M/S Oriental Insurance Company Limited Vs Smt Thathu — Karnataka HC (2025) — LawSathi Research

M/S Oriental Insurance Company Limited Vs Smt Thathu — Karnataka HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

MFA No.1969/2017 (insurer) partly allowed; MFA No.4423/2018 (employer) dismissed; award dated 01.10.2016 modified - insurer held liable to pay compensation of Rs.4,54,370/- and employer liable to pay balance sum of Rs.1,72,959.16 together with the interest at 12% p.a. awarded by the Tribunal; award otherwise left unaltered; insurer's deposit transmitted to Tribunal with refund of the excess, and the employer's deposit (with accrued interest) to be disbursed to the claimants.

Issue for consideration

Substantial question of law (i): Whether the Tribunal was justified in considering the wage of the deceased at Rs.5,874.6 and fastening the liability to pay the compensation on the 2nd respondent - Insurer. +1 more

Court's answer

Compensation is justly calculated by considering the wage of the deceased at Rs.5,874.6 as admitted by the employer (Tribunal's computation of 50% of monthly wage multiplied by the relevant factor of 213.57 per the Schedule to the Act is upheld).

Ratio / Principle

The insurer is fastened with liability to pay compensation only to the extent of the monthly wage of Rs.4,255/- per employee, and the balance sum of Rs.1,619/- is to be recovered from the employer.

Key takeaways

The grounds urged by the insurer in the appeal (declared wages of Rs.420/- per month) were never averred in its statement of objections filed before the Tribunal.ratio¶¶84
The insurer's appellate contention that the monthly wages per employee would be Rs.1,376.28 is contrary to the testimony of RW.1 (insurer's representative) in the examination-in-chief, where it was admitted that the monthly wage would be Rs.4,255/- per employee.ratio¶¶84
As rightly noticed by the Tribunal, the insurer did not produce the proposal form in which the employer declared the wages on the basis of which the premium was allegedly calculated.

Detailed headnote1 paragraphs

High Court of Karnataka (C.M. Poonacha J., oral judgment, 16-07-2025) - cross-appeals under S.30(1)/S.30(1)(a) of the Employee's Compensation Act, 1923 against the award dated 01.10.2016 in ECA No.196/2014 (Prl. Senior Civil Judge & CJM, Chikkamagaluru) granting Rs.6,27,320/- with interest at 12% p.a. for the death (03.08.2013) of an estate coolie who fell from a tree on 31.07.2013. Substantial question (i) answered partly in the affirmative: compensation was validly computed on the wage of Rs.5,874.6 (50% of monthly wage x factor 213.57 per the Schedule to the Act); the insurer's liability was confined to the monthly wage of Rs.4,255/- deposed by its representative RW.1 - the plea of declared wages of Rs.420/- per month was neither raised in the insurer's statement of objections nor supported, the proposal form declaring wages was not produced, and the appellate computation of Rs.1,376.28/- per month contradicted RW.1's testimony - with the balance of Rs.1,619/- recoverable from the employer. Substantial question (ii) answered in the negative: the employer, having deposited Rs.3,68,675/- only in 2015 i.e. beyond the 30-day period mandated by Section 4A, rightly bears the liability for interest at 12%. Order: MFA No.1969/2017 partly allowed; MFA No.4423/2018 dismissed; award modified - insurer to pay Rs.4,54,370/- and employer the balance Rs.1,72,959.16/- plus interest; the award otherwise unaltered.

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 16^TH DAY OF JULY, 2025

BEFORE

THE HON'BLE MR. JUSTICE C.M. POONACHA MISCELLANEOUS FIRST APPEAL NO. 1969 OF 2017 (WC)

C/W

MISCELLANEOUS FIRST APPEAL NO. 4423 OF 2018 (WC) IN MFA No. 1969/2017

BETWEEN:

M/S. ORIENTAL INSURANCE COMPANY LIMITED, BRANCH OFFICE, CHIKKAMAGALURU, THROUGH ITS REGIONAL OFFICE, 2ND FLOOR, SUMANGALA COMPLEX LAMINGTON ROAD, HUBLI - 580 020, REPRESENTED BY ITS REGIONAL MANAGER.

…APPELLANT

BHARATHI H M

Digitally signed by BHARATHI H M Location: HIGHCOURT OF KARNATAKA DHARWAD BENCH DHARWAD

(BY SRI. B.S. UMESH, ADVOCATE)

AND:

SMT. THATHU W/O SEENA, AGED ABOUT 56 YEARS R/A KARADI KHAN ESTATE SANGAMESHWARAPETE POST CHIKKAMAGALURU TALUK AND DISTRICT - 577 136.

M/S SANGAMESHWARA ESTATE (KARADI KHAN ESTATE) SANGAMESHWARAPETE POST,

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CHIKKAMAGALUR TALUK AND DISTRICT - 577 136.

…RESPONDENTS

(BY SRI. K VENKATE GOWDA, ADVOCATE FOR C/R1; SRI. P.D. VISHWANATH, ADVOCATE FOR R2)

THIS MFA IS FILED U/S 30(1) OF EMPLOYEES COMPENSATION ACT AGAINST THE JUDGMENT AND AWARD DATED 01.10.2016 PASSED IN ECA NO.196/2014 ON THE FILE OF THE PRINCIPAL SENIOR CIVIL JUDGE, & CJM, CHIKKAMGALURU, AWARDING COMPENSATION OF Rs.6,27,320/- WITH INTEREST @ 12% P.A. FROM AFTER 30 DAYS OF ACCIDENT TILL PAYMENT.

IN MFA NO. 4423/2018

BETWEEN:

M/S SANGAMESHWARA ESTATE LTD., (KARADI KHAN ESTATE) SANGAMESHWARAPETE POST, CHIKKAMAGALUR TALUK

AND DISTRICT - 577 101, REPRESENTED BY ITS MANAGING DIRECTOR.

...APPELLANT

(BY SRI. VISHWANATH P.D, ADVOCATE)

AND:

SMT. THATHU W/O SEENA, AGED ABOUT 56 YEARS R/A KARADI KHAN ESTATE SANGAMESHWARAPETE POST CHIKKAMAGALURU TALUK - 577 101.

M/S. ORIENTAL INSURANCE COMPANY LIMITED, BRANCH OFFICE, CHIKKAMAGALURU - 577 101,

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REPRESENTED BY ITS REGIONAL MANAGER.

...RESPONDENTS

(BY SRI. B.S. UMESH, ADVOCATE FOR R2; SRI. K. VENKATE GOWDA, ADVOCATE FOR R2)

THIS MFA IS FILED U/S 30(1)(a) OF EMPLOYEES COMPENSATION ACT, 1923, AGAINST THE ORDER DATED 01.10.2016 PASSED IN ECA.NO.196/2014 ON THE FILE OF THE PRINCIPAL SENIOR CIVIL JUDGE,CJM, CHIKKAMAGALURU, AWARDING COMPENSATION OF RS.6,27,320/- WITH INTEREST AT 12% P.A. AFTER EXPIRY OF 30 DAYS FROM THE DATE OF THE ACCIDENT TILL THE DATE OF PAYMENT.

THESE APPEALS, COMING ON FOR FURTHER HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE C.M. POONACHA

ORAL JUDGMENT

The above appeals are filed under Section 30(1)(a) of the Employee's Compensation Act, 1923¹ calling in question the judgment and award dated 01.10.2016 passed in ECA.No.196/2014 by the Prl. Senior Civil Judge

1 Hereinafter referred to as 'Act'

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& C.J.M., Chikkamagaluru² . Hence, both the appeals are taken up together for consideration.

For the sake of convenience, the parties herein are referred as per their rank before the Tribunal.

The relevant facts in a nutshell leading to the present appeals are that, claiming compensation for the death of deceased on 31.07.2013, the mother of the deceased filed a claim petition under Section 22 of the Act contending, inter alia, that when the deceased was working as a coolie in the estate owned by the 1^st respondent, he accidentally fell from a tree, due to which, he sustained grievous injuries and succumbed to the same in the hospital on 03.08.2013. The owner of the estate was arrayed as the 1^st respondent and the Insurer with whom the 1^st respondent had taken a workmen's compensation policy was arrayed as the 2^nd respondent. It was the further case of the claimant that the deceased

2 Hereinafter referred to as the ‘Tribunal’

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was earning a sum of Rs.8,000/- per month and hence, adequate compensation was sought.

appearance before the Tribunal and filed statement of objections admitting that the deceased was an employee of 1^st respondent. It was further averred that the daily wages being paid to the deceased was Rs.195.82 at the time of the accident and that all the employees of the 1^st respondent had been insured with the 2^nd respondentInsurer.

The 2^nd respondent-insurer entered appearance

before the Tribunal and filed statement of objections admitting the policy of insurance. However, the wages as averred in the claim petition, have been denied.

The Tribunal by its judgment dated 01.10.2016

has partly allowed the claim petition and awarded a total compensation of Rs.6,27,320/- and directed the 2^nd respondent-Insurer to pay the same. The Tribunal further

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directed the 1^st respondent-employer to pay interest at 12% per annum on the compensation amount of Rs.6,27,320/-. Being aggrieved, the Insurer has preferred MFA No.1969/2017 and the employer has preferred MFA No.4423/2018.

Learned counsel Sri B.S. Umesh appearing for the Insurer vehemently contends that the wages declared by the insurer under the policy of the insurance is Rs.420/- per month. Hence, it is contended that the insurer is liable to pay compensation to the extent of the wages that have been declared by the employer, with the insurer. It is further contended that the premium paid by the employer for 371 employees is Rs.51,060/- and hence, the premium having been collected on the declared wages the compensation payable by the insurer ought to be in terms of the wages declared at the time of issuance of the policy and the premium collected thereon.

Per contra, learned counsel Sri K.Venkate

Gowda appearing for the claimants submits that the

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representative of the insurer who was examined as RW.1 has specifically deposed in the examination-in-chief that the wages declared under the policy of insurance was Rs.4,255/-. It is further contended that the testimony as deposed by RW.1 in the affidavit by way of examinationin- chief is required to be relied upon and the grounds urged in the appeal by the insurer, which is contrary to the said statement ought not to be accepted. It is also contended that the Tribunal was justified in fastening the liability on the employer to pay interest in view of the fact that admittedly, the interest has been deposited only in the year 2015, that is, more than two years after the occurrence of the accident whereas the employer was required to deposit the amount within 30 days of the same.

The submissions of both the learned counsels have been considered and the materials on record including the records of the Tribunal have been perused.

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It is forthcoming that the above appeals were ordered to be listed for final hearing and hence, are being listed at the stage of hearing and have been heard. Accordingly, the above appeals are admitted to consider the following substantial questions of law:-

i) Whether the Tribunal was justified in considering the wage of the deceased at Rs.5,874.6 and fastening the liability to pay the compensation on the 2^nd respondent - Insurer?

ii) Whether the judgment of the Tribunal is contrary to the material on record and liable to be interfered with?

Re.question No.(i):

It is forthcoming from the material on record that the employment of the deceased with the employer is admitted. The employer has averred in the statement of objections that the deceased was drawing a daily wage of Rs.195.82. Accordingly, the Tribunal has calculated the compensation by taking 50% of the monthly wage and multiplying the same with the relevant factor of 213.57 in terms of the schedule to the Act.

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The 2^nd respondent/Insurer in the statement of objections before the Tribunal has merely denied the assertion of the wages paid as contended in the claim petition.

The representative of the insurer who was examined as RW.1 has deposed at para 3 of the affidavit by way of examination-in-chief that the owner/employer has paid total premium of Rs.51,060/- under the policy of insurance and the monthly wages was Rs.4,255/- per employee.

In the memorandum of appeal, it is sought to be contended on behalf of the insurer that the wages declared under the policy of insurance is Rs.420/- per month. It is further contended that the premium of Rs.51,060/- having been paid by the insured, for covering 371 workmen, the annul wages would be Rs.16,515.36 and the monthly wage would be Rs.1,376.28. It is thus, contended that the premium is collected as per the

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declared wage and the compensation payable by the insurer would be in terms of the declared wages.

The Tribunal while considering the said contention has noticed that RW.1 has admitted in the cross-examination that the employer had submitted the proposal form at the time of obtaining the insurance policy and as per the said proposal form, the insurer had issued the policy of insurance. The Tribunal has further noticed that the said proposal Form has not been produced before the Tribunal.

It is pertinent to note here that the grounds urged by the insurer in the appeal have not been averred in the statement of objections filed before the Tribunal. Further, the contention sought to be put forth by the insurer in the present appeal is that the monthly wages per employee would be Rs.1,376.28 is contrary to the testimony of RW.1 in the examination-in-chief where under, it is admitted that the monthly wage would be

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Rs.4,255/- per employee. Further, as rightly noticed by the Tribunal, the Insurer has not produced the proposal form, wherein the employer has declared the wages on the basis of which, the insurer allegedly calculated the premium, which was collected by the insurer at the time of obtaining the policy of the insurance.

Having regard to the aforementioned

discussion, it is just and proper that the compensation be calculated by considering the wage of the deceased at Rs.5,874.6 as admitted by the employer of the deceased. Further, it is just and proper that the insurer is fastened with the liability to pay the compensation to the extent of monthly wage of Rs.4,255/- per month and the balance sum of Rs.1,619/- be ordered to be recovered from the employer.

Accordingly, substantial question of law No.(i) framed for consideration is answered partly in the affirmative.

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Reg.question No.(ii):

While it is sought to be contended on behalf of the employer that he is not liable to pay interest having regard to the fact that the employer deposited a sum of Rs.3,68,675/- in the year 2015, the Tribunal considering the said contention has recorded a finding that as per Section 4A of the Act, the employer is required to deposit requisite amount within 30 days from the date of accident and the amount having been deposited after two years from the date of accident that is in the year 2015, the liability for payment of interest is required to be fastened on the employer. The employer has failed to demonstrate that the said finding is in any manner erroneous and liable to interfere with in the present appeal. Hence, the substantial question of law No.(ii) is answered in the

negative .

In view of the aforementioned, the following:-

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ORDER

i) MFA No.1969/2017 is partly allowed ii) MFA No.4423/2018 is dismissed; iii) The judgment and award dated 01.10.2016 passed in ECA.No.196/2014 by the Prl. Senior Civil Judge & C.J.M., Chikkamagaluru is modified to the extent of holding that the insurer (appellant in MFA No.1969/2017 / 2^nd respondent before the Tribunal) shall be liable to pay a compensation of Rs.4,54,370/- and the employer (Appellant in MFA No.4423/2018 / respondent No.1 before the Tribunal) shall be liable to pay balance sum of Rs.1,72,959.16. The owner shall also be liable to pay the interest awarded by the Tribunal at 12% p.a.

iv) The judgment and award dated 01.10.2016 in all other respects shall remain unaltered.

v) The amount deposited by the appellant in MFA No.1969/2017 be transmitted to the Tribunal together with the records.

vi) From and out of the amount deposited by the Insurer/appellant in MFA No.1969/2017, a sum of Rs.4,54,370/- shall be transmitted to the Tribunal for disbursal to the claimant in terms

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of the judgment of the Tribunal. The remaining amount shall be refunded to the appellant.

vii) From and out of the amount deposited by the employer before the Tribunal, the compensation of Rs,1,72,959.16 together with interest accrued shall be disbursed to the claimants in terms of the judgment of the Tribunal. The balance amount if any, be refunded to the owner.

viii) Registry to transmit the records to the Tribunal forthwith;

ix) Registry to draw the modified award accordingly.

Sd/(C.M. POONACHA) JUDGE

PSJ List No.: 1 Sl No.: 29 CT: BHK