The New India Assurance Co. Ltd. Vs Sri.Aithappa

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1 - NC: 2025:KHC:28875 MFA No. 3873 of 2018

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 28^TH DAY OF JULY, 2025

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BEFORE

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THE HON'BLE MRS. JUSTICE P SREE SUDHA MISCELLANEOUS FIRST APPEAL NO. 3873 OF 2018 (WC)

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BETWEEN:

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THE NEW INDIA ASSURANCE CO. LTD., COFFEE KRUPA BUILDING, G.T.ROAD, MADIKERI-572 001, REPRESENTED BY REGIONAL OFFICE, NO.2-B, UNITY BUILDING ANNEX, MISSION ROAD, BANGALORE-560 027 REP. BY ITS REGIONAL MANAGER

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…APPELLANT

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(BY SRI. RAVISHANKAR C R., ADVOCATE)

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AND:

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Digitally signed by MADHURI S Location: High Court of Karnataka

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SRI. AITHAPPA, AGED ABOUT 36 YEARS, S/O SRI MANSA, PAPLICAD ESTATE, SUNTICOPPA HOBLI, SOMWARPET TALUK, KODAGU DISTRICT-571 201.

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THE MANAGEMENT, PAPLICAD ESTATE, SUNTICOPPA HOBLI, SOMWARPET TALUK, KODAGU DISTRICT-571 201

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…RESPONDENTS

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(R1 AND R2 SERVED)

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THIS MFA IS FILED U/S 30(1) OF EMPLOYEES COMPENSATION ACT, AGAINST THE JUDGMENT AND AWARD DATED:05.03.2018 PASSED IN ECA.NO.15/2014 ON THE FILE

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2 - NC: 2025:KHC:28875 MFA No. 3873 of 2018

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HC-KAR

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OF THE SENIOR CIVIL JUDGE AND COMMISSIONER FOR EMPLOYEES COMPENSATION, KODAGU, MADIKERI, AWARDING COMPENSATION OF RS.79,876/- WITH INTEREST AT 12% P.A. FROM THE MONTH AFTER THE DATE OF INCIDENT TILL THE REALIZATION.

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THIS APPEAL COMING ON FOR ADMISSION THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MRS. JUSTICE P SREE SUDHA

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ORAL JUDGMENT

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This appeal is filed by appellant/Insurance under

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30(1) of Employees Compensation Act, against the judgment and award passed in ECA.No.15/2014 dated 05.03.2018 on the file of the Senior Civil Judge and Commissioner for Employees Compensation, Kodagu, Madikeri and to exonerate the liability to pay compensation in respect of interest on the compensation amount fixed on the Insurance company.

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The brief facts of the case is that the claimant approached the Labour Commissioner under Workmen’s Compensation Act, 1923 and the Commissioner after considering the evidence and arguments of both sides granted Rs.79,876/-, along with interest at the rate of

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NC: 2025:KHC:28875 MFA No. 3873 of 2018

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HC-KAR

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12 % p.a., from one month after the date of incident till realisation.

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Heard the arguments of the learned counsel for

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the appellant. Notice to Respondent Nos.1 and 2 was served and remained unrepresented.

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Being aggrieved by the interest granted by the Commissioner appellant/Insurance Company is before this court and mainly contended that there is contract. The contract of the insurance company is limited and restricted to the terms and conditions of the insurance policy. The insurance policy, at clause 1 (i) reads as follows:

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“Law(s)

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1. The Workmen’s Compensation Act, 1923 and subsequent amendments of the said Act, prior to the date of the issue of Policy. 2. The Fatal Accidents Act, 1855.

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It is hereby understood and agreed that the Workmen’s Compensation (Amendment) Acts, of 1959(8 of 1959, and 1962 (64 of 1962) and 1976 (65 of 1976) and 1984 (22 of 1984) and 1995 (30 of 1995) and 2000 (46 of 2000) and deemed to be added to the Laws set out in the Schedule to the Policy.

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Provided that the Insurance granted hereunder is not extended to include:

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NC: 2025:KHC:28875 MFA No. 3873 of 2018

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HC-KAR

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(i) any interest and/or penalty imposed on te Insured on account of his/her failure to comply with the requirements laid down under the W.C.Act.1923 and”

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Learned counsel for the appellant contended that

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insurance company is not liable to pay the compensation,

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but the tribunal granted the said amount. It is also submitted that as per the provisions of Employees Compensation Act, insurance policy is a reimbursable policy, if the employer fails to pay the compensation within 30 days from the date of incident then the Insurance Company will pay the same. As such, they cannot be made liable to pay the interest. He also relied upon a citation reported in 2006 AIR SC 1926 in case of New India

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Assurance Co. Ltd Vs Harshadbhai Amrutbhai

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Modhiya & Anr in which it was held as follows:

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“Insurance coverage, Not a statutory obligation under Act, Employer while entering to contract of insurance can therefore act as per his will , can contract out of certain items of his liability such as liability to pay interest.”

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5 - NC: 2025:KHC:28875 MFA No. 3873 of 2018

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HC-KAR

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Learned counsel for the respondent Nos.1 and 2

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even after service of the notice, remained absent.

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As such considering the submission made by the

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learned counsel for the appellant/Insurance, this court finds it just and reasonable to set aside the order of interest granted at the rate of 12% p.a. However, the compensation granted by the tribunal to an extent of Rs.79,876/- holds good. Hence, appeal deserves to be allowed.

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Accordingly, this appeal is allowed in part.

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The order passed in ECA.No.15/2014 dated 05.03.2018 on the file of the Senior Civil Judge and Commissioner for Employees Compensation, Kodagu, Madikeri, with respect to the interest is hereby set aside.

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Further, respondent No.2 is exempted from paying interest.

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NC: 2025:KHC:28875 MFA No. 3873 of 2018

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