Partly allowed

M/S Kathle Khan Estate v. Smt Mallikamma @ Mallika

Karnataka HC17 Dec 2021MFA/10158/2013

Case brief

AI extract

What is this about?

The Karnataka High Court allowed a first appeal filed by an employer against a workmen compensation award. The court set aside the order directing the employer to pay interest, holding there was no evidence of policy terms shifting such liability to the employer. Consequently, the insurance respondent was directed to pay the interest.

What did the court decide?

The order directing the employer to pay 12% interest was set aside; the insurance respondent is liable to pay interest from 16.04.2005.

M/S Kathle Khan Estate Vs Smt Mallikamma @ Mallika — Insurance | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 17^TH DAY OF DECEMBER 2021

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BEFORE

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THE HON'BLE MR.JUSTICE P.N.DESAI

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MFA NO. 10158/2013 (WC)

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BETWEEN:

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M/S. KATHLE KHAN ESTATE SAMPIGEKHAN POST TARIKERE TALUK, CHICKMAGALORE, REP. BY SENIOR GENERAL MANAGER, SRI.CHIDAMBARAM S/O CANDREGOWDA, AGED ABOUT 49 YEARS, CHICKMAGALORE-577101.

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...APPELLANT

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(BY SRI. VINOD GOWDA, ADVOCATE.)

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AND:

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SMT. MALLIKAMMA @ MALLIKA

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C/O MARISIDDAPPA, AGED ABOUT 45 YEARS, R/O HOSAGANGUR VILLAGE, KALATHIPURA POST, TARIKERE TALUK, CHIKMAGALUR DISTRICT-577101.

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THE MANAGER

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ORIENTAL INSURANCE COMPANY LTD., T.A.P. M.S.BUILDING, K.M.ROAD, CHIKMAGALORE-577101.

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…RESPONDENTS

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(SRI. VENKATE GOWDA, ADVOCATE FOR R1; SRI.H.C.VRUSHABENDRAIAH, ADV FOR R2)

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THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER SECTION 173(1) OF THE MOTOR VEHICLES ACT, 1988, AGAINST THE JUDGMENT DATED 17.03.2011 PASSED IN WCA/F-30/2007 ON THE FILE OF THE LABOUR OFFICER AND COMMISSIONER FOR WORKMEN COMPENSATION, SUBDIVISION-1, CHICKMAGALUR, AWARDING COMPENSATION OF RS.1,93,173/-.

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THIS APPEAL COMING ON FOR FINAL HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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This appeal arises out of the judgment and award

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dated 17.03.2011 passed by the workmen Compensation Commissioner in WCA (F) No.30/2007 on the file of Workmen Compensation, Dvi.No.1 at Chickmagalur, wherein the order was passed holding that the claimant is entitled for a compensation of Rs.1,93,173/- with interest. It is ordered that the 2^nd respondent shall deposit the said amount before the Court/Tribunal within a period of thirty days from the date of the order, failing which, the 2^nd respondent shall deposit the entire amount along with 12% interest, till the date of deposit. It is further ordered that the 1^st respondent shall pay interest at 12% per annum through Demand Draft from 16.04.2005 till the date of

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the order. The same is now challenged before this Court by the appellants.

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Learned counsel for the appellant contended that the claimant's husband late Sri.Marisiddappa @ Siddappa was employed him the appellant. On the advice of the appellant management, late Marisiddappa was assigned a work in the appellant estate on 15.03.2005. While working, late Marisiddappa received personal injuries and died on the spot in the appellant Estate. Since, the accident occurred during the course of employment, the claim petition was filed.

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In response to the notice, respondent Nos. 1 and 2 appeared before the commissioner and filed their separate objections. The 1^st respondent denied that the deceased was aged about 45 years and he was getting a salary of Rs.4,000/- per month. The 2^nd respondent admitted that the Insurance policy was in-force as on the date of accident. The 2^nd respondent contended that the liability of 2^nd respondent if any, is governed by the terms and conditions of the policy.

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Before the Court of Commissioner, the petitioner got herself examined as PW.1 and got marked four documents as Ex.P1 to P4. On behalf of respondents, account officer got examined as RW1 but insurance company has neither examined any of its officials nor produced any documents.

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After hearing the arguments, the workmen commissioner allowed the appeal awarding compensation of Rs.1,93,173/- with interest directing the 2^nd respondent to pay the compensation to the claimants and 1^st respondent shall pay the interest at the rate of 12% on the compensation amount from 16.04.2005 till the date of this order. Aggrieved by the same this appeal is filed.

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This Court by order dated 11.02.2020, framed the following substantial questions of law which reads as under:

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"I. Whether the Commissioner is justified in directing this appellant to pay the interest. Even though the Apex Court held in Civil Appeal No.5669/2012, in

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the case of Oriental Insurance Vs. Seby George and Others, the interest has to pay by insurance Company?

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II. Whether the Commissioner is justified in saddling the entire interest on this applicant?

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Heard learned counsel for the appellant and also the learned counsel for the insurance company and perused the appeal memo, order passed by the workmen Commissioner and other records.

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As far as quantum of compensation awarded is concerned, same is not disputed. The only question that arise for consideration is whether the Commissioner is justified in saddling the liability to pay the interest on the owner/employer?

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Learned counsel for the appellant argued that the Court of Workmen Commissioner wrongly directed the appellant to pay interest to the claimant. But according to policy, the 2^nd respondent insurance company is liable to pay the interest to the claimant. The 2^nd respondent paid only award amount but denied to pay interest amount. Learned counsel for the

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appellant further argued that in view of the decision of Hon'ble Apex Court in the case of Oriental Insurance

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Company Limited Vs. Siby George and others reported in AIR 2012 SUPREME COURT 3144 wherein the Oriental Insurance Company had challenged the levy of penalty on the employer and also interest and the said challenge came to be dismissed by the appellate court. Therefore, the learned counsel argued that in the absence of any evidence, the Commissioner was not justified in ordering the payment of interest by the owner/employer.

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Against this, learned counsel for the 2^nd respondent-insurance company relied upon the decision of co-ordinate bench of this Court in MFA No.3651/2018 dated 12.03.2020 in the case of Jaya Sagay Meri Vs. the Manager and another wherein the order 'for being spoken to', the court held that the interest on the enhanced compensation amount of RS.3,18,710/- at the rate of 12% per annum shall be satisfied by the respondent No.1/employer.

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I have perused the decision and also relevant Sections of The Employee's Compensation Act' 1923.

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In MFA No.3651/2018 , Jaya Sagay Meri

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Vs. the Manager and another, it is observed that the 2^nd respondent insurance company has produced insurance policy which clearly contemplates that in the event of any incident, the interest and penalty part has to be imposed on the employer. There is a relevant recital in this regard. But in this case, the insurance company has not produced any records or policy to show that there was any recital that in the event of any incident, the interest and penalty part has to be imposed on the employer. Further, the tribunal relied upon the decision of this Court report in ILR 2009 KAR 1422 in the case of Shri Aleemuddin and others Vs. the Divisional Manager M/s New India Assurance Company limited, Gulbarga . On the other hand, insurance company has admitted its liability and that the same is governed by the terms and conditions of the policy. It is contended that the insurance company is

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not liable to pay interest or penalty. However, in the absence of any evidence by the insurance company, such contention cannot be accepted. Further, the Commissioner has also not stated anything in this regard but has simply mentioned in the operative portion of the order fixing the liability of payment on employer without discussing as to why the insurance company is not liable. No reasons are assigned in this regard. Therefore, such a finding needs to be set aside. as far as payment of interest paid by appellant commissioner is concerned needs to set aside and modified. Accordingly, substantial questions of law framed is answered in the affirmative and in respect of second question, the order in respect of compensation has no modification and only in respect of interest portion needs modification as stated above.

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Accordingly, I pass the following:

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ORDER

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