Oriental Insurance Company vs Ashok and Others

A.S. Chandurkar, J.—This appeal filed under Section 30 of the Employees Compensation Act, 1923 takes exception to the judgment of the learned Commissioner for Workmen''s Compensation dated 4-10-2004 to the extent the appellant has been held jointly and severally liable to pay the amount of compensation with 12 % interest per annum along with respondent No. 2.

It is the case of respondent No. 1 that he was employed with the respondent No. 2 on the post of Jobber/Machine Operator. He was receiving salary of Rs. 3500/- per month. In an accident that occurred on 7-8-1999, respondent No. 1 suffered various injuries. He, therefore, filed application under Section 22 of the said Act seeking compensation.

The employer -respondent No. 2 filed its written statement vide Exhibit-14 and took the stand that respondent No. 1 was working on the post of Tackler in the Weaving Department. Occurrence of the accident was not denied. A stand was taken that the employees of the Mill were covered under the Insurance Scheme and hence, it was the liability of the appellant to satisfy the claim.

Written statement was also filed by the appellant taking a stand that the insurance policy did not cover the risk of Jobber/Machine Operator. Further stand was taken that there was no liability undertaken in respect of payment of interest and penalty.

Before the learned Commissioner, respondent No. 1 examined himself at Exhibit-22 and a Doctor at Exhibit-39. Respondent No. 2 examined one witness vide Exhibit-52 while the appellant examined one witness at Exhibit-58. After considering aforesaid evidence, the learned Commissioner came to the conclusion that the appellant as well as respondent No. 2 were jointly and severally liable to satisfy the claim for compensation. Accordingly, both were held liable to pay compensation of Rs. 92,227/- with interest at 12% per annum. Hence, this appeal.

On behalf of the appellant, Shri A.R. Kaple submitted that the appellant was not liable to satisfy the claim for compensation. It was submitted that as per the policy at Exhibit-59 various categories of employees who had been covered had been mentioned. However, a Jobber/Machine Operator was not covered under said policy. It was then submitted that there was a specific endorsement made in the policy that the same would not indemnify the employer in respect of any claim for interest and/or penalty that may be imposed in proceedings under the said Act. It was, therefore, submitted that the learned Commissioner erred in holding the appellant liable to satisfy the claim for compensation. It was then submitted that merely because the letter at Exhibit-28 was issued on behalf of the appellant, the same would not amount to covering risk of the concerned employee. In support of his submissions, reliance was placed on the following judgments:

[1] Ramashray Singh Vs. New India Assurance Co. Ltd. and Others, .

[2] Oriental Insurance Co. Ltd. Vs. Sony Cheriyan, .

[3] New India Assurance Co. Ltd. Vs. Harshadbhai Amrutbhai Modhiya and Another, .

[4] P.J. Narayan Vs. Union of India (UOI) and Others, .

[5] New India Assurance Co. Ltd. Vs. Mohammad Yusuf Inamuddin Pirjade and Others, .

Shri S.A. Kalbande, learned Counsel appearing for respondent No. 1 supported the impugned judgment. It was submitted that all employees of the Mill were covered by the policy in question and, therefore, the appellant was also liable to make payment for satisfying the claim. It was submitted that the appellant did not deny its liability at the initial stage and took such stand only before the learned Commissioner. In any event it was submitted that respondent No. 1 was entitled to receive the amount of compensation as adjudicated.

Shri R.B. Puranik, learned Counsel for respondent No. 2 opposed aforesaid submissions. It was submitted that the risk was duly covered in view of the policy at Exhibit-59. It was submitted that the estimated number of employees mentioned in the policy was 1092 which would also cover respondent No. 1. It was submitted that each category of employees could not be expected to be mentioned in the policy. In so far as the liability for interest is concerned, the learned Counsel placed reliance on the judgment in Smt. Rambhaben and Rashikbhai Madhabhai Koli Vs. Bachubhai Sukhabhai and New India Assurance Co. Ltd., .

With the assistance of the learned Counsel, I have gone through the records of the case and I have heard their respective submissions. The following question arises for determination:

Whether the appellant is liable to pay the amount of compensation and the amount of interest?

In the application for compensation, it was pleaded by respondent No. 1 that he was working on the post of Jobber/Machine Operator. In the written statement filed by respondent No. 2, it was stated that respondent No. 1 was in fact, working on the post of Tackler. In his cross examination, respondent No. 1 has stated that he was working as a Jobber and that Tackler and Jobber was one and the same post. The witness examined on behalf of the appellant stated that except persons mentioned in the policy others were not covered by the same. In his cross-examination, he stated that he did not know how many workers were working in the Pressing Machine out of total of one thousand employees. He admitted that letter at Exhibit-28 had been issued stating that if the certificate of the Civil Surgeon would be submitted, the compensation would be paid to the employee.

Perusal of the policy at Exhibit-59 indicates coverage to 1093 workers in the Textile Mill. The other categories of employee are supervisors, administrative staff, outdoor staff, clerks, gardeners, casual labour and transery. These are the categories of employees duly covered. Each category, therefore, indicates a specific class of employees who are covered. Considering the fact that respondent No. 1 was working as a Jobber/Machine Operator or for that matter as Tackler, it would be difficult to exclude such worker from the category of workers in the Textile Mill. It has not been demonstrated that Jobber/Machine Operator was distinct from the expression "worker" and, therefore, not covered. The decisions in Ramashray Singh (supra) and Oriental Insurance Co. Ltd. (supra), specifically lay down strict construction of the policy so that persons not covered would not be entitled to get benefit of the same. In the present case, considering the nature of work done by respondent No. 1, there is no basis whatsoever to hold that he was not covered by the first category of employees namely 1092 workers. Said finding recorded by the Commissioner, therefore, does not deserve to be interfered with.

However, in so far as the liability for payment of interest is concerned, it is to be noted that there is a specific endorsement in the policy that the same would not cover the liability for interest or penalty. To that extent the submission made on behalf of the appellant by relying upon the decisions in New India Assurance Co. Ltd. (supra), P.J. Narayan (supra) and in New India Assurance (supra) deserve to be accepted. Considering the specific endorsement in the policy, the appellant would not be liable to pay interest on the amount of compensation. The decision in the case of Rambhaben and another (supra) would not apply to the facts of the present case considering the specific clause in the policy. Hence, to that extent, the order passed by the learned Commissioner holding the appellant liable to pay interest 12% per annum will have to be set aside. The point as framed is answered accordingly.

In view of aforesaid discussion, the following order is passed:

(1) The judgment dated 4-10-2004 in W.C.A. Case No. 37 of 1998 is partly modified. It is held that the appellant would not be liable to pay interest at 12% per annum from the date of the accident till realization. The respondent No. 2 alone would be liable to pay 12% interest.

(2) The respondent No. 1 has withdrawn the principal amount on furnishing surety.

(3) Appeal is partly allowed in aforesaid terms. No costs.