HIGH COURT OF HIMACHAL PRADESH AT SHIMLA FAO No.: 225 of 2005 Reserved on: 30.6.2009 Decided on: 22.7.2009 The Oriental Insurance Company Limited ………Appellant. Versus Urmila Devi and others ………Respondents. Coram: The Hon’ble Mr.Justice V.K. Ahuja, Judge. Whether approved for reporting? Yes. For the appellant: Mr.G.C. Gupta, Senior Advocate, with Mr.Ashish Jamalta, Advocate. For respondents No.1 to 3: Mr.R.K.Gautam, Senior Advocate, with Mr.Sandeep Pandey, Advocate. For respondent No.4 & 5: Mr.S.V. Sharma, Advocate. V.K. Ahuja, J: This is an appeal filed by the appellant under Section 30 of the Workmen’s Compensation Act, 1923 against the order passed by the Commissioner, Workmen Compensation (SDM, Kandaghat), District Solan, dated 27.11.2004, vide which the Commissioner granted compensation, including interest and penalty, at Rs.6,14,545/-, to be indemnified by the appellant. Briefly stated the facts of the case are that a claim petition under Section 22 of the Workmen’s Compensation Act was filed by present respondents No.1 to 3 in which the present respondent No.4 was impleaded as respondent No.1 being __________ 1.Whether reporters of Local papers may be allowed to see the judgment? - 2 - the owner, while the present respondent No.5 was impleaded as respondent No.2 being the driver of the truck No.HP 13 0664 and the appellant was impleaded as respondent No.3, being the insurer of the truck in question. The claimants alleged that the deceased Kishore Kumar was the son of claimants No.1 and 2 while claimant No.3 was the unmarried sister of the deceased. The deceased was working as a Conductor in the truck and on 18.6.2003, the deceased was going as a Conductor in the truck being driven by the original respondent No.2. The truck met with an accident and consequently, Kishore Kumar sustained injuries and died as a result of the injuries sustained by him in the said accident. The claimants alleged that the age of the deceased was 21 years and 8 months at the time of death and he was getting Rs.3,000/- per month as fixed salary and Rs.50/- per day as daily allowance. Accordingly, the claimants claimed compensation under the provisions of the Act. Several pleas were taken by the respondents in their reply and they pleaded that the deceased was only getting Rs.1500/- per month plus Rs.60/- as daily allowance. The learned Commissioner, after conclusion of the trial, held that the income of the deceased was Rs.4,000/- per month. His age was 21 years, 7 months and 23 days and accordingly, it granted compensation, as detailed above, including interest at the rate of 12% from the date of accident till the date of award. The penalty was also imposed at the rate of 25% of the amount of compensation for the delay in depositing the compensation. - 3 - I have heard the learned counsel for the parties and have gone through the record of the case. The submissions made by the learned counsel for the appellant were that the learned Commissioner had concluded that the income of the deceased was Rs.4,000/- per month as per the evidence on record. It was not clarified by the learned Commissioner as to how this income was arrived at Rs.4,000/- per month. It was also submitted that the provisions of Section 2(m) of the Act clearly provides that the travelling allowance is not included in the term ‘wages’ and, therefore, it could not have been considered by the learned Commissioner. It was also submitted that the interest has to be awarded from the date of the petition and the future interest is penal which could not have been awarded. It was also submitted that in regard to the penalty, the same was payable by the owner and not by the Insurance Company and it has been wrongly imposed upon the Insurance Company. On the other hand, the learned counsel for the owner/respondent No.4 submitted that no penalty could be imposed upon the owner until and unless a show cause notice was given to him. It was also submitted that the maximum penalty could be 50% and if the facts justified, the penalty can be reduced. The learned counsel for the claimants/respondents No.1 to 3 had supported the findings of the learned Commissioner. It was submitted that the onus to prove the income was upon the Insurance Company in which they had failed and the learned Commissioner had granted the compensation in accordance with law. - 4 - The first plea raised, which deserves consideration, is in regard to the income of the deceased. The claimants alleged in the petition that the income of the deceased at the time of accident was Rs.3,000/- per month as fixed salary and Rs.50/- per day as daily allowance. One of the petitioner Roop Ram, the father of the deceased, appeared in the witness box and reiterated that the deceased was getting Rs.3,000/- per month and Rs.50/- as daily allowance and the deceased was paying a sum of Rs.1500/- to him out of the total amount he was receiving. There is no other evidence on record led by the petitioners. The respondents’ evidence consists of the testimony of RW-1 Sanjeev Aggarwal, General Power of Attorney of the owner, who stated that the deceased was being paid Rs.1500/- per month as salary. The amount which the deceased was getting per day has to be calculated on the basis of the evidence led by the parties irrespective of the fact upon whom the onus has been placed. Once both the parties had led evidence, the evidence led has to be considered accordingly. The petitioners’ allegations showed that the deceased was getting Rs.3,000/- per month and they had not produced any receipt since the deceased was only working as a Conductor. In regard to the contention that the wages do not include travelling allowance, the provisions of Section 2(m) of the Act are clear that the travelling allowance is not included in the salary. Therefore, the salary of the deceased does not include the travelling allowance of Rs.50/- or Rs.60/- being paid to the deceased, but the statement of his father and one of the - 5 - petitioners shows that the deceased was getting Rs.3,000/- per month. On the other hand, to rebut the above evidence or to prove the issue, respondent only examined the General Power of Attorney of the owner of the truck, who stated that the deceased was being paid Rs.1500/- per month. No record was produced by the owner to show as to the amount being paid to the Conductor. In the present days, no payments are made to any of the employees or labourers or workers except by taking receipt which is required to be maintained under law and some record is always available in regard to the payments made to a workman. However, no record has been produced by the respondent/owner and, therefore, their plea that they were paying Rs.1500/- per month to the deceased cannot be accepted as correct. However, the learned Commissioner had not given any findings as to how the figure of Rs.4,000/- as salary was arrived at. Moreover, a suggestion was put to RW-1 Sanjay Aggarwal, Attorney of the owner, that in those days even an ordinary labourer was getting Rs.80/- per day. In case no material was available on record, the learned Commissioner could have taken a judicial notice of the daily wages of a worker in a Government Department, which could have been considered as a basis since an employee/worker is entitled to get at least the minimum wages which are payable to a worker in a government department. Once there is no evidence in regard to the daily wages prevalent in the Government Departments at that time and there is specific evidence of the petitioners that the deceased was getting Rs.3,000/- per month, which has not been rebutted by the owner, I accordingly - 6 - hold that the income of the deceased has to be assessed at Rs.3,000/- per month as against Rs.4,000/- assessed by the learned Commissioner. Coming to the age, these findings have not been disputed by the appellant or others that the age of the deceased was 21 years, 7 months and 23 days, as held by the learned Commissioner. Accordingly, the claimants were entitled to compensation applying the factor of the age of 21, which is 222.71, and the compensation comes to Rs.3,34,065/- (Rs.3000 x 50/100 x 222.71 = Rs.3,34,065/-), excluding interest and penalty. The next question to be considered is in regard to the interest by whom it is payable and from which date. The learned Commissioner has granted the interest at the rate of 9% from the date of accident till the date of award i.e. 27.11.2004. It was held that there was a period of 526 days from the date of the accident till the date of award and the interest was calculated for 526 days. My attention has been drawn to the decision of this Court in Sita Ram versus Satvinder Singh & another, Latest HLJ 2008 (HP) 1110. In that case, the learned Single Judge of this Court, while relying upon a decision of the Constitutional Bench of the Apex Court, had held that the compensation falls due on the date when the accident took place and in case the same is not deposited within 30 days, the workman is entitled to claim interest at the rate of 12% without having to show that delay in depositing the compensation was attributable to the employer. There is nothing to show on record if the provisional compensation was - 7 - deposited by the employer within 30 days. Therefore, the claimants are entitled to claim interest at the rate of 12% and not 9%, as awarded by the learned Commissioner, which shall be payable after one month of the date of the accident took place till the date of deposit. The compensation awarded by the learned Commissioner is liable to be modified accordingly. Coming to the last question as to the penalty, the learned Commissioner has directed that the penalty shall be payable at the rate of 25% of the amount of compensation, which shall be deposited by the employer but the same shall be indemnified by the Insurance Company. Coming to the submissions made by the learned counsel for the appellant/Insurance Company, it was submitted that the penalty is payable by the employer and not by the Insurance Company and accordingly, this part of the order passed by the learned Commissioner deserves to be modified. In support of his submissions, the learned counsel for the appellant had placed reliance upon the decision of this Court in New India Assurance Company Ltd. versus Jagdish Ram and another, 2007 ACJ 806. In this case, the learned Single Judge of this Court had relied upon the decision of the Apex Court in Ved Parkash Garg versus Premi Devi, 1998 ACJ 1 (SC), wherein it was held that the order passed by the learned Commissioner directing the appellant Insurance Company to pay the amount of penalty is illegal since the penalty is payable by the employer. Applying the decision in the above case to the facts of the present case, I accordingly hold that the order passed by the learned Commissioner that the Insurance - 8 - Company was to indemnify the amount of penalty deserves to be modified accordingly. The order was clear that the compensation amount including penalty was to be deposited by the employer and thereafter, he was to be indemnified by the Insurance Company. There is nothing on record to show if any notice was not issued to the employer/owner as provided under Section 4-A proviso and it was for the employer to take this plea that no such notice was issued to him and, therefore, he was not liable to pay the amount, which order has not been assailed by the employer and therefore, it is not open to him to take the plea that no notice was given to him. Accordingly, the order directing the Insurance Company/appellant to indemnify the part of the penalty deserves to be modified and the said amount shall be payable by the employer only. The appeal is partly allowed in the aforesaid terms. July 22, 2009. (V.K. Ahuja), (TILAK) Judge.