Pookodan Francis v. Oriental Insurance Co. Ltd.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH & THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS THURSDAY, THE 1ST SEPTEMBER 2011 / 10TH BHADRA 1933 MFA.No. 21 of 2006() -------------------WCC.305/1999 of Commissioner for Workmen's Compensation THRISSUR .................... APPELLANT(S): 2ND OPPOSITE PARTY: --------------------------------- THE ORIENTAL INSURANCE CO. LTD., REGIONAL OFFICE, METRO PALACE, GROUND FLOOR, OPP. NORTH RAILWAY STATION, ERNAKULAM, REPRESENTED BY ITS MANAGER. BY ADV. SRI.VPK.PANICKER RESPONDENT(S): 1ST OPPOSITE PARTY & APPLICANT: ---------------------------------------------- 1. POOKODAN FRANCIS, VENDOOR, ALAGAPANAGAR P.O., VENDOOR DESOM, AMBALLOOR VILLAGE, MUKUNDAPURAM TALUK. 2. RAMAKRISHNAN, S/O. VELAYUDHAN, KUNDOLI HOUSE, KALIKAKUNNU DESOM, ELINJIPRA P.O. KODASSERY VILLAGE, MUKUNDAPURAM TALUK. ADV. SRI.K.N.PADMAKUMAR FOR R1 SRI.M.V.THAMBAN FOR R2 - SRI.SREEKANTH.K.R FOR R2 THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 01/09/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **K.M.JOSEPH & M.L.JOSEPH FRANCIS, JJ. ----------------------------------------------M.F.A. No.21 of 2006 ----------------------------------------------Dated 1[st] September, 2011.** ## **J U D G M E N T** ## **Joseph, J.** Appellant is the second opposite party/insurer in a proceedings under Section 22 of the Workmen's Compensation Act. It challenges the order passed directing payment of Rs.83,478/- with 12% interest from the date of the accident. 2. Briefly put the case of the applicant before the Commissioner was as follows : The applicant was employed as a mahout by the first opposite party. On 28.1.1999, he sustained injury by accident. The cause of injury was attack by the elephant owned by the first opposite party. It was during Pakalpooram in connection with a temple festival. The applicant sustained the following injuries : “(i) Loss of right kidney. (ii) Fracture right 10[th] and 11[th] ribs and severe shock. - (iii) Other bodily injuries.” Due to the accident, claimant is totally unable to work as mahout and his earning capacity is totally and permanently lost. He was 52 years old. The applicant was examined as AW1. The medical practitioner was examined as AW2. The MFA 21/06 2 Assistant Administrative Officer of the Insurance Company was examined as RW1. Exts.A1 to A8 were produced. Of the same, Exts.A4 and A6 are medical certificates, Ext.A7 is the discharge summary and Ext.A8 is the medical certificate. Ext.M1 is marked as agreement between the applicant and first opposite party. Ext.M2 is the insurance policy and Ext.M3 is a receipt from the Insurance Company. 3. The Commissioner has found that there is 50% loss of earning capacity, apparently, on the basis of the evidence of the medical practitioners and also the medical certificates. As far as issue no.6, as to which of the opposite party is liable to pay compensation, was concerned, the finding of the Commissioner is as follows : “It is already in evidence that the elephant involved in the accident is validly insured with the 2[nd] opposite party at the time of accident. Hence the 2[nd] opposite party is liable to indemnify the 1[st] opposite party for his liability to pay the compensation.” The second opposite party/insurer was accordingly directed to pay the amount. MFA 21/06 3 4. We heard learned counsel for the appellant, learned counsel for the claimant and also learned counsel for the employer. 5. Learned counsel for the appellant would point out that in this case, there is no policy under the Workmen's Compensation Act. According to him, there is only a personal accident policy. He brought to our notice certain terms of the personal accident policy, but we may straight away indicate that when we perused Ext.M2, such terms are not there and it is not produced and consequently there has been no occasion for the Commissioner to pronounce on the terms of the policy and no question of law can, as such arise from any such finding either. 6. Learned counsel for the appellant would further point out that even going by the terms of the policy, which is marked as Ext.M2, what is provided is a third party liability in respect of two unnamed mahouts. The sum insured is Rs.2,00,000/- each. We also notice that apart from this, of course, it provides for liability coverage for elephants and MFA 21/06 4 medical extension for two unnamed mahouts. Further, there is also third party property damage which is insured. 7. Learned counsel for the appellant relied on the decision of the Madras High Court reported in **National Insurance Co. Limited v. V.Prabhu Das and another** [II (2006) ACC 380 (DB)] , wherein the court has taken the view as follows : “The learned counsel appearing for the appellant submitted that the respondent No.2 took a Labour Group Personal Accident Policy for its employees. On the basis of the said policy, a sum of Rs.94,250/- was paid to the respondent No.1. Since the said policy does not cover any claim under the Workmen's Compensation Act, the appellant is not liable to pay any compensation more and above the amount already paid. From the evidence available on record, we are able to see that the said policy does not cover any claim under the provisions of Workmen's Compensation Act. According to the said policy, the amount has already been paid to the owner of the vehicle. The learned Deputy Commissioner, without even appreciating the scope of the said policy, has found that the Insurance Company is liable to pay the amount fixed by the Insurance Company in view of Ext.R1. The MFA 21/06 5 learned Deputy Commissioner of Labour has not even admitted the defence taken by them in the counter and also the evidence adduced on its side. Hence, the liability fixed on the Insurance Company by the Deputy Commissioner of Labour alone is set aside and the claimant can recover the amount from the respondent No.2.” 8. Learned counsel for the claimant and employer would contend that the application is perfectly maintainable against the appellant/insurer. 9. Learned counsel for the appellant would also, with reference to the terms of the accident policy, which we have already indicated were not produced before the Commissioner, submit that neither clause (b) nor (e) would apply. Having regard to the course we propose to adopt, we would not comment on the same as we intend to give opportunity to the parties to produce the same, if they are so advised, before the Commissioner to give ruling on the same. We would only like to indicate that under the Workmen's Compensation Act (for short, 'the Act'), unlike the Motor MFA 21/06 6 Vehicles Act, compulsory insurance is not provided for. In other words, the liability of an employer under the Act need not be compulsorily insured. The only provision which has some bearing on the question of insurance is Section 14 of the Act. Section 14 is mainly intended to operate in the case of insolvency of the insured. No doubt, it even provides for proceeding against the insured. Thus, however, the law does not forbid the insured/employer from getting the risk covered. Of course, the case of the appellant is that in such a case, there must be a contract of insurance taken out to cover the liability as such under the Act. There can be nothing wrong in the Commissioner ordering compensation against the insurer. The insurer would necessarily have the freedom of contract in such non-statutory contracts, to stipulate for exoneration of liability and a case in point would be the usual contracts where the insurer stipulates that it will not be liable to pay interest. 10. The Act actually deals with liability of the employer to pay compensation under Section 3 read with Section 4. The compensation payable relates to death, total MFA 21/06 7 permanent disablement [Section 4(1)(b)], permanent partial disablement [Section 4(1)(c)] and temporary, total or partial disablement [Section 4(1)(d)]. In fact, under Section 13 of the Act, as held by this Court it is open even for the Commissioner to proceed against the person who is primarily liable. Section 22 of course, does not specifically give any indication as to whether proceeding will lie or not lie against the insurer. Ultimately, it will depend upon the actual terms of the contract of insurance. With these observations, we feel that a decision must be taken and the matter has to be re-done by the Commissioner. We give opportunity to all the parties to adduce evidence as they wish. Accordingly, we set aside the order and remand the matter back. The parties will appear before the Commissioner on 3.10.2011. The commissioner will proceed to consider the matter and take a decision within a period of three months from 3.10.2011. In the circumstances of the case, we feel that we should permit the claimant to withdraw a sum of Rs.25,000/- (Rupees twenty five thousand only) from out of the amount which is deposited. It is so ordered. We further direct MFA 21/06 8 that it will be open to the appellant to withdraw the amount remaining, after the claimant is allowed to withdraw Rs.25,000/-. The amount which will be withdrawn will be subject to the result of the decision taken by the Commissioner. We make it clear that the fact that we have permitted the claimant to withdraw a sum of Rs.25,000/- shall not in any manner weigh with the Commissioner in the matter relating to the challenge regarding jurisdiction of the Commissioner raised by the appellant, to proceed against the appellant or the liability of the appellant in the matter. Sd/- ## **K.M.JOSEPH, JUDGE.** Sd/- ## **M.L.JOSEPH FRANCIS, JUDGE.** tgs (True copy) P.S. to Judge.