New India Assurance Company Limited v. Lalitha Bai

P.G.M. Patil, J. - The Insurer New India Assurance Company Limited being aggrieved by the Judgment and Award dated 06.04.2017 passed in E.C.A.No.59 of 2014 by the Additional Senior Civil Judge and J.M.F.C. Cum Commissioner for Workmens Compensation, Hosapete (for short the Commissioner) has filed this appeal.

2. It is the case of the claimants before the Commissioner that the petitioner No.1 is the legally wedded wife of deceased-Rama Rao Naik and petitioner Nos.2 to 5 are their children. Deceased-Rama Rao Naik was working as labour under the employment of the 2nd respondent. On the instructions of 1st respondent on 23.07.2010 at about 5.15 p.m. the deceased was working as labour and attending the plastering work at Block No.4, Room No.4 situated in Labour Colony in the premises of the 3rd respondent, at that time the other labour K.C.Ramesh Naik, who was working along with the deceased-Rama Rao Naik, went away from the room to take tea. In the mean time, all of a sudden, due to rain fall, water came inside the room from the door as well as from the walls, resulting the ground earth and deceased fell down on the ground due to electrocution. Immediately, after the incident the deceased was shifted to Sanjeevani Hospital, Vijay Vittal Nagar for treatment, but the doctor who examined the deceased declared about his death. Thus, the incident happened while the deceased was working as per the instructions of 1st respondent under the employment of the 2nd respondent in the premises of the 3rd respondent. As such, there is a jural relationship between the deceased and respondent Nos.1 to 3 and the respondent No.4 is the insurer.

3. At the time of death the deceased was aged about 40 years and he was hale and healthy and was earning Rs.300/- per day. Due to sudden death of the deceased petitioners have suffered with great mental shock, pain and agony, therefore, they filed their claim petition claiming compensation of Rs.15,00,000/- against respondent Nos.1 to 4.

4. In response to the notice, respondent Nos.1, 2 and 4 appeared through their counsels before the Commissioner, respondent No.3 remained absent and was placed ex-parte. Respondent Nos.1 and 2 have not filed any statement of objections. Respondent No.4- Insurance Company filed statement of objections denying the averments made in the claim petition and relationship of the deceased with respondent Nos.1 to 3, salary and other particulars. It is also contended that the death of the deceased has not happened during the course of employment. It is also further contended that the deceased was a labour and was not covered under the terms and conditions of the insurance policy. Therefore, respondent No.4-Insurer is not liable to pay any compensation to the petitioners.

5. On the basis of the pleadings of the parties Commissioner has framed issues. In support of the claim petition, claimant-petitioner No.1 was examined as PW-1 and got marked five documents at Ex.P.1 to Ex.P-5. On the other hand the authorized officer of respondent No.4-Insurance Company was examined as R.W-1 and got marked Ex.R-1 insurance policy.

6. The Commissioner after hearing both the parties, passed the impugned Judgment awarding compensation amount of Rs.6,45,400/- with interest at the rate of 12% per annum from expiry of one month from the date of death till the date of deposit. The 4th respondent was directed to deposit the compensation amount.

7. The appellant-Insurer being aggrieved by the Judgment and Award has filed this appeal on the grounds that the Commissioner has committed error in fixing the liability on the appellant-Insurance Company in spite of the evidence that the workers engaged in fabrication and engineering works are only covered under the policy and that the deceased was not covered under the policy. The deceased who was engaged in plastering work is not covered under the policy. It is also contended that the Commissioner committed error in awarding interest at the rate of 12 % per annum on the compensation amount. There is no liability to pay the interest on the compensation amount on the insurer. It is the liability of the employer under the Workmens Compensation Act. It is also further contended that the policy was issued in respect of 15 workers by collecting premium amount of Rs.19,872/- and therefore, the salary of each workers has to be construed at Rs.1,321/- per year.

8. Heard the learned counsels for the appellant- Insurer and respondents.

9. A short question which arises for consideration in this appeal is as to whether the Insurer has made out grounds to set aside the liability saddled against him on the ground that the insurance policy does not cover the risk of the deceased and whether the interest awarded against the insurer is liable to be set aside.

10. The learned counsel for the appellant-Insurer vehemently contended that Ex.R-1 Insurance Policy is a contractual insurance policy and it covers risk of the 15 employees engaged in fabrication and engineering works and that the deceased was not engaged in such a work and therefore the risk of the deceased is not covered under Ex.R-1. The learned counsel for the Insurer further contended that the deceased died due to electric shock while attending the plastering work and therefore the Insurance Company is not liable to pay the compensation. The learned counsel further submitted that there is no liability on the insurer to pay interest on the compensation amount and it is the liability of the employer to pay interest. In this regard, the learned counsel has relied on the Judgment in the case of New India Assurance Co. Ltd., Vs. Harshadbhai Amrutbhai Modhiya and Another, Appeal (civil) 2333 of 2006, decided by the Honble Supreme Court on 28.04.2006.

11. Per Contra, the learned counsel for the claimants submitted that the deceased was engaged in plastering work which is part of construction work and therefore, the risk of the deceased is covered under the Ex.R-1-Insurance Policy and that the accident took place when the deceased was engaged under the employment of respondent Nos.1 to 3 and therefore, it occurred in the course of employment.

12. The learned counsel for the respondentemployer submits that the employer has paid the premium and obtained the policy covering the risk of the employees and there is no negligence on his part, therefore, Insurer is liable to pay the compensation including the interest.

13. The contention of the insurer has to be considered with reference to Ex.R-1 Insurance Policy. It is not disputed that this insurance policy is issued covering the risk of 15 employees of respondent Nos.1 to 3 who are respondent Nos.6 to 8 in this appeal by collecting net premium amount of Rs.19,872/-. It is further mentioned that the risk of the workers engaged in the fabrication and engineering works is covered under the policy. Absolutely there is no mention that the Insurer is not liable to pay interest in case of awarding compensation. Therefore, next question would be as to whether the deceased was engaged either in the fabrication work or in the engineering works

14. The learned counsel for the appellant-Insurer submitted that the policy covers the risk of an employee engaged in both fabrication and engineering works and that the deceased was not engaged in fabrication work. Therefore, his risk is not covered under the Ex.R-1 Insurance Policy. The said arguments advanced by the appellant-Insurer cannot be accepted. The dictionary meaning of fabrication is "the creation of metal structures by cutting, bending and assembling process," i.e. manufacturing. As per the Law Lexicon "Engineering works includes construction work which in turn includes plastering i.e., finishing coat on masonry surfaces". Therefore, the fabrication work is all together different from the engineering works. The words used in the policy that the worker engaged in the fabrication and engineering works has to be construed that the workers engaged either in the fabrication work or in the engineering works are covered by the policy. An employee cannot be engaged simultaneously both in the fabrication and engineering works as is argued by the learned counsel for the appellant-Insurer. Admittedly, the deceased was engaged in plastering work which is part of construction work and it is also stated that the plastering work is part of basically civil engineering work. Therefore, the plastering work is part of construction work which in turn falls under civil engineering works. Therefore, the arguments advanced that the risk of the deceased who was engaged in plastering work is not covered under the Ex.R-1 has no merit and same is liable to be rejected. On this ground the appellant-Insurer cannot avoid its liability. In this regard, the learned counsel for the claimants has relied on the Judgment in the case of Golla Rajanna etc. Vs. (The) Divisional Manager and Another, (2017) 1 GLH 150, in which the Honble Supreme Court has held as follows :

"Workmens Compensation Act, 1923 Powers of appellant Authority Workmens Compensation Commissioner is the last Authority on facts the Parliament has thought it fit to restrict the scope of the appeal only to substantial questions of law, being a welfare legislation- Unfortunately, the question of limited jurisdiction could not respondent-appreciate the evidence Appeal allowed."

Therefore, the question raised by the appellant-Insurer cannot be held as a substantial question of law.

15. So far awarding interest on the compensation amount is concerned; the learned counsel for the appellant-Insurer has relied on the Judgment in the case of New Indian Assurance Co. Ltd., stated supra, in the said case the Honble Supreme Court has held as follows :

"1. This writ petition is for the purpose of directing Insurance Company to delete the clause in the Insurance Policy which provides that in case of compensation under the Workmens Compensation Act, 1923, the Insurance Company will not be liable to pay interest. We see no substance in the writ petition. There is no statutory liability on the Insurance Company. The statutory liability under the Workmens Compensation Act is on the employer. An Insurance is a matter of contract between the Insurance Company and the insured. It is always open to the Insurance Company to refuse is always open to the Insurance Company to refuse to insure. Similarly they are entitled to provide by contract that they will not take on liability for inter est. In the absence of any statute to that effect, insurance Company cannot be forced by Courts to take on liabilities which they do not want to take on."

16. Therefore, the pronouncement of the Honble Supreme Court in respect of liability to pay the interest is held as basically on the employer and the Insurance Company while entering into contract of insurance can contract out the same thereby it can refuse to pay interest. Therefore there must be clear contractual terms in the policy itself that the Insurance Company is not liable to pay interest on the compensation amount, in the absence of such contractual terms refusing to pay interest the insurer is liable to pay interest. Admittedly, in the present case as already referred there is no terms and conditions in Ex.R-1 contracting out the payment of interest. Absolutely there is no mention that the insurer is not liable to pay interest on the compensation amount. Therefore, the contention of the appellant- Insurer that he is not liable to pay interest on compensation is also not maintainable. Under these circumstances, this Court holds that appellant-Insurer has failed to make out that liability saddled against him is liable to be set aside and awarding of interest against him is liable to set aside. The point for consideration is answered accordingly. In the result this Court proceed to pass the following :

ORDER

The appeal is dismissed.

The amount of compensation deposited by the appellant-Insurer shall be transmitted to the concerned Commissioner forthwith.

The order with regard to deposit and disbursement as passed by the Commissioner holds good.