FA/278/2002 1/5 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 278 of 2002 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 ? ====================================== UNITED INDIA INSURANCE CO.LTD. Versus KHAIRUNISA BANUBHAI FAKIR AND OTHERS ====================================== Appearance : MR SV RAJU for Appellant. MRS SHILPA D SHAH for Respondent Nos.1 - 3. MR KARTIK V PANDYA for Respondent Nos.1 - 3. RULE SERVED for Respondent No.2. ====================================== CORAM : HONOURABLE MR.JUSTICE KS JHAVERI Date : 02/09/2008 ORAL JUDGMENT 1) By way of this appeal, the appellant has challenged judgment and award dated 26.8.1987 passed by the learned Ex-officio Commissioner for Workmen's Compensation, in Workman Compensation Application FA/278/2002 2/5 JUDGMENT No.12 of 1986 whereby the learned Commissioner, Himmatnagar has awarded Rs.52,788/- and also directed the opponents to pay penalty of 25% of the total amount of compensation. 2. The facts in brief, as emerging from record, are as under: 3. As per the case of the claimants, that deceased Babubhai was working as a driver with opponent no.1 and was earning Rs.600/- per month as salary. That on 16-12-1985, while discharging his duties as a driver on tempo no. GRN 3049, which is of the ownership of opponent no.1, the deceased was proceeding from Bhiloda to Himmatnagar on National Highway No.8 and during that time tempo met with an accident in the sim of village Karanpur. In the said accident, said Babubhai received injuries and as a result of it, Babubhai died on spot. It is also stated that at the time of accident the deceased was 23 years of age. It is also the say of the claimants that the accident has occurred during the course of employment and, therefore, opponent no.1 is liable to pay compensation as admissible under Workmen Compensation Act. It is also the say of the claimants that since the tempo was insured with opponent no.2, opponent no.2 is liable to indemnify liability of opponent no.1. It is also contended that for said purpose notice was given to the opponents, but the opponents have not paid any amount, therefore, the claimants have filed Workmen Compensation Application before Workmen Compensation Commissioner, Himmatnagar. Said application was resisted by opponents by filing written statement at Exh.34 contending that it is for the claimants to prove that the deceased was 23 years of age at the time of the accident. However, factum regarding death of deceased during the course of employment as well as the fact that he was drawing monthly salary of Rs.600/- are admitted. However, it is stated that it is for the claimants to prove that they are dependents FA/278/2002 3/5 JUDGMENT of the deceased and prayed for dismissal of application. Opponent no.2 has also resisted the application by filing written statement at Exh.11 and contended that liability of the insurance company is limited either under the Motor Vehicles Act or as per the policy of insurance company. It is also contended by insurance company that the deceased was not possessing valid driving license therefore, the claim is not required to be granted. It is also contended that the claim of the claimants is excessive and, therefore, claim application is required to be dismissed. After considering the evidence on record, Workmen Compensation Commissioner allowed said application and awarded Rs.52,788/- as compensation and also directed to pay penalty to the tune of 25% on the total compensation amount. 4. Being aggrieved and dissatisfied with the judgment and award passed by the learned Workmen Compensation Commissioner, Himmatnagar, the appellant-insurance company has preferred present appeal. 5. Heard Mr.S.V.Raju, learned Advocate appearing for the appellant- insurance company. He has submitted that the amount awarded by the learned Workmen Compensation Commissioner, Himmatnagar has not been rightly awarded as there is a clause in the insurance policy which provides that in case of accident, insurance company is not liable to pay the amount of penalty. He has also submitted that there is no statutory liability under the Workmen's Compensation Act, 1923 on the insurance company to pay the amount of penalty. He 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 penalty amount. FA/278/2002 4/5 JUDGMENT 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., Mr. Raju 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. Mr.Raju, learned Advocate has also relied upon the decision of the Hon'ble the Supreme Court in case of New India Assurance Co.Ltd. v. Harshadbhai Amrutbhai Modhiya, reported in AIR SC Weekly Vol.3, 2006, 2353, 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 amount of compensation to be paid under the Workmen's Compensation Act. 6. The learned Advocate for the respondent Nos.1 to 3 has submitted that the learned Workmen Compensation Commissioner, Himmatnagar, has rightly awarded the compensation amount with penalty by considering the age of the deceased and the salary which was being paid to the deceased. The learned Advocate has further submitted that the learned Commissioner, Himmatnagar, has rightly come to the conclusion that since appellant herein failed to pay or deposit the amount of compensation it is liable to pay penalty on said amount. Therefore, it is rightly held that the insurance company is also liable to pay compensation amount and penalty 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, Himmatnagar has rightly FA/278/2002 5/5 JUDGMENT awarded compensation and penalty interest thereon. 7. 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 penalty on compensation amount. Therefore, submissions of the learned Advocate appearing for Insurance Company are required to be accepted. Therefore, order impugned herein is required to be modified accordingly. 8. With the above observations, appeal is partly allowed. The appellant herein will not be required to make any payment towards penalty. However, it is held liable to pay principal amount of compensation as awarded by Workmen Compensation Commissioner. It will be open for the claimant to recover amount of penalty from the employer. 9. The appeal is allowed to the aforesaid extent with no order as to costs. (K.S.JHAVERI, J.) *malek