Gujarat High Court

National Insurance Co. Ltd vs Khimjibhai Bhurabhai Gohil on 23 July, 2025

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                            C/FA/4881/2006                                        JUDGMENT DATED: 23/07/2025

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                                    IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                                R/FIRST APPEAL NO. 4881 of 2006
                                                              With
                                                 CIVIL APPLICATION NO. 1 of 2006
                                               In R/FIRST APPEAL NO. 4881 of 2006

                       FOR APPROVAL AND SIGNATURE:


                       HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK
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                                   Approved for Reporting                         Yes           No

                       ================================================================
                                                 NATIONAL INSURANCE CO. LTD
                                                            Versus
                                              KHIMJIBHAI BHURABHAI GOHIL & ANR.
                       ================================================================
                       Appearance:
                       MR SUNIL B PARIKH(582) for the Appellant(s) No. 1
                       MR MAHENDRA U VORA(3034) for the Defendant(s) No. 2
                       NOTICE SERVED for the Defendant(s) No. 1
                       ================================================================

                         CORAM:HONOURABLE MR. JUSTICE HEMANT M.
                               PRACHCHHAK

                                                           Date : 23/07/2025
                                                           ORAL JUDGMENT

1. Present appeal is filed by the appellant - National Co. Ltd.

against the judgment and award passed by the learned

Commissioner for Workmen's Compensation, Bhuj-Kachchh in

Workmen's Compensation Case (N.F.) No. 15 of 2003,

whereby, the learned Commissioner has awarded

compensation of Rs.5,31,288/- with interest @ 12% p.a. in

favour of original claimant and also directed the respondent

No.2 - owner to pay penalty of Rs.5,000/-.

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2. The short facts giving rise to present appeal are that, the

respondent No.1 - original claimant was working with the

respondent No.2 as a driver and was driving the truck bearing

registration No. GJ-12-T-7186, owned by the respondent No.2

and was earning Rs.4,000/- per month and was also earning

Rs.3,000/- towards additional amount, in total he was earning

Rs.7,000/- per month. That, on 26.04.2003, when the

respondent No.1 was on duty, accident took place and he

sustained injuries on various parts of his body and sustained

fracture on his right hand. At the time of accident, the

respondent No.1 was aged 22 years and because of the

accident, he was unable to work as driver and he sustained

100% disablement. Therefore, the respondent No.1 had

claimed compensation of Rs.1,32,822/- by filing Workmen's

Compensation Case being Workmen's Compensation Case

(N.F.) No. 15 of 2003, whereby, the learned Commissioner has

awarded compensation of Rs.5,31,288/- with interest @ 12%

p.a. in favour of the respondent No.1 and also directed the

respondent No.2 - owner to pay penalty of Rs.5,000/-.

3. Being aggrieved and dissatisfied with the aforesaid

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judgment and award passed by the learned Commissioner, the

appellant Insurance Company has filed the present First Appeal

under Section 30 of the Workmen's Compensations Act, 1923.

4. Heard learned advocate Mr. Sunil B. Parikh, appearing for

the appellant - National Insurance Company Ltd. and learned

advocate Mr. Mahendra U. Vora, appearing for the respondent

No.2 - owner of the vehicle.

Though served, respondent No.1 - original claimant has

chosen not to remain present before the Court and thus, the

appeal is heard in his absence.

5. Learned advocate Mr. Parikh has submitted that the

impugned judgment and award passed by the learned

Commissioner is contrary to law and evidence on record. He

has submitted that though there was evidence of medical

certificate in nature relating to the injury, the doctor has

opined 35% permanent disablement likely to be caused to the

respondent No.1 claimant, however, without considering the

same, the doctor had not deposed before the learned

Commissioner and without examining the doctor, the learned

Commissioner has considered 100% permanent disablement

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and 100% permanent for the lost of earning capacity and thus,

the appeal is preferred mainly on two grounds that the learned

Commissioner has committed a jurisdictional error and

therefore, the present appeal is maintainable under the

provisions of Section 30 of the Workmen's Compensation Act.

He has submitted that even considering the decision of this

Court in First Appeal No.4211 of 2006 that even it can be

agitated at the time of final hearing, if it was not agitated at

the time of admission and therefore, he has urged that the

present appeal is required to be allowed and the impugned

judgment and award is required to be modified to that extent.

He has further submitted that the respondent No.1 himself has

admitted in his oral evidence that even after receiving such

injuries, his driving license was not cancelled meaning thereby,

that he was able to drive though he had received injuries,

which is not controverted by the respondent No.1 claimant and

therefore, learned advocate Mr. Parikh has urged that the

impugned judgment and award passed by the learned

Commissioner is required to be interfered with and is required

to be appropriately modified.

6. Per contra, learned advocate Mr. Vora, appearing for the

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respondent No.2 - owner with whom the claimant was working,

has also admitted that the claimant was working with him as a

driver and under such circumstances, appropriate orders be

passed.

7. I have heard the learned advocates appearing for the

respective parties and perused the material placed on record.

Considering the submissions canvassed by both the sides, it

appears that the injuries sustained by the respondent No.1

claimant i.e. fracture on the upper limb, falls under Schedule-1

Part-II of the Act and thus, considering the facts of the case

and the nature of injury sustained by the respondent No.1

claimant, the learned Commissioner without discussing any

further facts or without there being any cogent evidence in the

nature of deposition of doctor has considered disablement at

100% vocational disability and loss of 100% earning capacity,

for which, neither any sufficient evidence was discussed by the

learned Commissioner nor any legal provision was discussed

and merely by guess work, the learned Commissioner has

considered 100% permanent disablement, which is erroneous

and illegal finding recorded by the learned Commissioner and

thus, considering all these aspects, I am of the opinion that the

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present appeal is required to be partly allowed to the extent

that the amount awarded by the learned Commissioner to the

tune of Rs.5,31,288/- is required to be reduced and the

permanent disablement is required to be considered at 35%

instead of 100%. Now, so far as the interest is concerned, since

the policy was under Motor Vehicles Act and not under the

Workmen's Compensation Act, in view of the decision of the

Kamla Chaturvedi vs. National Insurance Co. Ltd. and

others, reported in [2009] ACJ 115, the liability to pay

interest is upon the Insurance Company and not upon the

employer. The relevant paragraphs are reproduced hereunder :

"6. In Ved Prakash Garg v. Premi Devi and others [1997(8) SCC 1] this court observed that the Insurance Company is liable to pay not only the principal amount of compensation payable by the insurer employer but also interest thereon if ordered by the Commissioner to be paid by the insured, employee. Insurance company is liable to meet claim for compensation along with interest as imposed on insurer employer by the Act on conjoint operation of Section 3 and 4(A)(3)(a) of the Act. It was, however, held that it was the liability of the insured employer alone in respect of additional amount of compensation by way of penalty under Section 4(A)(3)(b) of the Act. In New India Assurance Co.'s case (supra) and Ved Prakash Garg's case (supra) was distinguished on facts. It was observed that in the said case the court was not concerned with a case where an accident had occurred by use of motor vehicle in respect whereof the Contract of Insurance will be governed by the provisions of the Motor Vehicles Act, 1988 (in short the `M.V. Act'). A contract of Insurance is governed by the provisions of the Insurance Act, 1938 (in short the `Insurance Act'), unless the said contract is governed by the provisions of a statute. The parties are free to enter into a contract as per their own volition. The Act does not contain a provision like Section 148 of the MV Act where a statute does not provide for a compulsory insurance or accident thereof. The parties are free to choose their terms of contract. In that view of the matter contracting out so far as the reimbursement of amount of interest is concerned is not prohibited by a statute. This position have been

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reiterated in P.J. Narayan v. Union of India and others [2006 (5) SCC 200]. In the instant case the position is different. The accident in question arose on account of vehicular accident and provisions of MV Act are clearly applicable. We have gone through the policy of insurance and we find that no such exception as was the case in New India Assurance Co.'s case was stipulated in the policy of insurance. Therefore, the Insurance Company is liable to pay the interest.

7. The further question arises as to from which date it would be paid.

8. In National Insurance co. Ltd. v. Mubasir Ahmed & Anr. [2007(2) SCC 349] it was, inter alia, held as follows:

"(9) 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 v.

Jashwant Singh [(1998) 9 SCC 134]. 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."

8. In view of above, the impugned judgment and award

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passed by the learned Commissioner for Workmen's

Compensation at Bhuj-Kachchh in Workmen's Compensation

Case (N.F.) No.15 of 2003 is hereby modified to the extent that

the disability is calculated at 35% and thus, the respondent

No.1 original claimant is entitled for an amount of

Rs.1,85,951/- with interest @ 12% from the date of application

till realization and the excess amount of Rs.3,45,337/- is to be