The High Court
Case Details
- 1 - NC: 2025:KHC:22564 MFA No. 5591 of 2016 C/W MFA No. 6579 of 2016 HC-KAR IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE UMESH M ADIGA MISCELLANEOUS FIRST APPEAL NO. 5591 OF 2016 (WC) MISCELLANEOUS FIRST APPEAL NO. 6579 OF 2016 C/W IN MFA No. 5591/2016 BETWEEN: UNITED INDIA INSURANCE CO. LTD. DO-VI NO.89/1, II FLOOR, 11TH CROSS SAMPIGE ROAD, MALLESHWARAM BANGALORE - 560 003 THROUGH ITS REGIONAL OFFICE KRISHI BHAVAN, 5TH FLOOR, NRUPATHUNGA ROAD BANGALORE - 560 009 REP. BY ITS MANAGER SMT. BHARATHI (BY SRI. KRISHNA KISHORE S., ADVOCATE) …APPELLANT AND: 1. MR. GONI MIYA @ MIYA GANI AGED ABOUT 55 YEARS S/O LATE ALEM Digitally signed by SHARADAVANI B Location: High Court of Karnataka - 2 - NC: 2025:KHC:22564 MFA No. 5591 of 2016 C/W MFA No. 6579 of 2016 HC-KAR
Legal Reasoning
claimants is that there is no dispute in respect of wages earned by the deceased at Rs.12,000/- per month. Therefore, the - 11 - NC: 2025:KHC:22564 MFA No. 5591 of 2016 C/W MFA No. 6579 of 2016 HC-KAR same ought to be considered while calculating compensation. Except the self serving statement of the clamant, there are no other materials to prove the same. Respondent except filing written statement did not prosecute the case, at least, the claimant should have summoned concerned officials of respondent No.1 - Company to prove the said contention. In the absence of required materials, it is difficult to believe that income of the deceased was Rs.12,000/- per month. The Trial Court has rightly taken the income as Rs.8,000/- per month and this does not call for any interference by this Court. 14. The submission of the learned counsel for the claimants that the Commissioner ought to have directed respondent No.1 to pay penalty as provided under the provisions of Employees Compensation Act. To consider the same it is necessary to refer Section 4A of the Employees Compensation Act, which reads as under: "4A. Compensation to be paid when due and penalty for default.--(1) Compensation under section 4 shall be paid as soon as it falls due. (2) In cases where the employer does not accept the liability for compensation to the extent claimed, he - 12 - NC: 2025:KHC:22564 MFA No. 5591 of 2016 C/W MFA No. 6579 of 2016 HC-KAR shall be bound to make provisional payment based on the extent of liability which he accepts, and, such payment shall be deposited with the Commissioner or made to the employee, as the case may be, without prejudice to the right of the employee to make any further claim. (3) Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner shall-- (a) direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve per cent. per annum or at such higher, rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government by notification in the Official Gazette, on the amount due; and (b) if, in his opinion, there is no justification for the delay, 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:" 15. Undisputedly, the employer did not deposit the admitted claim within a period of 30 days from the date of incident, either in the office of Commissioner or directly to the claimants. It is not the case of respondent No.1 - employer that any such amount has been paid. The Trial Court has lost sight of the said provision and has not directed the employer to pay penalty as per above rules. Considering facts and circumstances of present case, respondent No.1 is directed to pay penalty of 50% of compensation to the claimants. - 13 - NC: 2025:KHC:22564 MFA No. 5591 of 2016 C/W MFA No. 6579 of 2016 HC-KAR 16. For the above said discussions, I answer substantial question of law No.1 in the affirmative; question No.2 in negative and question No.3 in the affirmative and proceed to pass the following:
Arguments
2. SMT. SAYRA BIBI W/O MR GONI MIYA @ MIYA GANI AGED ABOUT 51 YEARS BOTH ARE RESIDENTS OF RASHIDANGA VANKAND KOTHWALI THANA, COOCH BEHAR DISTRICT WEST BENGAL 3. THE MANAGING PARTNER SNC CONSTRUCTIONS RAJA SANNIDHI SURVEY NO.20/9 AND 20/P2 KAMMANAHALLI VILLAGE BEGUR HOBLI BANGALORE-560 083 ( R1 AND R2 SERVED AND UNREPRESENTED; V/O DATED 20.01.2020 NOTICE TO R3 IS TAKEN AS SERVED) …RESPONDENTS THIS MFA IS FILED U/S 30(1) OF W.C. ACT AGAINST THE JUDGMENT AND AWARD DATED 07.06.2016 PASSED IN ECA NO.493/2014 ON THE FILE OF THE XXI ADDITIONAL SMALL CAUSE JUDGE, & XIX ACMM, MEMBER,MACT, BENGALURU, AWARDING COMPENSATION OF Rs.8,72,640/- WITH INTEREST @ 12% P.A. FROM THE DATE OF INCIDENT TILL REALIZATION. - 3 - NC: 2025:KHC:22564 MFA No. 5591 of 2016 C/W MFA No. 6579 of 2016 HC-KAR IN MFA NO. 6579/2016 BETWEEN: 1. GONI MIYA @ MIYA GANI S/O LATE ALEM AGED ABOUT 55 YEARS 2. SAYRA BIBI W/O GONI MIYA @ MIYA GANI AGED ABOUT 49 YEARS BOTH ARE RESIDING AT RASHIDANGA VANKAND KOTHWALI THANA COOCH BEHAR DISTIRCT WEST BENGAL (BY SRI. SHRIPAD V SHASTRI, ADVOCATE) ...APPELLANTS AND: 1. THE MANAGING PARTNER SNS CONSTRUCTIONS RAJA SANNIDHI SY. NO. 20/9 AND 20/P2, KAMMANAHALLI VILLAGE BEGUR HOBLI BANGALORE-83 - 4 - NC: 2025:KHC:22564 MFA No. 5591 of 2016 C/W MFA No. 6579 of 2016 HC-KAR 2. UNITED INDIA INSURANCE COMPANY LIMITED DIVISIONAL OFFICE VI, NO.89/1, II FLLOR, 11TH CROSS, SAMPIGE ROAD, MALLESHWARAM BANGALORE-3 (BY SRI. S KRISHNA KISHORE, ADV. FOR R2; R1 IS SERVED AND UNREPRESENTED) ...RESPONDENTS THIS MFA IS FILED U/S.30(1)a OF WORKMEN COMPENSATION ACT, AGAINST THE JUDGMENT AND AWARD DATED07.06.2016 PASSED ON ECA NO.493/14 ON THE FILE OF THE 21ST ADDITIONAL SMALL CAUSE JUDGE & 19TH ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, MEMBER, MACT, BENGALURU, PARTLY ALLOWING THE CLAIM PETITION FOR COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION. THESE APPEALS, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: - 5 - NC: 2025:KHC:22564 MFA No. 5591 of 2016 C/W MFA No. 6579 of 2016 HC-KAR CORAM: HON'BLE MR JUSTICE UMESH M ADIGA ORAL JUDGMENT Both these appeals arise out of award passed by the Commissioner of Labour under the Workmen's Compensation Act,1923 and XXI Additional Small Causes Judge, MACT (SCCH-23), Bengaluru (for short 'the Commissioner) dated 07.06.2016 passed in E.C.A. No.493/2014. 2. For the sake of convenience, the parties are referred to as per their ranking before the Trial Court. 3. Both the appeals are admitted to consider the following substantial questions of law: 1) Whether Commissioner is justified in directing insurer to pay interest contrary to terms of insurance policy? 2) Whether Commissioner is justified in not accepting contentions of claimant that deceased - 6 - NC: 2025:KHC:22564 MFA No. 5591 of 2016 C/W MFA No. 6579 of 2016 HC-KAR was earning Rs.12,000/- per month when employer was not disputed the same? 3) Whether Commissioner is justified in not directing the employer to pay penalty when admittedly employer had not deposited the admitted compensation within 30 days from the date of incident? 4. The brief facts of the case are that, one Mufaz-Ul-Haque was working with respondent No.1 as his employee and was doing centering work at his instructions. There existed employee and employer relationship between deceased and respondent No.1. On 28.06.2014 at around 4:30 p.m., the deceased during the course of his employment and as per the directions of respondent No.1, was working in an ongoing project i.e., Raga Apartment site situated at Kannur village. At that time, he accidentally fell down from 12th floor of the said building. As a result he sustained head injuries and died on the spot. The dead body was shifted to Dr. B.R.Ambedkar Medical College. After the postmortem, the - 7 - NC: 2025:KHC:22564 MFA No. 5591 of 2016 C/W MFA No. 6579 of 2016 HC-KAR dead body was handed over to the claimants. Claimants are parents of the deceased. 5. It is further case of the claimants that the deceased was aged about 25 years. He was drawing salary of Rs.12,000/- per month. Claimants were depending upon his earnings. With these reasons, they prayed to award compensation. 6. Before the Trial Court, respondent No.1 in his written statement pleaded ignorance about the relationship between deceased and claimants. It is further contended that the death of Mufaz-Ul-Haque was due to his own negligence. Therefore, claimants are not entitled for compensation. Respondent No.1 admitted that deceased was an employee and was working under him and that the incident had occurred during the course of employment. He further contended that in case if the compensation is awarded, respondent No.2 shall be directed to pay the same. With these reasons, respondent - 8 - NC: 2025:KHC:22564 MFA No. 5591 of 2016 C/W MFA No. 6579 of 2016 HC-KAR No.1 prayed to dismiss the claim petition against respondent No.1. 7. Respondent No.2 - insurer denied the contentions of the claimants and also contended that it is not liable to indemnify respondent No.1. It denied the relationship of employee and employer between the deceased and respondent No.1. It also contended that the petition is not maintainable as per the Employees Compensation Act, 1923. It further contended that as per the Workmen's Compensation policy taken by respondent No.1, respondent No.2 is not liable to pay interest or penalty. With these reasons, respondent No.2 prayed to dismiss the petition against it. 8. The claimants to prove their claim examined two witnesses as PW.1 and 2 and marked 12 documents as Exs.P1 to P12. Respondent No.2 has examined one witness as RW.1 and marked exhibits as Exs.R1 to 3. - 9 - NC: 2025:KHC:22564 MFA No. 5591 of 2016 C/W MFA No. 6579 of 2016 HC-KAR 9. The Trial Court after hearing both the parties, held that the deceased Mofaz-Ul-Haque died during the course of employment and the claimants are entitled to claim the compensation. The Trial Court assessed the income of the deceased at Rs.8,000/- per month and applied the factor as 216.91 deducting 50% of said income awarded the compensation at Rs.8,67,640/-. The Commissioner has also apportioned the liability to pay compensation between insurer and insured as per the terms of the policy. However, the Commissioner directed both respondents to pay interest at the rate of 12% per annum from 28.06.2014 till its realization. 10. Heard the arguments of the learned counsel for both the sides. 11. Most of the facts of the case are not disputed. Hence, let me consider the relevant disputed facts. Undisputedly, as per the terms of the policy of Insurance Company, respondent No.1 - employer declared that the salary paid to its skilled laborer / employee is Rs.6,000/- p.m. The - 10 - NC: 2025:KHC:22564 MFA No. 5591 of 2016 C/W MFA No. 6579 of 2016 HC-KAR Commissioner held that he was a skilled laborer and assessed his salary as Rs.8,000/- and calculated the compensation and directed the Insurer to pay the compensation according to its liability, as per terms of the Insurance policy. 12. RW.1 in his evidence has stated that insurer is not liable to pay interest and penalty as per terms of policy. The said fact is not in serious dispute. Therefore, the contention of insurer that it is not liable to pay the interest on the compensation amount awarded by the Commissioner is justifiable. The Trial Court has erroneously held that the respondents are liable to pay interest at the rate of 12% per annum from 30 days after the incident i.e., 28.06.2014, till its realization. The said liability of interest is only on respondent No.1 - employer along with portion of compensation to which he is liable to pay the same. 13. The contention of the learned counsel for the
Decision
ORDER i) M.F.A. Nos.5591 of 2016 and 6579/2016 are allowed in part; ii) The judgment and award dated 07.06.2016 passed by the Commissioner under Workmen's Compensation Act, XXI Additional Small Causes Judge, MACT (SCCH-23) at Bengaluru, in E.C.A.No.493/2014 is modified; iii) The claimants are entitled for total compensation of Rs.8,72,640/- with interest at the rate of 12% per annum from 30 days after 28.06.2014, till its realization and out of that, insurer (respondent No.2) shall pay Rs.6,50,730/- and employer (respondent No.1) shall pay remaining amount and interest; - 14 - NC: 2025:KHC:22564 MFA No. 5591 of 2016 C/W MFA No. 6579 of 2016 HC-KAR iv) Respondent No.1 shall pay penalty of Rs.4,36,320/- as provided under Section 4A(3)(b) of the Workmen's Compensation Act to the claimants; v) The learned counsel for Insurer submits that already Rs.6,50,730/- has been deposited before the Trial Court by the insurer and it might be kept in Fixed Deposit by the Trial Court. Registry to verify the same and transmit the said amount with interest to the Trial Court for disbursement to claimants. Claimants are entitled to receive interest accrued on the said Fixed Deposit; vi) Remaining portion of the award is not disturbed. Send back Trial Court records along with the copy of the judgment to the Trial Court. Sd/- (UMESH M ADIGA) JUDGE KG List No.: 1 Sl No.: 21