Smt. Kola Devi vs New India Assurance Co. and Another

Rajesh Tandon, J.—Heard Sri S.N. Babulkdar Sr. Advocate assisted by Sri Tumul Nailwal Counsel for the appellant and Sri P.C. Maulekhi Counsel for the respondent No. 2.

Present appeals have been filed against the judgment and award dated 14.1.1992 passed by the Workmen''s Compensation Commissioner, Chamoli awarding a sum of Rs. 64,584.00 as compensation to the claimant.

The claimant-appellant has filed a claim petition before the Workmen Compensation Commissioner, Chamoli for grant of compensation on account of death of her son in a motor vehicle accident.

Briefly stated the son of the claimant namely Kishor Singh was employed as a driver in Bus No. UTS 1091, owned by Sri Ram Lal Batra. Sri Kishor Singh died in a motor vehicle accident during his employment on 18.9.1990. His employer did not pay any compensation for the death of Kishor Singh in the accident.

The opposite party has admitted that the son of the claimant Sri Kishor Singh was employed as a driver on his bus. The bus was insured with the New India Assurance Company and the insurer of the vehicle is liable to pay compensation.

Parties adduced evidence and on the basis of evidence on record the Commissioner has held that Kishor Singh was employed as a driver in the bus and he died due to accident during his employment. At the time of accident the age of the deceased was 26 years and he was getting monthly wages of Rs. 750/-. The Workmen''s Compensation Commissioner has awarded a compensation of Rs. 64,584/- to the claimant.

Feeling aggrieved the claimant has preferred the present appeal.

Counsel for the appellant .has urged that the Workmen''s Compensation Commissioner has not paid any interest to the claimant, while, the claimant was entitled to get interest @ 6% from the date of death of her son. He placed reliance on National Insurance Co. Ltd. Vs. Mubasir Ahmed and Another, , where the Apex Court has held as under:

Interest is payable u/s 4A(3) if there is default in paying the compensation due under this Act within one month from the date it fell due. The question of liability u/s 4A was dealt with by this Court in Maghar Singh Vs. Jashwant Singh, . By amending Act 30 of 1995, Section 4A of the Act was amended, inter alia, fixing the minimum rate of interest to be simple interest � 12%. In the instant case, the accident took place after the amendment and, therefore, the rate of 12% as fixed by the High Court cannot defaulted. But the period as fixed by it is wrong. The starting point is on completion of one month from the date on which it fell due. Obviously it cannot be the date of accident. Since no indication is there as to when it becomes due, it has to be taken to be the date of adjudication of the claim. This appears to be so because Section 4A(1) prescribes that compensation u/s 4 shall be paid as soon as it falls due. The compensation becomes due on the basis of adjudication of the claim made. The adjudication u/s 4 in some cases involves the assessment of loss of earning capacity by a qualified medical practitioner. Unless adjudication is done, question of compensation becoming due does not arise. The position becomes clearer on a reading of Sub-section (2) of Section 4A. It provides that provisional payment to the extent of admitted liability has to be made when employer does not accept the liability for compensation to the extent claimed. The crucial expression is "falls due". Significantly, legislature has not used the expression "from the date of accident". Unless there is adjudication, the question of an amount falling due does not arise.

In the case of Pratap Narain Singh Deo v. Srinivas Sabata 1976 (32) FLR 92 (SC), the Apex Court has observed as under:

Section 3 of the Act deals with the employer''s liability for compensation. Sub-section (1) of that Section provides that the employer shall be liable to pay compensation if "personal injury is caused to a workman by accident arising out of and-in the course of his employment". It was not the case of the employer that the right to compensation was taken away under Sub-section (5) of Section 3 because of the institution of a suit in a Civil Court for damages, in respect of the injury, against the employer or any other person. The employer therefore became liable to pay the compensation as soon-as the aforesaid personal injury was caused to the workman by the accident which admittedly arose out of and in the course of the employment. It is therefore futile to contend that the compensation did not fall due until after the Commissioner''s order dated May 6, 1969 u/s 19. What the Section provides is that if any question arises in any proceeding under the Act as to the ability of any person to pay compensation or as to the amount or duration of the compensation it shall, in default of agreement, be settled by the Commissioner. There is therefore nothing to justify the argument that the employer''s liability to pay compensation u/s 3, in respect of the injury, was suspended until after the settlement contemplated by Section 19. The appellant was thus liable to pay compensation as soon as the aforesaid personal injury was caused to the appellant, and there is no justification for the argument to the contrary.

Compensation fell due from the date of accident. u/s 4A of the Act, the interest to be simple interest @ 6% per annum in the present case.

Now the question arises as J to who is liable to pay the interest? There is no contract in between the insurer and the insured to pay interest to the employees/claimant by the Insurance Company, Counsel for the insurance company has submitted that as there was no contract between the insured and insurer regarding payment of interest on the award, the insurance company is liable only to pay compensation and the employer is liable to pay interest and penalty. He placed reliance on the observations made by the Apex Court in the case New India Assurance Co. Ltd. Vs. Harshadbhai Amrutbhai Modhiya and Another, . The Apex Court has observed as under:

Section 17 of the. Workmen''s Compensation Act voids only a contract or agreement whereby a workman relinquishes any right of compensation from the employer for personal injury arising out of or in the course of the employment and insofar as it purports to remove or reduce the liability of any person to pay compensation under the Act. As my learned Brother has noticed, in the Workmen''s Compensation Act, there are no provisions corresponding to those in the Motor Vehicles Act, insisting on the insurer covering the entire liability arising out of an award towards compensation to a third party arising out of a motor accident. It is not brought to our notice that there is any other law enacted which stands, in the way of an insurance company and the insured entering into a contract confining the obligation of the insurance company to indemnify to a particular head or to a particular amount when it relates to a claim for compensation to a third party arising under the Workmen''s Compensation Act. In this situation, the obligation of the insurance company clearly stands limited and the relevant proviso providing for exclusion of liability for interest or penalty has to be given, effect to. Unlike the scheme of the Motor Vehicles Act the Workmen''s Compensation Act does not confer a right on the claimant for compensation under that Act to claim the payment of compensation in its entirety from the insurer himself. The entitlement of the claimant under the Workmen''s Compensation Act is to claim the compensation from the employer. As between the employer and the insurer, the rights and obligations would depend upon the terms of the insurance contract. Construing the contract involved here it is clear that the insurer has specifically excluded any liability for interest or penalty under the Workmen''s Compensation Act and confined its liability to indemnify the employer only against the amount of compensation ordered to be paid under the Workmen''s Compensation Act. The High Court was, therefore, not correct in holding that the appellant Insurance Company, is also liable to pay the interest on the amount of compensation awarded by the Commissioner. The workman has to recover it from the employer.

In view of above, the order passed by the Court below is modified to the extent that claimant is entitled to get interest on the amount of award @ 6% per annum from 18.9.1990 till actual payment, which shall be recovered from the owner of the vehicle respondent No. 2.

Accordingly, the appeal is allowed.

No order as to costs.