S. Paravatha Rao, J.
1. The New India Assurance Company Limited, the appellant herein, questions the order of the Commissioner for Workmen's Compensation, Rangareddy District Zone dated 11-2-1991 in W. C. Case No. 177 of 1989.
2. That case arose on an application dated 2-9-1989 made by the 1st respondent herein claiming compensation of Rs. 1,03,990/- for personal injuries caused to him in an accident that occurred while driving an oil tanker bearing Registration No. AHU 135 at Ananthagiri Hills on 15-6-1989. At the time of the accident, the 1st respondent was working as a driver under the 2nd respondent herein. In his application he stated that he was earning Rs. 1,500/- per month at that time and that he was aged about 30 years. In the accident the suffered fracture of the right thigh bone and also compound fracture of his right hand and other grievous injuries. He also stated in his application that as a result of the injuries received by him in that accident, he suffered total permanent disability as he could not any more drive any vehicle. According to him, the said accident arose out of and in the course of his employment. The lorry was insured with the appellant herein and therefore he impleaded the appellant herein as 2nd respondent in his application and claimed that the appellant was also liable to pay the compensation found payable by his employer the 1st (sic. 2nd) respondent herein.
3. Apart from getting marked the insurance policy as Ex. R-1, the respondents did not adduce any evidence. On the evidence adduced by the workman, the Commissioner found that he was employed as driver by the 2nd respondent herein and that at the time of the accident he was driving lorry bearing Registration No. AHU 135 involved in the accident and that the workman received injured while working under the employment of the 2nd respondent herein as a driver. The Commissioner also held that the minimum wages payable or a driver was Rs. 865/- and, taking also batta at the rate of Rs. 25/- per day for 15 days, the total wages received by the workman should be Rs. 1,240/- which he limited to Rs. 1,000/-. He also held that though the physical disability assessed by the Doctor in the disability certificate marked as Ex. P-5 was 50%, the workman's loss of earning capacity should be assessed at 90% as he was not fit to drive any vehicle and he was not in a position to do any other job as he was walking with stick. The Commissioner also held that the age of the workman at the time of the accident was 30 years. On the basis of the said fact found by him, the Commissioner fixed the compensation payable to the 1st respondent therein as Rs. 93,591/- payable with interest at there are of 6% per annum from the date of the accident, and he directed the employer and the Insurance Company, i.e., the 2nd respondent and the appellant herein, to pay the same within 20 days of receipt of the order.
4. The first contention raised by the learned counsel for the appellant is that as the monthly wages of the 1st respondent exceeded Rs. 1,000/-, the Commissioner had no jurisdiction to entertain the application. The learned Counsel obviously did not notice the amendment to Clause (n) of Sub-section (1) of Section 2 of the Workmen's Compensation Act, 1923 (hereinafter referred to as 'the Act') effected by Act 22 of 1984 with effect from 1-7-1984 where under the words 'on monthly wages not exceeding Rs. 1,000/-' were omitted from sub-clause (ii) in the said Clause (n) defining 'workman' Noticing the said amendment, the learned Counsel does not press this contention.
5. The second contention urged by the learned Counsel for the appellant is that under the Act the Insurance Company cannot be made liable to pay the compensation even though the injuries suffered by the workman resulted from an accident involving a motor vehicle. He also contended that the Insurance Company was neither a necessary nor a proper party in proceedings for compensation before the Commissioner under Section 3 of the Act. The learned Counsel submits that the Insurance Company would be liable only under Section 14 of the Act only in the event of the employer becoming insolvent and if the requirements under the said Section are satisfied. He relies on a decision of a learned single Judge of the Madhya Pradesh High Court in National Insurance Co. Ltd. v. Jabunbi, 1985 I CLR 152. This decision did not relate to an accident arising out of the use of a motor vehicle. Therefore it had no relevance so far as the facts of the present case are concerned. The learned Counsel for the appellant also seeks to rely on the judgment of a Division Bench of this Court in G. Sreedharan v. H. I. Insurance Corporation Ltd. 1976 LIC 732 (A. P.). The question that arose in that case was whether the Insurance Company could be impleaded before the Commissioner at the instance of the employer when the workman did not choose to implead the Insurance Company. This Court held that the Insurance Company could not be impleaded at the instant of the employer because the Insurance Company was not a necessary party in a proceeding arising under the Act. In taking that view, this Court did not agree with the view expressed in that regard by the Division Benches of Gujarat and Karnataka High Courts in The Northern India Motor Owners Insurance Co. Ltd., Bombay v. Magan Shanaji Solanki, 1974 LIC 72 (Gujarat) and Hindustan Ideal Insurance Co. Ltd. v. Pappu Poojary, 1972 ACJ 433 (Karnataka) respectively and held as follows :-
'We are also unable to agree with the view of the Gujarat High Court that the Insurance Company is a necessary party. It may at bet be a proper party in case the claimants prefer to implead it as a party respondent, otherwise not. The employer has no remedy directly against the insurer. The right to claim damages from the insurance company on the basis of the policy of insurance would arise or accrue to him only after the determination of has liability to pay compensation under the award passed by the Commissioner. Hence, it is not open to the appellant-employer to make the insurer a party respondent in an application for compensation under Section 19(1) where the claimant prefers not to make the insurer a party.
The Learned Judge (of the Karnataka High Court) expressed that the insurance company is a proper party without which there can be no effective adjudication of all the disputes between the parties... The jurisdiction conferred upon the Commissioner under Section 19(1) is restricted only to decide questions arising under the provisions of the Act relating to the payment of compensation by any person. The provisions of Section 19(1) must be read with the definition of 'compensation' and the provisions of Section 3 which provides for the employer's liability to pay compensation and the intendment and object of the very act. When so construed. We cannot agree with the view expressed by the learned Judges of the Mysore High Court as well as the Gujarat High Court in the aforesaid cases that the Commissioner has jurisdiction to pass an award or order against the insurer in an application under the provisions of the Act for awarding compensation to the claimant. We do not find that the insurer is a necessary party to an application by the claimant. The claimant can certainly obtain an award or order against the employer alone if he so desires. It cannot be said that no award or order can be passed against the employer without the presence of the insurer in such an application. There can be an effective adjudication even without the presence of the insurer. Where the injured workmen or the dependents or legal heirs of the deceased workman chooses or choose to make both the employer and the insurer party respondents is an application for compensation, the insurer maybe considered to be a proper party, though not a necessary party. The volition or choice is given to the applicant or the claimant. If the applicant or claimant does not to implead the insurer as part respondent or where he feels satisfied if he can obtain an award or order against the employer alone, the insurance company cannot be compelled to be a party respondent at the instance of the employer. Admittedly, the employer can have no relief against the insurer in that application. After obtaining an award or order for compensation against employer, the claimant or the injured workman may proceed to recover the sum awarded against the insurer directly on the strength of the provisions of Section 96 of the Motor Vehicles Act, or he may choose to recover the amount only from the employer. He cannot be compelled to proceed against the insurer if he insists upon the realisation of the compensation amount only from the employer. The employer, in such circumstances, has to file a suit in a Civil Court against the insurer for damages and recover the amount or compensation pad by him to the injured workman or the claimant but he cannot resort to the provision of Section 12 or any other provisions under the Act (i.e., Workmen's Compensation Act) for indemnification from the insurer)'.
In the present case, the Insurance Company i.e., the appellant herein, was made a party in the proceedings before the Commissioner by the workman himself. Therefore the decision of this Court in G. Sreedharan's case (supra) is of no assistance to the appellant. It is therefore open to the 1st respondent workman to recover the compensation directly from the insurer i.e., the appellant herein. I therefore do not find any merit in this contention of the learned Counsel for the appellant. I have also to notice that Faizanuddin, J., of the Madhya Pradesh High Court (as he then was) observed in national Insurance Co. Ltd. v. Prembai, 1987 ACJ 278 (M. P.) that a Full Bench of the Madhya Pradesh High Court considered the following two questions :-
'(1) Whether in a proceeding for compensation under Workmen's Compensation Act for the personal injury or death of an employee occurring by a motor accident, the Commissioner has jurisdiction to make the award against the insurance company and
(2) Whether the insurer of employer's vehicle involved in the accident can be fastened with the liability to indemnify the insured even in the absence of the employer being adjudged as an insolvent as provided in Sub-section (1) of Section 14 of the Act ?'
and decided as follows :-
'Full Bench of this Court (Madhya Pradesh High Court) by order dated 31st March, 1985, decided the questions and answered the same in the affirmative in favour of the claimants and against the appellant by giving its opinion that the Commissioner for Workmen's Compensation has jurisdiction under the Act, in a proceeding for compensation for the personal injury or death of an employee occurring in a motor accident, to award compensation against the insurance company; and that the insurance company can be fastened with the liability of making payment of compensation to the successful applicant in a proceeding before the Commissioner for Workmen's Compensation under the Act, even in the absence of the employer being adjudged an insolvent as required under Sub-Section (1) of Section 14 of the Act'.
I have also to observe that a Full Bench of the Kerala High Court in United India Insurance Co. Ltd. v. Vasudevan, 1989 II CLR 479 (Kerals), held that in proceedings under Section 22 of the Act, the Commissioner was empowered to direct the insurer to pay the compensation as provided for even in cases where Section 14 of the Act had no application. The Full Bench also differed from the view of this Court in G. Sreedharan's case (supra) and held as follows :-
'The provisions of the Motor Vehicles Act are therefore necessarily to be read into the provision of the Workmen's Compensation Act when the question arises as to the liability of the insurer to indemnify the insured and satisfy the claim of the person entitled to get the benefit of the adjudication. We are clearly of the view that under the Workmen's Compensation Act in proceedings under Section 22 thereof the Commissioner is empowered to enforce the liability of the employer to pay the compensation to the employee by directing the insurer to discharge the liability in terms of the policy which covers the liability.
The Commissioner's jurisdiction to determine the liability of any person to pay compensation is in no way limited by the provision contained in Section 14 of the Act........
The special liability of the insurer under Section 14 does not exclude or limit the general liability under Section 95 of the Motor Vehicles Act. Similar provisions are contained in Section 97 of the Motor Vehicles Act.'
6. The next contention urged by the learned counsel for the appellant so that the Commissioner erred in estimating the disability of the 1st respondent at 90% when the Doctor's disability certificate estimated it at 50%. He also contends that the Commissioner has no power to enhance the disability suo motu. In this connection it has to be noticed that in the disability certificate dated 20-4-1990 issued by the Orthopedic Surgeon, marked as Ex. P-5, the extent of disability was noted as 50% and it was also noted as follows :-
'Partial permanent disability. He cannot drive the vehicle.'
From this it is clear that the 1st respondent could not do any more work as driver of motor vehicles. The permanent partial disablement suffered by the 1st respondent is not by virtue of an injury specified in Part-II of Scheduled I to the Act. In view of the observation of the Doctor that the 1st respondent would not be able to drive vehicles, the Commissioner could have held that the disablement in the present case was total in view of the definition of total disablement in Clause (1) of Sub-section (1) of Section 2 of the Act, which is as follows :-
'(1). total disablement means such disablement, whether of a temporary or permanent nature, as incapacitates a workman for all work which he was capable of performing at the time of the accident resulting in such disablement....'
A similar question arose before this Court in National Insurance Co. Ltd. v. Mohd. Saleem Khan, 1992 I CLR 44. In that case also it was contended that the Doctor found that the disability was only to an extent of 50% and that the Commissioner erred in awarding compensation as if it was a case of permanent total disablement instead of treating it as permanent partial disablement. A learned single Judge of this Court held as follows :-
'By the date of the accident, R-1 herein was working as a driver of the truck, a heavy vehicle. It is in evidence that in view of the injuries R-1 herein is not fit to drive the heavy vehicle. Thus it is a case of disablement which incapacitated R-1 herein from driving the heavy vehicle i.e., the work which he was capable of performing at the time of the accident. Such disablement comes within the purview of total disablement as defined in Section 2(1), Workmen's Compensation Act, though the doctor held that physical impairment and loss of physical function was to the extent of 50% only. The work which the workman was capable of performing at the time of the accident is material to consider whether it is a case of total disablement or not, in view of the injuries sustained in the accident. If the workmen is incapacitated to do all the work which he was capable of performing at the time of the accident, it is a case of total disablement. It may be that in view of the above injuries, the workman is capable enough to render some other sort but still when there is incapacity to do the work which he was capable of performing by the date of the accident, it is a case of total disablement. The judgment in Pratap Narain Singh Deo v. Shrinivas Sabata, 1976 ACJ 141 and Punambhai Khodabai Parmar v. G. Kenel Constructions, 1984 ACJ 739, support the above contention for R-1 herein'.
7. The appellant questions the inclusion of batta at the rate of Rs. 25/- per day for 15 days in computing the wages of the 1st respondent relying on the decision of a learned single Judge of this Court in National Insurance Company Ltd. v. Mohd. Mujataba Khan, 1993 II CLR 29. That was also a case where the workman was a driver who met with an accident while he was driving a van. It was contended therein that the Commissioner was wrong in including the batta payable to the workman at Rs. 20 - per day and that the batta paid to the driver did not form part of the wages paid to the workman. This Court held as follows :-
'The High Court of Orissa in Gopal Singh v. Nilamani Pradhan, 1988 ACJ 244 (Orissa) has also held that the amount paid to a workman towards batta or food allowance indicate that the amount is paid to cover any special expanses incurred by him due to the nature of his employment and hence it is not included in the wages. In view of the definition of wages referred to above (Section 2(1)(m) of the Act) and the decision of the Orissa High Court, I agree with the contention of the learned Counsel for the appellant that the batta paid to the workman cannot be included in wages.'
In Gopal Singh's case (supra) before the Orissa High Court, the facts showed that the workman, who was a driver of a motor vehicle, 'was getting Rs. 20/- per day towards allowance on days of his duty'. In view of that fact a learned (single Judge of the Orissa High Court) held as follows :-
'The definition of ('wages' in the Act) excludes travelling allowance or a sum paid to a workman to cover any special expenses entailed by him by the nature of his employment. The very fact that Rs. 20/- per day is paid to the applicant on the day he performs him duty towards 'Batta' or food allowance itself indicates that the amount is paid to cover any special expenses incurred by the workman due to the nature of his employment. Thus, this amount would not be included in wages.'
The judgment in Mohd. Mujataba Khan's case (supra) did not state for what purposes the batta was paid to the workman in that case and there was no discussion on that aspect of the matter. On the facts of that case perhaps the learned Judge took the view that the sum paid towards batta related to special expenses incurred by the workman. In the present case, the 1st respondents there in his evidence as A. W. 1 deposed that the was received a salary of Rs. 1,000/- per month and also batta of Rs. 25/- per day. The employer did not adduce any evidence to the contra. The Commissioner in his order observed that the employer did not come forward with his muster roll and wages register maintained by him. In spite of that the Commissioner took into consideration the minimum wages payable to a driver as Rs. 865/- and the batta at the rate of Rs. 25/- per day for 15 days only and arrived at total wage at Rs. 1,240/-. He had not given any reason for taking batta for 15 days only or for not accepting the evidence of the workman that he was receiving salary at Rs. 1,000/- per month. The only reason could be that the Commissioner must have though that as he was limiting the wages to Rs. 1,000/- it would not make any difference. On the facts of the present case, therefore, I am not inclined to interfere with the decision of the Commissioner taking the salary of the 1st respondent herein as Rs. 1,000/- per month and computing the compensation payable to him on that basis. In this connection, I may also note the decision of a Division Bench of the Kerala High Court in Ouseph Mathai v. Mathew, 1981 ACJ 8 (Kerala). In that case, the question that arose was whether the daily batta of Rs. 3/- being paid to the workman would form part of wages as defined in Section 2(1)(m) of the Act. The Division Bench held as follows :-
'There is no case for the respondents that the daily batta of Rs. 3/- was being paid by way of travelling allowance or travelling concession or that it was paid to cover any special expenses entailed on the deceased by the nature of his employment. It would appear from the evidence that the remuneration for the work of the deceased employee was so fixed, that a portion of it was to be paid on a mostly basis and the other portion was to be paid daily, probably to facilitate the employee to meet his daily needs. That a part of the remuneration due to a worker was being paid daily and the remaining on monthly basis will not make either of the payments any-the-less wages so long as it is a benefit capable of being estimated in money. The question in each case is whether the workman concerned can claim the amount as of right for the services rendered by him. If he can do so and if it does not fall under the excluded category mentioned in Section 2(1)(m), there is no scope for dispute that it is wages which should be taken into account in deciding the quantum of compensation due to the workman.'
A similar view was taken by a Division Bench of the Gujarat High Court in K. A. Ibrahim Tai v. N. T. Company, (1973) I LLJ 447 (Gujarat), in respect of daily allowance of Rs. 3-50 paid to the workman.
8. Lastly the learned Counsel contends that the appellant cannot be made to pay the interest on the compensation as that was charged because of the default of the employer. He relies on Mohd. Mujataba Khan's case (supra). In that case, N. D. Patnaik J., merely followed the judgment of D. J. Jagannadha Raju, J., in C. M. A. No. 338 of 1982 dated 6-9-1989 observing as follows :-
'... the learned Judge held that the Insurance Company has undertaken to indemnify the employer only to the extent of the statuary liability that was incurred as per law. But if the employer does not deposit the compensation as on the date of the accident and he was ordered to pay the interest, the Insurance Company, therefore, not liable to pay the interest.'
N. D. Patnaik, J., merely followed that decision without advertising to the facts obtaining in the case before him. In the oriental fire and General Insurance Company Ltd. v. Smt. Menaka Patra & Anr. Judgment dated 6-9-1989 in C. M. A. No. 338 of 1982, the facts were that the employer was evading to pay the mount of composition as admitted by him and he went on asking the Insurance Company to pay the amount. On those facts D. J. Jagannadha Raju, J., held as follows :-
'This is a case where the employer acted without looking into the legal aspect and without knowing what exactly is his duty and liability.
The further question that arises is whether in a case of this nature the Insurance Company can be mulcted with interest and penalty which is the direct consequence of the negligence of the employer viz., the assured. It should also he remembered that at the earliest stage, the employer did not deny the liability. There is a direct decision dealing with such cases. It is reported in Gautam Transport v. Jiluben Huseinbhai, (1989 ACJ 587). A Division Bench of the Gujarat High Court categorically laid down that 'if by his negligence, the assured incurs an additional responsibility for having violated a statutory requirement, them the insurance company cannot be asked to indemnify the assured on that score. If such a view were to be taken, it would given a blanket licence to the assured for violating the statutory requirement and in some unforeseen cases, it might even lead us to a situation where the assured and the claimant may join hands to fleece the indemnifier i.e., the insurance company.'
It should be remembered that what the insurance company undertook is to indemnify the employer for the statutory liability that is incurred a per law when the assured complies with the liability. In the present case the employer foolishly and negligently and in a sense adamantly went on asking the insurance company to deposit the amount and he did not act as per Section 4 and Section 4A. It is the foolishness of the employer that has resulted in the liability being increased from Rs. 23,100/- to Rs. 43,277-85. Had the employer deposited the amount of compensation as admitted by him within one month, there was no question of payment of interest or the penalty. The Insurance Company the present appellant cannot be made liable for paying the interest and penalty that has become payable in this case.'
Thus, that decision was rendered on the basis of a finding that the employer was grossly negligent in not paying the compensation amount as admitted by him within one month as required under Section 4A of the Act which provides as follows :-
'4-A Compensation to be paid when due and penalty for default :- (1) Compensation under Section 4 shall be paid as soon as it falls due.
(2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and, such payment shall be deposited with the Commissioner or made to the workman, as the case may be, without prejudice to the right of the workman to make any further claim.
(3) Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner may direct that, in addition to the amount of the arrears, simple interest at the rate of six per cent per annum on the amount due together with, if in the opinion of the Commissioner there is no justification for the delay a further sum not exceeding fifty per cent of such amount, shall be recovered from the employer by way of penalty.'
The learned Judge in fact observed also in that case that at the earliest stages the employer did not deny the liability.
9. The facts of the present case are altogether different. The 2nd respondent did not admit his liability. There was no provisional amount fixed by the Commissioner which had to be paid under Sub-section (2) of Section 4A of the Act. The accident occurred on 15-6-1989 and the 1st respondent made his application to the Commissioner on 2-9-1989 impleading also the Insurance Company i.e., the appellant herein as the 2nd respondent. The appellant there in filed a counter denying even the occurrence of the accident and almost every fact alleged in the application. The employer (the 2nd respondent herein) adopted the counter of the appellant herein. In fact, the same learned counsel appearing for the insurer and the insured. I the order dated 11-2-1991 the Commissioner directed the insured as well as the insurer both 'to deposit an amount of compensation of Rs. 93,591-00 and interest at the rate 6% per annum from the date of accident, amounting to Rs. 8,422/-' within 20 days of receipt of this order. In the present appeal, the insurer i.e., the appellant herein, sought interim stay in C. M. P. No. 7939 of 1991 and interim stay was granted on 28-6-1991. The 1st respondent filed C. M. P. No. 10104 of 1991 for vacating the said interim stay. The interim stay was made absolute on 16-11-1991 on condition that the appellant should deposit half of the amount awarded together with costs. In the circumstances, it cannot be said that there was any negligence on the part of the 2nd respondent i.e., the insured employer. In am therefore not inclined to interfere with the order of the Commissioner making the insurer also liable to pay the interest amount on the facts of the present case. I am supported in this view by a decision of the Rajasthan High Court in United India Insurance Co. Ltd. v. Roop Kanwar, 1991 ACJ 74 (Rajasthan). Wherein a learned single Judge held as follows :-
'The last question for considerations whether the appellant is not liable to pay the interest and penalty. The above quoted endorsement No. 16 clearly shows that the appellant in consideration of the payment of additional premium agreed to indemnify the insured employer against his liabilities under the Workmen's Compensation Act, 1923. Admittedly, the amounts of penalty and interest have been levied by the Commissioner under Section 4A of the Act of 1923. Sub-section (5) of section 95 of the Act of 1989 reads as under :
'(5) Notwithstanding anything elsewhere contained in any law, a person issuing policy of insurance under this section shall be liable to indemnify the person or classes of person specified in the policy in respect of any liability which the policy purposes to cover in the case of that person or those classes of person.
Thus the Commissioner rightly made the appellant liable to pay the amounts of interest and penalty. In Gautam Transport v. Jiluben Huseinbhai, 1989 ACJ 587 (Gujarat), the insurance policy had no endorsement like above quoted endorsement No. 16. Thus there is no force in the appeal.'
In the present case also the Insurance policy Ex. R-1 shown that extra premium of Rs. 16/- was collected for legal liability to 'paid driver and/or Cleaner as per END IMT 16'. That endorsement indemnifies the insured against his liability under the Workmen's Compensation Act, 1923 and also provided that the insurer 'will in addition be responsible for all costs and expenses incurred with its written consent.'
10. In the result, the appeal is dismissed with costs.