Aboobacker v. Santhosh K.V and The National Insurance Co. Ltd.

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **TUESDAY, THE 7TH DAY OF AUGUST 2012/16TH SRAVANA 1934** ## **MFA.No. 231 of 2010 ( )** **----------------------WCC.20/2004 of WORKMEN'S COMPENSATION COURT,ERNAKULAM** ## **APPELLANT(S):** **------------** **ABOOBACKER, MANAGING PARTNER, STAR CONSTRUCTIONS, NETTIKKADU, CHELAKULAM VENGOLA P.O., PERUMBAVOOR-683 554.** **BY ADVS.SRI.A.V.XAVIER SRI.K.JOLLY JOHN** ## **RESPONDENT(S):** **--------------** **1. SANTHOSH.K.V, S/O.VELAYUDHAN NAIR, "ASWATHY" NAD NORTH, EDATHALA P.O., ALUVA ERNAKULAM DISTRICT.-683583** ## **2. THE NATIONAL INSURANCE CO.LTD., PERUMBAVOOR-683 542.** **BY ADV. SRI.MANUEL THOMAS BY ADV. SRI.M.A.GEORGE (B/O) BY ADV. SRI.MATHEWS JACOB (SR.) BY ADV. SRI.P.JACOB MATHEW** **THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 07-08-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **MFA.No. 231 of 2010 ( )** ## **APPENDIX** ## **PETITIONER'S ANNEXURES:** **ANNEXURE A1: ORDER DATED 14.05.2010 IN W.C.C.20/2004 BEFORE THE COMMISSIONER FOR WORKMEN'S COMPENSATION, ERNAKULAM. ANNEXURE A2: COPY OF THE COVERING LETTER DATED 01.07.2002 REGARDING SUBMISSION OF CLAIM FORM TO THE 2ND RESPONDENT. ANNEXURE A3: COPY OF THE LETTER OF ADVOCATE A.V.XAVIER DATED 07.05.2003 ADDRESSED TO THE 1ST RESPONDENT. ANNEXURE A4: COPY OF THE LETTER OF THE 1ST RESPONDENT DATED 20.12.2003 ADDRESSED TO THE APPLICANT.** ## **RESPONDENTS ANNEXURES: NIL** ## **//TRUE COPY//** ## **P.A.TO JUDGE.** ## **dlk** ## **Thottathil B. Radhakrishnan & K. Vinod Chandran,JJ.** **------------------------------------M.F.A(W.C.C.) NO. 231 of 2010 ----------------------------------------Dated this the 7[th] day of August, 2012** ## **JUDGMENT** ## Vinod Chandran,J The employer is before this Court in appeal against the order of the Workmen's Compensation Commissioner allowing the claim of the workman computing the compensation payable at Rs.1,19,796/- with 12% interest from the date of accident. While the liability to pay the compensation was mulcted on the insurer, the interest liability was cast on the employer/appellant. 2. The brief facts are that the applicant who was working under the first respondent employer as a skilled worker, while painting a multi storied building fell from a height of 40 feet and sustained severe injuries. It was alleged that he had to undergo continuous treatment at a 2 ## **M.F.A(W.C.C.) NO. 231 of 2010** hospital in the course of which his right knee-cap was removed and he has been totally incapacitated from carrying on his work as a painter. The claim was filed with the employer alone in the party array and later the insurer was impleaded as the second opposite party. The employer admitted the employment of the applicant as also the accident that occurred on 20.04.2002. It was contended that the entire medical bills of the applicant was paid by the employer and that the applicant had failed to respond to a specific request made by the employer to forward his personal details and that of the injuries suffered in the accident; so as to prefer a claim before the insurer. The insurer denied the employment and also the accident but accepted the valid insurance policy of the opposite party. It is to be specifically noticed that the insurance company did not have any other dispute with respect to the policy in the written statement. The applicant was examined as AW1 and the employer examined himself as DW1. The insurance **M.F.A(W.C.C.) NO. 231 of 2010** 3 company did not choose to examine any one on its side but marked the insurance policy as Ext.D4. 3. The Workmen's Compensation Commissioner on appreciation of evidence found that the accident had occurred as described in the claim that too when the applicant was working under the employer. The insurance policy was also found to be valid and current. The wages of the applicant was taken as Rs.4,000/- per month and adopting the loss of earning capacity at 24%, as certified by the medical board, the quantum of compensation was determined at Rs.1,19,796/-. The liability for such compensation also was mulcted on the insurer. There is no appeal in so far as these aspects are concerned. 4. What is challenged by the employer is the grant of interest at the rate of 12% from the date of accident as also the determination of the date on the “pleading of the second respondent brushing aside the contrary documentary evidences(sic)”. These are the two questions of law raised **M.F.A(W.C.C.) NO. 231 of 2010** 4 in the appeal. The determination of the date of accident is a factual issue and cannot at all be raised as a question of law. In any event, even according to the employer as is evident from the purported request for details made by the employer to the applicant; the accident occurred on 20.04.2002. This request letter is produced as Ext.P2 before the lower authority and as Annexure A3 along with the appeal. In such circumstances there cannot be any dispute relating to the determination of the date of accident. We refuse to answer the question raised by the appellant and confirm the findings of the lower authorities on this respect. 5. The other question raised in appeal is with respect to the grant of interest from the date of accident. The same is settled by the decision of the Division Bench of this Court in MFA No. 59 of 2011 wherein, the Division bench after elaborately considering the decisions of the Supreme Court as also of other bench decisions of this Court, found that 5 ## **M.F.A(W.C.C.) NO. 231 of 2010** interest can be and ought to be levied from the date of accident. Following the said judgment we answer the question in favour of the applicant and against the employer. 6. We find from the order of another Division Bench dated 20.03.2012 in the instant appeal that two other questions were raised for consideration ;one - with respect to the liability of the appellant to satisfy the third proviso to Section 30 of the Workmen's Compensation Act,1923. The said proviso makes an appeal defective and not maintainable in the event of the memorandum being not accompanied by a certificate of the Commissioner evidencing the deposit of the amount payable under the order appealed against. We notice, on a reading of the provisions of the Act that as the Act orginally stood it contemplated only compensation and the computation of the amount of compensation was as per Section 4 of the Act. Subsequently in 1933 by Act 15 of 1933, the above **M.F.A(W.C.C.) NO. 231 of 2010** 6 mentioned proviso mandating pre-deposit was introduced. It is also to be noticed that at that point there was no provision for granting interest or penalty in addition to the compensation awarded. However, noticing the working of the Act and the reluctance of employers in general to provide immediate succour in terms of money to the employees and their families for treatment and for essential sustenance in the event of fatal injury; the provision of interest and penalty was introduced, in the year 1959 by Act 8 of 1959. Section 4A provided that the compensation shall be paid as soon as its falls due; i.e., immediately after the accident occurs, on failure of which the Commissioner on eventual adjudication was conferred the power to impose interest and penalty. When such a power was conferred on the Commissioner in all fairness, the Legislature also provided, by introduction of sub section (aa) in Section 30 that an appeal can be maintained from such orders imposing interest or penalty. It is to be noticed that the appeal **M.F.A(W.C.C.) NO. 231 of 2010** 7 provision, Section 30, provides for six situations from which appeal can be maintained and an order of compensation was singledout in the proviso, mandating pre-deposit for maintaining an appeal. The legislature while introducing Sub Clause (aa) did not think it fit to provide for pre-deposit from appeals arising from such orders. The wisdom of the legislature cannot be gone into by this Court, especially in a statutory appeal. The provision for appeal does not mandate or insist on a pre-deposit for maintaining an appeal against an order imposing interest or penalty; if such appeal is only against the imposition of interest or penalty. The above appeal does not challenge any other findings of the tribunal, except for the factual determination of date of accident, which again is for the purpose of computing the actual interest liability. We are of the opinion that no pre-deposit can be insisted in such cases. We are fortified in our finding by the judgment of the High Court of Karnataka in **Kap Steel Ltd. v. R. Sasikala (1990 ACJ 913)** . **M.F.A(W.C.C.) NO. 231 of 2010** 8 7. The other question that another bench raised for consideration; is with respect to the person on whom the liability for interest is to be fastened. Whether it is the insurer or the insured who is liable to pay interest. As noticed above the insurance company admitted the policy and did not at all raise any contentions regarding any exclusions in the written statement. However, Ext.D4 was produced by the company to prove that the penalty costs and interest in a Workmen's Compensation policy are specifically excluded. The question is not whether such exclusion is valid or not. It is trite that such exclusion is valid as held by the Supreme Court in **P.J. Narayanan v. Union of India and others (2004 ACJ 452)** and **New India Assurance Company v. Harshadbhai Amrutbhai Modhiya [2006(2) KLT 667]** . But the question raised here is whether on the specific policy conditions issued to the appellant it was competent for the insurance company to plead before the Commissioner that as per the terms of the **M.F.A(W.C.C.) NO. 231 of 2010** 9 policy they were not liable to indemnify the insurer to the extent of the interest liability. 8. Ext. D4 is the bulwark of the contention raised by the insurance company. Ext. D4 is the copy of the letter purportedly written by the insurer to the insured forwarding the policy document. A computer generated document is seen attached therewith where in it has been shown after the exceptions numbering 9 under the heading “penalty, cost and interest endorsement”; that liability to interest and/or penalty has been specifically excluded in a Workmen's Compensation policy. The learned senior counsel for the insurance company also would take us through the Workmen's Compensation tariff, expounding the tariff policy of the insurance company; to state that in the teeth of such tariff policy it can only be assumed that the policy issued is specifically to indemnify the compensation payable to workmen and would definitely exclude interest and penalty. We are afraid, on a tariff policy document which is binding 10 ## **M.F.A(W.C.C.) NO. 231 of 2010** only on the insurance company and the officers under it; we cannot assume that none would depart or deviate from such policy. There is no warrant far totally excluding human fallibility. 9. In this context we also looked into Ext.D4. The covering letter is only that and nothing more. The attachment is a computer generated printout without any signature or seal either of the insured or the insurer. The details of the insurer, the policy number, the premium amount, the agency from which it was taken, the period of insurance etc., for which specific columns are provided in the attachment are left completely blank. We have also seen the seal of the Aluva Divisional Office of the National Insurance Company Ltd. on the attachment. The insurer impleaded as the second opposite party is the Perumbavoor branch of the insurance company; who has issued the insurance policy. We are afraid that the reliance placed by the Commissioner on Ext.D4 to mulct the liability of interest 11 ## **M.F.A(W.C.C.) NO. 231 of 2010** on the employer and release the insurer from indemnifying such liability was wholly erroneous and perverse. We cannot but set aside the said finding. In such circumstance, we partly allow the appeal directing the liability for interest at the rate of 12% from the date of accident also to be indemnified by the insurer. The appeal would stand partly allowed directing the insurance company to deposit the interest at the rate of 12% as fixed by the Workmen's Compensation Commissioner, from the date of accident within a period of two months before the Commissioner. We confirm the findings of the Commissioner with respect to all other issues. ## **Thottathil B. Radhakrishnan,Judge.** ## **K. Vinod Chandran,Judge.** dlk **M.F.A(W.C.C.) NO. 231 of 2010** 12