FA/989/2005 1/5 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 989 of 2005 For Approval and Signature: HONOURABLE MR.JUSTICE KS JHAVERI ========================================= = 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================= = THE NEW INDIA ASSURANCE CO.LTD. Versus LAVJIBHAI KANTIBHAI NADIA C/O. PRAKASH V. NASIT & ANR ========================================= = Appearance : MS LILU K BHAYA for Appellant:1 MR BIREN A VAISHNAV for Defendant:1 RULE SERVED for Defendant:2 ========================================= = CORAM : HONOURABLE MR.JUSTICE KS JHAVERI Date : 29/08/2008 FA/989/2005 2/5 JUDGMENT ORAL JUDGMENT 1. By way of this appeal, the appellant has challenged judgment and award dated 05.12.2003 passed by the learned Commissioner, Labour Court, Kalol in Workman Compensation Application No.5 of 1995 whereby the learned Commissioner, Kalol has awarded Rs.82,008/- including the amount of interest @ 12%. 2. The facts in brief, as emerging from record, are as under: 2.1 As per the case of the claimants, Shri Kantibhai Malabhai Nadiya, the father of respondent No.1 herein was working as labourer in Lime Kiln situated at Bilaspur at the salary of Rs.1850/- per month. 2.2 On 7.10.1993, at about 8.30 morning, when Kantibhai Nadiya had gone into Kiln for putting some bricks/stones in a proper manner, he fell down in Kiln and due to asphyxia on account of lime gas he died during the course of employment. 2.3 The respondent No.1 herein thereafter preferred application for compensation being Workmen Compensation Application No.5 of 1995 before the learned Workmen Compensation Commissioner at Kalol, who vide his judgment and award dated 05.12.2003 partly allowed the application by awarding Rs.67,776/- as compensation to the respondent No.1 herein along with interest on the said amount @ 12% p.a. from 7.11.1993 till the date of award and thereby awarded Rs.82,008/- as compensation. 2.4 Being aggrieved and dissatisfied with the judgment and award passed by the learned Workmen Compensation FA/989/2005 3/5 JUDGMENT Commissioner, Kalol, the appellant herein preferred the present appeal. 3. Heard Ms.Lilu Bhaya, learned Advocate appearing for the appellant-New India Assurance Company Ltd. She has submitted that the amount awarded by the learned Workmen Compensation Commissioner, Kalol has not been rightly awarded as there is a clause in the insurance policy which provides that in case of accident, insurance company is liable to pay compensation amount only under the Workmen's Compensation Act, 1923 but not the interest. She has also submitted that there is no statutory liability under the Workmen's Compensation Act, 1923 on the insurance company. She has further submitted that it is a matter of contract between the insurance company and the insured and it is always open to the insurance company to refuse to insured. The insurance company is also entitled to provide the terms in the contract that the insurance company will not be liable to pay the interest. Relying upon the decision of the Apex Court rendered in S.L.P. (Civil) No.341 of 2003 in case of P.J.Narayan Vs. Union of India and Ors., Ms. Bhaya submitted that in absence of any statute to this effect the insurance company cannot be forced by the Court to take the liability which is not contemplated under the policy. Ms.Bhaya, learned Advocate has also relied upon the decision of the Hon'ble the Supreme Court reported in AIR SC Weekly Vol.3, 2006, 2353 in case of New India Assurance Co.Ltd. v. Harshadbhai Amrutbhai Modhiya, wherein the Hon'ble the Supreme Court has held that the Insurance Company is not liable for the interest. The Hon'ble the Supreme Court, in the given case, construing the contract involved, held that the insurer has specifically excluded any liability for interest or penalty under the Workmen's Compensation Act and confined the liability to indemnify the employer only against the FA/989/2005 4/5 JUDGMENT amount of compensation to be paid under the Workmen's Compensation Act. 4. The learned Advocate for the respondent No.1 has submitted that the learned Workmen Compensation Commissioner, Kalol, has rightly awarded the compensation amount with interest by considering the age of the deceased and the salary which was being paid to of the deceased. The learned Advocate has further submitted that the learned Commissioner, Kalol, relying upon settled legal proposition of law, has rightly come to the conclusion that in default of making payment of compensation within a month by the employer, under the Workmen's Compensation Act, the insurance company is also liable to pay compensation amount and the interest thereon. The learned Advocate has submitted that the respondent No.1 herein has produced all necessary documentary evidences in support of claim for amount of compensation relying on which the learned Commissioner, Kalol has rightly awarded the compensation and the interest thereon. 5. I have considered the submissions made by learned advocates for both the sides. I have also gone through the documents on record and impugned judgment of the Commissioner as well as decisions cited by learned advocate for the appellant. Looking to the settled legal position of law as held by the Hon'ble the Supreme Court in case of New India Assurance Co.Ltd. v. Harshadbhai Amrutbhai Modhiya (supra), the Court is of the opinion that the Insurance Company is not required to make payment towards interest on compensation amount. The Court is in complete agreement with the submissions of the learned Advocate appearing for Insurance Company. Therefore, order impugned herein is required to be FA/989/2005 5/5 JUDGMENT modified accordingly. 6. With the above observations, appeal is partly allowed. The appellant herein will not be required to make any payment towards interest except the principal amount to the claimant. It will be open for the claimant to recover the interest amount from the employer. 7. The appeal is allowed to the aforesaid extent with no order as to costs. (K.S.JHAVERI, J.) Amit/-