National Insurance Co. Ltd. v. Kalaivani W/o Late Albert Mohan and The Manager, Koduvakarnam Estate, Peermade

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE P.G. AJITHKUMAR** **TUESDAY, THE 12[TH] DAY OF DECEMBER 2023/21ST AGRAHAYANA, 1945** **M.F.A.(ECC) NO. 70 OF 2015** **AGAINST THE ORDER DATED 28.05.2015 IN ECC 19/2014 OF THE EMPLOYEES' COMPENSATION COMMISSIONER,IDUKKI** ## **APPELLANT/2ND OPPOSITE PARTY:** **NATIONAL INSURANCE CO.LTD., FOURTH FLOOR PARCO TOWERS, PM TAJ ROAD, PB NO.207,KOZHIKODE DISTRICT, KERALA. PIN - 673 019REP. BY THE DY.MANAGER, REGIONAL OFFICE, KOCHI.** **BY ADV SRI.RAJAN P.KALIYATH** ## **RESPONDENTS/APPLICANT & 1ST OPPOSITE PARTY:** **1 KALAIVANI W/O.LATE ALBERT MOHAN, NO.1 DIVISION,KODUVAKARNAM ESTATE, HOPLE PLANTATIONS,PEERMADE, PIN - 685 531.** **2 THE MANAGER, KODUVAKARNAM ESTATE, PEERMADE PIN - 685 531.** **R2 BY SRI.SAJJU.S R2 BY SRI.K.SHAJ** ## **OTHER PRESENT:** ## **SMT MAYA MN, PUBLIC PROSECUTOR** **THIS MFA (ECC) HAVING COME UP FOR FINAL HEARING ON 06.11.2023, THE COURT ON 12.12.2023 DELIVERED THE FOLLOWING:** 2 M.F.A.(ECC) No.70 of 2015 ## **P.G. AJITHKUMAR, J.** **----------------------------------------------------------M.F.A.(ECC) No.70 of 2015 ----------------------------------------------------------Dated this the 12[th] day of December, 2023** ## **JUDGMENT** This is an appeal filed under Section 30 of the Employees Compensation Act, 1923 (E.C.Act). The 2nd respondent in ECC No.19 of 2014 before the Employees' Compensation Commissioner, Idukki is the appellant. The grievance of the appellant is that the order directing it to pay the whole of the compensation is beyond the liability it has underwritten as per Ext.R1 insurance policy. 2. Heard the learned counsel for the appellant and the learned counsel for the 2nd respondent. The 1st respondent did not choose to appear before the Court. 3. Sri.Albert Mohan, who is the husband of the 1st respondent, died in an accident arising out of and in the course of his employment in the estate of the 2nd respondent. The accident was on 23.11.1999. While carrying manure, he fell down and sustained injuries. He succumbed to the injuries 3 M.F.A.(ECC) No.70 of 2015 on 31.12.1999. 4. The 1st respondent filed claim application claiming a compensation of Rs.2,15,280/-. The contention raised by the 2nd respondent was that there was no causal connection between the accident and the employment of Sri.Albert Mohan. The appellant contended that the 1st respondent was not the dependent, the policy was not valid and that the claim was barred by law of limitation. The Compensation Commissioner recorded evidence, both oral and documentary. Oral testimonies of AWs1 & 2 and RW1 and Exts.A1, A2, R1 and R2 compose the evidence. On the basis of the said evidence, the learned Commissioner held that Sri.Albert Mohan died as a result of the accident arising out and in the course of his employment, who was 26 years of age at that time and the 1st respondent, his wife, was entitled to get a compensation of Rs.2,03,922/- besides the funeral expense of Rs.2,500/-. The learned Commissioner has taken the monthly wages as Rs.1925.70 and on that basis, the compensation was computed. Further, holding that the appellant, being the 4 M.F.A.(ECC) No.70 of 2015 insurer, was liable to pay the compensation and a direction to that effect was issued as per the impugned order. 5. The appellant would contend that in the insurance policy itself the wages of the field workman was declared by the 2nd respondent, which was Rs.873/- per month and the liability of the appellant is limited to the compensation computed on the basis of that declared wages. The learned counsel for the appellant would further submit that the policy as per Ext.R1 is a contractual one and not statutory, and therefore, liability under it cannot exceed what is underwritten. It is pointed out that the number of field workmen declared in the Annexure to Ext.R1 was 563 and their monthly wage in terms of the total amount of wages and the proportionate premium paid would come to Rs.873/- and therefore the liability of indemnification is to that extent only. It is further submitted that even according to the 2 nd respondent the monthly wages of Field Workmen was Rs.1272.35 alone. However, the Tribunal took the wages as 1925.70, which is again wrong. 5 M.F.A.(ECC) No.70 of 2015 6. The learned counsel for the 2nd respondent, on the other hand, would submit that the declaration regarding the number of field workmen in Ext.R1 does not have any relation to the liability of the insurer. In Ext.R1, the wages of the Field Workmen and others were stated for calculating premium, but that fact cannot be the basis for the extent of the insurer. It is further submitted that the appellant did not have such a contention before the Employees' Compensation Commissioner and therefore it is precluded now from raising such a contention. What is possible in an appeal under Section 30 of the E.C.Act is to question the order on the ground of substantial question of law and the present contention is a pure question of fact and hence the same cannot be countenanced in this appeal. 7. Apart from that the liability of the appellant is limited in proportion to the amount of the declared wages, a few other contentions are also raised by the appellant. At the time of hearing what is pursued is only that the liability of the appellant to indemnify the 2nd respondent shall be limited to 6 M.F.A.(ECC) No.70 of 2015 the liability in terms of the policy of insurance. The contention of the appellant is that as per the schedule to the policy, Ext.R1, annual wages of field workmen, totalling 563, was mentioned on the basis of the declaration by the 2nd respondent for which only premium was collected and therefore, the liability under the said policy can be corresponding to the said wages alone. The monthly wages of the field workmen as per the said schedule is Rs.873/- per month. The question is whether the agreement between the parties to which the rate of monthly wages of field workmen also forms a part would regulate the liability of the insurer. 8. The Apex Court in **New India Assurance Co.Ltd. v. Harshadbhai Amrutbhai Modhiya [(2006) 5 SCC 192 :** **2006 (2) KLT 667 (SC)]** held that a contract of insurance is governed by the provisions of the Insurance Act and in terms of the provisions of the Insurance Act, an insured is bound to pay premium which is to be calculated in the manner provided for therein. With a view to minimise his liability, an employer can contract out so as to make the insurer not liable as 7 M.F.A.(ECC) No.70 of 2015 regards indemnifying him in relation to certain matters which do not strictly arise out of the mandatory provisions of any statute. The Apex Court further held that the E.C.Act does not contain a provision like Section 147 of the Motor Vehicles Act, 1988, where it is provided for a compulsory insurance or the extent thereof. Therefore, a policy of insurance coming under the E.C.Act is not controlled by the provisions of the Statute, but by the terms of the contract. Therefore is a contention of the learned counsel for the appellant that the liability for indemnifying the insured under Ext.R1 policy is to the extent of the terms of the contract. 9. The learned counsel for the 2nd respondent strenuously contended that the amount of premium fixed as per Ext.R1 cannot be termed as a term controlling the liability of the insurer. Further, it was submitted that the monthly wages was computed by the learned Commissioner based on the evidence before it and therefore this Court while exercising jurisdiction under Section 30 of the E.C.Act cannot re-appreciate the evidence and reverse the said finding on 8 M.F.A.(ECC) No.70 of 2015 facts. As held in **North East Karnataka Road Transport Corporation v. Smt.Sujatha [2018 (4) KLT 3090 (SC)]** the factual findings of the Commissioner unless they are perverse, arbitrary, based on no evidence or against any provision of law, cannot be interfered with by the appellate court. 10. This Court in **Oriental Insurance Co.Ltd. v.** **Subramanian and another [ILR 1998 (2) Ker. 60]** took the view that no appeal shall lie under Section 30 of the E.C. Act unless a substantial question of law is involved. The Apex Court, however, in **Fulmati Dhramdev Yadav v. New India Assurance Co.Ltd. [2023 Livelaw (SC) 746]** held that the merits of the findings of the Commissioner can be looked into by the appellate court in order to ascertain whether the findings are frowned with any perversity. 11. The question is as regards the effect of mutual agreement and the amount of premium upon the liability of the insurer. From Ext.R1 it is seen that the premium was fixed on the basis of the actual annual wages. 2.45% of the actual 9 M.F.A.(ECC) No.70 of 2015 annual wages was fixed as the amount of premium. When the said fact is quite explicit from the terms of the agreement, the 2nd respondent cannot contend that the said aspect is only a question of fact and cannot be looked into by the appellate court. In fact, there is no dispute as regards the actual annual wages, number of field workmen or the amount of premium. So, the question relates to the interpretation of the clauses in Ext.R1 alone. If the interpretation of the said clauses is incorrect, it is certainly upto the appellate court to look into and correct the mistakes, if any. 12. Following the principle laid down by the Apex Court in **Harshadbhai** (supra), this Court in **National Insurance Company Ltd. v. Murali [2013 (3) KLT 209]** held that the obligation of the insurer stands limited to conditions in the policy. Viewed so, the contention of the appellant that the liability of the appellant can only be to the extent of the premium collected, is liable to be accepted. So, the liability of the appellant is to indemnify the insured to the extent the amount of compensation calculated at the rate of Rs.873/- as monthly wages. 10 M.F.A.(ECC) No.70 of 2015 13. The learned Commissioner quantified the compensation as Rs.2,03,922/- by taking the monthly wages as Rs.1,925.70. There is no challenge from the 2nd respondent for such quantification. Therefore, the question involved in the appeal is only to decide what is the liability of the appellant. As stated, the liability of the appellant is to indemnify the 2nd respondent-insured to the extent of compensation payable by quantifying on the basis of monthly wages of Rs.873/-. The amount of compensation, taking the monthly wages as Rs.873/-, is Rs.92,447/-. The liability of the appellant is limited to Rs.92,447/- and its interest. The balance compensation and proportionate interest and costs shall be liable to be paid by the 2nd respondent. The appeal is allowed accordingly. **Sd/P.G. AJITHKUMAR, JUDGE** dkr