Karnataka High Court
The Divisional Manager vs Smt Basawwa on 2 June, 2022
Bench: P.Krishna Bhat
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MFA No. 21040 of 2010
C/W MFA No. 21326 of 2010
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 02ND DAY OF JUNE, 2022
BEFORE
THE HON'BLE MR JUSTICE P.KRISHNA BHAT
M.F.A. NO.21040 OF 2010 (WC-)
C/W
M.F.A.NO.21326 OF 2010
IN M.F.A. NO.21040 OF 2010
BETWEEN:
THE DIVISIONAL MANAGER
NWKRTC DIVISIONAL OFFICE SIRSI,
DIST:KARWAR AND THE APPELLANT IS
REPRESENTED BY ITS CHIEF LAW OFFICER,
CENTRAL OFFICE, HUBLI
...APPELLANT
(BY SRI. SHIVAKUMAR S BADAWADAGI, ADVOCATE)
AND:
1. SMT BASAWWA W/O TIPPANNA HUBLI
AGED ABOUT 41 YEARS,
OCC:HOUSEWIFE,
R/O KADASIDDESHWAR ONI,
SAUNDATTI, DIST:BELGAUM
2. KUMARI. CHANNAMMA D/O TIPPANNA HUBLI
AGED ABOUT 15 YEARS,
Digitally signed
by JAGADISH T R
R/O. KADASIDDESHWAR ONI,
Location: HIGH
COURT OF SAUNDATTI, DIST:BELGAUM
KARNATAKA,
DHARWAD
Date: 2022.06.06 MINOR REPRESENTED BY HER
11:02:19 +0530
NATURAL MOTHER RESPONDENT NO.1
3. IRANNA S/O TIPPANNA HUBLI
AGED ABOUT 9 YEARS,
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MFA No. 21040 of 2010
C/W MFA No. 21326 of 2010
R/O. KADASIDDESHWAR ONI,
SAUNDATTI. DIST:BELGAUM
MINOR REPRESENTED BY HIS
NATURAL MOTHER RESPONDENT NO.1
4. ASHOK SHETTY S/O ANAND SHETTY,
AGE MAJOR, OCC:OWNER OF BUS
BEARING NO.KA-20/A-3859,
R/O LAXMI NIVAS,
POST:SALIKERI BHAMAVAR,
TQ AND DIST:UDUPI
5. THE DIVISIONAL MANAGER
UNITED INDIA INSURNCE CO. LTD.,
DIVISIONAL OFFICE, HUBLI,
DIST:DHARWAD
...RESPONDENTS
(BY SRI. NAGARAJ K. APPANNAVAR, ADV., FOR
SRI. LAXMAN T MANTAGANI, ADV., FOR R1;
R2 & R3 ARE MINORS AND REPRESENTED BY R1;
SRI. S. K. KAYAKMATH, ADV., FOR R4;
SRI. N. R. KUPPELUR, ADV., FOR R5)
THIS MFA IS FILED UNDER SECTION 30(1) OF W.C. ACT,
1923 AGAINST THE JUDGMENT & ORDER DATED 30.11.2009
PASSED IN WCA. F. NO.91/2008 PASSED BY THE COMMISSIONER
AND LABOUR OFFICER FOR WORKMEN'S COMPENSATION, SUB-
DIVISION -II, HUBLI, AWARDING A COMPENSATION OF
RS.1,00,000/- WITH INTEREST @ 12% PER ANNUM FROM THE
DATE OF PETITION TILL THE DATE OF REALISATION.
IN M.F.A.NO.21326 OF 2010
BETWEEN:
UNITED INDIA INSURANCE CO.LTD.,
HUBLI D.O,
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MFA No. 21040 of 2010
C/W MFA No. 21326 of 2010
THROUGH ITS DIVISIONAL OFFICE,
LEA COMPLEX, DHARWAD,
REPRESENTED BY ITS
DIVISIONAL MANAGER
SRI.S.K.CHOUDHURY
...APPELLANT
(BY SRI. N. R. KUPPELUR, ADV.,)
AND:
1. SMT BASAVVA
AGED ABOUT 42 YEARS,
W/O THIPPANNA HUBLI @ SANNA HUBLI
R/O KADASIDDESHWAR ONI,
SAVADATTI, DIST:BELGAUM
2. KUM.CHANNAMMA
AGED ABOUT 16 YEARS,
D/O THIPANNA HUBLI @ SANNA HUBLI
MINOR REPRESENTED BY RESPONDENT NO.1
R/O KADASIDDESHWAR ONI,
SAVADATTI, DIST:BELGAUM
3. MASTER EARANNA,
AGED ABOUT 10 YEARS,
MINOR REPRESENTED BY RESPONDENT NO.1
R/O KADASIDDESHWAR ONI,
SAVADATTI, DIST:BELGAUM
4. SRI. ASHOKA SETTY,
MAJOR
S/O ANANDA SETTY,
R/AT LAXMI NIVAS SALIKERI,
BRAMHAVAR, UDUPI TQ AND DISTRICT
(OWNER OF BUS NO.KA-20/A-3859)
5. THE DIVISIONAL MANAGER
NWKRTC, DIVISIONAL OFFICE SIRSI,
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MFA No. 21040 of 2010
C/W MFA No. 21326 of 2010
KARWAR DISTRICT.
...RESPONDENTS
(BY SRI. NAGARAJ K. APPANNAVAR, ADV., FOR
SRI. LAXMAN T MANTAGANI, ADV., FOR R1;
R2 & R3 ARE MINORS AND REPRESENTED BY R1;
SRI. S. K. KAYAKMATH, ADV., FOR R4;
SRI. SHIVAKUMAR S. BADAWADAGI, ADV., FOR R5)
THIS MFA IS FILED U/S 30(1) OF THE WORKMEN'S
COMPENSATION ACT, AGAINST THE JUDGMENT AND ORDER
DATED:30-11-2009 PASSED IN WCA/F-91/2008 ON THE FILE OF
THE LABOUR OFFICER AND COMMISSIONER FOR WORKMEN'S
COMPENSATION, SUB-DIVISION-II, HUBLI, AWARDING
COMPENSATION OF RS.3,32,580/-ALONG WITH INTEREST AT THE
RATE OF 12% P.A.FROM THE DATE OF PETITION TILL DEPOSIT.
THESE APPEALS COMING ON FOR FINAL HEARING THIS DAY
COURT DELIVERED THE FOLLOWING:
JUDGMENT
These two appeals are at the instance of the
NWKRTC, which is the hirer of the bus in question in which
the deceased was working as a driver and also by the
insurer of the bus calling in question the judgment and
order dated 30.11.2009 passed in WCA/F-91/2008 by the
learned Labour Officer and the Commissioner for
Workmen's Compensation, Sub-Division II, Hubli (for short
MFA No. 21040 of 2010
C/W MFA No. 21326 of 2010
"the Commissioner"). By the said award, learned
Commissioner has awarded a sum of Rs.3,32,580/- with
interest thereon @ 12% per annum w.e.f. 30 days from
the date of the award. Learned Commissioner has further
levied a penalty of Rs.1,00,000/- payable jointly and
severally against the owner of the bus and NWKRTC,
which is the hirer of the bus.
2. The foundational facts based on which the claim
petition has been filed is not much in dispute except that,
the insurer questions the finding that the accident
resulting in the death of the employee was arising out of
and in the course of employment.
3. Learned counsel for the appellant-NWKRTC
places reliance on Section 4A of the Employees'
Compensation Act, 1923 (for short "the Act") and submits
that the appellant being the hirer of the vehicle, is not
liable to pay the penalty and under the provisions of the
Act, the penalty is liable to be paid only by the employer-
MFA No. 21040 of 2010
C/W MFA No. 21326 of 2010
owner of the vehicle. It is therefore, contended on behalf
of NWKRTC that said part of the award is liable to be set
aside insofar as the appellant-NWKRTC is concerned and
appeal to the said extent is required to be allowed.
4. Learned counsel for the insurer advances two
fold contentions. Firstly, it is contended by him that the
death of the deceased-workman did not take place in an
employment related accident arising out of and in the
course of employment and he died due to natural causes
namely heart-attack. His second contention is that in
terms of Section 4A of the Act, the Insurance Company is
not liable to pay the penalty.
5. Learned counsel appearing for the claimants,
per contra, submits that the learned Commissioner upon
detailed consideration of the evidence has recorded a
finding that the deceased-workman had died due to an
employment related accident arising out of and in the
course of employment and such finding being based on
MFA No. 21040 of 2010
C/W MFA No. 21326 of 2010
evidence is not liable to be interfered with. He also
submits that the finding of the learned Commissioner that
NWKRTC as well as the Insurance Company are jointly and
severally liable to pay not only the compensation proper
but also the penalty imposed is not liable to be interfered
with and there is no merit in the appeals and they are
liable to be dismissed.
6. The records clearly show that deceased-
workman was working as a driver in the bus belonging to
the appellant-Ashok Shetty and while he was performing
his duties, he suffered breathlessness and thereafter he
was taken to hospital and he died due to heart-attack on
the same day. This shows that the deceased-workman was
performing his duty as a driver of a heavy vehicle like bus
and because of work related stress, he suffered
breathlessness to which he succumbed in the hospital and
the doctors have recorded a diagnosis that it was a heart-
attack. In the circumstances, it cannot be said that there
MFA No. 21040 of 2010
C/W MFA No. 21326 of 2010
is no causal connection between the nature of work of the
deceased and the heart-attack he had suffered due to
which he died. Learned Commissioner having recorded
such a finding I do not find any good ground to interfere
with the same and accordingly the submissions of the
learned counsel for the Insurance Company in this behalf
is rejected.
7. The only other contention which survives for
consideration is whether the Insurance Company and
NWKRTC are liable to pay the penalty portion of the award
made by the learned Commissioner for non-payment of
the compensation when it fell due in terms of the Act. For
the said purposes, it is necessary to make reference to
Section 4A of the Act, which reads as follows:
"4A. 1 Compensation to be paid when due and
penalty for default.-
(1) Compensation under section 4 shall be paid as soon
as it falls due.
MFA No. 21040 of 2010
C/W MFA No. 21326 of 2010
(2) In cases where the employer does not accept the
liability for compensation to the extent claimed, he
shall be bound to make provisional payment based on
the extent of liability which he accepts, and, such
payment shall be deposited with the Commissioner or
made to the workman, as the case may be, without
prejudice to the right of the workman to make any
further claim.
(3) Where any employer is in default in paying the
compensation due under this Act within one month
from the date it fell due, the Commissioner shall, -
(a) direct that the employer shall, in addition to the
amount of the arrears, pay simple interest thereon at
the rate of twelve per cent per annum or at such higher
rate not exceeding the maximum of the lending rates
of any scheduled bank as may be specified by the
Central Government, by notification in the Official
Gezette, on the amount due and
(b) if, in his opinion, there is no justification for the
delay, direct that the employer shall, in addition toteh
amount of the arrears and interest thereon, pay a
further sum not exceeding fifty per cent of such
amount by way of penalty:
Provided that an order for the payment of penalty shall
not be passed under clause(b) without giving a
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MFA No. 21040 of 2010
C/W MFA No. 21326 of 2010
reasonable opportunity to the employer to show cause
why it should not be passed."
(underlining by me)
8. A plain reading of the above, clearly shows that
liability to pay the penalty is entirely on the employer of
the workman, who is required to make the compensation
amount or at least the admitted portion thereof when it
becomes due under the provisions of the Act. There is no
dispute in this case that NWKRTC has hired the bus in
question from the owner Ashok Shetty with the driver,
who is employed by the owner himself. The owner of the
bus had taken policy of insurance to cover the risk of the
driver and third parties etc. The said fact is admitted
before me during the hearing. The service of the deceased
driver was provided by the owner as a package under the
hire agreement and, therefore, inevitably it is required to
be held that owner himself is the employer.
9. The Act is very clear that the compensation for
the death of a workman due to work related accident
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MFA No. 21040 of 2010
C/W MFA No. 21326 of 2010
becomes due within thirty days from the date of such
accident. Therefore, the liability to pay the penalty is
entirely upon the owner of the vehicle himself.
10. Learned counsel for the owner of the vehicle
makes an attempt to press into service Section 12 of the
Act and he contends that in view of the provisions of
Section 12 of the Act, the NWKRTC which had hired the
bus is liable to pay the penalty. He submits that since
NWKRTC has hired the bus, constructively, the NWKRTC
has to be construed as the employer. For the facility of
understanding, Section 12 of the Act is required to be
extracted, which reads as follows:
"12. Contracting.-
(1) Where any person (hereinafter in this section
referred to as the principal) in the course of or for the
purposes of his trade or business contracts with any
other person (hereinafter in this section referred to as
the contractor) for the execution by or under the
contractor of the whole or any part of any work which
is ordinarily part of the trade or business of the
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MFA No. 21040 of 2010
C/W MFA No. 21326 of 2010
principal, the principal shall be liable to pay to any
workman employed in the execution of the work any
compensation which he would have been liable to pay if
that workman had been immediately employed by him;
and where compensation is claimed from the principal,
this Act shall apply as if references to the principal
were substituted for references to the employer except
that the amount of compensation shall be calculated
with reference to the wages of the workman under the
employer by whom he is immediately employed.
(2) Where the principal is liable to pay compensation
under this section, he shall be entitled to be
indemnified by the contractor, 2 or any other person
from whom the workman could have recovered
compensation and where a contractor who is himself a
principal is liable to pay compensation or to indemnify
a principal under this section he shall be entitled to be
indemnified by any person standing to him in the
relation of a contractor from whom the workman could
have recovered compensation,] and all questions as to
the right to and the amount of any such indemnity
shall, in default of agreement, be settled by the
Commissioner.
(3) Nothing in this section shall be construed as
preventing a workman from recovering compensation
from the contractor instead of the principal.
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MFA No. 21040 of 2010
C/W MFA No. 21326 of 2010
(4) This section shall not apply in any case where the
accident occurred elsewhere than on, in or about the
premises on which the principal has undertaken or
usually undertakes, as the case may be, to execute the
work or which are otherwise under his control or
management.
11. A plain reading of Section 12 of the Act makes
it abundantly clear that the contract which is referred to in
the said section is applicable to an altogether different
context where the agreement of contract relates to "for
the execution by or under the contractor of the whole or
any part of work" for the purpose of which the workman
has been employed by the contractor. Therefore, it is
evident that section 12 of the Act is applicable only to
situations where the contract pertains to execution of
projects and not cases like the present one where
NWKRTC has hired the bus along with its driver from the
owner of the bus. In a situation of this nature, the plain
terms of section 12 of the Act is not amenable to be
construed as NWKRTC while carrying on its transport
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MFA No. 21040 of 2010
C/W MFA No. 21326 of 2010
business engaging the owner of the bus as a contractor for
executing its work without causing violence to terms of
Section 12 of the Act. The owner of the bus from whom
NWKRTC has hired the bus continues to be the employer
of the driver. In fact the very fact that the owner has
taken the policy of insurance to cover the risk of accident
to the driver etc., further establishes that he is the
employer of the driver. In that view of the matter, the
owner himself is liable to pay the penalty imposed by the
learned Commissioner for not making the payment of
compensation when it actually fell due. In that view of the
matter, the contention of the learned counsel for the
owner is rejected.
12. The learned Commissioner has committed a
serious error of law in not awarding interest w.e.f. 30 days
from the date of the accident itself. Therefore, the award
made by the learned Commissioner is modified to the
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C/W MFA No. 21326 of 2010
extent that the interest shall be paid w.e.f. 30 days from
the date of the accident by the Insurance Company.
13. In view of the above, I proceed to pass the
following:
ORDER
The appeal in MFA No. 21040/2010 filed by
NWKRTC is allowed to the extent that NWKRTC is
not liable to pay the penalty awarded by the
learned Commissioner..
The appeal in MFA No. 21326/2010 filed by
the Insurance Company is allowed to the extent
that it is liable to pay only the compensation with
interest and not the penalty under the award.
The penalty component of the award shall
be paid by the owner of the vehicle in question.
The deposit of amount made by the
appellant-NWKRTC shall be refunded to it
forthwith.
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MFA No. 21040 of 2010
C/W MFA No. 21326 of 2010
The amount in deposit, if any, made by the
Insurance Company along with TCR shall be
transmitted to the jurisdictional Court of learned
Senior Civil Judge, for disbursement.
In view of disposal of the appeals, pending
interlocutory applications, if any, do not survive
for consideration and are dismissed accordingly.
Sd/-
JUDGE
YAN
