IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA 1. FAO(WCA) No.334 of 2004 2. FAO(WCA) No.342 of 2004 Judgment reserved on: 1.12.2008 Date of decision: 19.12.2008 1. FAO(WCA) No.334 of 2004 New India Assurance Co. …….Appellant Vs. Keshav Ram and others …. Respondents. 2. FAO(WCA) No.342 of 2004 Keshav Ram and others ……..Appellants Vs. Salig Ram and another ……Respondents ____________________________________________________ Coram The Hon’ble Mr. Justice Kuldip Singh, Judge. Whether approved for reporting?1 Yes For the Appellant : Mr. K.D. Sood, Advocate with Mr. Sanjeev Sood, Advocate, for appellant in FAO(WCA) No.334 of 2004 and for respondent No.2 in FAO(WCA) No.342 of 2004 For the Respondents : Mr. Ashwani Pathak, Advocate, for respondents No.1 to 3 in FAO(WCA) No.334 of 2004 and for appellants in FAO(WCA) No.342 of 2004. Kuldip Singh, Judge. 1. This judgment shall dispose of FAO(WCA) No.334 of 2004 and FAO(WCA) No.342 of 2004 which have arisen out of Whether the reporters of the local papers may be allowed to see the Judgment?Yes …2… award dated 30.6.2004 passed by Commissioner, under Workmen’s Compensation Act cum SDM, Rampur Bushahr, in Case No.2/2002. FAO No.334 of 2004 has been filed by New India Assurance Company against awarding of interest and FAO No.342 of 2004 has been filed by the claimants for enhancement of compensation etc. 2. The brief facts of the case are that appellants in FAO No.342 of 2004 filed petition for payment of compensation, penalty, interest against Salig Ram owner of truck No.HP-07-4675 and New India Assurance Company insurer of the said truck on the ground that Hem Raj was driving truck No.HP-07-4675 on 19.1.2002 but due to sudden failure of brakes the truck rolled down into river Satluj and Hem Raj drowned in the river. The dead body of Hem Raj was traced on 4.3.2002. The accident took place during the course of employment of Hem Ram as driver of truck No.HP-07-4675 which was owned by Salig Ram. The deceased was earning Rs.4500/- per month salary and Rs.50/- per day allowance as driver of the truck. The claim petition was filed by parents and unmarried sister who were dependants on the deceased. 3. The petition was contested by Salig Ram by filing reply in which preliminary objection of maintainability of the petition for want of notice was taken. On merits, it was submitted that Pushpa Kumari was not dependant on deceased. The deceased was being paid Rs.1800/- per month salary and Rs.50/- as daily allowance. It was admitted that deceased was …3… employed as driver. The insurer of the truck is liable to pay compensation, if any, as the truck was insured at the time of the accident. The particulars of the ill-fated truck, driver etc. were already furnished as per the requirement of the insurer. The owner denied the liability to pay any compensation, penalty or interest. New India Assurance Company also contested the petition by filing reply in which ownership of the truck in question and insurance thereof was admitted but employment of deceased on the truck was denied. It has been pleaded that owner of the truck failed to bring to the notice of insurer relevant facts in time and therefore, penalty cannot be imposed on the insurer. The Insurance Company has prayed for dismissal of the claim petition. The Commissioner framed the following issues:- 1. Whether the applicant is an employee/workmen’s as covered in the Act? 2. Whether the accident occurred in the course of/out of employment? 3. Whether the petitioner is entitled for any compensation as pleaded, if yes then from whom? 4. The commissioner vide award dated 30.6.2004 held that deceased was earning Rs.3300/- per month as driver and awarded Rs.4,15,541/- to the claimants inclusive of Rs.3,62,918/- on account of compensation and Rs.52,623/- interest at the rate of 6% per annum w.e.f. 19.2.2002 to date of award. The award amount was ordered to be paid to the legal heirs of Hem Raj. …4… The Insurance Company and the claimants have filed separate appeals as noticed above. 5. FAO No.334 of 2004 was admitted on the following substantial questions of law:- 1. Whether the insurance company is liable to pay interest under Workmen Compensation Act in view of the judgment passed by Hon’ble Apex Court in case P.J. Narayan vs. Union of India; Writ Petition (Civil) No.341 of 2003? FAO No.342 of 2004 was admitted on 20.9.2004 without indicating substantial questions of law which are however available at page-6 A of the paper book and are as follows:- 1. Whether learned Commissioner could determine the monthly salary on the basis of consent by parties, in the absence of any statements by claimants or their counsel? 2. Whether Ld. Commissioner could reduce the rate of interest at his discretion than the statutory rate of interest provided under Section 4-A (3)(a) of Workmen’s Compensation Act? 3. Whether Commissioner could omit to record his findings with respect to penalty whereas clear-cut case for liability was made out? 4. Whether Ld. Commissioner could order the payment of compensation to LRs of deceased, whereas, the Act makes provision for the payment to dependents of deceased? …5… 6. I have heard Mr.K.D. Sood, learned counsel for the Insurance Company and Mr. Ashwani Pathak, learned counsel for the claimants on the above substantial questions of law in both the appeals and gone through the record, none appeared on behalf of Salig Ram owner of the truck. FAO No.334 of 2004 Substantial question of law No.1 7. Mr. K.D. Sood, learned counsel for the insurer has submitted that insurance company is not liable to pay interest in view of Supreme Court decision in P.J. Narayan vs. Union of India and others 2004 ACJ 452. In P.J. Narayan, a writ petition was filed for the purpose of directing insurance company to delete the clause which provides that in case of compensation under the Workmen’s Compensation Act, 1923 (for short Act), the insurance company will not be liable to pay interest. On those facts, the Hon’ble Supreme Court has held that there is no statutory liability on the insurance company. The statutory liability under the Act is on the employer. An insurance is a matter of contract between the insurance company and the insured. The insurance company is entitled to provide by contract that they will not take on liability for interest. In the present case, there is nothing on record to show that the insurance company by contract had excluded its liability to pay interest. P.J. Narayan supra is not applicable in the facts and circumstances of the case. The substantial …6… question of law is accordingly decided against the insurance company. FAO No.342 of 2004 Substantial question of law No.1 8. The claimants in the claim petition have pleaded that the deceased was earning Rs.4500/- per month salary and Rs.50/- daily allowance. The owner of the truck has pleaded that he was paying Rs.1800/- per month to the deceased and Rs.50/- daily allowance. The insurance company has not taken specific stand with respect to the salary of the deceased. PW-1 Keshav Ram father of the deceased has stated that Hem Raj was 23 years of age and was receiving Rs.4500/- per month salary and Rs.50/- daily allowance. PW-2 Kamal Kishore is a driver who has stated that he knew Hem Raj who was receiving Rs.4500/- salary per month and Rs.50/- daily allowance. He himself is a driver and is getting Rs.4000/- per month and Rs.100/- daily allowance. 9. RW-1 Salig Ram owner of the truck has stated that on 18.1.2002 truck met with an accident and driver of the truck drowned in the Satluj river. He had been paying Rs.1500/- per month salary and Rs.50/- daily allowance to the driver. In cross- examination he has stated that ordinarily a beldar gets Rs.100/- per day and the salary of the driver is 3-4 times than the wages of beldar. He has also stated that driver gets more than Rs.6000/- salary. The cumulative effect of the above statements is that Hem Raj was getting Rs.50/- daily allowance, the question is about his per month salary. PW-1 father of the deceased in his statement …7… has stated that deceased had been receiving Rs.4500/- salary per month as driver. RW-1 Salig Ram owner of the truck which met with an accident has pleaded in his reply that he was paying Rs.1800/- to the deceased but in his statement he has stated that he was paying Rs.1500/- per month salary to the deceased which is in contradiction to his stand taken in his reply. In cross- examination he has stated that beldar gets Rs.100/- per day but the wages of the driver are 3-4 times than the wages of the beldar. He has also stated that driver gets more than Rs.6000/- per month salary. PW-2 Kamal Kishore, a driver, was getting Rs.4000/- per month salary and Rs.100/- daily allowance. The statement of RW-1 Salig Ram regarding the salary of the deceased has not been supported by contemporaneous material on record. There is contradiction in his reply and statement given by him before the Commissioner. It appears Salig Ram has stated less salary of the deceased with the obvious reason to reduce his liability of payment of compensation being the employer of the deceased. There is nothing on record that the parties had agreed that the wages of the deceased were Rs.3300/- per month. The Commissioner has erred in assessing the wages of the deceased at Rs.3300/- per month, such assessment does not emerge from the evidence on record nor there is supporting material on record that the parties had agreed that the wages of the deceased were Rs.3300/- per month, accordingly the finding of the Commissioner that the deceased was earning Rs.3300/- per month is not sustainable. In view of …8… material on record it is held that deceased was getting salary and daily allowance totaling more than Rs.4000/- per month, hence, in view of explanation (ii) of Section 4 of the Act., the wages of the deceased can be safely taken Rs.4000/- per month. The deceased was 23 years of age, therefore, as per schedule 4 of the Act factor of 219.95 is applicable in the present case and the amount of compensation comes to 219.95 x 2000 = 4,39,900/- The substantial question of law No.1 is decided in favour of the claimants and against the insurance company as well as the owner of the truck. Substantial question No.2 10. Clause (a) of sub section 3 of section 4A of the Act provides that on the amount of compensation simple interest at the rate of 12% per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank shall be payable. In other words 12% interest per annum is the minimum rate of interest payable on the amount of compensation, if not paid within one month from the date it fell due. In the present case the Commissioner has awarded 6% interest without indicating why interest at the rate of 6% has been awarded instead of statutory minimum rate of 12% per annum on the amount of compensation. The claimants are entitled to 12% per annum interest on the amount of compensation Rs.4,39,900/- from 19.2.2002 to 30.6.2004. The substantial question of law No.2 is decided in favour of the claimants and against the insurance company. …9… Substantial question of law No.3 11. The clause (b) of sub section 3 of section 4A provides that employer shall be liable to pay penalty not exceeding 50% on the amount of compensation, if there is no justification for delay in paying the compensation. The proviso to clause (b) of sub section 3 of section 4A of the Act further provides that order of penalty shall not be passed under clause (b) without giving a reasonable opportunity to the employer to show cause why it should not be passed. In the present case no finding has been recorded by the Commissioner that there was no justification for delay in paying the compensation nor any show cause was issued to the employer by the Commissioner for payment of the penalty, hence, claimants are not entitled to penalty from the employer. The substantial question of law No.3 is decided against the claimants. Substantial question of law No.4 12. The dependants of the deceased workmen are entitled to file an application under section 22 of the Act read with rule 20 of the Workmen’s Compensation Rules 1924. The dependant has been defined in clause (d) of sub section 1 of section 2 of the Act. The Commissioner proceeded to decide the claim of the claimants, however, at the end of the impugned award he has observed that the awarded amount shall be paid to the legal heirs of Hem Raj. In the body of the impugned award the Commissioner has held the entitlement of the claimants to claim compensation on account of death of Hem Raj. The act …10… contemplates payment of compensation to the dependants as against the legal heirs, therefore, claimants who were dependents on the deceased are entitled to compensation, the observation of the Commissioner that the compensation shall be paid to the legal heirs of Hem Raj is accordingly modified. The substantial question of law No.4 is decided in favour of the claimants. 13. No other point was urged. 14. The result of above discussion, FAO No.334 of 2004 is dismissed. FAO No.342 of 2004 is partly allowed and award dated 30.6.2004 passed by the Commissioner, under Workmen’s Compensation Act cum SDM, Rampur Bushahr in Case No.2/2002 is modified, an award of Rs.4,39,900/- is passed in favour of the claimants namely Keshav Ram, Kala Devi, Pushpa and against Salig Ram employer of the deceased as well as New India Assurance Company insurer of the truck No.HP-07-4675 jointly and severally along with interest at the rate of 12% per annum on the amount of compensation Rs.4,39,900/- from 19.2.2002 to 30.6.2004 and after 30.6.2004 at the rate of 6% per annum till payment. The truck was insured, therefore, award amount along with interest shall be paid by insurer to the claimants. No costs. ( Kuldip Singh ) Judge. December 19, 2008 (sks) …11… IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA. FAO(WCA) No.342 of 2004 Judgment Reserved on: 1.12.2008 Date of Decision: 19.12.2008 Keshav Ram and others ……………..Appellants Versus Salig Ram and another …………Respondents ________________________________________________________ Coram The Hon’ble Mr. Justice Kuldip Singh, Judge Whether approved for reporting? For the Appellants : Mr. Ashwani Pathak, Advocate. For the respondents: Mr. K.D. Sood, Advocate, for respondent No.2. Kuldip Singh, J For judgment, see judgment of date rendered in RFA No.334 of 1998 titled New India Assurance Co. vs. Keshav Ram and others. ( Kuldip Singh) Judge December 19, 2008 (sks) …12…