Partly allowed

Smti Kamala Ghosh v. the Branch Manager National Insurance Co. Ltd.

Gauhati HC26 Apr 2022MFA/277/2010

Case brief

AI extract

What is this about?

The Gauhati High Court allowed the appeal, setting aside the Workmen's Commissioner's order requiring the vehicle owner to pay interest. Relying on Ved Prakash Garg, the court held the insurer liable to pay both the principal compensation and the interest, distinguishing cases where the insurer's contract explicitly excluded liability.

What did the court decide?

The appeal is allowed; the order awarding interest against the appellant/owner is set aside and modified to direct the insurer to pay the claimant the principal amount and interest.

Smti Kamala Ghosh Vs the Branch Manager… — Pension and Retirement Benefits | Gauhati HC (2022)

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Page No.# 1/11

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GAHC010107752010

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THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

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Case No. : MFA/277/2010

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SMTI KAMALA GHOSH

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C/O BHABENDRA NATH GHOSH, COLLEGE ROAD, BIDYAPARA, P.O. DHUBRI, DIST. DHUBRI, ASSAM.

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VERSUS

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THE BRANCH MANAGER NATIONAL INSURANCE CO. LTD. NATIONAL INSURANCE CO. LTD., D.K. ROAD, P.O. DHUBRI, DIST. DHUBRI, ASSAM.

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2:MD. AMIR ALI

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. S/O LATE MOSIRUDDIN SK. VILL. MOTIRCHAR NO. 1 P.S. DHUBRI DIST. DHUBRI ASSAM

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Advocate for the Petitioner : MR.J P SARMA

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Advocate for the Respondent : MR.P MAHANTA

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Linked Case : MFA/250/2010

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SMTI. JAGADISH SARMA C/O LATE SHYAM CHANRAN SHARMA CENTURY APARTMENT FLAT NO. 6/B P.O. GANESHGURI

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Page No.# 2/11

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GUWAHATI DIST. KAMRUP ASSAM. VERSUS THE BRANCH MANAGER UNITED INDIA INSURANCE CO. LTD. DISPUR BRANCH RADHIKA BHAWAN P.O. GANESHGURI CHARIALI GUWAHATI DIST. KAMRUP ASSAM. 2:KASMA BEWA

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WIFE OF NUR ZAMAL SK 3:MD. SARMED ULLAH SK S/O LATE NEKMAT ALI 4:MUSTT. SABIJAN BIBI W/O MD. SARMED ULLAH SK. ALL RESIDENTS OF VILL. TELIPARA PS. GAURIPUR DIST. DHUBRI ASSAM -----------Advocate for : MR.J P SARMA Advocate for : MR.R K AGARWALA appearing for THE BRANCH MANAGER

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BEFORE HONOURABLE MRS. JUSTICE MARLI VANKUNG

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ORDER

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Date : 26-04-2022

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Heard Mr. JP Sarma, learned counsel representing the appellant and Mr. M.Dutta, representing the opposite party.

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Page No.# 3/11

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2] This is an appeal against the Judgment and Award dated 15.9.2006 passed in Case No. WC.8/2005 by the Commissioner, Workmen’s Compensation, Dhubri whereby compensation of Rs.1,99,661.00 was awarded in favour of the claimant directing the opposite party No.1, National Insurance Company Ltd. to deposit the award money and further directing the opposite party No.2, owner to deposit the interest amounting to Rs.68,034.00 to the Court within 30 days from the date of the of award.

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3] Brief facts of the case that led to this appeal is that the respondent No.2 claimant was employed as driver by the owner/opposite party No.2 of the vehicle No.AML-473 (BUS). On 30.11.2002 the vehicle met with an accident while the claimant was driving from Simlaguri towards Dhubri. The driver having lost control knocked against a stranded truck on N.H. 31 near village Chakchaka Gauria Math under Sarbheg Police Station, whereby he suffered serious injuries in the accident and had under gone treatment resulting in permanent disablement and claimed compensation of Rs.3 lac with interest.

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4] The Commissioner, Workmen’s Compensation, Dhubri after recording evidence and hearing the parties held that the claimant sustained serious injuries in the accident on 30.11.2002 near village Chakchaka Gauri Math when the claimant was on duty. The court accepted that although no am-putation was done and the injuries are not specified in the schedule, the doctor has assessed 40% disability on the basis of physical injury. Hence, taking the age of 30 years and monthly salary to be Rs.4000/- per month under Explanation-II of Section 4 of the Act as amended held the claimant to be entitled to compensation of Rs.

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Page No.# 4/11

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1,99,661.00 (40% x Rs.2,400.00 x 207.98) and directed that the interest @ 9% per annum amounting Rs.68,034.00 shall be paid by the owner of vehicle and as per verdict of the Supreme Court passed on 8.8.2003 in WP. (C) No.341 of 2003. Being aggrieved with Judgment and Award dated 15.9.2006 passed in case No. WC.8/2005 by the Commissioner, Workmen’s Compensation, Dhubri directing the appellant/owner to pay the interest amount within 30 days from the date of award, the appellant/owner of the vehicle preferred this appeal.

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5] Mr. JP Sarma learned counsel representing the appellant submits that the accident vehicle N0. AMI – 473 (bus) was duly insured with the National Insurance Company, bearing policy No. 200701/31/02/6306/60. The validity of the said insurance policy covered and insured the risk of the appellant/owner against all risk of death or bodily injuries to the driver, handyman etc. of his vehicle. Thus, having been fully covered by a valid insurance policy under the terms of which the insurer is legally bound to keep, the appellant is indemnified and the court below was not justified in law in awarding interest against the appellant and directing him to pay the same.

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6] Mr. JP Sarma further submits that the learned Commissioner has failed to judicially apply the ratio of apex Court decision in W.P.(C) No. 341 of 2003 dated 8.8.2003 in the case of P.J. Narayan -Vs- Union of India as the same was passed in different set of facts in which the petitioner was seeking for a writ directing the Insurance Company to delete clauses relating to interest in the policy. Hence evidently the ratio of that decision has been wrongly applied in the instant case in as much as in the instant case neither the Insurance Company has pleaded that they are not liable to pay interest in their written

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statement nor have they even sought to prove existence of such term in the policy. Hence, the Commissioner ought to have applied the ratio of Apex Court’s decision in Ved Prakash Garg -Vs- Premi Devi and Others reported in (1997) 8 SCC 1 which is holding the field. He also placed his reliance on the Apex Court decision in New India Assurance Co. Ltd. -Vs- Harshadbhai Amrutbhai Modhiya and Another reported in (2006) 5 SCC 192 which discussed how the matter in Ved Prakash Garg’s case (supra) was not applicable in the concerned case and how support was taken in the concerned case in the New India Assurance Co. Ltd. -Vs- Harshadbhai Amrutbhai Modhiya and Another (supra).

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7] Mr. M. Dutta, learned counsel for the opposite party submits that there are some controversies in para 14 and 17 of the Apex court’s decision in Ved Prakash Garg’s case(supra) and he further stated that the interest should be calculated from the date of adjudication and not from the date of the accident. He relied on Apex Court decision in National Insurance Co. Ltd. -Vs- Mubasir Ahmend reported in (2007) 0 Supreme (SC) 109.

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8] After considering the submission of both the counsels of the parties and on perusals of the documents on record, I find that the point for consideration in this appeal is - whether the trial court is justified into directing the owner of the vehicle/appellant to pay interest in a motor policy in the instant case by relying on the decision of the Apex Court in P.J. Narayan -VsUnion of India (supra) or whether in the facts and circumstances of the case the ratio of decision of Apex Court in Ved Prakash Garg’s case (supra) would apply.

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9] I find that as pointed out by Mr. JP Sarma, learned counsel representing the appellant, the writ petition before the Hon’ble Apex Court in P.J. Narayan v. Union of India and Ors (supra) is for the purpose of directing Insurance Company to delete the clause in the Insurance Policy which provides that in case of compensation under the Workmen's Compensation Act, 1923, the Insurance Company will not be liable to pay interest.

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10] The Apex Court herein held that :

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“We see no substance in the writ petition. There is no statutory liability on the Insurance Company. The statutory liability under the Workmen's Compensation Actis on the employer. Insurance is a matter of contract between the Insurance Company and the insured. It is always open to the Insurance Company to refuse to insure. Similarly they are entitled to provide by contract that they will not take on liability for interest. In the absence of any statute to that effect, insurance Company cannot be forced by Courts to take on liabilities which they do not want to take on.”

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11] The issue in the instant case is entirely different. In the instant case the claimant had received injury in a motor accident on 30.11.2002 in the course of his employment and the accident vehicle (Bus) was duly insured with the respondent Insurance Company, covering all risk of the appellant/owner of the vehicle. There was no clause relating to deleting of the interest in the policy or any direction for Insurance Company to delete the clause in the Insurance Policy. I find that from the facts and circumstances of the instant case the decision of the apex court in Ved Prakash Garg’s (supra) fairly applies in this case.

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Page No.# 7/11

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12] In Ved Prakash Garg’s(Supra) case the issue raised was that :

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“Where an employee receives a personal injury in a motor accident arising out of and in the course of his employment while working on the motor vehicle of the employer, whether the insurance company, which has insured the employer-owner of the vehicle against third party accident claims under Motor Vehicles Act, 1988 (hereinafter referred to as ‘the M.V. Act’) and against claims for compensation arising out of proceedings under the Workmen’s Compensation Act, 1923 (hereinafter referred to as ‘the Compensation Act’) in connection with such motor accidents, is liable to meet the awards of Workmen’s Commissioner imposing penalty and interest against the insured employer under Section 4-A(3) of the Compensation Act’.

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13] I find that the facts and circumstances of this instant case is similar to the above.

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Page No.# 8/11

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14] The Apex Court in Ved Prakash Garg (supra) after a elaborate discussion while dealing with the controversies and different decisions of various High Courts held that:

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“On a conjoint operation of the relevant schemes of the aforesaid twin Acts, in our view, there is no escape from the conclusion that the insurance companies will be liable to make good not only the principal amounts of compensation payable by insured employers but also interest thereon, if ordered by the Commissioner to be paid by the insured employers. Reason for this conclusion is obvious. As we have noted earlier the liability to pay compensation under the Workmen's Compensation Actgets foisted on the employer provided it is shown that the workman concerned suffered from personal injury, fatal or otherwise, by any motor accident arising out of and in the course of his employment. such an accident is also covered by the statutory coverage contemplated by Section 147of the Motor Vehicles Act read with the identical provisions under the very contracts of insurance reflected by the Policy which would made the insurance company liable to cover all such claims for compensation for which statutory liability is imposed on the employer under Section 3read with Section 4Aof the Compensation Act. All these provisions represent a well- knit scheme for computing the statutory liability of the employers in cases of such accidents to their workmen. As we have seen earlier while discussing the scheme of Section 4Aof the Compensation Act the legislative intent is clearly discernible that once compensation falls due and within one month it is not paid by the employer then as per Section 4A(3)(a)interest at the permissible rate gets added to the said principal amount of compensation as the claimants would stand deprived of their legally due compensation for a period beyond one month which is statutorily granted to the employer concerned to make good his

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liability for the benefit of the claimants whose bread-winner might have either been seriously injured or might have lost his life. Thus so far as interest is concerned it is almost automatic once default, on the part of the employer in paying the compensation due, takes place beyond the permissible limit of one month. No element of penalty is involved therein. It is a statutory elongation of the liability of the employer to make good the principal amount of compensation within permissible time limit during which interest may not run but otherwise liability of paying interest on delayed compensation will ipso facto follows. Even though the Commissioner under these circumstances can impose a further liability on the employer under circumstances and within limits contemplated by Section 4A(3) (a)still the liability to pay interest on the principal amount under the said provision remains a part and parcel of the statutory liability which is legally liable to be discharged by the insured employer.”

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15] In New India Assurance Co. Ltd. -Vs- Harshadbhai Amrutbhai Modhiya and Another(supra) the Apex court has again very aptly observed that in deciding, whether interest is payable by an insurer while indemnifying the insured the amount of compensation awarded against him under the Workmen's Compensation Act, 1923, Ved Prakash Garg (supra) has no manner of application in relation to the question posed in the case .

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16] The Apex Court in New India Assurance Co. Ltd. -VsHarshadbhai Amrutbhai Modhiya and Another(supra) held that

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“We are, in this case, not concerned with a case where an accident has occurred by use of a motor vehicle in respect whereof the contract of insurance would be governed by the provisions of the Motor Vehicle Act, 1988. As indicated hereinbefore, a contract of insurance is governed by the provisions of the Insurance Act. Unless

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the said contract is governed by the provisions of a statute, the parties are free to enter into a contract as for their own volition. The Actdoes not contain a provision like Section 147of the Motor Vehicles Act. Where a statute does not provide for a compulsory insurance or the extent thereof, it will bear repetition to state, the parties are free to choose their own terms of contract. In that view of the matter, contracting out, so far as reimbursement of amount of interest is concerned, in our opinion, is not prohibited by a statute.

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The views taken by us find support from a recent judgment of this Court in P.J. Narayan v. Union of India and Ors. [2004 ACJ 452]”.

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17] I do not find weight in the submission of the learned counsel for the respondent regarding para 14 & 17 in Ved Prakash Garg(supra). There is also no dispute regarding the date from which the interest is to be calculated held in P.J. Narayan v. Union of India and Ors. (supra).

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18] In view of the above decisions of the Hon’ble Apex Court and considering the instant facts and circumstances of the instant case which I find it is fairly covered by the ratio in Ved Prakash Garg(supra) case. The appeal is allowed and the order dated 15.9.2006 passed in Case No. WC. 8/2005 by the Commissioner, Workmen’s Compensation, Dhubri awarding interest of Rs.68,034.00 against the appellant/owner and directing him to pay the same is set aside and is modified to the extent that the insurer/the respondent Insurance Company shall be liable to pay the claimant the principal amount and the interest arising thereof.

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19] The same reasoning and ratio of the decision of the Apex Court in Ved Prakash Garg (supra) shall apply in the analogous/similar case in MFA

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No.250/2010 which is been clubbed with the MFA No.277/2010. Wherein the order dated 3.5.2006 passed in Case No. W.C. 7/2005 by the Commissioner, Workmen’s Compensation, Dhubri awarding interest of Rs.46,982.00 against the appellant/owner and directing him to pay the same is set aside and is modified to the extent that the insurer/the respondent Insurance Company shall be liable to pay the claimant the principal amount and the interest arising thereof.

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20] Accordingly, MFA No. 277 of 2010 with MFA No. 250 of 2010 stands disposed of.

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JUDGE

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Comparing Assistant

Smti Kamala Ghosh v. the Branch Manager National Insurance Co. Ltd.

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Smti Kamala Ghosh v. the Branch Manager National Insurance Co. Ltd.

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