United India Insurance Company Ltd. Vs. Shri L.N. Tamuly and ors. - Court Judgment

Excerpt:
- - amu-2783 belonged to the owner shri balen chandra kallta met with a disastrous accident while the wooden bridge over the river khorkhari broke down when the loaded truck was passing over the same and in the said accident pradip kumar talukdar who was serving as handy-man in the truck died in the accident which occurred on 7.3.86. when the owner and the insurance company did not settle with the claim of compensation of smt. in that sense insurer's failure to settle the claim within the time limit makes him liable for penalty and interest and by the agreement the insurer is to indemnify the insured unless there is any specific bar in the terms and agreement of the insurance policy. moreover, as per section 95(2) of the motor vehicles act, the award made for compensation is well below..... p.k. deb, j.1. this appeal under section 30(1)(aa) of the workmen's compensation act, 1923 has been directed against the judgment and award dated 19.6.89 passed by the learned commissioner, workmen's compensation, kamrup, guwahati in w.c. no. 2/88.2. the crux of dispute as canvassed in this appeal is whether the insurance company the appellant is liable to pay interest and penalty as contemplated under section 4a of the workmen's compensation act alongwith the statutory compensation as per section 3 of the same act. the facts of the case are very simple. the truck ho. amu-2783 belonged to the owner shri balen chandra kallta met with a disastrous accident while the wooden bridge over the river khorkhari broke down when the loaded truck was passing over the same and in the said accident.....

Judgment:

P.K. Deb, J.

1. This appeal under Section 30(1)(aa) of the workmen's Compensation Act, 1923 has been directed against the judgment and award dated 19.6.89 passed by the learned Commissioner, Workmen's Compensation, Kamrup, Guwahati in W.C. No. 2/88.

2. The crux of dispute as canvassed in this appeal is whether the Insurance Company the appellant is liable to pay interest and penalty as contemplated under Section 4A of the Workmen's Compensation Act alongwith the statutory compensation as per Section 3 of the same Act. The facts of the case are very simple. The Truck Ho. AMU-2783 belonged to the owner Shri Balen Chandra Kallta met with a disastrous accident while the wooden bridge over the river Khorkhari broke down when the loaded truck was passing over the same and in the said accident Pradip Kumar Talukdar who was serving as handy-man in the truck died in the accident which occurred on 7.3.86. When the owner and the Insurance Company did not settle with the claim of compensation of Smt. Binapani Talukdar, she preferred W.C. No. 2/88 and the learned Commissioner (Additional Deputy Commissioner), Kamrup, Guwahati after hearing both the parties passed the impugned order granting statutory compensation alongwith interest and penalty @ 6% p.m. simple interest and penalty of 25% on the principal amount towards penalty which amounted to Rs. 62,494.79. Admittedly the Insurance Company-appellant in the present case deposited the statutory compensation amount by a cheque on 2.6.89. It has been ordered by the learned Commissioner that the balance amount of the awarded compensation should be paid by the Insurance Company within seven days next. On the basis of the judgment and award dated 19.6.89 the Insurance Company deposited whole of the amount awarded but raised objection by way of filing appeal before this Court to the effect that legally they were not entitled to penalty and interest as contemplated under Section 4A of the Workmen's Compensation Act, 1923 (hereinafter shall be referred to as 'the Act').

3. Mr. S.K. Barkotoki appearing on behalf of the Insurance Company has relied on the decision of this Court passed in the Division Bench as referred to in (1992) 2 GLR 260 wherein it has been held that the liability of the insurer shall be to indemnify the default of the employer in payment of the compensation but the Insurance Company cannot be saddled with liability to pay interest and penalty on the analogy that Sub-Section 3 of Section 4A of the Act specifically mentions that the penalty and the interest can be imposed upon the employer only on default of payment of compensation within one month from the date it is falling due and as such interest and penalty can never be and integral part of the compensation which can be imposed upon the insurer who is to indemnify the employer. On the other hand Mr. B.K. Jain, appearing for the claimant-respondents supported the impugned judgment and order on the ground that the insurance Company cannot dis-shoulder its liability regarding interest and penalty when they had also not settled the claim within the period and in the absence of Insurance Policy being filed it cannot be said that their liability is only to the extent of the statutory compensation and not beyond that. He has also referred to the decision of our High Court as reported in 1987 1 GLR 271 where it has been held that the Commissioner under the Workmen's Act can directly impose on the Insurance Company to pay the claim determined under the Act and also on the provisions of Section 95(2) of the Motor Vehicles Act when the liability of the Insurance Company is much above the amount awarded by the Commissioner.

4. To appreciate the submissions of the learned Counsel for both the parties follow in admitted facts gathered from the records of the Lower Court require to be considered. The accident occurred on 7.3.86 and in that year itself the Insurance-Surveyor Shri Purkayastha verified the documents required for settling the claim. On 13.1.87 the employer informed the Insurance Company by way of W.C. claim with relevant facts and copy of documents required for settling the claim. When no claim was settled even after the claim preferred by the claimant on 1.11.87, the claimant filed this W.C. case before the Commissioner and the Insurance Company received the notice of the case on 24.2.88. On 30.12.88 Insurance Company filed written statement. On 23.5.89 the employer also filed written statement. Then only on 2.6.89 the Insurance Company deposited the statutory claim by a cheque.

5. In the impugned order, the learned Commissioner appreciated the gesture of the Insurance Company in depositing the statutory claim on 2.6.89 but imposed penalty and interest on the principal amount of compensation holding that there was delay in settling the claim of the claimant although that has not been specifically or elaborately mentioned in the impugned judgment.

6. It is true that the interest and penalty is not an integral part of the compensation and the same can be imposed only if the employer fails to settle the claim within one month when it is falling due. Insurer is also to indemnify the insured as per the contract and agreement between the insurer and the insured. In that sense insurer's failure to settle the claim within the time limit makes him liable for penalty and interest and by the agreement the insurer is to indemnify the insured unless there is any specific bar in the terms and agreement of the Insurance Policy. In the present case Insurance Policy has not been filed and there is no scope for this Court to scrutinise the same to find out whether there in any specific bar to that effect or not. Any general insurer is to indemnify the insured in respect of the claim arising out of the accident of death or bodily injury for all purpose as a whole. Moreover, as per Section 95(2) of the Motor Vehicles Act, the award made for compensation is well below the limit prescribed. It is now well settled after the decision of the Apex Court as reported in 1988 SC 719. that it is the liability of the insurer to gather the higher risk when it fails to show specifically by filing insurance policy that he is not liable to do so.

7. In the present case just after the incident, insurance Company was in the know of the incident and on 13.1.87 employer specifically preferred claim of settlement for the workman. But the Insurance Company kept silent and slept over the same even after receipt of the notice of the W.C. Case on 24.2.88 and did not settle the claim. They deposited the statutory amount only on 2.6.89 and hence on the ratio of the decisions of our High Court in the above two decisions it is found and held that there was delay as contemplated under Section 4A of the Act on the part of the Insurance Company and hence the appellant is liable to pay the penalty and interest with the award.

8. In the result, the appeal is dismissed but no order an to cost. As per direction given by this Court while admitting this appeal on 15.9.89 shall now be complied with. The balance amount kept in deposit with the Bank with interest shall be paid to the claimant.