Partly allowed

The Manager, National Insurancecompany Limtied, Allahabad. v. Hridaylal Misra and Another

Telangana HC7 Nov 2023CMA/632/2012

Case brief

AI extract

What is this about?

The High Court allowed the appeal partly, holding that under prevailing Supreme Court precedents, an insurance company is not liable to pay penalties imposed on the employer due to the employer's personal fault, thereby deleting the 50% penalty from the impugned order.

What did the court decide?

The order dated 29.05.2007 in W.C. No.37 of 2002 is modified to delete the penalty imposed under Section 4-A(3) of the Act.

The Manager, National Insurancecompany… — Pension and Retirement Benefits | Telangana HC (2023)

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[³²⁵³ ]

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IN THE HIGH^{COURTFOR THESTATEOF TELANGANA} AT HYDERABAD

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TUESDAY, THE^{SEVENTH DAYOF NOVEMBER} TWO THOUSAND^{ANDTWENTY THREE}

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PRESENT

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THE HONOURABLE^{SMT JUSTICE M.G.PRIYADARSINI}

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CIVIL MISCE^{LLANEOUSAPPEALNO: 632oF 2012}

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Appeal Under^{Section 30 of Workmen Comoensation Act against the} decree dated^{29.05.2007 ;ait i"Wc'ru o37 of 2002 on the file of the} Commissioner^{for WorrmeniJ-6o'p"nt'tionand AssistantCommissioner of} Labour at Nizamabad.

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Between:

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The Manager,^{National lnsurance company Limited' Branch Office' 5-C' SardarPatel} Marg, Allahabad^. [UPxlnsuia;;-C";;^{fuote No 346055 valid from 18 09 1998 to} 17 09 1999)

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"'Appellanu2nd^{oppositeParty}

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AND

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1 Hridavlal Misra^{S/o Ramkelayan, Occ: Driver of Lorry No UP 42 B 6329' R/o} U. t to.'OaZ, Mittigunj,^{Allahabad[UP]}

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2 ftalS nOr-"itnrt6 r.ro.i^finrn"" i" di;ris;;J^{Co. Ltd , kapar ior Road' Allahabad [UP]'derault vide court order dated} iiiil;;;;;i 12.12.20111

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...Respondents

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t.A. NO: 2oF^{2009(CMAMP. NO:1545OF2009)}

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PetitionunderSectionl5lCPCprayingthatinthecircumstancesstatedin the affidavit^{filed in supportoiit'"-p"liirn,th; High.court may be pleasedgrant} stay of operation^{of the d;"-,;;'iJ;;oei in wC No37l2o02on the file of the} Commisisoner for^{Worxrnl"n'i-Co'pLnt'tionand AssistantCommissioner of} Labour at Nizamabad'^{dated 29th May,2007'}

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: STi P BHANU^PRAKASH Counsel for^{the APPellant}

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: STi G RAJESHWAR^RAO Counsel for^{the ResPondents}

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The Court^{delivered the following} : JUDGMENT

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THE HONOURABLE SMT. JUSTICE M.G.PRIYADARSINI

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Civil Miscellaneous ADDeal No.632 OF 2OL2

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JUDGMENT:

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Aggrieved by the order dated 29.O5.2OO7 in W.C.Case No.37 of 2002 (NF) (hereinafter will be referred as 'impugned order') passed by the learned Commissioner for Workmen's Compensation and Assistant Commissioner of Labour, Nizamabad, the opposite party No.2 has hled the preser)t CiviL Miscellaneous Appeal.

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For the sake of convenience, hereinafter, the parties will be referred as per their array before the learnecl Assistant Commissioner.

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The brief facts of the case are that the applicant filed an application under the provisions of Workmen's Compensation Act, 1923 (amended as Employees' Compensation Act, 1923) claiming compensation of Rs.3,00,0O0/ - for thc injuries sustained try him in the road accident that occurred during the course of his employment under opposite par[' No.1. The applicant rvas employed by opposite party No. 1 a s driver on Lorry bearing No. UP 42 B 6329, which was irrsured with opposite party No.2. The applicant, who was agt-d about 38 years as on the date of accident, was being paid Rs 3,O00/- per

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2 MGP,J cMA 632 2012

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month as salary. On 20.02.1999 while the applicant^was proceeding on the above said lorry towards Hyderabad, two lorries bearing Nos.AP 25 T 2452 and AP 16 W^{111O1 came} suddenly from opposite direction^{betweenGannaramVillage} and Roopla Nayak Thanda, due^{to which the applicantdashed} both the lorries, resulting in fracture^{injuries to the rightleg of} the applicant. Since the insurance^{policy of the vehiclewas} subsisting as on the date of the^{accident, the oppositeparty} No. 1 being the owner and opposite^{party No.2 beingthe insurer} are^jointly and severally liable^{to pay the compensation amount} of Rs.3,00,OOO/-

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After receipt of notices, the^{oppositepartyNos. Iar,.d' 2} Frled their respective counters,^{wherein the opposite party No.1} admitted the employee-employer reiationship^betweenthe applicant and opposite party No.l, age and^{wages of the} applicant, manner of accident,^{nature of injuries sustained by} the applicant. The opposite^{party No.l contendedthat sincethe} vehicle was insured, opposite^{partyNo.2 alone is liable to pay} compensation and thus,^{prayed to dismiss the claim application} against opposite party No.2. On the other^{hand,oppositeparty} No.2 denied the employee-employer relationship^{between the} applicant and opposite party No. 1, wages and age of the

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MCP,J cMA_632_2012

deceased. It is lurther contended that the policy does not cover the risk of injured and that accident is conco<.ted for the purpose of claiming compensation and finally prayed to dismiss the claim application.

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On behalf of the applicant, the applicant was ,:xamined as PW I and also examined the doctor, who issue d disability certificate in respect of the injuries sustained by the applicant, as PW2. Exs.Al to A10 were marked on behalf of the applicants. Exs.Al and A2 are the certified copies of FIR and charge sheet. Exs.A3 to A6 are the photostat C,:pies of the insurance policy, driving license, permit and registration certificate of the vehicle. Exs.A7 to A9 are lhe medical certi[icate, medical bills, disability certificate and Ex.A10 is the certi[red cop1. of injury certihcate. On behalf of opposite parties, none were examined, however, Ex.B 1 copy of the insurance policy was marked. The learned Commissioner after considering the evidence on record, both oral and docurnentary, by determining the wages of applicant as Rs.2,500/- per month and by applying the relevant factor ,1g9.56, for the age of injured being 38 years and fixing the loss of earnrng capacity @ 407o, has au'arded compensation of Rs.1,13,736/_. Thereafter, the zrpplicant has hled an affidavit under Section 4 {A) of the Act

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MGP,J cMA 632²⁰¹²

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stating that the^{opposite party No.2 faiied to depositthe} compensation^{amount as ordered by the Commissionerin the} order dated^{2T.O5.2OO7and thus,prayed to impose penaltyof} 50%o and interest @^{12% per annum on the compensation} amount. Accordingly,^{the learned Commissionerhas passed} order dated^{2g.12.2OO7 directingthe oppositeparty No'2was} directed to deposit^interest @^{l2o/o and penalty of 5O%o of the} compensation^{amount by way of demand draft in favourof the} Commissioner.^{Aggrieved by the same,the opposite party No'2} has filed the^{present appeal to set aside the impugned order'}

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Heard both sides and^{perused the record'}

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Though several^{groundswere raised by the learned} Standing Counsel^{for the opposite party No'2, the arguments} were conhned only^{to the extentof contendingthat the Iearned} Assistant Commissioner^{erred in directing the opposite party} No.2 to^{pay penaltyat 5Oo/oof the compensationamountln} Divisional Manager,^{OrientalInsurance Company Limited'} Hyderabad v. ZarirLa^{Bee and anotherr, the High Courtfor the} erstwhile State of^{AndhraPradeshheldas under:}

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"6. Mr. Subba Rao,^{the learnedCounsel fairlu} coaceded that, in uiettt^{of hEstipulated' temtsof tfe policu} to ind.emnifg the otaner^{regardinothecompensotionto be} poid bu hii, the h -surance Company did^{notchallerlQe the} 'aructrd as q tulwle but has confined itsef in regard to the

'^{1997(2) ALD489}

MGP,J (MA 632 20t2

\ \

tiabilitu to pau the penaltV and interest. Such conterttion of the insurer in this cqse ho,s all the force. Tlrc leaned Contmissioner under the Act has not considered this asp<'ct of tlle ntatter in the tnle leqal perspectiue but fastened. the liabilitp utithout onu reason. The grieuance of the leamed Counsel is that euen the exptanation qiuen bg the insurer bt1 ft.linq tlte counter as to whq the amount of compensation u)as not deposited Luithin the stipulated time uas not considered. At an!.1 rote, part of the aluard in question [mpositry penaltg on ttle appellant cannot be sustained.,

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B. In L.R.Ferro Alloys Limitcd v. Mahavir Mahto and

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another2, the Honourable Supreme Court held as follows:

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"ht Ved Pro'kash Garq u. Premi Deui and Ors., liris Court after exami.ning the entire scheme of tlte Act held Lat paument of tnterest and penqltlj are tu)o distinct liabilitles qisinq under the Act, tlhile tiabilitu to pau interest is part and parcel of teqql liabitita to pau compensation upon defauLt of pallment of that amount Luithin one mon*L Therefore, claim for compensation along with interest ttill haue to be made qood .iointlU by tLe Insurance A Compontl with the insured employer. But, so far as the perutttg tmposed on the insured emploger is on account of ltis personal fault Insurance Company cannot be made liable to reimburse penaltu imposed on the emploUer. Hence the contpensotion uith interest is pauable b11 the Insuranrce Compantl but not penaltU. Follou.rinq the said declsion ctnd. for^{the reasons} stated therein ue modifu the order made by the High Court to that ertenL

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Considcring the submissions of the learned Standing Counsel for the opposite party No.2 and in view of the principle laid down in the above said authorities, this Court is inclined to interfere with the findings of the learned Commissioner to the extent of deleting the penalty imposed under Section 4-A (3) of the Act.

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Accordingly, the Civil Miscellaneous Appeal is allowed in part. The order dated 29.O5.2OO2 in W.C.Case No.37 of 2O02

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, {2002) 9 Suprcrne Court Cases 450

MGP,J cMA..632 2012

.s;

(NF) passed by the learned Commissioner for Workmen,s Compensation and Assistant Commissioner of Labour, Nizamabad is modilied to ttre extent of deleting the penalty imposed by the learned Commissioner under Section a-A (3) of

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the Act. There shall be no order as to costs.

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Pending Miscellaneous applications, if any, shall stand

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closed'

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sD/- K sRlNrvASA^R JOINT REGIST R

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//TRUE COPY//

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SECTION OFFICER