IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 3624 of 1983 with SPECIAL CIVIL APPLICATION No.4047 of 1983 and SPECIAL CIVIL APPLICATION No.5929 of 1983 and SPECIAL CIVIL APPLICATION No.6562 of 1984 and SPECIAL CIVIL APPLICATION No.1879 of 1988 For Approval and Signature: Hon'ble MR.JUSTICE S.K.KESHOTE ---------------------------------- ---------------------------------- INSTRUCTED BY MR.MOTWANI, THE THEN ASSTT. SECY. TO THE HON'BLE CJ TO FEED INTO THE COMPUTER. T O C O M P A R E WITH THE ORIGINAL SCRIPT BEFORE ISSUANCE OF WRIT. TRANSFERRED TO COMMONPOOL UNCOMPARED AS INSTRUCTED BY MR.PARAMESHWARAN, ASSTT. SECY TO THE HON'BLE CJ. -- P.S. -------------------------------- ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements? 2. To be referred to the Reporter or not? 3. Whether Their Lordships wish to see the fair copy of the judgement? 4. Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? -------------------------------------------------------------- ORIENTAL FIRE AND GENERAL INSURANCE CO. LTD Versus RANA KIRITSINH JATUBHABHAI -------------------------------------------------------------- Appearance: Mr. Ajay Mehta for Mr. R.H. Mehta for the petitioner in all the Special Civil Applications. In Special Civil Application No.3624 of 1983. Mr. Mehul S. Shah for the respondents nos.1 and 2. Mr. Gaurang H. Bhatt for the respondents nos.3 to 5. In Special Civil Application No.4047 of 1983. Mr. D.M. Thakkar for the respondents. In Special Civil Application No.5929 of 1983 Mr.A.J. Patel for the respondents nos.1 and 2. In Special Civil Application No.6562 of 1984. Mr. T.V. Shah for the respondent no.1. Mr.D.M. Thakkar for the respondent no.2. In Special Civil Application No.1879 of 1988. Mr. P.R. Nanavati for the respondent no.1. Mr. H.J. Nanavati for the respondent no.2. -------------------------------------------------------------- CORAM : MR.JUSTICE S.K.KESHOTE Date of decision: 16/08/96 COMMON ORAL JUDGEMENT : As substantially same issue has been raised in these petitions by the counsel for the petitioners and as such these petitions are being disposed of by this common judgment. Special Civil Application No.3624 of 1983. 2. The respondents nos.1 and 2, herein are the sons of late Jatubha Chakubha Rana who was serving with the respondents nos.3 to 5 as helper for distribution of L.P. Gas Cylinders at their godown at Surendranagar. The respondents nos.3 to 5 are the distributors of the Indane Gas at Surendranagar. On 16.12.1981, late Jathubha was on duty at the godown of the respondents nos.3 to 5. Some unknown persons who may have come to commit theft of LP Gas Cylinders have been challenged by the deceased. Those persons have inflicted injury to the deceased father of the respondents nos.1 and 2, which resulted in his death. Those persons had also committed theft of eight LP Gas cylinders. As the death of the father of the respondents nos.1 and 2 had been in accident arisen out of and in course of employment as workman with the respondents nos.3 to 5, the respondents nos.1 and 2 have filed an application for compensation of Rs.30,000/- in the court of Civil Judge (SD) and Ex Officio Commissioner for Workmen's Compensation, Surendranagar. In the claim application, the petitioner was originally not impleaded as party. The respondents nos.3 to 5 have taken the defence that the petitioner is liable to pay amount of compensation claimed by the respondents nos.1 and 2 in the case. on this plea of these respondents the Court summoned the petitioner in the proceedings and the petitioner filed its reply at Exhibit No.21. The defences taken by the petitioner in its reply in the proceedings are as follows, (i) the deceased was not the workman of the respondents nos.3 to 5; (ii) the death of the father of the claimants was not caused in an accident arising out of and in course employment as workman the respondents nos.3 to 5; (iii) as per the terms of the insurance policy, the coverage was given to two clerical employees and eight employees engaged in the distribution of LP Gas cylinders and deceased was not covered under the said policy because he was a watchman and therefore, the company is not liable to pay any compensation for his death. The learned court below framed many issues in the case but it appears that the petitioner did not press for framing of any issue on the pleas taken by it in its reply. The learned court below under its award dated 14.12.1982 awarded Rs.18,000/- as a compensation to the respondents nos.1 and 2 with interest thereon @ 6 % p.a. from 17.12.81 till the date of realisation of the amount, and Rs.150/- as costs of the application. It has further been ordered that if this amount of compensation costs and interest is realised from the opponents, it shall have a right of being reimbursed to this extent by the Oriental Fire and General Insurance Co. Ltd. with which the employees of the opponents were insured. The claim application of the respondents nos.1 and 2 has been decided by the court on 14.12.1982. The petitioner filed this writ petition before this court on 15.3.1983. In this petition, the order has also been challenged of the court dated 14.10.1983 under which the Collector was directed to realise this amount from the Insurance Company. Special Civil Application No.4047 of 1983. 3. The case of the respondent no.1, who was the applicant before the Civil Judge (SD) and Ex Officio Commissioner for Workmen's Compensation, Amreli, was that he was serving in Kishor Oil Mills, Amreli on daily wages. The respondent no.2 herein is the owner of the said Mill. On 18.8.1982 when he was working in the Mill of the respondent no.2 at night his left leg got into groundnut seeds expeller and thereby he received injuries on his left ankle and there was a fracture and bone had come out. As the respondent no.1 sustained these injuries in an accident arising out of and in course of employment he prayed for compensation of Rs.14,500/- and Rs.1000/- as expenses incurred after treatment, in the application filed before the lower court. In the claim application the respondent no.1 impleaded both the owner and the Insurance company, the petitioner herein, as opponents. Both the respondent no.2 and the petitioner contested the claim of the applicant- respondent no.1. The petitioner has taken defences. (i) it is not necessary party to the application; (ii) it has contractual liability and not statutory; (iii) there is no privity of contact between the company and workman; (iv) the company is not liable for the interest, penalty and costs as no information of claim or claim papers were supplied in time. The court below framed many issues in the case but it appears that the petitioner did not press for framing of any issue on the pleas taken by it in its reply. The court found that the respondent no.1, the applicant therein, has sustained the injuries in an accident arising out of and in course of the employment which resulted in partial disablement to the extent of 50%. The court has assessed Rs.14,900/- as the amount of compensation to be granted to him. Order of payment of the amount of compensation has been made against both the respondent no.2 and the petitioner. No award of interest, penalty or costs is made in this case by the court. There is no dispute in this case that the respondent no.2 has taken the policy of Workmen's Compensation Act, 1923 in respect of all of its employees. The court below made award in this case on 19.2.1983. It is significant to mention here that the petitioner has not put appearance in final arguments. It also does not appear from the award of the court below that the petitioner has produced any evidence in support of its defence. This petition is filed by the petitioner before this court on 13.6.1983. Special Civil Application No.5929 of 1984. 4. The respondents nos.1 and 2 herein were the applicants before the Civil Judge (SD) and Ex Officio Commissioner for Workmen's Compensation at Godhra. The respondents nos.1 and 2 are the parent of late Shri Girish Kumar Annakutta Nair, workman who died in an accident arising out of and in course of employment on 31.12.80 at the premises of the respondent no.4. The deceased workman was serving as Mistri with the respondent no.3 on the monthly salary of Rs.900/-. The respondent no.3 had taken a contract of erecting of factory building of the respondent no.4. The respondent no.4 had got the person employed in the construction insured with the petitioner. The wall of the factory fell down and the deceased was crushed under the said wall and died immediately. The respondents nos.1 and 2 filed an application for compensation under the provisions of the Workmen's Compensation Act, 1923 and Rs.30,000-00 claimed therein. In the claim application, the claimants have impleaded the principal employer, contractor and insurance company as parties. The principal employer did not contest the claim application. The contractor, the employer though filed reply to the claim application but did not dispute the claimant's claim. The contractor stated that the insurance policy was taken by the principal employer for the workmen who worked in construction of factory building and as such, the liability is of the insurance company of payment of the compensation to the dependents of deceased employee. The Insurance company has filed the reply to the claim petition and has disputed the claim as a whole. the defences taken by the Insurance Company, the petitioner herein, are as follows, (i) as per the terms and conditions of the policy, the company under the policy was not liable in respect of the insurer's liability of the employees of the contractor. (ii) the respondent no.4 has very specifically entered into contract with the petitioner for his own employees and those were only insured and in this case, the deceased being employee of the contractor who has no contract with the company and hence the petitioner is not liable for the compensation. The court below framed many issues in this case but it appears that the petitioner did not press for framing of any issue on the pleas taken by it in its reply. Not only this but the petitioner also did not produce any evidence in this case also. The court below allowed the application of the claimants and amount of Rs.30,000/- was awarded as compensation with interest @ 6% p.a. The costs has also been awarded. Award has been made on 4.2.1983 and this writ petition is filed by the petitioner on 27.09.1983. Special Civil Application No.6562 of 1984. 5. The respondent no.1, in this Special Civil Application, filed an application for claim of compensation under the provisions of Workman's Compensation Act, 1923 before the Civil Judge (SD) and Ex Officio Commissioner, Junagadh, claiming Rs.50,000/as compensation for the death of her husband, Shri Harsukhlal Tribhovandas Murabia, who died on 6.1.1983 in an accident arising out of and in course of employment. The husband of the applicant - respondent no.1 herein, was working in the Ajanta Printing Press at Junagadh of which the respondent no.2 herein, is the owner. He was getting Rs.600-00 as salary and Rs.10.00 for over time work. He was also getting the miscellaneous expenses for tea, cigarettes, etc. and in all the deceased was getting Rs.1,000-00 per month. The respondent no.1 has come up with the case that her husband died of heart attack which was result of his hard work on the previous day, and he was working upto 8.00 PM, in the employment of the respondent no.2. The respondent no.1 has further stated that the owner of the press was having the insurance policy of the compensation under Workmen's Compensation Act, 1923. Both the petitioner and the respondent no.2 have contested the claim application of the respondent no.1. The defences taken by the petitioner are, (i) the deceased workman did not die of an accident arising out of and in course of employment; (ii) the workman died of his natural death; (iii) the primary liability to pay compensation is that of employer and liability of the company is only a contractual one and as such it is not a necessary party to the claim application; (iv) indemnity granted by the policy is only in respect of compensation payable and not in respect of the penalty, interest and costs. The Workmen's Compensation Commissioner awarded an amount of Rs.21,000/- towards the compensation and Rs.5250/- towards penalty. Interest @ 6% p.a. and costs have also been awarded by the court below to the claimant. The award has been made by the court below against both the petitioner and the respondent no.2. The award was passed on 26.08.1984 and this petition is presented by the petitioner in this court on 6.12.1984. Special Civil Application No.1879 of 1988. 6. The respondents nos.1 and 2 were the claimants before the Workmen's Compensation Commissioner, Junagadh. Deceased workman Shri Hira Lakham was working with the respondent no.3, herein, at his vessel "Meghgarjana" registered at Veraval Port No.3325 and he was getting Rs.450-00 as salary. He was also getting meal and other expenses from the employer during his voyage travel. On 20.5.1984 the vessel was near the Mastra Tapu, Parvan was break and deceased sustained injury on head and immediately on 25.5.1984 entire vessel was drown under the water and deceased died. The claim has been made of Rs.28,764-00 as compensation, Rs.4050/- as salary, Rs.14,382/- as penalty and Rs.253.80 as notice charges. The petitioner has taken the defence that it is liable to only reimbursement to owner, without prejudice to their contention. It has denied each and every allegation made in claim application and further defence has been taken that the court has no jurisdiction to decide the matter. The Commissioner on 29.9.1987 made the award and the petitioner has filed this petition in this court on 3.12.1987. The Commissioner has awarded Rs.19,200/- as compensation with interest @ 9% from the date of the application till date of realisation of the amount, Rs.8600/- as penalty and further interest has been awarded on the penalty amount in case the said amount is not paid within the stipulated time, and cost of the application has also been awarded. 7. In Special Civil Application No.3624 of 1983, the court granted interim relief in favour of the petitioner and the recovery proceedings of the amount awarded by the Commissioner has been stayed. On 1.12.1983 this Court made final order and interim relief granted earlier was directed to continue to operate until further orders. It is not in dispute that the interim stay order continues till day. 8. In Special Civil Application No.4047 of 1983, the order has been made by this Court on 29.8.1983 that meanwhile ad interim relief against withdrawal of the amount deposited in the Commissioner's Court. On the record of this case I do not find any order of the court permitting the claimants withdrawal of deposited amount of compensation from the Court of Commissioner. 9. In Special Civil Application No.5929 of 1983 this Court made order, "Ad interim relief of stay of the award, so far as the appellant, Insurance Company is concerned, on the condition that the appellant, Insurance Company shall deposit in the Court of Commissioner, Godhra in Compensation Case No.23/81 an amount of Rs.1000/- (one thousand) to be paid to the heirs of the deceased workman by way of costs. Such deposit to be made within two weeks from today." On 24.9.1986 this Court passed the order, "Ad interim relief is confirmed on the condition that the petitioner, Insurance Company deposits before the Commissioner of Workmen Compensation, Panchmahal at Godhra, the amount awarded together with interest and costs within four weeks from today. On such deposit being made, an amount of Rs.30,000/- shall be deposited in the joint names of the respondents in the Fixed Deposit for a period of 37 months with a Nationalised Bank. The respondents shall be entitled to withdraw interest accruing due on the Fixed Deposit as and when such interest becomes due and payable without furnishing security. They shall, however, not be entitled to raise any loan or encash the Fixed Deposit before maturity. The balance of the amount shall be paid to the respondents without furnishing security. Amount of Rs.1,000/- paid by the petitioner - Insurance Company shall be adjusted towards the aforesaid amount to be deposited by the Insurance Company. It will be open to the respondents to take appropriate action against the employer against whom also award is passed for the recovery of the amount due to them under the award." 10. In Special Civil Application No.6562 of 1984 this Court made the order; "Notice returnable on 18.1.85. In the meanwhile, there will be an order restraining the withdrawal of the amount in excess of Rs.21,000/- (Rupees twenty one thousand) and the proportionate interest on it as awarded. We make it clear that this order does not stand in the way of the disbursement of the Workmen's Compensation Commissioner's award of Rs.21,000/- and interest and in fact, we expect it to be disbursed immediately. We will hear the matter on 18th January 1985. Dt.2.1.85 Sd/-" On 21.1.1985 the interim order was made absolute by this Court. 11. In the Special Civil Application No.1879 of 1988 this Court granted interim relief in favour of the petitioner on 18.4.1988 which is as follows, "Rule. To be heard with Special Civil Applications Nos.3624/83 and 6562/84. Ad interim stay against recovery of the amount from the Insurance Company on condition that Rs.19,200/- together with interest and proportionate costs is deposited in this Court within eight weeks from today. On such deposit, the Registrar to invest the amount in long term Fixed Deposit and pay interest six monthly to the claimants in whose favour the award is made." 12. In all these Special Civil Applications the learned counsel for the petitioners, therein, submitted written submissions. Now I will briefly state the submissions raised by the petitioners in their written statements/ arguments. 13. Substantially the submissions in all these petitions are same and gist thereof is as follows, (i) Liability under Workmen's Compensation Act is fixed by sec.3, whereby an employer is liable to pay compensation in case of personal injury to the workman arising out of any accident, which occurs in the course of employment. It is, therefore, submitted that the Commissioner for Workmen's Compensation has jurisdiction only to determine compensation payable to a workman by his employer. It is, therefore, submitted that since the Act empowers the Commissioner for Workmen's Compensation only to determine compensation which is payable by the employer to the employee, there cannot and does not arise any question of the Commissioner for Workmen's Compensation being entitled to pass any award against the petitioner - insurance company, which has issued a policy for indemnifying the employer. (ii) In this regard, it is further submitted that the provisions of the Workmen's Compensation Act, 1923 are quite distinct from the provisions of the Motor Vehicles Act. It is submitted that under the provisions of sections 95 and 96 of the Motor Vehicles Act, 1939, statutory insurance coverage is provided for certain class of workman involved with the use of the vehicle. The sec.96 of this Act also provide that an insurer (insurance company) would be liable to satisfy an award as a judgment debtor. The case of statutory liability in respect of a workman in relation to the M.V. Act is quite distinct from the liability under the W.C. Act. (iii) Once the claim is made solely under the provisions of the W.C. Act with no involvement of the Motor Vehicles Act, there is no statutory liability cast upon the insurer to satisfy an award. The W.C. Act also does not provide for any such compulsory statutory insurance. In the aforesaid premises, it is submitted that the Commissioner for Workmen's Compensation in the present case had no jurisdiction to pass any award against the petitioner. (iv) The judgment of this Court reported at 1974 ACJ 55 is in relation to a claim by the heirs of the driver, employee of the insured. It is submitted that in the said judgment, the insurer (insurance company) is held liable, on an interpretation of the provisions of the W.C. Act, 1923 read together with the provisions of sections 95 and 96 of the M.V. Act, 1939. It was held in para 4 of the judgment that in case of a motor vehicle accident, such a deeming fiction may arise because of the subsequent legislative scheme. In para 5 of the judgment, it was held that in a compulsory statutory insurance cover, the Commissioner for Workmen's Compensation can determined the issues of compensation. The said judgment has no bearing with the facts of the present case and the ratio of the said judgment can, by no stretch of imagination, be made applicable to the facts of the present case. It is submitted that in the present case, deceased was not a workman as envisaged by the M.V. Act, 1939 and the death of the deceased was also not due to any involvement of any Motor Vehicle and hence the provisions of sections 95 and 96 of the M.V. Act, 1939 would not be attracted and consequently, no liability can be fastened on the petitioner - insurance company. Further there is no statutory insurance cover. (v) It is reiterated further that W.C. Act, 1923 casts a statutory liability only upon the employer for payment of compensation and no such statutory obligation is cast upon the insurance company or any other person, except for the employer. It is submitted that sec.14(1) of the W.C. Act, 1923 provides for the liability of the insurance company. Thus, the legislature in its wisdom and after due consideration has cast a statutory liability on the insurance company to satisfy an award only in case where there is an insolvency of the employer and in no other case. It is, therefore, submitted that once the legislature in its wisdom has enacted a provision casting a statutory liability on the insurer only in cases of insolvency of the employer, there cannot and does not arise any question of the Commissioner for Workmen's Compensation in the first instance holding the insurance company liable to satisfy the award. (vi) It is further submitted that such assertion of jurisdiction by the Commissioner for Workmen's Compensation is contrary to the mandate of the legislature and cannot, by any stretch of imagination, be countenanced. It is, therefore, submitted that in such circumstances the award of the Commissioner for Workmen's Compensation against the petitioner - insurance company is ex facie bad, illegal and without jurisdiction and hence is required to be quashed and set aside. (vii) It is further submitted that the High Court of Madras in the judgment reported at 1981 ACJ 532 has specifically held that in the absence of any provisions in the Act, there cannot be any direction by the Commissioner for Workmen's Compensation in the exercise of powers under W.C. Act, 1923 to pay compensation. It is further submitted that in the judgment it has been specifically held that there can be no award against the insurance company except for cases of insolvency of the employer, where, as stated hereinabove, by the operation of the provisions of sec.14, the insurance company can be held liable. (viii) It is further submitted that High Court of Madhya Pradesh has also in the judgment reported in 1984 ACJ 741 held that except for cases of insolvency of the employer, the Commissioner cannot fasten any liability on the insurance company. In the said judgment, it is also further held that statutory liability is cast only upon the employer and it is only the employer against whom the Commissioner for Workmen's Compensation can pass an award. (ix) The Kerala High Court has also, in the judgment reported in 32 FLR 371 held that no award can directly be