Md. Yunus Ali Khan vs Reshmi Bewa

N. Chaudhury, J.—This is an appeal under Section 30 of the Workmen''s Compensation Act, 1923 against the judgment and award dated 26.04.2006 passed by the Commissioner, W.C., Dhubri in W.C. No.27/2003. By that award, the appellant was directed to deposit an amount Rs.92,924/- with interest @ 9% per annum before the Court within 30 days from the date of award. The appellant has challenged the award by this appeal on various grounds.

One Rashmi Bewa filed a claim petition before the W.C Commissioner at Dhubri, stating that her husband, Afsar Ali was engaged as handiyman in vehicle No. AS-17-3275 (Mini Bus). On 08.07.2003 he was on the roof of the vehicle for keeping luggage in proper place. But due to rash and negligence action on the part of the driver, the vehicle started moving all of a sudden and as a result, he fell down from the roof of the vehicle and sustained injury. He was taken to Dhubri Civil Hospital, he stayed for 2 days and thereafter he was referred to GMCH and he succumbed to the injury in the G.M.C.H on 17.07.2003, Bogribari P.S. Case No.63/2003 was registered in regard to the said incident. The claimant stated that deceased was earning Rs.1000/- per month apart from daily allowance of Rs.80/- and that he was 25 years of age at the time of the accident. Claimants, therefore claimed Rs.5,00,000/- as compensation.

On being summoned, the appellant appeared and submitted written statement denying employment and liability as well and at the same time disclosed that the vehicle was covered by valid insurance under the opposite party, New India Assurance Company Ltd. The Insurance Company appeared and submitted written statement denying responsibility saying that the claim therein was not maintainable and that notice was not served under Section 10 etc.

Upon such pleadings of the parties, WC Commissioner framed as many as 4 issues, which are as follows:-

"1) Is there any cause of action to entertain the claim?

2) Whether the claim petition is maintainable in its present form?

3) Whether the opposite parties are liable to pay compensation as claimed by the claimant petitioner?

4) If yes, what relief is the claimant petitioner is entitled to?"

The W.C Commissioner held that there was cause of action for the claim that the claim therein was maintainable in its present form and the opposite party is liable to make payment of compensation to the claim for death of the workmen. Considering the evidence on record, the WC Commissioner assessed compensation of Rs.3,68,747/- along with interest @ 9% per annum. But by the same judgment and award, the Insurance Company was directed to make payment of the amount within a period of 30 days. It was further mentioned therein that Insurance Company will be liable to make payment of 50% of the awarded amount as penalty if the amount was not deposited within a period of 30 days without any justification. Whether the Insurance Company was subsequently saddled with the liability to make payment of penalty by paying 50% of the compensation in addition to the total compensation amount is not clear as neither the Insurance Company nor the claimant nor the owner have furnished further facts before this Court.

However, in the penalty made in paragraph of the award, the WC Commissioner directed the owner of the petitioner who is appellant herein to deposit an amount of Rs.92,924/- along with interest @ 9% per annum within a period of 30 days. In so doing, the judgment passed by the Supreme Court in the Case of P.J Narayanan v. Union of India in Writ Petition(Civil) No.341/2003 has been relied on. This judgment however was reported in (2006) 5 SCC. The owner of the vehicle Md. Yunus Ali has challenged this part of the award on the ground that the Insurance Company is liable to make payment of the interest in addition to the compensation amount and that the aforesaid judgment in the case of P.J. Narayanan does not apply to the case in hand. This Court while admitting this appeal on 23.06.2006 did not frame any substantial question of law as required under Section 30 of the Workmen Compensation Act, 1923.

I have heard Mr. S. Katakey, learned counsel appearing for the appellant. Also heard Ms. M. Choudhury, learned counsel appearing for the respondent No.3. None appears for the respondent Nos. 1 and 2 although notices have been served on them.

Mr. Katakey, learned counsel for the appellant submits that the judgment passed in P.J. Narayanan (supra) is based on altogether different consideration. It was a writ petition wherein a direction was sought against the Insurance Company for deleting a 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. The Supreme Court dismissed the writ petition, however, observing that in the absence of any statute to that effect, the Insurance Company cannot be forced by Court to take liabilities which liability they do not want to take. Mr. Katakey has placed reliance on the case of Kamala Chaturvedi v. National Insurance Company Ltd and Ors. Reported in (2009) 1 SCC 487, wherein the aforesaid case of P.J Narayanan was also considered along with the case of Ved Prakash Garg v. Premi Devi reported in (1997) 8 SCC 1 that in the case of Kamala Chaturvedi, the Hon''ble Supreme Court after consideration of the earlier judgment held that under Section 147 of the Motor Vehicle Act, the driver of the vehicle is covered by Insurance and since the provision of Motor Vehicle Act are applicable in the case, the Insurance would be liable to pay interest. In that case, the Insurance Policy did not contain any term to the affect that the Insurance Company would not be liable to make payment of insurance. Even in the present case, there is no term in the insurance policy laying down any exception to the affect that the insurance company would be liable to make payment of interest on the compensation amount. This is also a case of claim under the Motor Vehicle Act. The only difference is that the claimant by exercising option under Section 167 of the Motor Vehicle Act lodged the claim before the WC Commissioner and not before MACT. Since the insurance policy also does not contain any exception in regard to exclusion of liability of the insurance company for paying interest, the case of Kamala (supra) would be squarely applicable to the present case.

After hearing the learned counsel for the parties, this Court feels inclined to frame the following substantial question of law in the case:-

"Whether in the absence of any exception clause in the insurance policy, the insurance company can be settled with law for making payment of interest on assessed compensation?"

The learned counsels for the parties are heard on the substantial question of law. In view of what has been discussed above and on consideration of the judgment relied on by the learned counsel for the parties, it appears that the motor vehicle in question was also covered by valid insurance of the respondent No.3. The insurance policy was in force as on the date of the accident. Insurance policy has been brought on record and it does not contain any clause for excluding the liability of the insurer to make payment of interest.

Apart from that if a vehicle has been insured by the owner and the insurance is in force, it does not appear to be logical as to why the insurer should be made liable to make payment to compensation only whereas interest will be directed to be paid by the owner. If the owner is liable to make compensation to the workmen, because of contract of insurance between the insurer and the insured, the insurance company is bound to indemnify the insured. Such indemnity will be subject to the condition of the policy. Unless there is a specific provision expressly absolving the company from making payment of interest on compensation, the insurance company will always be liable to make payment of interest as it is liable to make payment of compensation. This being the position, the sole substantial question of law is decided in favour of the appellant. Appeal stands allowed. The interest of Rs.92,924/- shall be paid by the Insurance company within a period of 2 months from today to the jurisdictional W.C. Commissioner at Dhubri with an indemnify letter to the claimant vide registered cover.