Allowed

United India Ins.Co.Ltd., v. Albones

Madras HC6 Oct 2021CMA/2768/2018

Case brief

AI extract

What is this about?

The High Court allowed an appeal challenging an award under the Workmen's Compensation Act, 1923. The Court held that since the insurance policy did not provide for payment of interest, the insurer was not liable to pay it, distinguishing such contractual liability from statutory employer liability.

What did the court decide?

The impugned award dated 31.08.2017 is set aside only to the extent of interest awarded to the respondents against the Appellant Insurance Company.

United India Ins.Co.Ltd., Vs Albones — Insurance | Madras HC (2021)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 06.10.2021

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CORAM:

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THE HON'BLE MR.JUSTICE ABDUL QUDDHOSE

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C.M.A.NO.2768 OF 2018 & CMP.NO.18433 OF 2018

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United India Insurance Co. Ltd., No. A5 & 6, II Floor, Appasamy Towers, New 27, Sri Thyagaraya Road, (Next to (Old) Theatre Nagesh), T. Nagar, Chennai - 600 017. ... Appellant

.Vs.

1. Albones

2. Chandrasekar

3. Thambiraj

4. Indra

5. M/s.SRM Engg Construction Corporation Ltd., No.2, Veerasamy Street, West Mambalam, Chennai - 600 033.

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... Respondents

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Civil Miscellaneous Appeal filed under Section 30 of Workmen Compensation Act, 1923 against the award dated 31.08.2017 made in W.C.No.162 of 2013 on the file of Workmen's Compensation Authority (Employee's Compensation Authority), (DC1) at Chennai.

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For Respondents : Ms.A.Subadra for M/s.M.Malar for R1 to R4. R5 - No Appearance

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JUDGMENT

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(This case was heard through Video Conferencing)

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This Appeal has been filed by the Insurance Company challenging the award dated 31.08.2017 passed by the Deputy Commissioner of Labour - I, Chennai under the Employees Compensation Act, 1923 in W.C. No. 162 of 2013.

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https://hcservices.ecourts.gov.in/hcservices/

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2. Heard, Mr.C.Paranthaman, learned counsel for the Appellant and Ms.A.Subadra, learned counsel for the respondents 1 to 4. Despite service of notice on the fifth respondent and their name having been printed in the cause list today, there is no representation on their side.

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3. This Appeal is admitted on the following substantial questions of law:

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1. Whether the learned Commissioner in right in holding that the deceased Shanmugathai is an employee of the 5th respondent?

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2. Whether the learned Commissioner is right in holding that the insurer appellant is liable to pay interest as per the policy condition?

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4. The main contention of the Appellant Insurance Company in the Appeal is that being a contractual liability the Tribunal ought not to have awarded interest to the respondents/ applicants under the impugned award. It is their contention that since the insurance policy does not provide for payment of interest, they are not liable to pay interest to the respondents/ applicants.

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5. Mr.C.Paranthaman, learned counsel for the Appellant drew the attention of this Court to the insurance policy in support of the contention raised by the Appellant / Insurance Company in this Appeal. He also relied upon a decision of the Hon'ble Supreme Court in the case of P.J. Narayan vs Union of India (Uoi) and Others reported in 2004 ACJ 452 which was followed by a Single Bench Judgment of this Court in the case of Bharti AXA General Insurance Company Limited vs T. Pappa and 3 others in CMA No.628 of 2020 dated 17.02.2021.

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6. Admittedly, under the Employees Compensation Act, 1923, there is no statutory liability for the Insurance Company to pay the compensation but it is only a contractual liability. As seen from the insurance policy issued by the Appellant to the 5th respondent which has been marked as Ex.P6 and Ex.R2, it is clear that no interest is payable under the policy to the claimant. However, as seen from the impugned Award, the Deputy Commissioner of Labour - I, Chennai has erroneously awarded interest at 12% per annum to the respondents/ applicants. The relevant paragraph of the order of the Hon'ble Supreme Court in P.J. Narayan vs Union of India (Uoi) And Others reported in 2004 ACJ 452 referred to by the learned counsel for the Appellant reads as follows:

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https://hcservices.ecourts.gov.in/hcservices/

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This writ petition 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. 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 Act is on the employer. An 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. The Writ Petition is dismissed. No order as to costs.

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7. The aforesaid decision has also been followed by a learned single Judge of this Court in the decision dated 17.02.2021 in the case of Bharti AXA General Insurance Company Limited vs T. Pappa and 3 others in CMA No.628 of 2020 .

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8. If at all, the respondents/ applicants are entitled to get interest, they can only claim from the Employer viz., the 5th respondent herein and not from the Insurance Company as the Insurance Company does not provide for payment of interest.

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9. For the foregoing reasons, substantial questions of law, formulated by this Court is answered in favour of the Appellant / Insurance Company and the Civil Miscellaneous Appeal is allowed and the impugned award dated 31.08.2017 is set aside only to the extent of interest awarded by the Tribunal as against the Appellant / Insurance Company. No costs. Consequently, connected miscellaneous petition is closed.

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10. Insofar as the compensation determined by the Tribunal at Rs.6,49,667/- is concerned, the Appellant Insurance Company is liable to pay the respondents/ applicants. Insofar as the funeral expenses at Rs.5,000/- is concerned, the same is confirmed by this Court.

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The Appellant Insurance Company has deposited the entire award amount as determined by the Tribunal which includes the funeral expenses also at Rs.6,54,667/-. Since the award for payment of interest has been set aside by this Court, the Appellant /Insurance Company is permitted to withdraw the excess

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https://hcservices.ecourts.gov.in/hcservices/

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amount paid by them by filling an appropriate application before the Deputy Commissioner of Labour - I, Chennai.

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Assistant Registrar(CCC)

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//True Copy//

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Sub Assistant Registrar

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ab/vsi2

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1. The Deputy Commissioner – 1, Workmen's Compensation Authority, (Employee's Compensation Authority),

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Chennai-6.

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2. The Section Officer,

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V.R. Section, High Court, Madras.

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+2cc to Mr.C.Paranthaman , Advocate, S.R.No.52538 +1cc to M/s.M.Malar, Advocate, S.R.No.52675

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CMA.No.2768 of 2018 &

CMP.No.18433 of 2018

PMK (CO)

CS/08/11/2021

https://hcservices.ecourts.gov.in/hcservices/

United India Ins.Co.Ltd., v. Albones

Case brief

What is this about?

What did the court decide?

United India Ins.Co.Ltd., v. Albones

Case brief

What is this about?

What did the court decide?

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