FAO No.40 of 2010 (O&M) 1 In the High Court for the States of Punjab and Haryana at Chandigarh. Decided on February 10,2010. Ajay Appellant vs. Balwan Singh and another -- Respondents CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR JAIN Present: Mr.Anurag Jain,Advocate,for the appellant Mr.Tara Chand Dhanwal,Advocate,for respondent No.1. Mr.Harsh Aggarwal,Advocate,for respondent No.2. Rakesh Kumar Jain, J, (Oral) This appeal is directed against order dated 22.9.2009 passed by the Commissioner, Hisar Circle, under the Workmen Compensation Act, 1923 (for short,'the Act') by which National Insurance Company has been directed to pay compensation to the claimants to the tune of Rs. 40,088/- and the appellant is directed to pay interest @ 12% per annum on the said amount from the date of accident i.e.27.12.2002 to the date of order i.e. 22.9.2009 amounting to Rs. 32,404/- with a further direction that in case, no payment is made, then to pay simple interest @12% per annum from the date of order till its realization. The appellant is aggrieved only against the award of interest. Facts of the case are that applicant/respondent No.1 was FAO No.40 of 2010 (O&M) 2 employed as a Cleaner on truck No.HR-46-A-/6251 by the appellant. His salary was fixed at 1000/- per month with Rs.50/- as daily out of pocket expenses. The applicant/respondent No.1 was drawing salary to the tune of Rs.2000/- per month. The said truck met with an accident on 27.12.2002 at 10.30 p.m. in which applicant/respondent No.1.suffered injuries for which he filed a claim petition before the Commissioner under the Act, asking an amount of Rs.3,00,000/- as compensation along-with interest. At the very outset, learned counsel for respondent No.1. has objected to the maintainability of appeal in view of Section 30 (1), third proviso of the Act, on the ground that the amount of interest which has been challenged by the appellant has not been deposited with the Commissioner and thus the appeal is not maintainable without attaching the certificate of the Commissioner with the memo of appeal. In this regard, learned counsel for the appellant has submitted that third proviso to Section 30 (1) (a) of the Act is not applicable in the case where imposition of interest is challenged because interest is awarded under Section 30(1) (aa) of the Act. Before deciding the appeal on merits, the question of maintainability is required to be decided at this stage and for that purpose, a close look at Section 30 of the Act, is necessary:- “30.Appeals. (1) An appeal shall lie to the High Court from the following orders of a Commissioner, namely:- (a) an order as awarding as compensation a lump sum 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; FAO No.40 of 2010 (O&M) 3 (aa) an order awarding interest or penalty under section 4A,.” (b) an order refusing to allow redemption of a half-monthly payment (c) an order providing for the distribution of compensation along the dependants of a deceased workman, or disallowing any claim of a person alleging himself to be such dependant; (d) an order allowing or disallowing any the amount of an indemnity under the provisions of sub-section (2) of section 12; or (e) an order refusing to register a memorandum of agreement or registering the same or providing for the registration of the same subject to conditions; Provided that no appeal shall lie against any order unless a substantial question of law is involved in the appeal, and in the case of an order other than an order such as is referred to in clause (b), unless the amount in dispute in the appeal is not less than three hundred rupees: Provided further that no appeal shall lie in any case in which the parties have agreed to abide by the decisions of the Commissioner, or in which the order of the Commissioner gives effect to an agreement come to by the parties: [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 appealed against] (2)The period of limitation for an appeal under this section shall be sixty days. FAO No.40 of 2010 (O&M) 4 (3)The provisions of section 5 of [ the Limitation Act,1963 (36 of 1963)], shall be applicable to appeals under this section. From a reading of the aforesaid provisions, it is apparent that third proviso of Section 30(1) (a) is applicable to sub section (a) and not to sub section (aa). Therefore, objection raised by learned counsel for the respondent about the maintainability of appeal is without any foundation and the same is hereby rejected. Learned counsel for the appellant has then referred to the Insurance Policy placed on record as Annexure A/1 in which it is specifically provided that three employees of the employer/appellant were insured under the Act for which the appellant had paid Rs. 75/- towards premium. He has further drawn attention of the Court to an endorsement on the policy Annexure A/1 (i.e.IMT Endorsement Numbers printed herewith attached hereto 21,20,17, 28). Learned counsel has referred to Clause 28 of IMT (India Motor Tariff), which reads as under:- “ IMT.28. Legal liability to paid driver and/or conductor and/or cleaner employed in connection with the operation of insured vehicle. In consideration of an additional premium of Rs.25/- notwithstanding anything to the contrary contained in the policy it is hereby understood and agreed that the insurer shall indemnify the insured against the insured legal liability under the Workmen's Compensation Act, 1923, the Fatal Accidents Act, 1855 or at Common Law and subsequent amendments of these Acts prior to the date of this Endorsement in respect of personal injury to any paid driver and/or conductor and/or cleaner whilst engaged in the service of the insured in FAO No.40 of 2010 (O&M) 5 such occupation in connection with the vehicle insured herein and will in addition be responsible for all costs and expenses incurred with its written consent”. It is submitted by learned counsel for the appellant that the applicant/respondent No.1. was employed as a cleaner to whom Section 28 of IMT is applicable and for that Insurance Company is liable to indemnify the appellant with regard to compensation as well as interest. He has also relied upon a decision of the Apex Court in the case of Ved Parkash Garg Vs. Premi Devi and others 1998 ACJ,1 and a decision of Delhi High Court in the case of New India Assurance Co. Ltd. Vs. Momina Khatum and others 2008 ACJ 2734 to contend that where an employee suffers injuries during the course of his employment, Insurance Company is liable to indemnify the employer not only towards compensation but also towards interest. In reply, learned counsel for the Insurance Company has submitted that in a recent judgment of the Supreme Court in the case of New India Assurance Co. Ltd. Vs. Harshadbhai Amrutbhai Modhiya and another, (2006) 5 Supreme Court Cases 192, it is held that Insurance Company is not liable to pay interest . In the present case, the question is as to whether Insurance Company is liable to indemnify the insured on account of payment of interest awarded by the Commissioner under the Act if the liability to make the payment of interest is not specifically excluded in the policy. In Ved Parkash Garg's Case (Supra), it was held by the Apex Court as under:- “The insurance company will be liable to meet the claim for FAO No.40 of 2010 (O&M) 6 compensation along-with interest was imposed on the insured employer by the Workmen's Commissioner under the Compensation Act on the conjoint operation of section 3 and section 4-A sub-section (3) (a) of the Compensation Act”. “A similar view has been taken by the Delhi High Court in Momima Khatum's Case (Supra) which is as under:- “In the instant case , in light of the law laid down by the Supreme Court in Ved Parkash Garg's Case (Supra) and the categorical finding by the Commissioner, Workmen's Compensation , that the insurance company has failed to bring on record any clause in the policy which exonerated it from the payment of the interest, I find no infirmity in the decision of the Commissioner Workmen's Compensation, in directing the insurance company to pay interest at the rate of 12% per annum to the dependents”. Whereas in the case of Harshadbhai Amrutbhai Modhiya (Supra), it was found that there was a specific exclusion clause of liability of payment of interest . Therefore, it was held as under:- “Provided that the insurance granted hereunder is not extended to include:- (i) any interest and/or penalty imposed on the insured on account of his/her failure to comply with the requirements laid down under the WC Act, 1923 and (ii) any compensation payable on account of occupational diseases listed in Part 'C” of Schedule III of the WC Act, 1923”. FAO No.40 of 2010 (O&M) 7 “As indicated hereinbefore, a contract of insurance is governed by the provisions of the Insurance Act. Unless the said contract is governed by the provisions of a statue, the parties are free to enter into a contract as far their own violition. The act does not contain a provision like Section 147 of the Motor Vehicles Act. Where a statue does not provide for a compulsory insurance or the extent thereof, it will bear repetition to state that the parties are free to choose their own terms of contract. In that view of the matter, contracting out, so far as reimbursement of amount of interest is concerned, in our opinion, is not prohibited by a statue”. After holding that contract can be entered into with respect to interest specifically, the Apex Court held in the case of Harshadbhai Amrutbhai (Supra), that the Insurance Company was not liable to pay interest. The law relied upon by the Insurance Company is not applicable in the facts and circumstances of the present case because in the present case, liability of insurance company to pay interest has not been excluded in the policy. Therefore, the judgment relied upon by the learned counsel for the appellant in Ved Parkash Garg's Case (Supra) is fully applicable to the facts and circumstances of the present case and as such, the Insurance Company is liable to pay interest to the claimants. Thus, in view of my above discussion, the present appeal is allowed and the impugned order is modified to the extent that the FAO No.40 of 2010 (O&M) 8 appellant is not liable to pay amount of interest awarded by the Commissioner under the Act and the same would be paid by the Insurance Company to the claimants. February 10,2010 (Rakesh Kumar Jain) RR Judge