The Manager National Insurance Co. Ltd. vs K.K. Kallesh

Aravind Kumar, J.—Heard Sri. Poonacha., learned counsel appearing for the appellant. None appears for the respondents though served and unrepresented. This Court by the order dated 2.6.2008, has admitted the appeal to consider the following substantial question of law.

"Whether the Commissioner had erred in law in making the appellant-insurance company liable to pay the entire award amount in the light of the terms of the insurance policy-Ex. R1."

Claimant was working under respondent No. 2 and operating in the coffee washing unit and in the course of his employment, accident occurred due to which the claimant lost 4 fingers in left hand. Hence, a claim petition was filed under the Workmen''s Compensation Act seeking compensation, contending inter alia that he was earning wages of Rs. 150/- per day. The Commissioner for Workmen''s Compensation after considering the evidence on record allowed the claim petition in part and awarded a sum of Rs. 2,01,600/- with interest at the rate of 12% per annum, payable after 30 days from the date of award.

It is the contention of Mr. Poonacha that claim arises out of policy issued under Workmen''s Compensation Act and said policy itself would clearly indicate the wages declared by the employer which was been paid to workmen @ Rs. 1,250/- per month and in the absence of any proof contrary to the same, Commissioner could not have assessed the wages of the claimant at Rs. 3,000/- per month or in alternate he contends that Commissioner for Workmen''s Compensation could not have directed the insurer to pay the compensation by calculating the wages at the rate of Rs. 3,000/- per month and in the second alternative he contends that liability of the insurer ought to have been restricted to the extent of the wages that was being paid to the workmen and balance was required to be paid by employer. In support of his submission, he has relied upon the judgment of this Court in The Oriental Insurance Company Limited, Bangalore Vs. Gangavva and Another, .

In the instant case, the Commissioner while determining the compensation payable to the claimant has assessed income of the claimant at Rs. 3,000/- per month. Said finding has been recorded by the Commissioner based on a plea found in the written statement filed by respondent No. 1-employer, where under employer has admitted that claimant-workman was being paid wages of Rs. 150/- per day and Rs. 20/- batta. Policy in question would indicate that declared wages paid by the employer to the workmen was Rs. 1,250/- per month. The liability of the insurer, if any, has to be necessarily restricted to the said amount and it cannot be made liable to pay the amount beyond the wages declared by the employer at the time of obtaining insurance policy. The Co-ordinate Bench in Gangawa''s case referred to supra has held to the following effect.

"The learned counsel for the appellant-insurance company argued that it was liable to compensate only to an extent of Rs. 29,808/- in terms of the insurance policy obtained by the contractor of the respondent 2 as in the claim petition filed by the contractor, it was clearly set out that the wage of the deceased for the months of December, 1990 to March, 1991 as set out in para 4 above. It is also not in dispute that the appellant-Insurance Company had computed a sum of Rs. 29,808/- with reference to Section 5(c) of the Act and further with reference to the terms and conditions of the insurance policy as the insurance premium was paid with reference to the wages disbursed by the contractor to the deceased. The said argument of Sri. S.P. Shankar appearing for the appellant has to be accepted, as it appears to me."

In the light of undisputed fact, namely, that policy in question issued to the employer would cover 10 employees whose wages declared by the employer was Rs. 1,250/- per month, insurer would be liable to the extent of premium received by it on said wages and any amount determined by Commissioner for Workmen''s Compensation exceeding the declared wages, would be liable to be indemnified by the employer. As such, substantial question of law formulated hereinabove is answered in affirmative i.e. in favour of the appellant-insurer. However, it is made clear that quantum of compensation determined by the Commissioner is not disturbed, inasmuch as the employer in his statement of objection has admitted the actual wages that was being paid and based on the said pleading, Commissioner has construed the wages of the claimant at Rs. 3,000/- per month and determined the compensation. Said finding does not suffer from any infirmity and same requires to be affirmed and accordingly, it is hereby affirmed. Hence, the following

ORDER

(i) The appeal is hereby allowed in part.

(ii) Judgment and award passed by the Commissioner for Workmen''s Compensation in WC:NFC:01/2005 dated 2.8.2007, is hereby modified. It is hereby ordered that appellant-insurer would be liable to indemnify the insured and pay the claimant to the extent of wages namely, Rs. 1,250/- and the balance compensation on the wages of Rs. 1,750/- would liable to be paid to the claimant-workman by respondent No. 2-employer.

(iii) Registry is directed to issue cheque to respondent No. 1-claimant on proper identification by the Registry.

(iv) Balance if any payable with accrued interest thereon shall be deposited by the appellant-insurer to the extent indicated hereinabove before this Court within four weeks from the date of receipt of certified copy of this judgment.

(v) No costs.