c^- C^J. 'as-y ^usauSBS)UBW»M^aSSSifijCS—n^a IN THE HIGH COURT OF CHHATISGARH_AT BILASPUR (C.G.) MISC. APPEAL [C] No.:-^1 /2009 S.B. APPELLANT: - [Non-applicant no. 1] -^s •?-.• ^'.. ^- v Basant Roadways Conipany, V Through its Proprietor:- x^ \G^..--'-'y •y'' -•• '^\^y~ ^ r J) ^^•^ y^^-- •:"^^" ^•'' Arvind Agrawal, Age^Zyears, S/0- Late Shri Radheyshyam Agrawal, By Profession Proprietor of Basant Roadways Company, R/0:-Seth Basant Lal Street, Near Brahmad Road, Ambikapur, Tahsil Ambikapur, Distt. Suruguja [C.G.] [Owner ofthe Vehicle BUS-C.G.-IS/ZA/ 2620] :VERSUS: RESPONDENTS: - (Claimantl [Non-applicant no.2] 1. Anil Singh, Age:-36 Yrs, S/0 Shri Parmanand, By Profession Bus Diver, R/0 Behind Chhabra House Bus Owner, Namnakala, Near Ring Road, R/0 Village-Gangapur Khurd, P.S. Gandhi Nagar, Ambikapur, Tahsil Ambikapur, Distt. Sumguja [C.G.] [Driver ofthe Vehicle Bus-C.G.-15/ZA/ 2620] 2. The Unlted India Insurance Com. Ltd. Through its Branch Manager, Madina Building at Raipur, Jail Road, Raipur, Distt. Raipur-[C.G.] [Insurance Company ofthe Vehicle Bus-C.G.- 15/ZA/ 2620] -: MEMO OF MISC.APPEAL UNDER SECTION 30 OF WORKMEN'S COMPENSATION ACT,1Q23^ HIGH COintT OF CBOHATnSQARH AT BILA3PXJR APPBLLANT RESPQNDENT M.A.C. No. 841 OF 2009 Basant Roadways Company Versus Anil Singh aad another SmGI*B BENCai:- Hon. Shri N.K. Agarwal, J PRBSEaiT :- Stari J.A. Lohani, Adv. for fhe appeUant Sbri A.N. Bhakta, Adv. for respondent No. 1. Shri Dashra.th Oupta, Adv. for respondent No. 2. ORAL ORDER (5-3-2010) 1. This is employers appeal against fhe award dated 9-3-2009 passed by the Coiiunissioner for Workman Compensation- cum-Labour Coiirt, Amblkapur (brieffy, the Coimiussioner^ m Case No. 14/WC Act/2005 NF challenging fhe T^rt ofthe award whereby and whereunder fhe liability of payment of penalty of mterest has been fastened upon fhe appellant/employer by learned Commissloner. 2. Brief facts of fhe case are that the respondent No. 1 was working under tfie employment of appellant as bus driver. On 4-7-2004, the respondent No. 1 sustained injuries arising out of aad duitng the course of employment. The respondent No. 1 filed claim before the Commissioner. The appellant appeared before fhe Commissioner and denied his liability to pay any compensation to the respondent No. 1. It was furfher pleaded fhat fhe Uability, if any, is of the respondent No. 2/tasurance Company as the vehicle was insured with'the respondent No. 2/Insurance Company at fhe time of accident. Leamed Commissioner on a dose scrutiny of the evidaace led, material placed and submissions made held that the accident anse out of and diiring fhe course of employment; assessed montKly w^es ' ofthe respondent No. 1 as Rs. 3,000/-, assessed permanent disability to the extent of 10% and lookmg to the age of the respondent No. 1 as 36 years at the time of accident. fi$?'j awarded Rs. 35035/- as compensation holding the appellant and respondent No. 2/Insurance Company Uable for its payment Leamed Cammissioner also ayarded Rs. 17500/- as penalty under Section 4-A of fhe Workmen's Compensation Act and iaterest at bank rate fi^rn the date of appHcation tiU its payment ^ainst fhe appellant only. 3. The appellant feeling a^rieved by the part of fhe award whereby aad whereunder the appellant was made liable for payment ofpenalty aad interest preferred this appeal. 4. The appeal was admitted for heming on tfae following substantial question aflaw:- "Whefher Commissioner Compensatron was not justttied to impose the penalty and Interest upon the appeUant ?" 5. Shd J.A. Lohani, leamed counsel for the appeUant wouM submit tihat although m view of the decision of the Supreme Coi.urt in case of New India Assurance Co. Ltd -v- Marshadbhal Amrutbhal Modhiva and another1, the tasurance Company is not liable for payment of penalty and penalty part of the award has to be paid by &e appellant but so far as interest part ofthe award is concemed, since the policy of insurance is a motor vehicle policy, fheEefore, the interest part of fhe award is certainfy payable by the respondent No. 2/Insurance Company and leaned Conttiaissioner has erred in fastening fhe IlatMlity of payment of iaterest part of fhe award upon fhe appeUant/eiaployer. 6. On the other hand, Sbri Dashrath Gupta, learrued (»unsel appearing for (he respondent No. 2/tasuran(% Compaay supported the award and subinitted that leanied Commissioner has rightly fastened fhe liability to pay interest upon the appellant. 7. I have heard leamed counsel for fhe parties airi perused the impugned award. 8. ,The issue involved in fhe present case for decision making is whether the amount of interest awarded by the T92 1 Artn/*^^<rt ^-</*< < Af^ /%. ff 8 •^T^' '•^'"^ JS ^ EffleESS Commissioner is payable by fhe employer or by fhe Insurance Company m a policy issued ynda- the Motor VehiclesAct, 1988. 9. The Supreme Court in case of I&mla Cbsdnrvedi —v- National Insurance Comoanv and others2 observed in para 7 and 8 as unden- "7. fa. Ved Prakash Gca-g v. Premi Dew (1997) 8 SCC 1 thls Court observed fhat the insuraace companv is liable to pay not only fhe principal amount of compensation payable by fhe insurer emplcyea- but ateo interest thereon if ordered by the Conamissioner to be paid to the insured employee. The insurance company is Uable to meet the claim for compensation alor^ with interest as inaposed on the InsureT employca' by fhe Act on conjoint operation of Sections 3 and 4-A(3)(c^ of fhe Act. It was, however, held that it was fhe liatallty of the insured employer alone in respect of additional amount of compensation by way of penalty uiider Sectton 4- A(3)(fc)oftheAct. 8. In New Sidia Assurance Co. case 2006(5)SCC 192, yed Prakash Gcay case (supra) was distinguishe^ on facts. It was oteerved fUat in fhe sald case the Court was not concemed wlfh a case where an accident had occurred by use of motor vehicle m respect whereofthe contract of insurance will be govemed by the provisions of fhe Motor Vehicles Act, 1988 (m short "theMVAct"): "19. ... a contract ofinsiirance 1s govemed ly the provisions of (te Insurance Act {, 1938 (In short the InsuranGe Act;)}. Unless the said contract is govemed by the provisioi^ of a statute, the parties are free to enter into a eoatract as [per] thar own volition. The Act does not contain a provision like Section 147 of fhe Motor Vehicles Act. Where a statute does not provide for a compulsory msuraace or fhe extent fhereof, ... the parties are free to choose fheir own tCTms of contract. In that view of fhe matter, contracting out, so far as [the] raimbursement of amount of interest is concemed, ... is not prohibited by a statute." [New India Assurance Co. case^, SGC p 198, para 19) This position has been reiterated in P.J. Naraycm v. Union o/Aidia (2006(5) £CC 200^. ta fhe instant case the position is different. The accident in questicMi arose on account of vehteular acddent and the provisions of the MV Act are clearly applicable. We have gone through the policy of insurance and we find that ho such exception as was the case in New Mdia Assurance Co. case (supra) was stipulated in (he policy of 2009(1)SCC487 10. insurance. Therefore, the Insurance Company is liabte to pay the interest. In case of New Indla Assurance Co, Ltd -v- Harshadbhai Amrutbhai Modhlva and another (supra), the Supreme Court was not conceraed wifli a case where an accident had occuxred by use of motor vehicle in respect whereof the confa'act of insurance will be govemed by fbe provlsions ofthe Motor Vehicles Act, 1988. 11. By applying fhe legal proposition of law as eniindated by fhe dicta of Supreme Court In the above referred case in the facts of fhe present case, it is crystal clear fhat the accident in question arose on account ofvehiei-daT accident and policy issued is under the provisions af MotcH- Vehicle Act, and fherefore, I am of fhe considered opinion that the Insurance Company atthou^i not liable to indeinnify the insured against the amount of penally imposed a^unst fhe employer but is certainly liable to indeiimify fhe employer/ appeUant against the part of award by which interest has been awarded by leamed Conunissioner. 12. In vlew of above, the appeal is allowed in part. It is held fhat the respondent No. 2/Insurance Company is also jouitly and severely Uable to pay interest to the respondent No. 1/claimant as awarded by leamed Ctoinmissioner. In order to avoid any future dispute with regard to rate of interest of scheduled baiik, I propose to award interest at the rate of 12% per aiuiiim fi-om the date of application till its payment. Three months time fi-om today is granted to the respondent No. 2/Insurance Ctompany to deposit fhe interest part of fhe award with leamed Commissioner. Sd/- N.K. Agrawal Judge