1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD FIRST APPEAL NO. 122 OF 2004 M/s New India Assurance Co. Ltd., having its Regd. and Head Office at 87, M.G. Road Mumbai – 400 001, Branch office at Aurangabad and Divisional Office, Ajay Engg. Complex Dr. Rajendra Prasad Road, Aurangabad 431 005 through it’s Asstt Manager & Constituted Attorney Mr. Hiralal Namdeo Vispute, aged about 51 years, Occupation service. Appellant V E R S U S 1. Surayyabegam w/o Sayyed Isaq, aged 23 years, Occupation Household work, Respondents 2. Zakir Hussain s/o Ahmed Hussain, aged 58 years, Occupation Nil, 3. Rahemanbee s/o Zakir Hussain, aged 53 years, Occupation Household work, All resident of Tilaknagar, Kannad, Taluka Kannad, District Aurangabad. 4. M/s Agrawal Dairy, Bhadgaon Road, Pachora, Taluka Pachora, District Jalgaon. Mr. V.N. Upadhye, Advocate for the appellant Mr. P.F. Patni, Advocate for respondents No. 1 & 3 Respondent No.2 is deleted as per order of Court dated 16th July, 2004 vide C.A.No.4859 of 2004 Mr. A.S. Bajaj, Advocate for respondent No.4 2 CORAM : A.V. NIRGUDE, J. DATED : 10th June, 2010 ORAL JUDGMENT 1. This appeal is filed against the Judgment and Award passed by the learned Judge & Commissioner for Workmen’s Compensation, Labour Court, Aurangabad in Application (W.C.) No. 52 of 2002. The appellant / Insurance Company was opponent No. 2 in the lower Court, whereas the respondents No. 1 to 3 were claimants. The respondent No.4 was the opponent No.1, employer of the deceased employee. The case of the respondents No. 1 to 3, in short, was as under : 2. Sayyed Isaq, the husband of respondent No.1 and the father of respondents No. 2 and 3, was working as a driver of a goods vehicle belonging to the respondent No.4, at the relevant time, in the year 1998. Sayyed Isaq was on duty on 11th June, 1998 and was driving his vehicle on Dhule – Surat Highway and at about 03.30 a.m. on that day he met with an accident. He banged his vehicle head on a tree. He died due to the injuries he suffered. Sayyed Isaq was getting Rs. 2,000/- per month as a salary and Rs.50/- per day as Bhatta. He was the only earning member of the family, and so, the respondents No. 1 to 3 were entitled for compensation of Rs.3,00,000/-. They further stated that the vehicle in question was insured with the appellant. It was with a comprehensive insurance policy. The respondent No.4 – employer did not submit any reply, whereas the appellant / Insurance Company opposed the claim on various grounds. The Court below rejected all the objections and allowed the application and awarded Rs.2,41,200/- as compensation along with 12% per annum interest and 50% penalty. 3. After hearing submissions of the learned Advocates, following points arose for my consideration : 3 1 Whether the application was barred by Section 167 of the Motor Vehicles Act ? 2 Whether the application was not maintainable before the Aurangabad Forum for want of territorial jurisdiction ? 3 Whether the application was barred by Limitation ? 4 Whether the learned Judge of the lower Court committed error in calculating the compensation by taking into account daily Bhatta amount as part of salary ? 5 Whether the appellant was liable to pay the penalty awarded by the lower Court ? 4. Admittedly, the respondents No. 1 to 3 initially went before the Motor Accident Claim Tribunal, Aurangabad for seeking compensation against the appellant and the respondent No.4. They tried to prove that the accident occurred due to harsh head lights of a vehicle that came in front of the vehicle of Sayyed Isaq at the relevant time, due to which, he lost control over the vehicle. However, the learned Member of the Tribunal held that the respondents No. 1 to 3 could not prove the fact that a vehicle came in front of the vehicle of Sayyed Isaq, and that, due to its harsh head lights, he had lost control over his vehicle. The learned Member held that the accident took place only because of negligent driving of Sayyed Isaq. In view of that finding, the learned Member dismissed the claim petition. Thereafter, admittedly, the respondents No. 1 to 3 rushed to the Commissioner for Workmen’s Compensation, Labour Court. 5. Mr. Upadhye, learned Advocate for the appellant placed reliance on Section 167 of the Motor Vehicles Act, which reads as under : 167. Option regarding claims for compensation in certain cases – 4 Notwithstanding anything contained in the Workmen’s Compensation Act, 1923 (8 of 1923) where the death of, or bodily injury to, any person gives rise to a claim for compensation under this Act and also under the Workmen’s Compensation Act, 1923, the person entitled to compensation may without prejudice to the provisions of Chapter X claim such compensation under either of those Acts but not under both. Indeed, apparently the above mentioned provisions would debar the respondents No. 1 to 3 from approaching once again the Commissioner for Workmen’s Compensation. However, the law on this subject was discussed quite elaborately by the learned single Judge of this Court in the case of Smt. Neelabai Mahadeo Salunke and others V. Shamrao Tatoba Pawar and others (AIR 1995 Bombay 55). The fact situation was almost similar. However, the provisions of the Motor Vehicles Act, 1939 were applicable to the facts of that case. Section 110AA of the above mentioned Act is almost paramateria to the provisions of Section 167 of the Motor Vehicles Act. The learned Single Judge of this Court held - “If the application for compensation made before the Motor Accidents Claims Tribunal is rejected on the ground that the deceased himself was negligently driving the tractor in question it can hardly be said that the death of the deceased gave rise to a valid claim for compensation under Motor Vehicles Act, 1939. If the claim for compensation made under Motor Vehicles Act, 1939 could not be entertained by the Claims Tribunal for want of proof in respect of negligence of the driver causing the accident as alleged, Section 110AA of Motor Vehicles Act, 1939 can never be applied so as to bar the claim for compensation under Workmen’s Compensation 5 Act, 1923. Even if the deceased was himself negligently driving the tractor leading to the accident in question, the claim for compensation under Workmen’s Compensation Act, 1923 may be still maintainable against the employer concerned or against the insurance company if the deceased died as a result of an accident which took place during the course of employment of the deceased. Section 3 of Workmen’s Compensation Act provides for statutory liability of the employer to pay compensation to the workman or his dependents if the death or personal injury is caused by accident arising out of and in the course of employment of the workman concerned. The criteria to be applied for determination of an application for compensation under Workmen’s Compensation Act, 1923 is some what different than the criteria to be applied for determination of a claim for compensation under Section 110A of Motor Vehicles Act, 1939.” While deciding this, the learned Single Judge placed reliance on a Judgment of Division Bench of High Court of Karnataka in a matter of B. Prabhakar and another V. Smt. Bachima (AIR 1984 Karnataka 225) dealing with the same question. The Karnataka High Court held in that case that no claim for compensation under Motor Vehicles Act, 1939 could be entertained by the Claims Tribunal unless the accident had occurred due to actionable negligence of the owner or driver of the vehicle causing injury or death of a third party. The Court held that when the accident occurred due to actionable negligence of the deceased himself being a driver, no claim by his representatives would be entertained. The Court further held that in such a case Section 110AA would not be attracted. The Law on this subject is thus discussed above and I am told that there is no further 6 Judgments on this point delivered by this Court or by the Supreme Court. Mr. Upadhye, learned Advocate on the other hand tried to place reliance on various other but older Judgments to buttress his submission but in vain. I will deal these Judgments one by one. (1) Antony Lobo and others V. C.M. Merchand (1979 LAB. L.C. 61). This Judgment certainly favours Shri. Upadhye’s submissions, but the subsequent Judgment of our High Court, referred to above, has dealt with this Judgment and distinguished it on facts. (2) National Insurance Co. Ltd., Bhatinda V. Parveen and others (2000 (1) Transport and Accidents Cases 566) (P & H). In this Judgment the facts situation was quite similar, but the scope of inquiry under Section 165 of the Motor Vehicles Act has not been discussed. Besides, the respondent was absent before the learned Single Judgment of Punjab and Haryana High Court. I, therefore, not relying on this Judgment. (3) Shaikh Imam Bi and another V. Oriental Fire & Genl. Ins. Co. Ltd. and others (1989 ACJ 291) (A.P.). In this case, the learned Single Judge of Andhra Pradesh High Court held that the motor accident claim petition was not maintainable because the other legal heir had earlier filed workmen’s compensation case and had obtained an Award. Obviously, this Judgment is not applicable to the facts of this case. (4) Pawan Kumar V. Commissioner, Workmen’s Compensation, Jalandhar and another (1997 ACJ 397) (P & H). In this case, the legal representatives of a driver of a Van filed claim for compensation before the Commissioner under the Workmen’s Compensation Act. They also filed claim petition before Motor Accident Claim Tribunal. It was held that the claimants had option to file one claim before either of the forums. The ratio of this Judgment is not applicable to the facts of this case. I am therefore convinced 7 that the application was not barred under Section 167 of the Motor Vehicles Act, 1988. 6. The second question is, whether the learned Commissioner at Aurangabad could have decided the application without giving notice contemplated under Proviso to sub-section (1) of Section 21 of the Workmen’s Compensation Act, 1923 ? In order to answer this question, one has to read carefully Section 21 of the Act, which reads as under : “21. Venue of proceedings and transfer – (1) Where any matter under this Act is to be done by or before a Commissioner, the same shall, subject to the provisions of this Act and to any rules made hereunder, be done by or before the Commissioner for the area in which - (a) the accident took place which resulted in the injury ; or (b) the workman or in case of his death, the dependant claiming the compensation ordinarily resides; or (c) the employer has his registered office: Provided that no matter shall be processed before or by a Commissioner other than the Commissioner having jurisdiction over the area in which the accident took place, without his giving notice in the manner prescribed by the Central Government to the Commissioner having jurisdiction over the area and the State Government concerned: Provided further that, where the workman, being the master of a ship or a seaman or the captain or a member of the crew of an aircraft or a workman in a motor vehicle or a company, meets with the accident outside India any such matter may be done by or before a Commissioner for the area in which the owner or agent of the ship, aircraft or motor vehicle resides or carries on business or the registered office of the company is situate, as the case may be, (1-A) If a Commissioner, other than the Commissioner with whom any money has been deposited under section 8, proceeds with a matter under the Act, the former may for the proper disposal of the matter call for transfer of any records or money remaining with the latter and on receipt of such a request, he shall comply with the same. (2) If a Commissioner is satisfied that any matter arising out of any proceedings pending before him can be more conveniently dealt with by any other Commissioner, whether in the same State or not, he may, subject to rules made under this Act, order such matter to be transferred to such other Commissioner either for report or for disposal, and, if he does so, shall forthwith transmit to such other 8 Commissioner all documents relevant for the decision of such matter and, where the matter is transferred for disposal, shall also transmit in the prescribed manner any money remaining in his hands or invested by him for the benefit of any party to the proceedings: Provided that the Commissioner shall not, where any party to the proceedings has appeared before him, make any order of transfer relating to the distribution among dependants of a lump sum without giving such party an opportunity of being heard. (3) The Commissioner to whom any matter is so transferred shall, subject to rules made under this Act, inquire thereinto and, if the matter was transferred for report, return his report thereon or, if the matter was transferred for disposal, continue the proceedings as if they had originally commenced before him. (4) On receipt of a report from a Commissioner to whom any matter has been transferred for report under sub-section (2), the Commissioner by whom was referred shall decide the matter referred in conformity with such report. (5) The State Government may transfer any matter from any Commissioner appointed by it to any other Commissioner appointed by it.” 7. It is common ground that the accident in question occurred in the State of Gujrat, whereas the dependents / claimants of the deceased workman ordinarily resided within the jurisdiction of Aurangabad Commissioner. So, the claim could have been filed either before the Commissioner for the area in which the accident took place or before the Commissioner where the claimants ordinarily resided. It is common ground that the claimants filed the application before the Commissioner, Aurangabad. The provision to sub-section (1) provided that on receiving such an application the Commissioner should give a notice in the manner prescribed by the Central Government to the Commissioner for the area in which the accident had taken place. It is further common ground that such notice does not appear to have been given by the Commissioner Aurangabad to the other Commissioner. The question is, whether this lapse on the part of Commissioner at Aurangabad would prove fatal to the case? It is submitted that the proviso uses word “shall”, and therefore, the Commissioner at 9 Aurangabad was legally bound to give such notice, and in absence of such notice, the proceeding would stand vitiated. On the other hand, it is submitted that the procedure laid down under Section 21 of the Act for deciding the venue for proceeding of this nature is essentially to ensure that there should not be different proceedings before different Commissioners and there should not be multiple payments made to various claimant for the same cause of action. However, in this case, there does not appear any apprehension of multiplicity of proceedings in different Forums. In this case, the respondents were notified when the application was moved before the Commissioner at Aurangabad. The owner did not appear, however, the Insurance Company did not deny the statement of the claimants that the vehicle was insured with them. Besides, the accident took place way back in 1998, twelve years back and had there been any proceeding initiated elsewhere by any other dependent of the deceased, by now, the respondents could have known about it. These circumstances, in my view, would eliminate apprehension of multiplicity of applications and multiplicity of payments of compensation. In my view, the lapse on the part of Commissioner at Aurangabad, for not sending the notice to the Commissioner, in whose area the accident took place, would not prove fatal to the application. 8. The third objection raised in respect of delay in filing of the application. Admittedly, the application was moved after expiry of period of limitation of two years. Section 10 of the Act provides that a claim should be entertained only if it is preferred within two years after occurrence of the accident or death. However, fifth proviso to sub- section (1) of Section 10 further provides that the Commissioner may entertain and decide the claim is not preferred in due time, if he is satisfied that the delay had occurred due to sufficient cause. In this case, the record shows that the claimants filed an affidavit along with the application before the Commissioner and explained the delay that 10 was caused in making the application. It seems, the Commissioner decided this application independently and then ordered to register the application. Therefore, the objection raised in this regard has no substance. 9. The appellant further contended that the learned Commissioner committed error in calculating the amount of compensation. He pointed out that the learned Commissioner included daily bhatta paid to the deceased worker in his monthly wages. He asserted that even if deceased worker was paid Rs.50/- per day as daily allowance, this amount cannot be assumed as wages as contemplated under Section 2 (m) of the Act. Section 2 (m) reads as under : S.2 (m) “wages” includes any privilege or benefit which is capable of being estimated in money, other than a travelling allowance or the value of any travelling concession or a contribution paid by the employer of a workman towards any pension or provident fund or a sum paid to a workman to cover any special expenses entailed on him by the nature of his employment.” Mr. Upadhye, the learned Advocate for the appellant asserted that bhatta being essentially a food and daily allowance paid to a worker like driver or cleaner of a goods-vehicle or a conductor of a passenger-vehicle is to cover such worker’s expenses for food or lodging and other incidental expenses. He further admitted that ‘bhatta’ cannot be said to be travelling expenses because a driver would not incur expenses for travelling, and therefore, he asserted that bhatta paid to a driver would be a sum to cover special expenses entailed by him by the nature of his employment. In support of his submission, he placed reliance on a Division Bench of our High Court in the case of Zubeda Bano and others V. Divisional Controller, Maharashtra State Road Transport Corporation and others (1990 ACJ 923). The learned Judges of the Division Bench held that the basis for calculation of compensation is monthly wages and such 11 wages would exclude the travelling allowance. However, the Division Bench in that Judgment did not lay down specifically a ratio that food allowance or bhatta paid to a driver is required to be excluded. On the other hand, a recent Judgment of Division Bench of Karnataka High Court in the case of New India Assurance Company Limited and another V. Subhas (2005 ACJ 479) is cited before me by the learned Advocate appearing for the respondents. The Division Bench of Karnataka High Court answered this controversy in following words: “14. It is contended by the appellants, that insofar as drivers and cleaners/conductors are concerned, daily batta is paid only when they go on line i.e., when they travel in the lorry/bus from the Headquarters to any destination and back and, therefore, it should be considered as travelling allowance. Normally when an employee with a fixed place of work is sent out, an allowance paid to him may relate to two distinct matter : (i) cost of travelling; and (ii) expenses incurred for boarding, lodging and incidentals outside the workplace. Drivers and cleaners/conductors employed in a lorry or bus do not work in any ‘fixed place’ but are always travelling. In the case of a driver or cleaner/conductor of a lorry/bus, the question of paying any cost of travelling by way of travelling allowance does not arise because the driver is driving the lorry/bus and cleaner/conductor is travelling free in the vehicle in connection with his employment and they do not incur any expenditure nor spend money for actual travelling. Therefore, any allowance paid to a driver or cleaner of the lorry whenthey go out, is an outstation allowance or an allowance paid to meet the expenses for food or lodging or other incidental expenses. Therefore, any batta paid to a driver and cleaner is not travelling allowance, but an allowance given as a ‘benefit’ which will necessarily fall within the definition of ‘wage’.” I think, in view of no other Judgment in the field on this point delivered by the Division Bench of this Court, it would not be improper to follow the ratio laid down by this persuasive precedent. Besides I 12 respectfully agree with the view expressed in this judgment. I am therefore rejecting argument of the appellant on this point. 10. The next question is, what amount of compensation is payable to the claimants. It has come on record that the age of the deceased at the time of accident was 30 years. The accident took place in the year 1998. As per the provisions of Section 4, explanation II, as it prevailed in 1998, the multiplier in the age 30, I am told is 207.98. Having regard to these figures, the amount of compensation payable comes to Rs.2,07,980/-. The respondents / claimants admittedly received Rs.50,000/- as N.F.L. when the case came before Motor Accident Claims Tribunal. So, the amount of compensation now payable to them comes to Rs.1,57,980/-. 11. The next objection to the impugned Judgment and order is the direction of the learned Commissioner to the appellant/Insurance Company and the respondent No.4 to pay penalty of 50% on the compensation of amount, in case the amount of compensation is not deposited within one month from the date of order. Having regard to the provisions of Section 4-A, it is clear that this direction to pay 50% penalty is grossly erroneous. The question as to whether an employer is liable to pay penalty arises when he fails to pay the amount of compensation within one month. In such event, the Commissioner is expected to issue show cause notice to the employer as to why penalty up to 50% should not be imposed on him. The employer, in response to that notice, is in a position to explain as to why he could not deposit the amount within stipulated period. The learned Commissioner without following this necessary procedure, imposed the penalty as if the employer/respondent No.4 had failed to pay the amount of compensation within one month from the date of the order. It was not the case, because the employer / respondent No.4 had still time till 17th August, 2003 to deposit such amount. So, the order directing the parties to pay penalty of 50% is apparently 13 illegal and deserves to be set aside. However, the claimants are given liberty to take steps under Section 4-A of the Act to seek further direction in respect of penalty etc against the respondents. (a) Appeal is partly allowed. (b) The appellant and respondent No.4 shall jointly or severally pay Rs.1,57,980/- (Rupees One Lac Fifty Seven Thousand Nine Hundred Eighty) by way of compensation to the respondents No. 1 and 3 with 12% p. a. interest from 17th July, 2003. They shall also pay the costs of this appeal to the respondents No. 1 and 3. (c) The direction to pay penalty up to 50% of the compensation amount is set aside. (d) The amount of Rs.50,000/- (Rupees Fifty Thousand) deposited by the appellant in the Court shall be remitted to the office of Commissioner for Workmen’s Compensation, Aurangabad along with interest etc accrued on the said amount immediately. (A.V. NIRGUDE, J.) srm/fa/122/04/ok