IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE J.B.KOSHY & THE HONOURABLE MRS. JUSTICE K.HEMA TUESDAY, THE 8TH JANUARY 2008 / 18TH POUSHA 1929 MFA.No. 1468 of 1998(B) ----------------------- WCC.128/1994 of W.C.C.,ERNAKULAM .................... APPELLANT: ----------------- UNITED INDIA INSURANCE COMPANY LTD., HOSPITAL JUNCTION, ALUVA, REPRESENTED BY ITS DEPPUTY MANAGER, MOTOR THIRD PARTY CLAIMS, VETTUKATTIL BUILDINGS, P.B.NO.1835, JOSE JUNCTION, KOCHI 682 016. BY ADV. SRI.K.P.VIJAYAN SMT.C.B.SUMA DEVI RESPONDENTS: --------------------- 1. RAJAGOPAL, S/O.VASUDEVAN PILLAI, AMBIKALAYAM, EAST KODUNGALLUR, ALUVA. 2. T.H.ALIYAR, S/O.HDROSE, BURAL HOUSE, PARAMBAYAM, CHENGAMANAD. 3. M.M.YUSUF, S/O.MUHAMMED, MANAKKAPARAMBIL, THAIKATTUKARA, ALUVA. BY ADV. SRI.V.K.GOPALAKRISHNA PILLAI THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 8.1.2008, THE COURT ON 08/01/2008 DELIVERED THE FOLLOWING: J.B.KOSHY & K.HEMA,JJ. ----------------------------------------- M.F.A.No. 1468 of 1998 ----------------------------------------- Dated this the 8th day of January, 2008 JUDGMENT Koshy, J. The Insurance Company filed this appeal questioning the award of the Workmen Compensation Commissioner in WCC.128 of 1994. The first respondent driver sustained serious injuries in a motor accident during the course of employment and he claimed compensation of Rs.1,50,000/-. The vehicle was originally owned by the third respondent. Subsequently, it was transferred to second respondent and the Tribunal, on the basis of the medical certificate, found that there is loss of earning capacity of 15% and directed the Insurance Company to deposit the compensation amount. Compensation was calculated taking Rs.2,000/- as the monthly income. The insurance coverage was admitted. One contention taken by the appellant Insurance Company is that since the vehicle was transferred, the Insurance Company has no liability for the workmen compensation liability. The Supreme Court in G.Govindan v. New India Assurance Co. Ltd. (AIR 1999 SC 1398) held that notwithstanding the transfer of the vehicle, the Insurance Company MFA.1468/98 2 will continue to be liable if there is valid coverage of policy on the vehicle insured. 2. Second contention raised is that the accident occurred on 31.1.1994. The Tribunal has taken Rs.1,800/- as the monthly income. The Supreme Court in K.S.E.B v. Valsala (1999 SC 3502) held that the compensation can be calculated under the Workmen Compensation Act depending upon the date of accident, as compensation falls due on the date of accident. Here, the accident occurred in 1994, before the Act was amended in 1995. Before the 1995 amendment, maximum income that can be taken into account for calculation of compensation is only Rs.1,000/-. So, even if the workman is receiving more than Rs.1,000/- per month, for the purpose of calculation of compensation, only Rs.1,000/- can be taken into account. Therefore, compensation payable will be: 1000 x 50 x 203.85 x 15 = 15,288.75, instead of 100 100 Rs.34,440/-. Since the interest amount is related to the date of payment of the amount and the payment of compensation was after the amendment, he is entitled to 12% from the date of application till the date of accident till the date of deposit, i.e., from 31.1.1994 till 15.9.1998. MFA.1468/98 3 3. It was held by the Supreme Court that Insurance Company need not pay penalty, but they are liable to pay interest (vide Ved Prakash Garg v. Premi Devi and others (1997)8 SCC 1). In this case, the award was dated 6.6.1998 and it was communicated later and amount was paid on 15.9.1998 itself. 4. The amount of Rs.15,288.75 rounded to Rs.15,289/- due to the claimant after deducting the amount, if any, debursed shall be paid to the claimant and the excess amount deposited shall be refunded to the appellant forthwith. We are of opinion that the order to pay penalty cannot be sustained. Therefore, the order to pay penalty is set aside. The appeal is allowed, partly. J.B.KOSHY, JUDGE K.HEMA, JUDGE vgs. MFA.1468/98 4 J.B.KOSHY & K.HEMA, JJ. ------------------------------ M.F.A.NO.1468 OF 1998 ------------------------------ JUDGMENT 8.1.2008