Smt Sunita Narasimha Naik vs The United India Insurance Co Ltd
2022 Latest Caselaw 2937 Kant

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

   DATED THIS THE 22ND DAY OF FEBRUARY 2022

                        BEFORE

    THE HON'BLE MR. JUSTICE ASHOK S. KINAGI

           M. F. A. NO. 525 OF 2021 (CPC)
                        C/ W

           M. F. A. NO. 419 OF 2021 (CPC)

IN MFA No.525 OF 2021

BETWEEN:

SRI. ANAND BALGI
S/O RAGUVEER BALAGI
AGED ABOUT 38 YEARS
REP. BY HIS GUARDIAN WIFE
SMT. ANANYA BALGI, W/O ANAND BALGI
AGED ABOUT 30 YEARS
R/AT NO.110, V.V. ROAD, NAVAYATH COLONY
BHATKAL TALUK.
                                       ...APPELLANT

(BY SRI. NAGARAJA HEGDE, ADVOCATE)

AND:

1 . THE NATIONAL INSURANCE CO. LTD.,
    BRANCH OFFICE: KUNDAPURA
    2ND FLOOR, SAI CENTER MAIN ROAD
    KUNDAPURA.
                          2



2 . SRI. RAGHAVENDRA SHET
    S/O GANAPATHI SHET
    AGE BY MAJOR
    R/AT VEERA VITHAL ROAD
    BHATKAL TALUK.
                                    ...RESPONDENTS

(BY SRI. A.N. KRISHNASWAMY, ADVOCATE)


     THIS MFA IS FILED UNDER ORDER 43 RULE 1(a) OF
CPC, PRAYING TO SET ASIDE THE ORDER DATED
21.11.2020, PASSED IN ECA NO.2/2020, ON THE FILE OF
THE SENIOR CIVIL JUDGE AND COMMISSIONER FOR
EMPLOYEES COMPENSATION ACT, AT KUNDAPURA.


IN MFA No.419 OF 2021

BETWEEN

1 . SMT. SUNITA NARASIMHA NAIK
    W/O LATE NARASIMHA MAHADEVA NAIK
    AGED ABOUT 30 YEARS

2 . PREETAM NARASIMHA NAIK
    MINOR
    S/O LATE NARASIMHA MAHADEVA NAIK
    AGED ABOUT 6 YEARS

3 . JAHNAVI
    MINOR
    D/O LATE NARASIMHA MAHADEVA NAIK
    AGED ABOUT 5 YEARS

   APPELLANTS No.2 AND 3 ARE MINORS
   REP. BY GUARDIAN MOTHER
   1ST APPELLANT SUNITHA NARASIMHA NAIK
                             3



4 . SMT. LAXMI MADEVA NAIK
    W/O LATE MADEVA NAIK
    AGED ABOUT 60 YEARS
    ALL ARE R/AT NO.197/1,
    HEBBAGILU MANE
    MADGAKERI ROAD, BELKE,
    BHATKAL, UTTARA KANNADA
                                      ...APPELLANTS

(BY SRI. NAGARAJA HEGDE, ADVOCATE)

AND:

1.   THE UNITED INDIA INSURANCE CO. LTD.
     BRANCH OFFICE. KUNDAPURA
     SRI. LAXMI NARASIMHA COMPLEX
     OPP. KSRTC DEPOT
     N.H-66, VADERHOBLI
     KUNDAPURA.

2.   SRI. SHRIDHAR M NAIK
     S/O MANJAPPA NAIK
     AGED BY MAJOR
     R/AT HANUMAN NAGAR
     BHATKAL TALUK
                                     ...RESPONDENTS

(BY SRI. A.N. KRISHNASWAMY, ADVOCATE FOR R-1
    NOTICE TO R-2 IS DISPENSED WITH VIDE ORDER
    DATED 18.11.2021)


     THIS MFA IS FILED UNDER ORDER 43 RULE 1(a) OF
CPC, PRAYING TO SET ASIDE THE ORDER DATED
21.11.2020, PASSED IN ECA NO.4/2020, ON THE FILE OF
THE SENIOR CIVIL JUDGE AND COMMISSIONER FOR
EMPLOYEES COMPENSATION ACT, AT KUNDAPURA.
                              4



     THESE APPEALS HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 10.01.2022, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT DELIVERED THE
FOLLOWING:


                         JUDGMENT

The appellants aggrieved by the orders dated

21.11.2020, passed by the Senior Civil Judge &

Commissioner for Employees Compensation Act,

Kundapura in E.C.A.No.2/2020 and E.C.A.No.4/2020,

have filed the present appeals.

2. Brief facts leading rise to filing of these

appeals are as under:

The appellant in MFA No.525/2021 have filed a

claim petition in ECA No.2/2020 before the Trial Court

contending that appellant was working as a driver of

car bearing Reg.No.KA-7-M-7665 owned by

respondent No.2. On 09.05.2019, during the course

of his employment under respondent No.2, when he

was driving the said car and when the car reached

near Bette Veera Temple, Gulme Village, Bhatkal-

Sagar Road, SH-50, met with an accident and in the

said accident, he has sustained injuries and taken

treatment at KMC Hospital, Manipal. The appellant in

the said appeal filed a claim petition before the

Commissioner for Employee's Compensation.

The appellants in MFA No.419/2021 filed a claim

petition in ECA No.4/2020 contending that they are

the legal heirs of Sri. Narasimha Mahadeva Naik who

died in the road accident which occurred on

01.02.2019 during the course of his employment as

he was driving a passenger tempo bearing Reg.No.KA-

47-1076 under the employment of respondent No.2.

The Commissioner for Employee's Compensation

has passed an order exercising powers under Section

23 of the Employee's Compensation Rules, 1966 and

Order VII Rule 10 of CPC to return the claim petition

to present it before proper Court on the ground that

the said Court is not having territorial jurisdiction to

entertain the same, since, as per Section 21(1) of the

Employee's Compensation Act, 1923 ('the Act' for

short), the parties of the petition are residing in

Bhatkal Taluk and therefore the Commissioner of

Employee's Compensation is having a territorial

jurisdiction to entertain the petition filed by the

appellants.

The appellants being aggrieved by the order

passed by the Commissioner for Employee's

Compensation, have filed these appeals.

3. The appeals are admitted on the following

substantial question of law:

Whether the appellants prove that the impugned order passed by the Commissioner for Employee's Compensation is arbitrary?

4. Heard learned counsel for the appellants

and learned counsel for the respondents.

5. Learned counsel for the appellants submits

that the Trial Court has committed an error in

returning the claim petition to present it before the

proper forum. He submits that Section 21 of the Act

provides the venue of proceedings and transfer. He

further submits that as per Clause (c) of Sub-section

(1) of Section 21, the employer has his registered

office at Kundapura and the Commissioner of

Employee's Compensation, Kundapura has jurisdiction

to entertain the claim petition. He further submits

that the employer means and includes the insurance

company and he places reliance on the judgment of

the Co-ordinate Bench of this Court in YAMUNA

CHANNABASAPPA SHETTY VS. K. RAGHUKUMAR @ RAGHU

reported in LAWS(KAR)-2019-7-235. He submits that

the Trial Court has the jurisdiction to entertain the

claim petition filed by the appellants. He further

submits that the Commissioner of Employee's

Compensation committed an error in returning the

claim petition to present it before proper forum.

Hence, on these grounds, prays to allow the appeals.

6. Per contra, learned counsel for the

respondents submits that the Commissioner of

Employee's Compensation is justified in relying upon

Section 21 of the Act and further submits that the

accident has taken place within the jurisdiction of

Bhatkal Rural Police Station and the appellants are the

residents of Bhatkal. He submits that the Bhatkal

Commissioner of Employee's Compensation has got a

jurisdiction to entertain the claim petition. In support

of his contention, he has placed reliance on the

following decisions of this Court in MFA

No.20749/2008 c/w 20748/2008, disposed of on

08.08.2018; MFA No.5797/2008, disposed of on

08.08.2018; and MFA No.1307/1990, disposed of on

19.02.1991. Hence, on these grounds, prays to

dismiss the appeals.

7. Perused the records and considered the

submissions made by learned counsel for the parties.

8. It is not in dispute that the appellant in MFA

No.525/2021 and Narasimha Mahadeva Naik met with

accidents which occurred on 09.05.2019 and

01.02.2019, respectively, during the course of their

employment and they were driving the vehicles under

the employment of respondent No.2. The appellant in

MFA No.525/2021 and legal heirs of Narasimha

Mahadeva Naik have filed claim petitions under

Section 8 and 10 of the Act. From the perusal of the

records, the accident occurred within the jurisdiction

of Bhatkal Rural Police Station and the appellants are

the residents of Bhatkal. In order to consider the

contention of the learned counsel for the parties, it is

necessary to examine Section 21(1) and Section

2(1)(e) of the Act which governs the venue of

proceedings under the Act which reads as under:

"21. Venue of the proceedings and transfer - (1) Where any matter under this Act is to be done by or before a Commissioner, the same shall, subject to the provision of this Act and to any rules made hereunder, be done by or before the Commissioner for the area in which -

(a) the accident took place which resulted in the injury; or

(b) the employee or in case of his death, the dependant claiming the compensation ordinarily resides; or

(c) the employer has his registered office."

"Section 2(1)(e) of the Act reads as under:

'employer' includes any body of persons whether incorporated or not and any managing agent of an employer and the legal representatives of a deceased employer, and, when the service of an employee are temporarily lent or let on hire

to another person by the person with whom the employee has entered into a contract of service or apprenticeship, means such persons while the employee is working for him."

9. A careful reading of the said provision makes

it clear that the word 'employer' includes any body of

persons whether incorporated or not and any

managing agent of an employer and the legal

representatives of the deceased employer, and when

services of an employee are temporarily lent or let on

hire to another person by the person with whom the

employee has entered into a contract of service or

apprenticeship, means such other person while the

employee is working for him which includes managing

agent of the employer/insurance company.

10. When a policy of insurance is taken by the

employer with the insurance company, automatically a

contract between the employer and insurance

company takes place and the insurance company

becomes the managing agent of the employer. The

insurance company includes within the definition of

'employer'. The said view is reiterated by the Co-

ordinate Bench of this Court in YAMUNA

CHANNABASAPPA SHETTY (SUPRA), as under:

"30. When a policy is taken by the employer with the insurance company, automatically a contract between 'employer' and 'insurance company' takes place and the insurance company becomes the managing agent of the employer. Therefore, the contention of the learned counsel for the appellant that, an 'employer' does not include the 'insurance company', cannot be accepted.

31. It is well established fact that the Employee's Compensation Act, 1923, is a beneficial legislation whereby the interest of the workmen is sought to be protected. The object of adding third proviso, to Section 30(1) of the 'Act' is to ensure the compliance

of the award passed by the Commissioner for Workmen's Compensation/Tribunal, in the event of dismissal of the appeal filed by the employer, so that the workmen is not required to run from pillar to post for years together for getting the amount of compensation. This becomes further apparent from the fact that the right of appeal under Section 30 of the 'Act' is restricted by providing that an appeal under Section 30 would lie only on a substantial question of law. The literal interpretation of the term 'employer' as suggested by the learned counsel for the appellant and learned counsel appearing for the insurance company is bound to lead to an anomalous situation, where though the employer is required to deposit the amount of compensation before filing an appeal against the award and file certificate of deposit along with memorandum of appeal, but the insurer, if chooses to file an appeal against the same award becomes liable to pay the compensation on account of contract of insurance between the employer and the insurer, can file appeal without depositing the amount of compensation and without

certificate of deposit. This could never be the intention of the legislature while enacting the third proviso to Section 30(1) of the 'Act'. Section 30(1) of the 'Act' does not give any independent right of appeal to the insurer. Virtually the right of appeal given to the employer is availed by the insurer, who feels aggrieved by the award on account of the contract of insurance between the insurer and the employer. How then the insurer can be on a better footing than the employer? It goes without saying that the said right can be availed by the insurer under those restrictions only which are imposed on the employer. Therefore, the contention that the 'insurer' cannot become 'employer' cannot be accepted.

32. It is also well settled that the liability of the insurer is co-extensive and co-terminus with that of the insured. i.e., the employer and the insurer cannot question the order awarding compensation by raising grounds which are not open to the employer so far as the quantum of compensation is concerned. The question, whether the insurer can

question the quantum of compensation awarded to a workman by preferring an appeal is another one. Considering the intendment in requiring the entire amount payable under the order appealed against to be deposited is to see that the fruits of the order are not denied or delayed and are assured and considering the fact that the 'Act' itself is a beneficial legislation, the insurer cannot be placed in a different position than that of the insured i.e., the employer. Therefore, this Court is inclined to take the view that, an employer and the appellant are used interchangeably for the purposes of the third proviso to Section 30(1) of the 'Act'. This is not doing violence to the language of the third proviso, on the other hand, it is ironing the ruck created by the dual expressions used, i.e., employer at one place and appellant at another, by a process of interpretation to further the object and intendment of the legislature in enacting the third proviso in accordance with the well established principles of interpretation.

33. By a liberal and wider interpretation to the term 'employer' in the third proviso to

Section 30(1) of the 'Act', it can be held that, as the insurer gets the right to file an appeal against the award by stepping into the shoes of the employer on account of contract of insurance between them, the restrictions imposed by third proviso on the appeal at the behest of the employer would equally apply to the appeal filed by the insurer meaning thereby, the appeal at the instance of the insurer will also have to accompany a certificate from Commissioner for Workmen's Compensation that the amount of compensation has been deposited and in the absence of such a certificate, the appeal would not be maintainable.

34. Sri A.N.Krishna Swamy, learned counsel for the insurance company relied upon the provisions of Sections 12(2), 13 and 14 of the 'Act'. Section 12 deals with contracting, Section 13 deals with Remedies of employer against stranger and Section 14 deals with Insolvency of employer. By combined reading of the said provisions, it clearly indicates that, the person other than employer can also be made liable to pay the compensation under

the 'Act' and moreover, the expression used 'any person' under Section 19 of the 'Act' covers an 'insurer' also. Therefore, this Court finds no substance in the submission of the learned counsel for the insurance company that insurance company is not liable to pay compensation amount.

35. It is well settled that the Employee's Compensation Act, 1923, is a piece of social security and welfare legislation, its dominant purpose is to protect the workman and, therefore, the provisions of the 'Act' should not be interpreted too narrowly so as to debar the workman/employee from compensation which the parliament thought they ought to have. The intention of the legislature was to make the employer an insurer of the workman responsible against the loss caused by the injuries or death, which ought have happened, while the workman was engaged in his work."

Applying the above principle, this Court is of the

view that 'employer' includes insurance company.

11. This Court finds no substance in the

submission of the learned counsel for the insurance

company that the insurance company is not an

employer and hence the claim petitions filed by the

appellants are not maintainable before the

Commissioner of Employee's Compensation,

Kundapura.

12. In the present case, admittedly, the office of

the insurance company is situated at Kundapura.

Hence, the Commissioner of Employee's

Compensation, Kundapuar has got jurisdiction to

entertain the claim petitions filed by the appellants.

13. As per section 21(1)(c), the claim petition

can be filed before the Commissioner for the area in

which the employer has his registered office. In the

present case, the office of the insurance company is

situated at Kundapur. The Commissioner for

Employee's Compensation at Kundapur has got

jurisdiction to entertain the claim petitions filed by the

appellants. The Commissioner for Employee's

Compensation has committed an error in passing the

impugned order. In view of the above discussion, the

substantial question of law is answered in favour of

the appellants.

14. Accordingly, I proceed to pass the following:

ORDER

The appeals are allowed.

The impugned orders are set aside.

     Claim      petitions   are     restored.       The
     Commissioner             for          Employee's

Compensation is directed to dispose of the claim petitions in accordance with law.

SD/-

JUDGE

RD