Madras High Court
The General Manager vs M/S.National Insurance Company on 8 August, 2023
C.M.A.No.1392 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 08.08.2023
CORAM :
THE HONOURABLE MR.JUSTICE SUNDER MOHAN
C.M.A.No.1392 of 2022
and C.M.P.No.10176 of 2022
The General Manager,
Thiasola Estate,
Thiasola Post,
The Nilgiris District – 643 230 ...Appellant
Vs.
1.M/s.National Insurance Company
Betboard, Coonoor,
The Nilgiris District – 643 101.
2.J.Nagamma
...Respondents
Prayer: This Civil Miscellaneous Appeal is filed under Section 30 of
Workmen's Compensation Act, 1923, as amended by Act of 1984, against the
portion of the award directing the appellant herein to pay interest on
compensation amount Rs.4,13,537/- from the date of accident to till date of
deposit passed by the Workmen Compensation Commissioner, Coonor in
E.C.No.187/2017 dated 26.11.2018.
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C.M.A.No.1392 of 2022
For Appellant : Mr.K.Lavan
For Respondents : Mrs.Sreevidhya for R1
No appearance for R2
JUDGMENT
This appeal challenges the award passed by the learned Workmen
Compensation Commissioner, Coonoor in EC.No.187 of 2017 dated
26.11.2018, directing the appellant herein to deposit interest for the
compensation amount at the rate of 12% p.a., from the date of accident till
payment.
2. (a) The appellant is the employer of the second respondent's
husband. The employee while working in Thiasola Estate, died on
03.05.2015.
(b) The second respondent claimed compensation against the appellant
herein and the first respondent who is the insurer stating that the deceased
died during the course of the employment; that the Workmen Compensation
Commissioner, Coonoor (hereinafter referred to as Commissioner for the sake
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C.M.A.No.1392 of 2022
of convenience) held that the deceased died due to stress and strain involved
in the employment and therefore, the second respondent was entitled
compensation. The Commissioner directed the first respondent/Insurance
Company to pay a sum of Rs.4,13,537/- as compensation to the second
respondent. The Commissioner also directed the appellant to pay the interest
for the said compensation amount since it held that the first respondent was
not liable to pay interest as per the terms of the policy.
3. Aggrieved by the direction issued by the Commissioner to the
appellant to deposit the interest on the compensation, the appellant has filed
the above appeal.
4. The learned counsel for the appellant, submitted that it is true that
the Insurance Policy did not cover the liability of the insured for interest and
penalty; that however, in the instant case, the Insurance Company had
contested the claim petition and even denied the policy; that therefore,
the delay occurred only due to the act of the first respondent/Insurance
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C.M.A.No.1392 of 2022
Company and hence, the appellant cannot be made liable to pay interest for
the compensation. The learned counsel relied upon the Judgment of Rajasthan
High Court in Oriental Insurance Co. Ltd Vs. Vilas Devi and others reported
in 2001 ACJ 950 in support of his submission. The learned counsel further
submitted that in any event, the direction to pay the interest on the date of
accident is erroneous and that the appellant would only liable to pay interest
from the date of claim petition as held by this Court in Velu Ammal, Minor
Vs. Sri Krishna Agencies and United reported in 2007 (3) CTC 378 in
support of his submission.
5. Per Contra, the learned counsel for the first respondent/Insurance
Company submitted that the terms of the policy are clear and the appellant is
bound by the terms; that the learned Commissioner, had extracted the terms
of the policy and rightly held that the Insurance Company is not liable to pay
interest; that there is no reason to interfere with the said finding and hence,
prayed for dismissal of the appeal.
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C.M.A.No.1392 of 2022
6. Though notice has been served on the second respondent, none has
entered appearance on her behalf.
7. This Court finds that as per the terms of the policy under the head
Exclusions, the following Clause is found:-
“This Policy shall not cover liability of
the insured: “(d) For interest and /or penalty
imposed on the insured under law or
otherwise.”
8. However, it is the case of the appellant that since the delay was
caused by the Insurance Company due to an unfair denial of the claim,
the appellant is not liable to pay the interest. It is seen from the records that
the appellant remained ex-parte before the Commissioner. The appellant
ought to have participated in the proceedings before the Commissioner, if it
was their case that the Insurance Company/first respondent's denial of the
claim was unjust. Be that as it may. Merely because, the Insurance Company
had filed a counter and contested the claim petition, it cannot be said that they
were responsible for the delay in the award of compensation. The parties are
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C.M.A.No.1392 of 2022
bound by the terms of the policy, as per which, the first respondent would not
be liable to pay interest. Hence, the submission of the learned counsel for the
appellant that the delay is only due to the first respondent and hence, they are
not liable to pay interest cannot be accepted.
9. As regards the second submission of the learned counsel for the
appellant that interest from the date of claim petition and not from the date of
accident, this Court finds that the larger Bench of this Court in Branch
Manager, United India Insurance Co. Ltd., Vs. Nagammal and others has
held that the interest has to be calculated from 31st day after the accident and
hence, the appellant is liable to pay interest from the said date.
10. Therefore, this Court is of the view that the direction issued to the
appellant cannot be faulted. Thus, there is no merit in the instant appeal,
hence, this Civil Miscellaneous Appeal deserves to be dismissed.
The appellant is liable to pay the award amount of Rs.2,00,810/- together
with interest at 7.5% per annum from the date of the award till the date of
payment.
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C.M.A.No.1392 of 2022
11. In the result, this Civil Miscellaneous Appeal is dismissed.
No Costs.
08.08.2023
dk
Index: Yes/No
Neutral Citation: Yes / No
Copy to:-
1.The Workmen Compensation Commissioner,
Coonoor.
2. The Section Officer,
VR Section,
High Court of Madras,
Chennai – 104.
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C.M.A.No.1392 of 2022
SUNDER MOHAN, J.
dk
C.M.A.No.1392 of 2022
and C.M.P.No.10176 of 2022
08.08.2023
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