Sher Singh vs Rakesh Kumar and Others

Deepak Gupta, J.—The main appeal and the application filed are being taken up together for hearing with the consent of the parties.

The facts necessary for decision of the case are that Sher Singh filed a petition for grant of compensation on the ground that he was an employee of Kaushal Roller Flour Mills, Tahliwal, District Una, H.P. He alleged that Kaushal Roller Flour Mills was owned by Rakesh Kumar who was the sole proprietor of the flour mills. He alleged that during the course of employment his right hand was crushed in the grinding machine which resulted in permanent amputation of all the fingers. The claimant further alleged that his monthly wages were Rs. 2,800 and prayed for compensation accordingly.

Rakesh Kumar was arrayed as the respondent and shown to be the proprietor of Kaushal Roller Flour Mills. In his reply, he stated that in fact he was not the proprietor of Kaushal Roller Flour Mills and the firm Kaushal Roller Flour Mills is a separate juristic entity being a private limited company. He, however, did state that he was the Managing Director of Kaushal Roller Flour Mills and claimant was an employee with Kaushal Roller Flour Mills. It was, however, stated that the wages of the claimant was only Rs. 1,320 per month.

United India Insurance Co. Ltd. had issued an insurance policy covering liability for 25 workers of Kaushal Roller Flour Mills. In its reply, the insurance company also took up the plea that Rakesh Kumar had no contract of insurance with it. It would be pertinent to mention that during the course of the proceedings before the Commissioner, an application under Order 6, rule 17, Civil Procedure Code, was filed by the claimant with regard to mis-description of Kaushal Roller Flour Mills and it was prayed that Kaushal Roller Flour Mills through Rakesh Kumar as Managing Director of the said mills be shown as respondent No. 1. This application was rejected by the Commissioner, Workmen''s Compensation on 22.2.2000. Thereafter the claim petition was also dismissed solely on the ground that claimant was an employee of Kaushal Roller Flour Mills and not of respondent No. 1, hence the petition was not maintainable. Both these orders have been challenged before this Court. By way of abundant precaution C.M.P. No. 1051 of 2005 has also been filed wherein it was prayed that Kaushal Roller Flour Mills through its Managing Director Rakesh Kumar be impleaded as party, respondent No. 3.

Reply to this application was filed by Rakesh Kumar who was the Managing Director of Kaushal Roller Flour Mills and by insurance company. The main ground taken is that the application should not be allowed since even if the application is allowed the petition against Kaushal Roller Flour Mills shall be deemed to have been filed only after allowing of the application and hence it would be barred by limitation.

In this behalf Mr. Baldev Singh, the learned Counsel for the respondent No. 1, places reliance upon the judgment of the Apex Court in Ram Prasad Dagduram Vs. Vijay Kumar Motilal Mirakhanwala and Others, Section 21 of the Limitation Act reads as follows:

Effect of substituting or adding new plaintiff or defendant.--(1) Where after the institution of a suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been instituted when he was so made a party:

Provided that where the court is satisfied that the omission to include a new plaintiff or defendant was due to a mistake made in good faith it may direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on any earlier date.

(2) Nothing in Sub-section (1) shall apply to a case where a party is added or substituted owing to assignment or devolution of any interest during the pendency of a suit or where a plaintiff is made a defendant or a defendant is made a plaintiff.

It is true that this section provides that normally when any person is added as party in a suit, the suit shall be deemed to have been instituted against him on the date when he is made party. However, this is not a universal rule and proviso provides that court can order that the suit shall be deemed to have been instituted against a newly added defendant from an earlier date.

In the present case, right from the very beginning, claimant has been claiming that he was an employee of Kaushal Roller Flour Mills. However, he bona fide believed that Rakesh Kumar was the sole proprietor of Kaushal Roller Flour Mills and, therefore, he sued Rakesh Kumar as the sole proprietor of Kaushal Roller Flour Mills. Thereafter even an application was moved during the pendency of the petition for amendment of the petition. This application was rejected on untenable ground. The learned Commissioner rejected this application mainly on the ground that the application should have been filed under Order 1, rule 10, CPC and not under Order 6, Rule 17, Civil Procedure Code. It is well settled law that if the court has power to pass an order the mere wrong mentioning of the provisions of law is not a sufficient ground to reject the application.

In the present case we are concerned with the proceedings under the Workmen''s Compensation Act. u/s 4A of the Act, it is the duty of the employer to deposit the amount before the Commissioner under the Workmen''s Compensation Act within one month of the accident taking place. In fact, even if a small mis- description of the party comes to notice of the Commissioner, Workmen''s Compensation, it is also his duty to see that the same is corrected. Social welfare legislation like Workmen''s Compensation Act, cannot be brought to naught by technicalities of limitation and mis-description of parties. In this behalf, it would be relevant to refer to Section 10A of the Workmen''s Compensation Act, which reads as follows:

10-A. Power to require from employers statements regarding fatal accidents.-- (1) Where a Commissioner receives information from any source that a workman has died as a result of an accident arising out of and in the course of his employment, he may send by registered post a notice to the workman''s employer requiring him to submit, within thirty days of the service of the notice, a statement, in the prescribed form, giving the circumstances attending the death of the workman, and indicating whether, in the opinion of the employer, he is or is not liable to deposit compensation on account of the death.

This provision of law casts a duty upon the Commissioner, when he receives information from any source that a workman has died in an accident, to issue a notice to the workman''s employer. It is his duty to find out who is the employer. In the present case, the Commissioner had more than sufficient information before him that the claimant had suffered injuries while working with Kaushal Roller Flour Mills of which Rakesh Kumar was the Managing Director. Rakesh Kumar may not have been the sole proprietor of Kaushal Roller Flour Mills but he definitely was the Managing Director of the same. He also admits in his statement in court that claimant met with an accident during the course of his employment. Once these facts were admitted, it was for him being the Managing Director of Kaushal Roller Flour Mills under the Workmen''s Compensation Act to deposit or pay the amount of compensation to the claimant as early as possible. However, this was not done so and instead technical pleas were raised that he has been sued whereas the company should have been sued.

In view of the fact stated above, I am of the considered opinion that application being C.M.P. No. 1051 of 2005 should be allowed and Kaushal Roller Flour Mills through Rakesh Kumar, Managing Director is ordered to be added as party in the present case. In normal routine, after the party is added, notice should have been issued to it. However, in the present case, I find that Rakesh Kumar who is the Managing Director of Kaushal Roller Flour Mills has himself appeared throughout in the proceedings and he is well aware of the entire facts and material on record and keeping in view the fact that the accident occurred on 8.8.1994 and the original petition for the grant of compensation was filed on 10.8.1995, I feel that I should decide the matter at this stage itself.

The material placed on record clearly shows that on 8.8.1994 the claimant met with an accident. Dr. Harish Behal, AW 1, who examined the claimant Sher Singh proved the injuries suffered by him and also proved the disability certificate, Exh. PW 1/A according to which the claimant has undergone post-traumatic amputation of right hand and disability has been assessed at 59 per cent. It would be pertinent to mention that in cross-examination Dr. Harish Behal has stated that while issuing the disability certificate, Exh. PW 1/A, for assessing the compensation, the Schedule attached to the Workmen''s Compensation Act has not been consulted since the same was not available with them.

Claimant Sher Singh while appearing as AW 2 has stated that when he was working on the grinding machine his hand was crushed. He was first taken to District Hospital at Una and thereafter shifted to PGI, Chandigarh where he remained admitted for 52 days. According to him, he is unable to do any work. In cross-examination, he has admitted that Kaushal Roller Flour Mills is a private limited company. He was unable to give particulars or name of the director. He admits that he used to sign the register with regard to his wages.

PW 1, Pawan Kumar has stated that Rakesh Kumar was the Managing Director of Kaushal Roller Flour Mills and the claimant was working in it. He stated that the monthly wages of the claimant Rakesh Kumar were Rs. 1,320 at the time of accident. He states that Rakesh Kumar was the Managing Director of the company where claimant was an employee. He states that Sher Singh during the course of employment met with an accident and suffered injuries. According to this witness, the entire medical expenses were borne by the company. In cross-examination, he states that the workers liability has been covered by the insurance company. The policy of insurance has been placed on record which shows that 25 workers of the company were covered for liability under the Workmen''s Compensation Act. There is an endorsement on the policy that the insurance company is not liable with respect to the penalty and interest.

The payment wages register which has been produced on record shows that Sher Singh was getting a salary of Rs. 1,320 per month at the time of the said accident. According to the Workmen''s Compensation Act, when there is amputation of the hand or thumb and four fingers of one hand then the disability works out to 60 per cent. Therefore, the compensation has to be assessed by taking the loss of earning capacity at 60 per cent. The accident had occurred on 8.8.1994. At that time, maximum wages which could be taken into consideration were Rs. 1,000. 50 per cent of this has to be multiplied by the relevant factor to assess the compensation payable on account of 100 per cent disablement. The claimant was aged 38 years at the time of the accident and the relevant factor is 189.56. The total compensation payable in case of 100 per cent disability would be Rs. 94,780. Since the disability suffered by the claimant has resulted in 60 per cent loss of earning capacity, he is entitled to compensation of Rs. 56,868. The claimant is also held entitled to interest at the rate of 6 per cent per annum on this amount from the date of 8.9.1994, i.e., one month after the date of accident as provided u/s 4A (3) of the Act till the date of deposit of this amount.

In the present case, the employer is trying to escape from its liability to pay compensation on one ground or the other. It was bound to pay the amount due under the Workmen''s Compensation Act within one month of the accident. Section 4A(3)(b) of the Workmen''s Compensation Act provides that if, there is no justification for the delay, the Commissioner can direct that the employer shall, in addition to the amount of the arrears and interest thereon, pay a further sum not exceeding fifty per cent, of such amount by way of penalty. In my opinion, penalty of 50 per cent should be imposed upon the employer in the present case. The accident occurred in 1994 and the claim petition was filed in 1995. The employer Rakesh Kumar who was the Managing Director of the company was arrayed as respondent in the claim petition. No doubt, the company was not arrayed as party respondent but the Managing Director of the company was well aware of the fact that he had been sued by showing him as the proprietor of the concerned company. He does not deny the accident. He does not deny the fact that claimant was an employee of the company. Therefore, he was well aware of the fact that compensation had to be paid by the company. Instead of paying the compensation, he tried to evade this burden by taking the plea that the company was not a party to the proceedings. Keeping in view the spirit of the Workmen''s Compensation Act the plea taken by employer is absolutely immoral and unjustified. Workers belong to poor section of the society. They may or may not be educated. The proceedings under the Workmen''s Compensation Act are not bound by the strict rules of evidence or Civil Procedure Code. The purpose of these proceedings is to ensure payment of compensation, once it is shown that an employee has suffered injuries arising out of or during the course of his employment.

In view of the above discussion, the appeal is allowed and the claimant is held entitled to compensation of Rs. 56,868 along with interest at the rate of 6 per cent per annum w.e.f. 8.9.1994 till the date of deposit of the amount. The claimant is also held entitled to penalty of 50 per cent of the awarded amount, i.e., Rs. 28,434. In view of the clear policy condition that the insurance company is not liable to pay penalty and interest, it is further ordered that the insurance company shall deposit Rs. 56,868 on account of compensation whereas the employer-insured Kaushal Roller Flour Mills which has been impleaded as respondent No. 3, shall deposit the amount of interest and penalty. Both, insurance company and the employer are directed to deposit the amount in the Registry of this Court within eight weeks from today failing which they shall be liable to pay interest at the rate of 12 per cent per annum on the respective amounts due and payable from them with effect from today. No costs.