1 IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 12th DAY OF JUNE 2019 BEFORE THE HON'BLE MR.JUSTICE P.G.M. PATIL MFA NO.25194/2011 [MV] C/W [CASE NUMBER] IN MFA NO.25194/2011 (MV): BETWEEN: THE CHAIRMAN AND MANAGING DIRECTOR, M/S. ATHANI FARMERS SUGAR FACTORY LTD., ATHANI, DIST: BELGAUM APPELLANT (By SRI. VINAY S. KOUJALAGI, ADV.) AND: 1. [ENTITY] MUNNAKUMAR PRASAD @BHAGAT AGED: MAJOR, OCC: HOUSEWIFE, R/O. BHADRAMMA VILLAGE, TQ: HUSSAINGANJ, DIST: SIVANA, STATE: BIHAR. 2. SRI. RAMA IQBAL BHAGAT AGED: MAJOR, OCC: AGRICUTLURE, R/O. BHADRAMMA VILLAGE, TQ: HUSSAINGANJ, DIST: SIVANA, STATE: BIHAR. 3. SMT. DHULARI RAMA IQBAL BHAGAT 2 AGED: MAJOR, OCC: HOUSEWIFE, R/O. BHADRAMMA VILLAGE, TQ: HUSSAINGANJ, DIST: SIVANA, STATE: BIHAR. 4. THE DIVISIONAL MANAGER, UNITED INDIA INSURANCE CO. LTD., MARUTHI STREET, BELGAUM. RESPONDENTS (By SRI. K ANANDKUMAR, ADV. FOR R1-R3; SRI. N.R.KUPPELUR, ADV. FOR R4) MFA FILED U/[SECTION] OF WC ACT, AGAINST THE [ENTITY] AND AWARD DTD 29-11-2010 PASSED IN KAPAKA/SR-19/2010 ON THE FILE OF THE LABOUR OFFICER AND COMMISSIONER FOR WORKMENS COMPENSATION, SUB-DIVISION-I, BELGAUM, AWARDING THE COMPENSATION OF RS.2,05,950/- SHALL BE DEPOSITED WITHIN THE 30 DAYS FROM THE DATE OF THE ORDER. IN [CASE NUMBER]: BETWEEN: THE DIVISIONAL MANAGER UNITED INDIA INSURANCE CO. LTD. DIVISIONAL OFFICE, MARUTHI GALLI, BELGAUM REP: BY ITS DIVISIONAL MANAGER, APPELLANT (By SRI. [ENTITY], ADV.) 3 AND: 1. [ENTITY] W/O MUNNAKUMAR AGE: MAJOR, OCC: HOUSE HOLD WORK, R/O BADRAM VILLAGE, TQ: HUSAINGANJ, DIST: SIWAN, STATE: BIHAR. 2. SRI. [ENTITY] AGE: MAJOR, OCC: AGRICULTURE, R/O BADRAM VILLAGE, TQ: HUSAINGANJ, DIST: SIWAN, STATE: BIHAR. 3. SMT. [ENTITY] W/O [ENTITY] AGE: MAJOR, OCC: HOUSEHOLD WORK, R/O BADRAM VILLAGE, TQ: HUSAINGANJ, DIST: SIWAN, STATE: BIHAR. 4. THE CHAIRMAN & MANAGING DIRECTOR, M/S ATHANI FARMERS SUGAR FACTORY LTD., ATHANI, BELGAUM. RESPONDENTS (By SRI. [ENTITY], ADV. FOR R1-R3; SRI. [ENTITY] AND SRI. [ENTITY], ADVOCATES FOR R4) MFA IS FILED U/[SECTION] OF [ACT], AGAINST THE [ENTITY] AND AWARD DTD:29.11.2010 PASSED IN [CASE NUMBER] ON THE FILE OF THE LABOUR OFFICER AND COMMISSIONER FOR WORKMENS COMPENSATION, SUB- DIVISION-I, BELGAUM, AWARDING THE COMPENSATION OF RS.4,11,900/- WITH INTEREST AT THE RATE OF 7.5% P.A. FROM 25.01.2010 TO 29.11.2010 AND AT THE RATE OF 12% P.A. FROM 29.11.2010 TILL ITS DEPOSIT. 4 THIS APPEAL COMING ON FOR ADMISSION, THIS DAY, THE COURT DELIVERED THE FOLLOWING:- [ENTITY]
The insured and the insurer being aggrieved by the judgment and order dated 29.11.2010 passed in [CASE NUMBER] by the Labour Officer and Commissioner for Workmen Compensation, Sub Division-2, Belgaum have filed these appeals.
2. The claimants filed the claim petition before the Commissioner for Workmen Compensation, Belgaum seeking compensation for the death of one [ENTITY].
3. It is the case of the claimants that the deceased [ENTITY] was working under the employment of respondent No.1- M/s [ENTITY], Athani, Belgaum and he was drawing wages of Rs.5,000/ p.m. It is further stated that on the direction of respondent No.1-[ENTITY], the deceased [ENTITY] went to the State of Bihar to bring skilled labours for working in the factory of the respondent No.1. It is further stated that the said [ENTITY] while returning from Bihar, on the way to Siwan Railway Station on 25.01.2008, an unknown jeep dashed against him, due to which he sustained fatal injuries and succumbed to the said injuries. Therefore the claimants claimed compensation of Rs.4,00,000/- on the ground that the death of the deceased was in the course and out of the employment with respondent No.1.
4. In pursuance of notice, the respondent No.1 and respondent No.2 -insurer appeared before the Commissioner for Workmen's Compnesation and filed separate objections. Respondent No.1 filed the objections wherein he has admitted that the deceased was under his employment on the date of accident and that he further stated that the deceased was drawing wages of Rs.2,600/- p.m. and not Rs.5,000/- p.m. as claimed. Respondent No.1 has further stated that it is false to state that the death is on account of his employment with the him and arising out of and in the course of employment. The applicants are put to strict proof of nexus between the death of the deceased and employment. He has further stated that the liability to pay compensation arising out of the employment injury with the appellant is insured with respondent No.2 and therefore respondent No.2 alone is liable to answer the claim of the claimants.
5. Respondent No.2 filed written objections denying the averments made in the claim petition. The claim is time barred. He do not admit that the deceased [ENTITY] was employee of respondent No.1 and that his death is out of and during the course of employment under respondent No.1. It is clear from the records that the deceased [ENTITY] had been to meet his wife and parents at his native place in the State of Bihar and died due to road traffic accident and therefore death of [ENTITY] was not during the course of and under the employment with respondent No.1. He denied about the wages drawn by the deceased. He also denied the allegations that the deceased while discharging his duties entrusted to him by respondent No.1 met with the accident and that the same was out of and arising out of his employment with respondent No.1. He has denied that respondent No.1 deputed the deceased workman to fetch skilled labours and there is no nexus in the death of the deceased and employment with respondent No.1 and therefore the claim petition is liable to be dismissed.
6. On the basis of the pleadings of the parties, the Commissioner for Workmen Compensation framed issues.
7. In support of their claim petition, claimant No.2- [ENTITY] was examined as PW-1 and they got marked 2 documents as Ex.P1 and P2. Respondent No.2 examined its witness as RW1 and got marked copy of the insurance policy at Ex.R1.
8. The learned Commissioner for Workmen's Compensation after hearing both the parties, passed impugned judgment awarding compensation of Rs.4,11,900/- with interest at 12% p.a. from 25.01.2010 and further imposed penalty of Rs.2,05,950/- on respondent No.1 and directed respondent No.2 to pay compensation amount and Respondent No.1 to penalty within 30 days.
9. The insured being aggrieved by the said judgment and order has filed [CASE NUMBER] on the ground that the order imposing penalty on him is contrary to cannons of law, arbitrary and illegal. The Commissioner for workmen compensation has categorically held that the working force of factory is insured with the insurance company and is liable to pay compensation with interest and therefore, the penalty imposed against him is liable to be set aside.
10. The Insurer United India Insurance Co. Ltd. being aggrieved by the impugned judgment and award has filed [CASE NUMBER] on the ground that the Commissioner for Workmen's Compensation acted arbitrarily and frivolously has entertained the claim petition though the death of the deceased was not during the course of and out of employment and that the Commissioner ignored the fact that the deceased had been to his native place and while he was proceeding near the railway station, an unknown vehicle dashed against him and he died and as such the death of the deceased was not out of the employment. The Commissioner for Workmen's Compensation failed to consider the ratio laid down by the Hon'ble Apex Court in the case of [PRECEDENT].
11. Heard the learned counsel for the parties.
12. A short question which arise for consideration before this Court is, as to whether the insurer has made out grounds to set aside the liability saddled against him and whether the insured has made out grounds for setting aside the penalty imposed against him.
13. The learned counsel for the insurer relying on the judgment in the case of [PRECEDENT] and also the judgment in the case of [PRECEDENT]. [PRECEDENT] reported in [CASE NUMBER] decided by the Hon'ble Supreme Court of India on 07.09.2010 and another decision in the case of [PRECEDENT] The Branch Manager, The Oriental Insurance Co. Ltd. and Anr. reported in [CASE NUMBER] decided by the Hon'ble Supreme Court of India on 12.02.2009, submitted that the death of the deceased in the present case is not proved to be in the course of or out of employment or incidental to his employment and therefore the claim petition itself is not maintainable and the liability saddled against the insured/appellant is liable to be set aside.
14. The learned counsel for the insurer further submitted that respondent No.1 who has filed the written statement has denied the case of the claimant that the deceased was sent by respondent No.1 with a direction to bring the skilled labours from the State of Bihar and therefore the death occurred while the deceased was returning as held in the course of and is out of or incidental to the employment of deceased with respondent No.1 cannot be accepted.
15. The learned counsel for the insured/ appellant submitted that the penalty imposed by the learned Commissioner for Workmen's Compensation is illegal and that unless the compensation is determined under [SECTION] of the [ACT] by the Commissioner for workmen compensation, the compensation is not due and as such the question of non payment of the compensation in terms of the said rules does not arise.
16. Per contra the learned counsel for the claimants relying on the judgment in the case of [PRECEDENT] submitted that the death of the deceased occured in the course and out of his employment with respondent No.1 on the ground that the deceased was sent by respondent No.1 to fetch skilled labours from the State of Bihar.
17. Learned counsel for the claimants submitted that the evidence of RW1 in this regard has to be accepted. The learned counsel further submitted that the risk of the employees of respondent No.1 was duly insured with respondent No.2 and the policy was in force as on the date of the accident and death of the deceased. Therefore the insurer is liable to pay compensation.
18. The learned counsel for the claimants also submitted that the penalty imposed by the learned commissioner for workmen compensation is sustainable in law.
19. Respondent No.1 the insured has admitted in his objection statement that the deceased was his employee as on the date of the death and therefore does not dispute that the deceased was workman and employee under the employment of respondent No.1. It is also not disputed that the death of the deceased occurred due to motor vehicle accident in the State of Bihar. It is the case of the claimants that the deceased had gone to the State of Bihar on the direction of respondent No.1 to fetch skilled labours for working in the factory of respondent no.1. This is the contention of the claimants in the claim petition.
20. Respondent No.1 has denied the same while admitting that the deceased was his employee. Therefore the burden is on the claimants to prove that the deceased was sent by respondent No.1 to the State of Bihar to fetch skilled labours and while returning from the State of Bihar, the deceased met with an accident and that the same arose out of and in the course of employment.
21. The claimants have to prove the nexus between the death of deceased and his employment with respondent No.1 and therefore unless the claimants have produced acceptable evidence to prove that respondent No.1 had deputed or sent the deceased to the State of Bihar to fetch skilled labours, it cannot be held that the deceased had been to the State of Bihar in the course of his employment.
22. In the case of Employee's State Insurance Corporation stated supra, the Hon'ble Supreme Court has held as follows:
"27. We are of the view that in the facts of this case, it cannot be said that the injury suffered by the workman one kilometer away from the factory while he was on his way to the factory was caused by an accident arising out of and in the course of his employment.
28. In the case of [PRECEDENT], it was observed by Lord [ENTITY] that:
"Nothing could be simpler than the words 'arising out of and in the course of the employment'. It is clear that there are two conditions to be fulfilled. What arises 'in the course of the employment' is to be distinguished from what arises 'out of the employment'. The former words relate to time conditioned by reference to the man's service, the latter to casualty. Not every accident which occurs to a man during the time when he is on his employment, that is directly or indirectly engaged on what he is employed to do, gives a claim to compensation unless it also arises out of the employment. Hence, the section imports a distinction which it does not define. The language is simple and unqualified."
29. Although the facts of this case are quite dissimilar, the principles laid down in this case are instructive and should be borne in mind. In order to succeed, it has to be proved by the employee that (1) there was an accident, (2) the accident had a causal connection with the employment and (3) the accident must have been suffered in course of employment. In the facts of this case, we are of the view that accident had any causal connection with the work he was doing at the factory and in any event, it was not suffered in the course of employment."
23. In the said case, the deceased workman suffered injuries while he was proceeding to the factory. It was held that the employee in that case was unable to prove that the accident had a casual connection with the work he was doing at the factory and in any event, it was not suffered in the course of employment. Further in the case of [PRECEDENT]. stated supra the Hon'ble Supreme Court has held at para 12 as under:
12. This Court in [PRECEDENT] referred to, with approval, the decision of Lord [ENTITY] in Dover Navigation Co. Ltd. v. Isabella Craig (1940 AC
190) wherein it was held: (All ER p. 563 ) "Nothing could be simpler than the words `arising out of and in the course of the employment'. It is clear that there are two conditions to be fulfilled. What arises `in the course' of the employment is to be distinguished from what arises `out of the employment'. The former words relate to time conditioned by reference to the man's service, the latter to causality. Not every accident which occurs to a man during the time when he is on his employment that is, directly or indirectly engaged on what he is employed to do gives a claim to compensation, unless it also arises out of the employment. Hence the section imports a distinction which it does not define. The language is simple and unqualified."
Further the Hon'ble Supreme Court has referred its earlier decision in the case of [PRECEDENT], at para 18 held as under:
18. "5. In [PRECEDENT], this Court held:
"5. To come within the Act the injury by accident must arise both out of and in the course of employment. The words `in the course of the employment' mean `in the course of the work which the workman is employed to do and which is incidental to it'. The words `arising out of employment' are understood to mean that `during the course of the employment, injury has resulted from some risk incidental to the duties of the service, which, unless engaged in the duty owing to the master, it is reasonable to believe the workman would not otherwise have suffered'. In other words there must be a causal relationship between the accident and the employment.The expression `arising out of employment' is again not confined to the mere nature of the employment. The expression applies to employment as such to its nature, its conditions, its obligations and its incidents. If by reason of any of those factors the workman is brought within the zone of special danger the injury would be one which arises `out of employment'. To put it differently if the accident had occurred on account of a risk which is an incident of the employment, the claim for compensation must succeed, unless of course the workman has exposed himself to an added peril by his own imprudent act."
24. Therefore the principles stated in these decisions are to the effect that there must be relationship between the accident and the employment. The expression arising out of the employment is not confined to mere nature of employment.
25. In the case of [PRECEDENT] stated supra the Hon'ble Supreme Court in para 9 held as follows:
9. In the case on hand, the deceased was employed as an engineer, assigned the duty of promoting the sales and installation of the products of the respondent company. It is not in dispute that a product was installed on the day prior to the accident at the Hero Honda Factory situated at [ENTITY] in the State of Haryana which is about 70 kms from Delhi State. It is also not in dispute that the deceased on the instruction and direction of the respondent, left for the field work assigned to him on 08.09.2007. After completing the necessary work assigned to him and his co-worker, both of them were returning to Delhi and at that time they met with the unfortunate accident. Thus, under the facts and circumstances, it is to be held that the deceased had to go to Hero Honda Factory, [ENTITY], Haryana from Delhi for the purposes of carrying out the work entrusted to him and after completing his work he was returning to Delhi. The very nature of his employment made it necessary for him to be there. In view of the same, in our considered opinion, it needs to be held that the accident had taken place in the course of the employment.
The facts in the said case were that the deceased on the instruction and direction of the respondent- employer, left for the field work assigned to him to [ENTITY], in the State of Haryana. While returning to Delhi he met with an accident and died. Under those circumstances of the said case, it was held that the very nature of his employment made it necessary for him to be there and therefore, the accident had taken place in the course of employment.
26. Applying this principle to the facts of the present case, it would have been held that the death of the deceased took place in the course of employment provided the claimants had proved that respondent No.1 directed and sent the deceased to the State of Bihar to fetch skilled labours for his factory. The claimants have not produced such evidence in the present case. On the other hand, respondent No.1 employer of the deceased has denied that the deceased was sent to the State of Bihar to fetch labours for his factory.
27. The evidence of RW.1 relied by learned counsel for the claimants wherein, it is stated that the deceased went to his native place to fetch labours is recorded in the cross examination. However, the said sentence is incomplete. It is not known whether it is a suggestion or voluntary statement by the witness. It cannot be held that it is a voluntary statement in view of her evidence in the chief examination, respondent No.2 has contended that the deceased was not deputed or not sent by the respondent No.1 to fetch the labours. Therefore, it cannot be held that the witness has stated voluntarily against their own defence, since the sentence in the cross examination is incomplete and cannot be relied on. Under these circumstances, this Court holds that the claimants have failed to prove that the death of the deceased is in the course of employment or out of the employment or incidental to his employment with respondent No.1. Therefore, the liability saddled against insurer is liable to be set aside and appeal filed by the insurer deserves to be allowed.
28. The owner/insured has contended that penalty imposed by the Commissioner for Workmen Compensation is not sustainable in law and that compensation become due only on passing the order by the learned Commissioner for Workmen Compensation and therefore, there is no violation of [SECTION] of [ACT].
29. [SECTION] of the [ACT] provides for awarding of compensation where the death results from the injury, where the permanent total disablement results from the injury. Therefore, as soon as the death occurs due to the injury sustained in the course of employment or the employee suffers from permanent total disablement due to the injury sustained in the accident the amount of compensation becomes due. [SECTION] of the Act provides for payment of compensation when it becomes due and penalty for default. [SECTION] of the Act provides that compensation under [SECTION] shall be paid as soon as it falls due. [SECTION] reads as under:
4A. 1 Compensation to be paid when due and penalty for default.- (1) Compensation under [SECTION] shall be paid as soon as it falls due.
30. Therefore, under [SECTION] where the employer does not accept the liability and fails to deposit the amount of compensation with the Commissioner, the employer is liable to pay the penalty as provided under [SECTION] of the Act. Proviso to the said Section provides that the order for payment of penalty shall not be passed under clause
(b) without giving a reasonable opportunity for employer to show cause why it should not be passed. In the present case, the learned Commissioner for workmen compensation has observed at para 28 of the judgment that show cause notice was issued to respondent No.1 on 25.07.2009 as to why penalty should not be imposed as provided under [SECTION] of the Act and it is further observed that respondent no.1 has not shown any cause for the same and has not explained why penalty should not be imposed against him, in terms of [SECTION] of the Act. Therefore, the contention of the insured employer that imposement of the penalty is not sustainable in law cannot be accepted. Under these circumstances, this Court holds that appeal filed by the insured employer is liable to be dismissed and in addition to this, in view of the findings of this Court, the liability saddled against the insurer is liable to be set aside and the employer insured is liable to pay compensation awarded to the claimant. Point for consideration is answered accordingly. In the result this court proceed to pass the following:
ORDER [CASE NUMBER] is allowed the judgment and order dated 29.11.2010 passed in [CASE NUMBER] by the Labour Officer, Commissioner for Workmen's Compensation, Belagavi sofaras saddling the liability on the Insurer United India Insurance Company Ltd., is set aside. Respondent No.4- The Chairman and [ENTITY] is liable to pay the compensation awarded to the claimants with interest.
[CASE NUMBER] is hereby dismissed.
The amount of compensation deposited by the appellant in [CASE NUMBER] before this Court and before the Commissioner for Workmen's Compensation, Belagavi if any shall be refunded to insurer United India Insurance Company Ltd.
The amount in deposit in [CASE NUMBER] shall be transmitted to the concerned Commissioner for Workmen's Compensation for disbursement forthwith.
JUDGE [ENTITY] 1-15/vb-16-26