IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 28.01.2010 CORAM THE HONOURABLE MR. JUSTICE. C.S.KARNAN C.M.A.No.773 of 2008 and M.P.No.1 of 2008 and Cross.Objn.No.33 of 2008 The National Insurance Co., Ltd. Cuddalore .. Appellant/2nd Opposite Party 3rd Respondent in Cross.Obj.33/2008 Vs 1.Sivaraman ..1st Respondent/Applicant / Cross Objc.33 of 2008 2.D.R.G.Blue Metals Kondamoor ..2nd Respondent/1st Opp.Party/ 1st Respondent in Cross.obj.33/08 3.Durai ..3rd Respondent/3rd Opp.Party 2nd Respondent in Cross obj.33/08 Appeal filed under Section 30 of the Workmen's Compensation Act, against the Award and Decree, dated 18.10.2007, made in W.C.No.334 of 2004, on the file of the Commissioner for Workmen's Compensation/Deputy Commissioner of Labour-II, Chennai-6. For appellant : Mr.S.Vadivel and for 3rd Respondent in Cross.Obj.33/08 For respondents : Mr.S.Rajaraman, for R1 for cross objection in 33/08 Mr.N.Prem Kumar, for R-2 for 1st Respondent in Cross.Obj.33/08 Mr.D.Saravanan, for R3 for 3rd Respondent in Cross.Obj.33/08 J U D G M E N T The above Civil Miscellaneous Appeal has been filed by the appellant/second respondent against the Award and Decree, dated 18.10.2007, made in W.C.No.334 of 2004, on the file of the https://hcservices.ecourts.gov.in/hcservices/ Commissioner for Workmen's Compensation/Deputy Commissioner of Labour-II, Chennai-6, awarding a compensation of Rs.1,12,309/-. 2.Aggrieved by the said Award and Decree, the appellant/second respondent, the National Insurance Co., Ltd., Cuddalore, has filed the above appeal praying to set aside the award and decree passed by the Deputy Commissioner of Labour-II, Chennai. 3.The short facts of the case are as follows: On 03.04.2004, at 7.00 a.m. the petitioner, who is a labourer working under the respondent Company, went to the respondent company and was engaged in his work of breaking boulders into small pieces of granite, by means of a hammer. One Sundaramoorthy was breaking stones just behind the petitioner. The stone, which was broken by Sundaramoorthy hit the petitioner in his hip. Because of this, the petitioner turned to the left side. While so, a small piece of stone about 5 Cms. in size, with sharp edge, hit the left eye of the petitioner. Due to pain, the petitioner swooned. The accident happened at about 11 a.m. and he was initially given first aid by one Dr.Sampath, but as the pain in his left eye persisted, he was later on taken to Jipmer Hospital, Pondicherry, where he was admitted as inpatient at 4.30 p.m. on 03.04.2004. The petitioner has lost the power of vision of his left eye and the Doctors have warned him that because of the injury sustained in the petitioner's left eye, there is the likelihood of impairment being caused to the right eye of the petitioner also. The petitioner was discharged from the hospital on 10.04.2004, but still takes treatment from the said hospital as an outpatient. The petitioner has become a disabled person because of the accident. As he has lost his left eye vision, he cannot do any work. As the petitioner has met with the above said accident out of and in the course of his employment in the respondent's company, the latter is liable to pay compensation to him. As the first respondent has insured all his employees with the second respondent, both the respondents are jointly liable to pay compensation to him. As the first respondent has insured all his employees with the second respondent, both the respondents are jointly liable to pay compensation to the petitioner. The petitioner has claimed a compensation of Rs.10,00,000/- with interest at the rate of 12% per annum from the date of filing the claim petition till the date of payment of compensation, from the respondents with costs. 4.The petitioner was being paid at the rate of Rs.150/- per day by the respondent and his wages were paid every week by the respondent. At the time of the accident, the petitioner was aged about 30 years. He had also sent a Notice to the first respondent on 26.07.2004 through his Advocate, demanding a claim of Rs.10,00,000/-, but the respondent has not paid him any compensation for the disability sustained by him in the said accident. 5.The first respondent, in his Counter has resisted the claim stating that the petitioner was not an employee under them and that https://hcservices.ecourts.gov.in/hcservices/ there is no employer-employee relationship between them and that the petitioner was only an employee under one Durai Maistry and that the said Durai Maistry had insured the employees working under him with the second respondent company, namely National Insurance Company Ltd., Cuddalore, under Police No.501503/42/03/8200100. Further, the first respondent has not admitted the age, occupation and income of the petitioner, as alleged in the claim and has also submitted that the claim is excessive and has prayed for dismissal of the claim petition. 6.At this stage, the petition given by the petitioner for admission of the second respondent as a necessary party in the case was allowed by the Deputy Commissioner of Labour-II. 7.The second respondent, in his Counter has resisted the claim stating that the policy produced by the first opposite party are group personal accident policy and that the said polices (3nos) have been issued by them to the insured persons namely Madasamy, Durai and Venu. It has been further submitted that they will be a necessary party only if a policy with workmen compensation coverage is issued. Admittedly, the first opposite party has not produced any policy covering workmen compensation. Further, as per the Workmen's Compensation Act, the first opposite party has to satisfy the award and he is entitled to be reimbursed in the event of valid policy coverage by the Insurance Company. It has been submitted that they are neither a necessary or proper party to the proceeding. Further, it has been submitted that as per the petition averments, the petitioner was admitted in Jipmer Hospital in Pondicherry as inpatient on 22.03.2004 and discharged on 10.04.2004 and as such the allegation of the petitioner, that a piece of stone about 5 Cms. in size, with sharp edge hit the left eye of the petitioner on 03.04.2004 by 11.00 a.m. could not have happened at all as stated in the petition. Further, the age, wage, alleged, disablement of the petitioner has not been admitted by the second respondent. It has further been submitted that the claim of Rs.10,00,000/- is baseless and as such it has been prayed that the claim should be dismissed with costs. 8.At this stage, the said Durai Maistry was added as the third respondent as per the petition given by the petitioner, requesting that he be added as a necessary party. 9.The third respondent, in his Counter has stated that he was a Contractor for the first respondent and was given the work of breaking stones and that he had employed daily labourers to do the said work and that he had taken insurance policies with the second opposite party for the daily labourers working under him to enable him to pay compensation to the labourers, if any untoward accident befalls them during the period of doing work as a labourer under him. He had further stated that the policy taken by him, in this connection ie.Policy No.501503/42/03 8200/00 was valid for the period from 09.10.2003 to 08.10.2004. He had therefore submitted that the https://hcservices.ecourts.gov.in/hcservices/ second opposite party is liable to pay compensation for the injuries sustained by the petitioner in his left eye on 22.03.2004, while he was working as an employee under him. 10.The petitioner was examined as a PW1 before the Deputy Commissioner of Labour-II and has given his sworn affidavit and marked Exs.P1 to P8 in support of his evident. Ex.P1 is the Discharge Summary issued by Jipmer Hospital, Ex.P2 is the Medical Report, Ex.P3 is the Advocate Notice, Ex.P4 is the Acknowledgement Card, Ex.P5 is the Medical Prescriptions, Ex.P6 is the Medical Bills, Ex.P7 is the Complaint given to the Police and Ex.P8 is the Complaint given at Villupuram Police Station. 11.On the petitioner's side, one Dr.Kavitha Subramanian, who had issued the Disability Certificate to the petitioner, was examined as PW2 and she had marked Ex.P9, the Disability Certificate issued by her to the petitioner. One Sundaramoorthy was examined as PW3 and he had also given evidence. On the respondents side no witnesses were examined and no documents were marked. The third opposite party, Durai Maistry was also examined and he also had given evidence. 12.The Deputy Commissioner of Labour-II framed five issues for the consideration namely: (i) Did the petitioner sustain injury while he was working for and during the course of employment under the first opposite party through Duraisamy Maistry? (ii) What is the age and salary of the petitioner? (iii)What is the percentage of loss of earning capacity incurred by the petitioner due to the accident? (iv)What is the quantum of compensation, which the petitioner is entitled to get? (v)Who is liable to pay compensation to the petitioner? 13.The petitioner was examined as PW1, in his chief-examination had deposed that he had been employed by the first opposite party for the purpose of breaking big boulders into small stones and that he had been employed as a daily labourer through Durai Maistry and that he was paid Rs.150/- per day and that his wages were paid on a weekly basis. The PW1 in his chief examination had given the same version of the accident that occurred on 03.04.2004, as he had alleged in his petition. On cross examination, he had admitted that he was employed through Durai Maistry and that Durai Maistry was the Contractor and that he was paid Rs.150/- per day and that he had no documentary proof to show that Durai Maistry was a Contractor. He had also https://hcservices.ecourts.gov.in/hcservices/ admitted that he had no direct contact with the first respondent; that on 03.04.2004, immediately after the accident, he had been admitted, as an inpatient, in Jipmer Hospital, Pondicherry and had taken treatment for nine days, during which time an eye surgery was also done on his eye. 14.One Sundaramoorthy was examined as PW3. In his chief examination he has deposed that he and the petitioner were employed in the first opposite party's firm to break big boulders into small stones; that on 03.04.2004, while he was in the process of breaking a boulder with his hammer, a stone from his boulder had hit the petitioner in his hip and when the petitioner turned his head on the left, a sharp edged stone measuring 5 Cms. had hit against the petitioner's left eye. Due to this, the petitioner had suffered bleeding injury in his eye and so he, Durai Maistry and another person named Vakil had initially taken the petitioner to Tindivanam Hospital for treatment and that subsequently, the petitioner was admitted at Jipmer Hospital, Pondicherry on 03.04.2004 and discharged on 10.04.2004. He had further deposed that due to the injury, the petitioner has lost his left eye vision and that the Doctors at the hospital had informed that even the right eye vision of the petitioner might be affected. 15.Durairaj was examined as RW1. In his evidence, he has adduced that he is a Contractor for the first respondent and had undertaken the work of breaking stones; that for doing such work, he had employed daily labourers; that he had taken a group insurance policy for the daily labourers working under him so as to facilitate payment of compensation, if any untoward accident befalls them during the course of their work; that the insurance policy number taken for workers for the period from 09.10.2003 to 08.10.2004 was 501503/42/03 8200/00; that the petitioner had sustained an injury in his left eye during the course of employment; that the second opposite party is liable to pay compensation to the petitioner; on cross examination he had admitted that the petitioner has been employed him to work in the first respondent's firm; that due to the accident, the petitioner has lost his eye sight and that the group insurance policy taken is for 20 persons and in support of this had marked Ex.R1, the group insurance policy. He had further deposed that the petitioner was working under him in the year 2003-2004. 16.As such, the Deputy Commissioner of Labour considered the Counter of the first respondent, wherein it had been stated that the petitioner has not been employed by them directly and that there is no employer-employee relationship between them. The Deputy Commissioner of Labour-II after scrutiny of Counter filed by the third respondent held that the third respondent was a Contractor for the first respondent company and that he had employed workers under him to carry out the contract work of breaking stones and that as a safety precaution, the workers, he had taken a group insurance policy with the second respondent firm benefit of workers employed under him https://hcservices.ecourts.gov.in/hcservices/ to cover their risks during their period of carrying out work in the course of their employment under him. 17.As such, the Deputy Commissioner opined that all the respondents had admitted that the accident happened and that the petitioner was an employee at the time of accident. From a scrutiny of Ex.P2, it is evident that the petitioner had taken medical treatment. On scrutiny of Exs.P7 and P8, it is found that the details contained herein were in consonance with that of the averments made in the petition and evidence given by him. As such, the Deputy Commissioner of Labour, on considering the evidence given by PW1 and PW3 and also the evidence of RW1 and on consideration of the documents marked as exhibits on the petitioner's side, held that the petitioner has been employed by the first respondent though the third respondent and that he had sustained injuries in the accident caused on 03.04.2004, when he was carrying out work during the course of his employment and so the petitioner was held as an employee as per the Workmen Compensation Act. 18.On the petitioner's side, Dr.Kavitha Subramanian was examined as PW2. In her evidence, she had deposed that she had done a medical examination of the petitioner and had inspected the medical records shown to her by him and that from the medical records it is evident that the petitioner had sustained injury in the left eye Cornea and Selera with veal tissue prolepses very poor vision and has very poor vision and in support of her evidence, she had marked Ex.P9, the Disability Certificate and certified that the disability sustained by the petitioner was 30%. Even on cross-examination, the second respondent was not able to contradict the evidence of PW2. As such, the Deputy Commissioner held that the disability sustained by the petitioner in the accident was 30%. 19.From a scrutiny of Ex.P9, the copy of Group Insurance Policy, it is seen that 20 employees, working under the third respondent, have been covered under the said policy taken with the second respondent firm; that each employee has a risk coverage of Rs.1,00,000/- under the said policy and that the policy is valid for the period from 09.10.2003 to 08.10.2004; that the petitioner had sustained injuries in the accident caused during his period of employment under the first respondent and during the period of validity of the group insurance. Hence, the Deputy Commissioner held that the second respondent is liable to pay compensation to the petitioner. On scrutiny of Ex.P1, the Deputy Commissioner held that the age of the petitioner at the time of accident was 30 years. As the petitioner had not produced any documentary evidence to prove his salary, the Deputy Commissioner held that the salary drawn by the petitioner was Rs.3,000/- per month. The Deputy Commissioner taking into account the age of deceased as 30 years, multiplier as 207.98, disability as 30%, salary as Rs.3,000/- per month assessed his loss of income as Rs.3,000/- X 60/100 X 30/100 X 207.98 = Rs.1,12, 309/-. The Deputy Commissioner of Labour directed the second opposite party to pay the above said award, into the credit of the W.C.No.334 of https://hcservices.ecourts.gov.in/hcservices/ 2004, on the file of the Commissioner for Workmen's Compensation- II/Deputy Commissioner of Labour-II, Chennai, within a period of 30 days from the date of receipt of its Order, failing which the said award amount has to be paid with an interest of 12% per annum from the date of accident till the date of payment of compensation. 20.The learned counsel appearing for the appellant in his appeal has contended that the Deputy Commissioner of Labour failed to see that the appellant had not issued any workmen compensation policy either in favour of the first opposite party or in favour of the third opposite party. Further, it has been contended that the learned Deputy Commissioner of Labour-II, Chennai-6, failed to see that Ex.R1, the policy referred to in the Counter statement filed by the first opposite party was not a workmen's compensation policy and it was a personal accident claim policy and that by virtue of the policy, the beneficiaries must make their claim with the insurance company by filing proof for their claim and that the policy will not enable them to lay their claims before the Commissioner for Workmen's Compensation. Further, it was contended that the learned Deputy Commissioner of Labour, Chennai-6, without valid proof had fixed the monthly income of the claimant as Rs.3,000/- and that the petitioner was employed under the first opposite party through the third opposite party. 21.The learned counsel appearing for the appellant has raised the following questions of law that are to be considered in this appeal namely: 1. Whether Ex.R1 is a Workmen's Compensation Policy to enable the applicant to claim compensation against the appellant? 2. Whether the policy issued under the group insurance scheme covering the personal accident risk of an individual would give raise to any liability on the appellant for indemnifying the liability of the first opposite party? 3. Whether the findings given by the learned Deputy Commissioner of Labour-II, Chennai-6 that the applicant had suffered injuries in an accident during the course of his employment under the first opposite party was correct? 4. Whether the Deputy Commissioner of Labour-II, Chennai- 6, is right in holding that the loss of earning capacity suffered by the petitioner on the basis of percentage of physical disability assessed by Doctor PW2, when admittedly the concept of physical disability and loss of earning capacity are totally different? https://hcservices.ecourts.gov.in/hcservices/ 5. Whether the Deputy Commissioner of Labour-II, Chennai, was right in holding that the monthly salary of the petitioner was Rs.3,000/- after giving a finding that the petitioner had not proved his monthly salary? 22.In support of his contentions, the learned counsel appearing for the appellant has cited the following Judgements: 2009 ACJ 908, High Court of Karnataka at Bangalore, New India Assurance Co., Ltd., V. Shantha and others, the relevant head notes of which are as follows: "Motor Vehicles Act, 1988, section 147 (1) proviso – Motor insurance – Cleaner – Death of – Liability of insurance company – Bus met with accident resulting in death of its cleaner – No statutory coverage for a cleaner in public service vehicle and no contractual liability undertaken by insurance company in the policy – Whether insurance company is liable – Held: no. Motor Vehicles Act, 1988, section 173 and Civil Procedure Code, 1908, Order 41, rule 27 (1) (b) – Appeal – Additional evidence in appeal – Appelate court in order to enable it to pronounce judgment and for substantial cause suo motu directed the insurance company to produce policy covering the offending vehicle – Insurance company produced the same – No dispute about authenticity and custody of policy – Whether the policy can be received on record and considered in deciding the appeal – Held: yes." 2008 ACJ 1974, High Court of Judicature at Madras, United India Insurance Co., Ltd., V. Anjalai and others, the relevant head notes of which are as follows: "Insurance – Workmen's compensation policy – Liability of insurance company – Death of contract labourer engaged by contractor of Electricity Board when he was directed by Electricity Board official to climb up electricity post for connecting cable due to electrocution – Contractor had taken a policy covering his labourers engaged in laying HT/LT cables and allied works but the deceased died while providing service connection to a residence – Agreement between Electricity Board and contractor only to lay HT/LT cables and not to provide service connection – Whether insurance company is liable for the death of labourer – Held: no; risk covered under insurance policy is specific and it cannot be extended; Electricity Board and contractor are liable." "13.From the overall analysis of the pleadings and evidence let in by the claimants, it is clear that the death had occurred due to electrocution, when the deceased executed the work ordered by the official of the Electricity Board and it is outside the scope of the K2 Agreement. The finding of the Tribunal fastening the liability on the insurance company is erroneous and it is liable to be set https://hcservices.ecourts.gov.in/hcservices/ aside. Therefore, the appellant is hereby absolved of their liability to pay compensation to the claimants. 14.The deceased was employed as a contract labourer by the opposite party No.3/contractor by virtue of the agreement and the death has taken place during the course of employment. There is also evidence to show that he had been employed from 1988 onwards, continuously by the contractors. In such circumstances, the opposite party No.3/contractor and the respondent Nos.1 and 2/Electricity Board are liable to compensate the claimants." AIR 1999 SUPREME COURT 3252, Oriental Insurance Co., Ltd., v. Sony Cheriyan, the relevant head notes of which are as follows: "Motor Vehicles Act (59 of 1988), S. 147 – Central Motor Vehicles Rules (1989), R.137, Table 3 – Liability of Insurer – Extent of Terms of policy have to be strictly construed – Motor vehicles permit granted for carrying unhazardous goods – Ethyl Ether specified as hazardous substance in Table 3 of Rs. 137 – Truck carried Ethyl solvent in contravention to terms of Insurance Policy caught fire – Insurer not liable to compensate loss suffered – Ethyl solvent is same substance as Ethyl Ether." "15.The insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more than what is covered by the insurance policy. The being so, the insured has also act strictly in accordance with the statutory limitations or terms of the policy expressly set out therein." 23.The learned counsel appearing for the respondent/applicant argued that the appellant issued the group insurance policy to the third respondent, who was the principal employer. As per policy, the liability of the appellant is Rs.1,00,000/-. The balance award amount should be necessarily paid by the employment. Further, the learned counsel appearing for the respondent argued that the accident happened in the year 2004 and the applicant was a labourer engaged in breaking boulders into small stones. This involves hard manual work for which the claimant was paid a sum of Rs.150/- per day as daily wages, which is reasonable. Further, it is an admitted fact that the accident happened in the course of employment. Supporting the claimant's case, the learned counsel for the respondent cited the following Judgements: 2002-3-L.W.391, High Court of Madras, Balmer Lawrie & Co., Ltd. Etc. v. National Insurance Co., Ltd. & others, the relevant head notes of which are as follows: https://hcservices.ecourts.gov.in/hcservices/ "Workmen's Compensation Act/Insurrance, Contract/Indemnity – According to Policy of insurance in this case, neither the subcontractor nor the sub contractor's workmen, nor casual employees were insured, and premium was paid only for workmen directly employed by the insured – Right of the insured to indemnity, held is limited to the persons for whom proposal has been given – Family of the deceased workmen, held will have the right to look to the terms