MFA.(ECC) No.26 of 2018 & MFA.(ECC) No.99 of 2018

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** **MONDAY, THE 09TH DAY OF MARCH 2020 / 19TH PHALGUNA, 1941** ## **MFA.(ECC) No.26 OF 2018** **AGAINST THE ORDER IN ECC 132/2014 DATED 22-11-2016 ON THE FILES OF INDUSTRIAL TRIBUNAL AND EMPLOYEES' COMPENSATION COMMISSIONER, KOZHIKODE** ## **APPELLANT/2ND OPPOSITE PARTY:** **ORIENTAL INSURANCE CO. LTD. KANNUR, REPRESENTED BY ITS REGIONAL MANAGER, REGIONAL OFFICE,ERNAKULAM NORTH, KOCHI -18.** **BY ADV. SMT.K.S.SANTHI** ## **RESPONDENTS/APPLICANT/1ST OPPOSITE PARTY:** **1 LATHEESH V. S/O. KRISHNAN P.P. (LATE),CHEKKANTHOTTIL HOUSE, IRIKKOOR P.O., KANNUR - 670 593. 2 C.V. SHABARI DAS PROPRIETOR, SHABARI INTERNATIONAL, P.O. ATTADAPPA, KANNUR - 670 006.** **R1 BY ADV. SMT.M.SANTHI (K/868/2011) R1 BY ADV. SRI.G.RANJU MOHAN R2 BY ADV. SRI.ABRAHAM K.JOHN R2 BY ADV. SMT.C.G.ARUNDHATHI R2 BY ADV. SRI.P.K.BALAKRISHNAN** **THIS MISC. FIRST APPEAL HAVING COME UP FOR ADMISSION ON 09.03.2020, ALONG WITH MFA.99/2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **MFA.(ECC) No.26 & 99/2018** **2** ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** **MONDAY, THE 09TH DAY OF MARCH 2020 / 19TH PHALGUNA, 1941** **MFA.(ECC)No.99 OF 2018** **AGAINST THE ORDER IN ECC 132/2014 DATED 22-11-2016 ON THE FILES OF INDUSTRIAL TRIBUNAL AND EMPLOYEES' COMPENSATION COMMISSIONER, KOZHIKODE** ## **APPELLANT/APPLICANT:** **LATHEESH V S/O.KRISHNAN P.P.(LATE), AGED 32 YEARS, CHEKKANTHOTTIL HOUSE, IRIKKOOR P.O., KANNUR-670 593.** **BY ADVS. SMT.M.SANTHI (K/868/2011) SRI.G.RANJU MOHAN** ## **RESPONDENTS/OPPOSITE PARTIES:** **1 C.V.SHABARI DAS PROPRIETOR, SHABARI INTERNATIONAL, P.O.ATTADAPPA, KANNUR-670 006. 2 THE ORIENTAL INSURANCE COMPANY LTD., DIVISIONAL OFFICE, K.P.K.RIALTO, P.O.THANA, KANNUR-12. R1 BY ADV. SRI.ABRAHAM K.JOHN R1 BY ADV. SRI.P.K.BALAKRISHNAN R1 BY ADV. SMT.C.G.ARUNDHATHI** **THIS MISC. FIRST APPEAL HAVING COME UP FOR ADMISSION ON 09.03.2020, ALONG WITH MFA.26/2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **MFA.(ECC) No.26 & 99/2018** **3** ## **JUDGMENT** These two appeals have been heard together and are being disposed of through this judgment, since one among them is filed by the Insurance Company, while the other by the claimant against the same Award of the Court of the Industrial Tribunal Employees Compensation Commissioner, Kozhikode (Compensation Commissioner for short). 2. The issues in these appeals arise from the final order of the Compensation Commissioner in E.C.C.No.132 of 2014, which had been filed by the appellant in M.F.A.No.99 of 2018 (who will hereinafter be referred to by his name Shri.Latheesh.V.), seeking compensation for the injuries sustained by him while he was working as a Packing Supervisor under his employer, Shri.C.V.Shabari Das, who has been arrayed as a 1[st] respondent in M.F.A.No.99 of 2018 and as the 2[nd] respondent in M.F.A.No.26 of **MFA.(ECC) No.26 & 99/2018** **4** 2018. 3. The Court of the Compensation Commissioner allowed the claim, granting an amount of Rs.1,51,142/-, along with interest @ 12% from 24/07/2007, after evaluating the evidence of AW1, namely Shri.Latheesh.V. and that of RW1 and RW2, the witnesses on behalf of the opposite parties and after assessing the merits of the documents produced in trial, namely, Exts.A1 to A4 on the side of the applicant Shri.Latheesh V., and Exts.B1 to B22 marked on the side of the opposite parties. 4. It is this award which is impugned in both these appeals. 5. Shri.George Cherian, learned Senior Counsel, instructed by Smt.K.S.Santhi, learned counsel appearing for the Oriental Insurance Company - the appellant in M.F.A.No.26 of 2018 - began his submissions by saying that his client is not responsible **MFA.(ECC) No.26 & 99/2018** **5** for the adjudicated amounts, since the employer, namely, Shri.Shabari Das, has, in his written statement before the Compensation Commissioner, stated unequivocally that Shri.Latheesh V. is covered under the ESI Scheme with Membership No.2845760. The learned Senior Counsel, therefore, says that in such circumstances, his client cannot be mulcted with any liability. 6. As a further contention, the learned Senior Counsel submits that, going by the policy conditions which are discernible from Ext.B22, the Insurance Company is not responsible to pay the statutory interest or penalties and that this can be mulcted only on the employer. 7. After submitting as afore, the learned Senior Counsel impels the third contention that since his client had already paid Rs.56,670/- to Shri.Shabari Das - the **MFA.(ECC) No.26 & 99/2018** **6** employer, which is evident from Ext.B10 disbursement voucher, the Compensation Commissioner could not have imposed his client with the responsibility of the amount in the Award. He thus prays that M.F.A.No.26 of 2018 be allowed and the impugned order of the Compensation Commissioner be set aside to such extent. 8. In response, Smt.Santhi.M., learned counsel appearing for Shri.Latheesh V. - appellant in M.F.A.No.99 of 2018, began her submissions by saying that even though the employer - Shri.Shabari Das - has stated in his written statement that her client was covered under the ESI Scheme, no document has been placed on record in its substantiation; and she vehemently submits that her client was not covered by such. She contends that in the absence of any evidence to prove this, the Compensation Commissioner was completely right in not having accepted **MFA.(ECC) No.26 & 99/2018** **7** this plea of the Insurance Company. 9. As regards the Policy is concerned, the learned counsel says that since it is the responsibility of the employer to have disbursed the amounts to her client at the right time, the default thereof would certainly bind him with respect to statutory interest and penalty and that the Insurance Company is responsible for the same also. 10. On the third contention of the Insurance Company - that Ext.B12 shows the payment of Rs.56,670/- to the employer by them - Smt.Santhi M. says that this will not, in any manner, bind her client, since this amount has admittedly not been paid by the employer to him and therefore, that it is for the Insurance Company to recover it as per law from the employer, but cannot be heard to plead that they be divested of such liability. 11. After saying so, Smt.Santhi M. **MFA.(ECC) No.26 & 99/2018** **8** argued the merits of M.F.A.No.99 of 2018 filed by her client Shri.Latheesh V., asserting that the salary adopted by the Compensation Commissioner was not correct, since her client was drawing Rs.6,500/- at the time of accident; and further that the Compensation Commissioner has gone wrong in assessing disability to the extent of 30% only, when concededly, Ext.B12/Ext.A1 disability certificate issued by the competent Medical Board has assessed such liability to be 40%. 12. Smt.Santhi M., finally submits that the employer is responsible to pay her client penalty under Section 4A of the Employees Compensation Act, but that the Compensation Commissioner has not considered this aspect at all. 13. At the time when these appeals were heard, there was no representation on behalf of the the employer and am, therefore, **MFA.(ECC) No.26 & 99/2018** **9** constrained to dispose of these matters without hearing his version. 14. As is discernible from the above, there are broadly four or five issues involved in these appeals. I propose to first deal with the contentions of the Insurance Company and then move on to the contentions of Shri.Latheesh V. - the claimant. 15. For the first, the Insurance Company submits that on account of the ESI Scheme allegedly applicable to Shri.Latheesh V., the Employees Compensation Act cannot apply. I am aware that the learned Senior Counsel is relying on the judgment of the learned Judge of this Court in _**Galaxy**_ _**Security Services v. Moly**_ **[2019(2)KLT SN 90]** in support of this. However, even though the position of law as declared by this Court in _**Galaxy Security Services (Supra)**_ cannot be doubted, the fact remains that there is **MFA.(ECC) No.26 & 99/2018** ## **10** absolutely no evidence on record in this case, except the bald statement of the employer that Shri.Latheesh V. was covered by the ESI Scheme or that he was a member thereof. In fact, the learned Senior Counsel concedes that his client is also unable to show any evidence to such effect even in this appeal. I, therefore, cannot accept this contentions on behalf of the Insurance Company and I, therefore, repel the same, finding that the Compensation Commissioner has concluded correctly on this issue. 16. For the second, the Insurance Company claims that they are not responsible to pay statutory interest or penalty as per the terms of Ext.B22 Insurance Policy. Even though Smt.Santhi.M. contends to the contrary, the fact remains that this aspect has not been considered by the Compensation Commissioner in any manner, but it has taken a view that since the employer is covered by **MFA.(ECC) No.26 & 99/2018** ## **11** Ext.B22 policy, the Insurance Company is also responsible for the interest and penalty, but without looking into the terms of the said policy and verifying whether such liability has been specifically excluded. This is important because, if the Insurance Policy specifically excludes such liability, then certainly the compensation Commissioner could not have imposed it on the Insurance Company, though the employer may certainly be liable for it. I do not propose to say anything further on this, since I am of the firm view that this issue requires a reconsideration by the Compensation Commissioner. 17. As far as the third contention of the Insurance Company is concerned, they say that, going by Ext.B12 journal, Rs.56,670/had been paid to the employer-Shri.Shabari Das under the policy and therefore, that they are not responsible for making this **MFA.(ECC) No.26 & 99/2018** **12** payment to the victim. This, again, I am afraid is not a contention that I can accept because, as per Ext.B12, there is nothing in evidence to show that the said amount has been paid as per the policy, though I am aware that the learned Senior Counsel, Shri.George Cherian, asserts that the number of the policy shown in the said journal would be sufficient proof of the same. However, in the absence of specific proof to show that this payment has been made in terms of the policy; and even if it is assumed so, the admitted factum of the same not having been paid by the employer to the victim certainly justifies the Compensation Commissioner in having computed the compensation payable to the claimant including this amount, but leaving liberty to the Insurance Company to recover the same from the employer. 18. This is more so because, the **MFA.(ECC) No.26 & 99/2018** **13** Employees Compensation Act is a welfare Act intended for the support and amelioration of the victim and therefore, the burden of recovery of such amounts from the employer cannot be shifted to the shoulders of the victim, especially when it is not been conclusively proved that the said payment had been made against the Insurance Policy. 19. Thus, having answered the various contentions of the Insurance Company as above, I now turn to the contentions of Smt.Santhi M. with respect to the claims made by the victim, who is the appellant in M.F.A.No.99 of 2018. 20. The first contention of Smt.Santhi M., is that the disability of her client ought to have been taken by the Compensation Commissioner as 40% and not 30%. However, as rightly pointed by the learned Senior Counsel, Shri.George Cherian, the amputation of a thump being a scheduled injury, which **MFA.(ECC) No.26 & 99/2018** **14** is covered by Section 4(1)(c) of the Employees Compensation Act, the loss of earning capacity on account of such an injury can only be as per Part II of Schedule I of the said Act, which, under Serial No.5 thereof, stipulates it to be only 30%. I cannot, therefore, find the Compensation Commissioner to be in error in having accepted this to be the percentage of injury, particularly when statutorily he could have done nothing more. 21. The second contention of Smt.Santhi M. is that the salary of the victim ought to have been taken as Rs.6,500 and not Rs.4,000/-. I am afraid that I cannot accede to this contention either, because, at the time when the accident happened in the year 2007, the second explanation to Section 4(1) of the Employees Compensation Act made it clear that when the salary of a victim accedes Rs.4,000/- only the said figure of **MFA.(ECC) No.26 & 99/2018** ## **15** Rs.4,000/- can be taken as salary and not more. Smt.Santhi concedes that the accident took place when this Section was in force and I, therefore, cannot find favour with her contention that Rs.6,500/- ought to have been taken as the salary by the Compensation Commissioner. **==> picture [338 x 12] intentionally omitted <==** the Compensation Commissioner ought to have considered the imposition of penalty on the employer under Section 4A of the Employees Compensation Act This contention, I notice, has not been considered by the Compensation Commissioner at all and I am certain that it requires a reconsideration by it on this issue. Resultantly and for the reasons above, I order these appeals as under:- **==> picture [338 x 11] intentionally omitted <==** part, setting aside the impugned Award of the Compensation Commissioner to the extent **MFA.(ECC) No.26 & 99/2018** ## **16** to which it has mulcted the liability of interest on the appellant-Insurance Company; with a consequential direction to it to reconsider it, based on Ext.B22 Insurance Policy and after affording necessary opportunity to both sides. All other findings in the impugned order will stand confirmed and the Compensation Commissioner will, for the purpose of this appeal, consider only that issue and nothing else. (b) M.F.A.No.99 of 2018 is allowed in part confirming the impugned judgment and decree, subject to my observations in M.F.A.No.26 of 2018; however, with a direction to the said Court to reconsider the issue of penalty against the employerthe 1[st] respondent herein, under the provisions of Section 4A of the Employees Compensation Act, after affording necessary opportunities to all sides. In order to facilitate the compliance of **MFA.(ECC) No.26 & 99/2018** **17** the afore directions, I direct the parties to mark appearance before the Court of the Compensation Commissioner on 31/03/2020; with a further direction to it to issue final orders in E.C.C.No.132 of 2014 in the afore manner as expeditiously as is possible, but not later than 30/06/2020. In the nature of the circumstances noticed in these appeals, I deem it appropriate not to make any order as to costs and to direct the parties to suffer their respective costs. **Sd/-** ## **DEVAN RAMACHANDRAN** **JUDGE** **MC/11.3.2020**