the insurance policy for its employees and hence, it

was contended that the appellant was not liable to pay compensation

as determined by the Commissioner on account of the death of an

employee engaged by the contractor. In view of the submission so

made, this Court remanded back the case to the Commissioner for

determining the liability of the appellant vis-à-vis the insured. The

relevant paragraph of the judgment dated May 22, 2008 where the

aforementioned submission of the appellant finds mention runs as

under:-

"It is appellant‟s case that Delhi Power Company Ltd. had taken out a policy of insurance through it in respect of its employees and none else. It is urged that the deceased workmen were employees of respondent No.4, a contractor engaged by Delhi Power Company Ltd. and in respect of the death of said workers, the insurance cover could not be used to make appellant liable to satisfy the claims under the Workmen‟s Compensation Act."

Interestingly, when the matter came before the Commissioner

after the remand, the appellant once again changed its stand as to

who was the insured. This time, it was stated that it was the

contractor who had taken the insurance policy under the Workmen‟s

Compensation Act and that the stand before the High Court that the

Delhi Power Company Limited had taken the insurance policy, was

inadvertently taken. In view of this changed stand of the appellant,

the Commissioner passed an order dated July 28, 2008 and thereby

reiterated its earlier order dated January 22, 2008 awarding the same

compensation amounting to Rs.2,01,532/- along with simple interest

@ 12% per annum with effect from October 24, 1998.

The Insurance Company has once again come in appeal before

this Court. This time the challenge is to the order dated

July 28, 2008.

From what has been noticed above one finds that the Insurance

Company had been shifting its stand with regard to who was insured

with it. Initially, before the Commissioner it admitted that the

insurance cover was taken from it by the contractor but subsequently,

in the appeal before this Court it took the plea that it was not the

contractor but the Delhi Power Company Limited which was insured

with it. When in view of its‟ said stand the matter was remanded back

to the Commissioner, it went back to its initial stand that it was the

contractor and not the Delhi Power Company Limited which was

insured with it. In view of the flip-flop and the latest stand of the

appellant, the very basis on which the case was remanded back fell

through and nothing was left for the Commissioner to decide

regarding the liability of the Insurance Company. Therefore, I find no

infirmity in the order holding the appellant liable to pay the awarded

amount to the claimants. This, however, is not the end of the matter.

The question still remains, whether the appellant is liable to pay

interest as awarded by the Commissioner?

It is submitted by the learned counsel for the appellant that the

liability of the Insurance Company to pay interest begins after 30 days

of the passing of the award. In support, reliance has been placed

upon a judgment of the Supreme Court in the case of National

Insurance Co. Limited Versus Mubasir Ahmed and Another,

reported in (2007) 1 SCC (L&S) 643. The relevant paragraph of the

judgment reads as under:-

"Interest is payable under Section 4-A(3) if there is default in paying the compensation due under this Act within one month from the date it fell due. The question of liability under Section 4- A was dealt with by this Court in Maghar Singh Versus Jashwant Singh. By amending Act 30 of 1995, Section 4-A of the Act was amended, inter alia, fixing the minimum rate of interest to be simple interest @ 12%. In the instant case, the accident took place after the amendment and, therefore, the rate of 12% as fixed by the High Court cannot be faulted. But the period as fixed by it is wrong. The starting point is on completion of one month from the date on which it fell due. Obviously it cannot be the date of accident. Since

no indication is there as to when it becomes due, it has to be taken to be the date of adjudication of the claim. This appears to be so because Section 4-A(1) prescribes that compensation under Section 4 shall be paid as soon as it falls due. The compensation becomes due on the basis of adjudication of the claim made. The adjudication under Section 4 in some cases involves the assessment of loss of earning capacity by a qualified medical practitioner. Unless adjudication is done, question of compensation becoming due does not arise. The position becomes clearer on a reading of sub-section (2) of Section 4-A. It provides that provisional payment to the extent of admitted liability has to be made when employer does not accept the liability for compensation to the extent claimed. The crucial expression is "falls due." Significantly, legislature has not used the expression "from the date of accident". Unless there is an adjudication, the question of an amount falling due does not arise."

Having regard to the aforementioned judgment of the Apex

Court, I modify the award and hold that the interest as awarded by

the Commissioner shall be payable to the claimants from the expiry of

30 days from the date of the first award of the Commissioner dated

January 22, 2008. The appellant shall pay the compensation along

with interest to the claimants within one month.

The appeal is disposed of. Dasti.

REKHA SHARMA, J.

JANUARY 14, 2010 PC/ka