Madras High Court

United India Insurance Company ... vs Vidyavathi on 14 July, 2023

                                                                                  C.M.A.No.630 of 2023


                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                     DATED: 14.07.2023

                                                          CORAM

                                  THE HONOURABLE MR. JUSTICE SUNDER MOHAN

                                                 C.M.A.No.630 of 2023
                                               and C.M.P.No.5227 of 2023

                     United India Insurance Company Ltd.,
                     No.44, GST Road,
                     Guindy,
                     Chennai – 600 032.                                      .. Appellant

                                                            Vs.

                     1.Vidyavathi
                     2.JSR Infra Developers Pvt. Ltd.,
                       JSR Towers, 4th Floor,
                       17/8, Vijayaragava Road,
                       T.Nagar, Chennai – 600 017.                    .. Respondents
                     Prayer : Civil Miscellaneous Appeal filed under Section 30 of the
                     Employees' Compensation Act, 1923, against the order dated 10.08.2022
                     made in B1.Case NO.2755 of 2021, on the file of the Commissioner of
                     Employees' Compensation (Joint Commissioner of Labour – 2), Chennai –6.
                                     For Appellant           :    Mr.S.Dhakshnamoorthy
                                     For Respondents
                                           For R1            :    Mr.N.Mugilvannan Nambi
                                           For R2            :    No appearance


                     1/9


https://www.mhc.tn.gov.in/judis
                                                                                        C.M.A.No.630 of 2023




                                                        JUDGMENT

The above appeal has been filed challenging the order of the

Commissioner for Employees' Compensation (Joint Commissioner of

Labour-2), Chennai, made in B1.Case.No.2755 of 2021dated 10.08.2022.

2. Though notice has been served on the 2nd respondent, none has

entered appearance for the 2nd respondent.

3. The appeal arises under the following circumstances:

(a) An employee of the 2nd respondent herein while returning from his

office and on the way home, after performing his office duties, met with an

accident; that the employer thereafter gave a notice of the accident to the

Joint Commissioner of Labour – 2. On the basis of the said notice, the Joint

Commissioner of Labour – 2 sent notice of hearing to the appellant herein

stating that the employer was insured with the appellant Insurance

Company. The employer also stated and let in evidence to show that the

deceased employee was performing his duties as an employee at the time of

https://www.mhc.tn.gov.in/judis C.M.A.No.630 of 2023

accident. The appellant resisted the stand taken by the employer and stated

that the employee died only while returning home and it cannot be stated

that the employee died in the course of employment and in such

circumstances, the appellant is not liable to pay compensation under the

insurance contract entered into between the employer and the appellant.

(b) The Joint Commissioner of Labour – 2, after considering the oral

and documentary evidence held that the employee died in the course of

employment and further held that the appellant was liable to pay

compensation to the tune of Rs.10,75,100/- (Rupees Ten Lakh Seventy Five

Thousand and Hundred only) together with interest at the rate of 12% from

the date when it became due till the date of payment. Aggrieved by the said

award passed by the Joint Commissioner of Labour – 2, the appellant has

preferred the above appeal.

4. The learned counsel for the appellant submitted that the claimant,

who is the wife/legal heir of the deceased and the employer had not

established that the employee/deceased died during the course of

https://www.mhc.tn.gov.in/judis C.M.A.No.630 of 2023

employment. The deceased died in a road accident and hence, it is not in the

course of employment. The learned counsel for the appellant further

submitted that in any event, the liability of the Insurance Company arises

out of insurance contract entered into between the Insurance Company and

the employer, which states that the Insurance Company is not liable to pay

interest or penalty on the award amount, as per the terms of the policy. The

learned counsel for the appellant pointed out to Ex.A2, the Insurance policy

document in support of his submission.

5.(a). The learned counsel for the 1st respondent claimant submitted

that the employer had given notice of the accident on 31.03.2021 within the

time stipulated under the Act. The employer had stated in the said notice

that the deceased was working as a Store Incharge and it was a part of his

duty to travel in that road to verify all the places where the stock belonging

to the employer were stored and that the accident took place when the

employee/deceased had inspected the stock in one place and was moving to

the next place for inspection. This aspect has not been refuted by the

Insurance Company by any legally acceptable evidence. As regards the

https://www.mhc.tn.gov.in/judis C.M.A.No.630 of 2023

interest awarded by the Joint Commissioner of Labour – 2 on the award

amount at 12%, the learned counsel fairly conceded that the Insurance

Company is not liable to pay interest on the award amount however, the

employer is liable to pay the interest on the award amount and hence, the

claimant may be permitted to recover the interest amount from the employer.

5.(b). Though notice was served on the 2nd respondent/employer, none

has entered appearance.

6. This Court finds that the claimant had marked Ex.P1 to Ex.P9 to

establish that the deceased was working under the 2nd respondent as a Store

Incharge and the 2nd respondent has not disputed the said fact. In fact, the 2 nd

respondent had given notice of the accident to the Joint Commissioner of

Labour – 2 and in that notice he had stated that the employee/deceased met

with an accident only during the course of the employment. The 2nd

respondent has examined a witness and also stated that as to how the

employee met with the accident in the course of employment.

7. The Joint Commissioner of Labour – 2, after considering the oral

https://www.mhc.tn.gov.in/judis C.M.A.No.630 of 2023

and documentary evidence, found that in the absence of any contrary

evidence, let in by the appellant, the claimants have established that the

employee died in the course of employment. The said factual finding of the

Joint Commissioner of Labour – 2 cannot be faulted. Therefore, this Court is

inclined to confirm the finding of the Joint Commissioner of Labour – 2 in

so far as he holds that the deceased died during the course of employment

with the 2nd respondent. Consequentially, in view of the insurance contract

entered into between the employer and the appellant Insurance Company,

the appellant is liable to pay the compensation amount.

8. However, this Court finds that the appellant is not liable to pay the

interest amount as awarded by the Joint Commissioner of Labour – 2. The

appellant is liable to pay only the principal amount of Rs.10,75,100/- to the

claimant. As per Ex.A2, the appellant is not liable to pay interest or penalty

on the award amount.

9. In this regard, it is relevant to rely upon the observations of the

Hon'ble Supreme Court in the case of New India Assurance Co.Ltd. Vs.

Harshadbhai Amrutbhai Modhiya and Others reported in

https://www.mhc.tn.gov.in/judis C.M.A.No.630 of 2023

MANU/SC/8127/2006 and the same is squarely applies to the facts of this

case. The relevant observations are as follows:

"18. ................. On a construction of the contract in question it is clear that the insurer had not undertaken the liability for interest and penalty, but had undertaken to indemnify the employer only to reimburse the compensation the employer was liable to pay among other things under the Workmen's Compensation Act. Unless one is in a position to void the exclusion clause concerning liability for interest and penalty imposed on the insured on account of his failure to comply with the requirments of the Workmen's Compensation Act of 1923, the insurer cannot be made liable to the insured for those amounts."

10. In the instant case as stated earlier the perusal of Ex.A2 clearly

shows that the appellant had not undertaken the liability and interest or

penalty on the award amount. However, the employer /2nd respondent is

liable to pay interest on the award amount to the claimant. It is needless to

https://www.mhc.tn.gov.in/judis C.M.A.No.630 of 2023

say that the said amount can be recovered from the 2nd respondent as per

the procedure prescribed under Section 31 of the Employees' Compensation

Act. It is also stated that the appellant has deposited a sum of Rs.13,53,625/-

with the Joint Commissioner of Labour – 2. After payment of

Rs.10,75,100/- to the claimant, the Joint Commissioner of Labour – 2 shall

refund the balance amount to the appellant. The Joint Commissioner of

Labour-2 may take steps for recovery of the interest amount from the