National Insurance Co. Vs. Gomti Devi and anr. and Kishan Singh - Court Judgment

Lokeshwar Singh Panta, J.

1. The question of law referred to the Full Bench by a Division Bench is whether the appeal by the Insurance Company under Section 30 of the Workmen's Compensation Act, 1923 (for short 'the Act') is maintainable without depositing the award amount unless the memorandum of appeal is accompanied by a certificate by the Commissioner under the Act to the effect that the appellant had deposited with him the amount payable under the order appealed against. This appeal under Section 30 of the Act has been filed by the National Insurance Company, being an insurer of a, vehicle bearing Registration No. HP-11-3842 which was the subject matter of the accident on March 14, 2001. In the said accident the son of the claimant-respondent No. 1 herein had died. The deceased was cleaner of the vehicle involved in the accident and the claimant had filed an application for compensation under the Act. In the application, the appellant-insurance company being the insurer of the vehicle was respondent No. 1 and the award was passed by the Commissioner against the appellant-insurance company because of the insurer of the vehicle. The appeal under Section 30 of the Act has been preferred by the insurer along with the application under Section 5 of the Limitation Act for condonation of delay in filing the appeal. The application came up for consideration before the Division Bench of this Court on April 22, 2003. During the hearing of the application, the question which arose for consideration is with respect to the maintainability of the appeal because admittedly, the appellant-insurance company has not filed along with Memorandum of appeal a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against.

2. The learned counsel for the appellant-insurance company contended before the Division Bench that the appellant being the insurer is not liable to deposit the amount because according to the learned counsel, the requirement of such deposit is restricted only if the appeal is filed by the 'employer' as provided in third proviso to Section 30(1) of the Act and as the insurer is not an 'employer' the appeal filed by it is maintainable. In support of his submission, reliance was placed on the judgment of the Division Bench of this Court in FAO No. 18 of 1993 dated August 26, 1993.

3. The learned counsel for the claimant on the other hand relied upon a Division Bench Judgment of Kerala High Court and a single Bench judgment of Jammu and Kashmir High Court in New India Assurance Co. v. M. Jayarama Naik and Anr., reported in 1984-I-LLJ-171 (Ker) and in United India Insurance Co. v. Ghulam Qadir Dar and Ors., reported in 1993-II-LLJ-9 (J&K;), wherein a contrary view has been taken by interpreting the third proviso to mean that the expression 'employer' as used in the third proviso includes within its ambit and purview an insurer of vehicle as well, inasmuch as by the factum of the insurance as well as the requirement of the insurance policy, also based on the relevant proviso contained in the Motor Vehicles Act, the insurer steps into the shoes of the 'employer' and, therefore, the liability to deposit the amount with the Commissioner under the third proviso is attracted. In that view of the matter, the issue was referred by the Division Bench to a Full Bench for reconsideration.

4. We have heard learned counsel for the parties. Mr. Ashwani Kumar Sharma, learned counsel for the appellant-Insurance Company again contended that the Insurance Company is not an 'employer' as defined in Section 2(i) Clause (e) of the Act. Therefore, the appeal under Section 30(1) of the Act can be preferred by insurer without depositing the compensation amount, following with a certificate of the Commissioner to that effect. In support of his submission reliance is placed on a judgment of learned single Judge of Rajasthan High Court in R. B. Moondra and Co. v. Mst. Bhanwari and Anr., reported in AIR 1970 Raj. 111; S.D. Sharma v. Ramesh Mahakud and Anr.,1999-III-LLJ (Suppl)-418 (Ori); National insurance Co. Ltd. v. Sarfuddin and Ors., 1999-III-LLJ (Suppl)-281 (M.P.); New India Assurance Co. Ltd. v. Manorama Sahu and Anr., 1993-II-LLJ-332 (Ori); Oriental Insurance Company Limited v. Lalita Bat and Ors., 1998 ACJ 119 (MP). Ms. Devyani Sharma, learned counsel appearing for National Insurance Co. Ltd. In CMP (M) 103 of 2003 has adopted the arguments of Mr. Ashwani Sharma, advocate.

5. We have carefully considered the ratio of the decisions in the abovesaid judgments. The learned single Judges in the abovesaid decisions have held that the restrictions contained in the third proviso to Section 30(1) of the Act for depositing the amount is expressly limited to appeal filed by the 'employer' and as the Insurance Company is not an 'employer', therefore, the third proviso to Section 30 of the Act is not applicable and the Insurance Company is not required to deposit any compensation with the Commissioner before filing an appeal.

6. In order to appreciate legal contentions urged on behalf of the appellant-insurance company, it is desirable to extract definition of the 'employer' as contained in Clause (e) of Section 2(1) of the Act which reads as below:

'(e) 'employer' includes any body of persons whether incorporated or not and any managing agent of an employer and the legal representative of a deceased employer, and, when the services of a workman are temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship, means such other person while the workman is working for him.'

The relevant provision of Section 30(1)(a) with its third proviso is extracted below:

'30. Appeals. - (1) An appeal shall lie to the High Court from the following orders of a Commissioner, namely-

(a) an order awarding as compensation a lumpsum whether by way of redemption of a' half-monthly payment or otherwise or disallowing a claim in full or in part for a lump sum;

Provided further that no appeal by an employer under Clause (a) shall lie unless the memorandum of appeal is accompanied by a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order/appeal against.'

From the facts as well as statutory provisions, noticed above, there is no dispute that appellant-insurer is entitled to file appeal against the impugned order and award under Clause (a) of Sub-section (1) of Section 30 of the Act. The only dispute is whether in absence of the compliance of the requirement of the third proviso of Section 30 referred to above, the appeal can be maintainable by the Insurance Company.

7. The law on the issue is by now well settled by different High Courts in the following decisions.

8. In Koili Bewa and Ors. v. Akshaya K. Mishra and Anr., 1994-II-LLJ-71, a Division Bench of Orissa High Court held that the insurer also, while preferring appeal under Section 30 of the Act, has to comply with the requirement of third proviso and the view taken by the learned single Judge in New India Assurance Co. Ltd. v. Manorama Sahu and Anr. (supra), and S.D. Sharma v. Ramesh Mahakud and Anr. (supra), was held not to be correct view. In Oriental insurance Co. Ltd. v. Renu Devi and Ors. 1997-II-LLJ-10 (Pat), it is held that the word 'employer' as found in the third proviso to Section 30 of the Act, must be construed so as to give effect to the scope and object of the Act or with a view to advance cause of justice and not to defeat it. A Division Bench of Karnataka High Court while dealing with identical question in the case of United India Insurance Co. Ltd. v. Kashimsab 1994-I-LLJ-500 (Kant), held as under at p. 506 of LLJ:

'20. ......to construct the proviso (3) to Section 30(1) of the Act, we should not confine to the literal meaning of the Act, but, on the other hand, we must hold, having regard to the object of the proviso and the fact that the insurer could be adjudged as if a judgment debtor under the decree, that in a case where an appeal is filed by the insurer challenging the judgment and award of compensation in favour of the workman, it cannot be entertained unless it is accompanied by a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against or otherwise, the very object of the proviso would be defeated. In the instant case, since the insurer has not filed the certificate along with the appeal for having deposited the compensation amount awarded by the Commissioner, the appeal is not maintainable. It is not possible to accede to the contention of Mr. Mahesh that Parliament intended to exempt the insurer from complying with the requirement of the third proviso to Section 30(1) of the Act.'

9. Similar view was taken by a Division Bench of Andhra Pradesh High Court in Gangireddy Venkateswara Rao and Anr. v. Divisional Manager, New India Assurance Co. Ltd. and Ors., reported in 1991 ACJ 262. In New India Assurance Co. v. M. Jayarama Naik and Anr. (supra), a Division Bench of Kerala High Court held that appeal filed by insurer against the award under Section 30, third proviso is applicable and the appeal is not maintainable unless insurer deposits amount of compensation and files certificate with memo of appeal accordingly. In United India Insurance Co. Ltd. v. Ghulam Qadir Dar and Ors. (supra), a learned single Judge of Jammu and Kashmir High Court following the decisions of the Kerala High Court in 1982 ACJ 3 and 1986 ACJ 1101 (MP), held that an appeal by insurance company is not maintainable without depositing the compensation amount as per requirement of third proviso to Section 30 of the Act and contrary view of learned Judge in National Insurance Co. Ltd. v. Sarfuddin (supra), was not accepted. Again learned single Judge of Punjab and Haryana High Court in New India Assurance Co. Ltd. v. Kartar Singh and Ors., reported in 2001 ACJ 1651, has also held that the appeal filed by the Insurance Company is not maintainable without a certificate by the Commissioner that the appellant has deposited the amount payable under the order appealed against.

10. It can be found from the above quoted judgments that different High Courts have taken different view regarding this question. No judgment of Apex Court has been cited before us by any of the parties. In our considered view insurance company can file the appeal only because it steps into the shoe of the insured, i.e., the 'employer'. It cannot, therefore, have better rights than that of 'employer' when there is no statutory provision for the same. If the 'employer' is barred from filing an appeal without filing of the certificate of having deposited the amount, there appears to be no reason to say that the bar is not applicable to the insurance company. When there is no special provision regarding filing of the appeal by the insurance company and the insurance company files an appeal only because it steps into the shoes of the employer, the bar will be applicable to the insurance company also. Moreover, the Workmen's Compensation Act is a benevolent legislation. Hence even if two views are possible, the one in favour of the claimant Workman would prevail. The insurer under the Act is to fulfil the pre-condition of depositing the amount as mentioned in third proviso of Section 30 of the Act.

11. We do not agree with the view differently taken by the learned single Judges in the above cited decisions relied upon by the learned counsel for the insurance company.

12. On consideration of the decision of the Division Bench of this Court in FAO No. 18/93 dated August 26, 1993, we find that the issue posed to us in these cases was not directly involved in that appeal and the learned Judges have only made a passing reference of the maintainability of appeal filed by the insurance-company and no reasons have been assigned in support of their views. Therefore, no reliance can be placed by the learned counsel for the appellant-insurance company upon the said decision. The judgment is overruled to that extent.

13. Thus, having regard to different decisions, as noticed above, we answer the reference as under:

'That even when the insurer prefers an appeal under Section 30 of the Act, third proviso is applicable and memorandum of appeal is to be accompanied by a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against.'

14. Before parting with the case, we place on record our appreciation to Mr. K.D. Sood, advocate who ably assisted us as amicus curiae.