IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN TUESDAY, THE 13TH DECEMBER 2011 / 22ND AGRAHAYANA 1933 WP(C).No. 10884 of 2006(U) ---------------------------------------- PETITIONER(S): ------------------------- KERALA ELECTRICAL & ALLIED ENGINEERING CO.LTD., MAMALA P.O., KOCHI-682 305-REPRESENTED BY ITS GENERAL MANAGER. BY ADV.SRI.N.D.PREMACHANDRAN SRI.M.K.THANKAPPAN SRI.D.AJITHKUMAR RESPONDENT(S): -------------------------- 1. THE DIRECTOR OF INSURANCE, KERALA STATE INSURANCE DEPARTMENT, HOUSING BOARD BUILDING, SANTHI NAGAR, THIRUVANANTHAPURAM-695 001. 2. STATE OF KERALA, REPRESENTED BY PRINCIPLE SECRETARY (FINANCE), THIRUVANANTHAPURAM. R1 & R2 BY SPL. GOVERNMENT PLEADER(FINANCE) SRI.SUNIL CYRIAC THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 13/12/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: sts WP(C)NO.10884/2006 APPENDIX PETITIONER'S EXHIBITS: P1 COPY OF THE POLICY NO.KSID/WC/3175/05. P2 COPY OF THE TELEGRAM DATED 14/3/05. P3 COPY OF THE TELEGRAM DATED 19/3/2005. P4 COPY OF THE LETTER DATED 26/3/2005 P5 COPY OF THE LETTER DATED 16/4/2005. P6 COPY OF THE LETTER DATED 23/6/2005. P7 COPY OF THE LETTER DATED 27/7/2005. P8 COPY OF THE LETTER DATED 30/8/205. P9 COPY OF THE LETTER DATED 22/11/2005. P10 COPY OF THE DISCHARGE VOUCHER DATED 22/11/2005. P11 COPY OF THE IMPLEADING PETITION DATED 5/8/2005. P12 COPY OF THE WRITTEN OBJECTION DATED 5/8/05. P13 COPY OF THE AWARD IN HINDI DATED 24/1/2006. P13(A) COPY OF THE ENGLISH TRANSLATION OF AWARD P14 COPY OF THE LETTER DATED 27/1/2006. P15 COPY OF THE COVERING LETTER DATED 14/2/2006. P16 COPY OF THE REGD.LETTER DATED 27/2/2006. RESPONDENT'S EXHIBITS: NIL /TRUE COPY/ P.A.TO.JUDGE sts S.SIRI JAGAN, J. ================== W.P.(C).No. 10884 of 2006 ================== Dated this the 13th day of December, 2011 J U D G M E N T The petitioner is the employer in a workmen's compensation case. They had taken out an insurance policy with the 1st respondent- Kerala State Insurance Department, against accident in the course of their business to their employees. They undertook a contract work on behalf of M/s.Hindustan Zinc Ltd., in Udayapur, in Rajasthan. On 14.3.2005, an accident occurred at the work site and one workman by name, Rama Avathar Singh died in that accident. On the basis of the policy taken by the petitioner, the petitioner requested the 1st respondent to pay compensation amount to the legal heirs of the deceased. The 1st respondent admitted a claim for ` 2,91,007/- and directed the petitioner to pay an arrears of premium of ` 81,979/-, which was paid and discharge vouchers were submitted as suggested by the 1st respondent. In spite of the same, the 1st respondent did not pay the compensation due to the legal heirs of the workman. The legal heirs of the deceased workman filed a workmen's compensation claim before the Workmen's Compensation Commissioner, Udayapur. The 1st respondent was also a party to the said workmen's compensation case. The Workmen's Compensation Commissioner awarded an amount of ` 3,08,381/- with interest at the rate of 12% till payment, and ` 2,500/- towards funeral expenses. The petitioner paid the compensation w.p.c.10884/06 - : 2 :- amount without interest to the legal heirs. The petitioner submits that in view of Ext.P1 policy between the petitioner and the 1st respondent, the 1st respondent is liable to make good the compensation amount awarded by the Workmen's Compensation Commissioner. The petitioner seeks the following reliefs: “i. To issue a writ of mandamus or other writ order or direction directing the 1st respondent to release the compensation of Rs. 308381/- and Rs. 2500/- towards funeral expenses with 12% interest from 14.3.2005 till date of payment as per Ext.P1 Policy of insurance to the petitioner forthwith. ii. To declare that as per Ext.P1, the respondents 1 and 2 are duty bound to indemnify the petitioner against the liability arisen under Ext.P13 & P13(a) Judgment and to pay the compensation to the petitioner as per Exhibit P1 policy forthwith.” 2. A counter affidavit has been filed on behalf of the respondents. The stand taken is that they admit only ` 2,91,007/- as compensation. The petitioner themselves agreed before the Workmen's Compensation Commissioner that they will pay a higher amount as compensation, which is not binding on the 1st respondent, is the 1st respondent's contention. The 1st respondent would submit that in view of the exception contained in clause (d) of Ext.P1 policy, since additional liability is by virtue of an agreement between the petitioner and the legal heirs of the deceased, the liability of the 1st respondent is excepted. They also rely on clause 5 of the policy, which reads thus: “5. No admission offer promise or payment shall be made by or on behalf of the Insured without the consent of the Government which shall be entitled if it is so desires to take over the conduct in his name the defence or settlement of any claim or to prosecute in his name for its own benefit any claim for indemnity or w.p.c.10884/06 - : 3 :- damages or otherwise and shall have full discretion in the conduct of any proceedings and in the settlement of any claim and the Insured shall give all such information and assistance as the Government may require.” 3. I have considered the rival contentions in detail. 4. The award of the Workmen's Compensation Commissioner is produced as Ext.P13. The 1st respondent in this writ petition is the 5th respondent therein. After considering the evidence, the Workmen's Compensation Commissioner has held thus: “After proving all the mentioned facts in favour of the Petitioner now under the Act the amount of the compensation has to be calculated which according to the provisions of this Act is Rs. 308381/-.” In Ext.P13, I do not find any agreement between the petitioner and the legal heirs of the workman recorded thereon. What the 1st respondent relies on is the following sentence in Ext.P13: “The Respondents stated that though the insurance companies are absent, but as per the agreement with the companies they are ready to pay the compensation, therefore the order in this case will be obeyed jointly and separately.” That sentence does not indicate any agreement between the petitioner and the legal heirs of the workman on a higher amount of compensation. The sentence indicates only an agreement between the two insurance companies involved in the matter of compensation due to the legal heirs. In fact Ext.P13 is not by agreement at all. The compensation has been fixed by the Commissioner on the basis of the date regarding age and salary per month of the deceased workman. As such, there is absolutely no merit in the contention of the 1st w.p.c.10884/06 - : 4 :- respondent. Even assuming that the petitioner agreed to that amount, once the Workmen's Compensation Commissioner passed an award, that award is binding on the 1st respondent also. It is not disputed before me that the 1st respondent is liable to pay the amount awarded by the Workmen's Compensation Commissioner, as per the policy. I do not think that the 1st respondent can rely on the conditions referred to above to deny liability. Those are conditions which except the insurance company from the liability in respect of the agreement between the petitioner and the legal heirs of the deceased. Ext.P13 award is an order of the Workmen's Compensation Commissioner calculating the compensation due to the legal heirs of the deceased on account of the death of the workman as per the statute. It was perfectly open to the 1st respondent to contest the matter on merits, before the Workmen's Compensation Commissioner, if they had a case that the petitioner illegally agreed to a certain higher amount as compensation. They also had a remedy by way of challenging Ext.P13 award in an appeal as provided under the Workmen Compensation Act. Having not chosen to challenge the same, it is too late in the day for the 1st respondent to contend that because the petitioner agreed to a higher amount before the Workmen's Compensation Commissioner, the 1st respondent is not liable to pay the same. Accordingly, I am of opinion the 1st respondent is liable to make good the entire w.p.c.10884/06 - : 5 :- compensation awarded by the Workmen's Compensation Commissioner to the legal heirs of the deceased as per Ext.P13 award with interest and costs. Accordingly, the 1st respondent is directed to pay to the petitioner the entire amount covered by Ext.P13, as expeditiously as possible, at any rate, within two months from the date of receipt of a certified copy of this judgment. The learned counsel for the petitioner submits that the petitioner has paid to the legal heirs the compensation amount, but admits that interest as awarded in Ext.P13 has not been paid to the legal heirs. That interest shall also be paid to the legal heirs immediately within one month from the date of receipt of the amount from the 1st respondent. If the 1st respondent has any case that they are entitled to recover the said amount or any part thereof from any of the other respondents in Ext.P13 award, this judgment will not stand in the way of their recovering the same from them by resorting to appropriate legal proceedings. The writ petition is allowed as above. Sd/- sdk+ S.SIRI JAGAN, JUDGE ///True copy/// P.A. to Judge