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New India Assurance Co. Ltd. Vs. M. Jayarama Naik and anr. - Court Judgment

LegalCrystal Citation
SubjectMotor Vehicles;Labour and Industrial
CourtKerala High Court
Decided On
Case NumberM.F.A. No. 43 of 1981
Judge
Reported in[1983]54CompCas595(Ker); (1984)ILLJ171Ker
ActsMotor Vehicles Act, 1939 - Sections 96, 96(2) and 96(6); Workmen's Compensation Act, 1923 - Sections 30
AppellantNew India Assurance Co. Ltd.
RespondentM. Jayarama Naik and anr.
Appellant Advocate P.V. Madhavan Nambiar,; K.L. Mohana Chandran,; Rosamma J
Respondent Advocate K.P.V.B. Ejman, Adv.
Cases ReferredNorthern India Insurance Co. v. Commissioner
Excerpt:
- .....the provisions of the workmen's compensation act, 1923 (hereinafter 'the act'). the appellant-insurance company was the 2nd respondent in these proceedings, the owner of the goods vehicle being the 1st respondent before the commissioner. there appears to have been no dispute that the accident arose out of and in the course of the 1st respondent's (applicant's) employment. the two issues raised therein concerned the salary drawn by the applicant--1st respondent and the nature of his disablement--whether it was permanent or partial. the commissioner found that the applicant--1st respondent's salary was rs. 600 per mensem and that the disability was permanent and total. the commissioner, therefore, awarded rs. 30,420 as compensation and made the insurance company liable therefor. that.....
Judgment:

George Vadakkel, J.

1. The second respondent is the owner of a goods vehicle. At the relevant time the 1st respondent was its driver. While the latter was driving the goods vehicle on June 8, 1977, a bus collided against it. As a result thereof the 1st respondent sustained personal injury. He, therefore, claimed compensation under the provisions of the Workmen's Compensation Act, 1923 (hereinafter 'the Act'). The appellant-insurance company was the 2nd respondent in these proceedings, the owner of the goods vehicle being the 1st respondent before the Commissioner. There appears to have been no dispute that the accident arose out of and in the course of the 1st respondent's (applicant's) employment. The two issues raised therein concerned the salary drawn by the applicant--1st respondent and the nature of his disablement--whether it was permanent or partial. The Commissioner found that the applicant--1st respondent's salary was Rs. 600 per mensem and that the disability was permanent and total. The Commissioner, therefore, awarded Rs. 30,420 as compensation and made the insurance company liable therefor. That company has preferred this appeal.

2. On behalf of the 1st respondent-applicant, the employee, his learned counsel raised a preliminary objection, namely, that this appeal is not maintainable, since the appellant-insurance company has not deposited with the Commissioner the amount awarded as compensation and has not produced along with the memorandum of appeal a certificate to that effect issued by the Commissioner as required by the third proviso to Section 30 of the Act. According to the learned' counsel for the appellant-insurance company that proviso does not govern an appeal preferred by an insurance company who is impleaded in the proceedings before the Commissioner.

3. 'The insurance company has in this appeal questioned the whole award. According to the appellant the order of the Commissioner which is appealed against is ' illegal and not supported by the provisions of the Act or any other law '. The appellant seeks to have the award of the compensation of Rs, 30,240 as a whole set aside.

4. The appellant-insurance company was a party to the proceedings before the Commissioner because of the provision in Section 96{2) of the Motor Vehicles Act, 1939, which reads :

' (2) No sum shall be payable by an insurer under Sub-section (1) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the court of the bringing of the proceedings, or in respect of any judgment so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto, and to defend the action on any of the following grounds, namely :--

(a) that the policy was cancelled by mutual consenst or by virtue of any provision contained therein before the accident giving rise to the liability, and that either the certificate of insurance was surrendered to the insurer or that the person to whom the certificate was issued has made an affidavit stating that the certificate has been lost or destroyed, or that either before or not later than fourteen days after the happening of the accident the insurer has commenced proceedings for cancellation of the certificate after compliance with the provisions of Section 105 ; or

(b) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:--

(i) a condition excluding the use of the vehicle-

(a) for hire or reward, where the vehicle is on the date of the contract : of insurance a vehicle not covered by a permit to ply for hire or reward, or

(b) for organised racing and speed testing, or

(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or

(d) without side-car being attached, where the vehicle is a motor cycle; or

(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification ; or

(iii) a condition excluding liability for in jury caused or contributed to by conditions of war, civil war, riot or civil commotion ; or

(e) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular.'

5. It is necessary to notice Sub-section (6) of Section 96 of the Motor vehicles Act, 1939, also. We, therefore, quote hereunder that sub-section :

'(6) No insurer to whom the notice referred to in Sub-section (2) or Sub-section (2A) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment as is referred to in Sub-section (1) or Sub-section (2A) otherwise than in the manner provided for in Sub-section (2) or in the corresponding law of the reciprocating country, as the case may be.'

6. The scheme of the provisions read above is that the insurer can defend the proceedings only on the grounds specified in Sub-section (2) of Section 96 and that he cannot, as provided in Sub-section (6), avoid his liability 'otherwise than in the manner provided for in Sub-section 2... '

7. Therefore, the insurer cannot under Section 96 of the Motor Vehicles Act defend the proceedings disputing the insured's liability for the compensation claimed on any ground, much less on such grounds as those raised herein, namely, raising an issue of the amount of monthly salary of the employee, or of the nature of the injury. These are, thereunder, contentions to be advanced by the employer and if the findings thereon go against him he can prefer an appeal against the order as provided for in Section 30 of the Act. We are not in this case concerned with the question as to whether, the insurer can, because the liability of the insured is statutorily passed on to the insurer, defend the proceedings before the Commissioner, tribunal or court, as the case may be, by advancing such grounds as are available to the insured and whether the insurance company can on such grounds available to the insured-employer prefer an appeal against the award of compensation. Without deciding that question, we will assume that it is possible. But then the insurer is only stepping into the shoes of the insured, the employer, and the defence isnot qua insurer but in the name of the insured and in his place. An appeal preferred on such grounds, if successful, will jeopardise the employee's right to recover the compensation from the employer also. What the insurer seeks in such an appeal is that the insured may be found to be not liable to pay the compensation, and, consequently, the insurer also may be held to be not liable. The primary relief sought for is the first mentioned relief and the other relief is consequent to the grant of that relief. Hence, such an appeal is preferred by the insurer for and on behalf of the employer and in his stead, though the aim of the insurer is to exonerate his own liability. What the insured cannot do by himself, viz., filing of an appeal without complying with the requirements of the third proviso to Section 30 the Act, cannot be done by another on his behalf. So the third proviso to Section 30 of the Act governs such appeals.

8. We are in agreement with the statement of law on this point in Central Engineering Corporation v. Dorai Raj, AIR 1960 Orissa 39 (at p. 40):

' The principle of Section 30 is that if the appeal be such that by it the workman's right to the compensation awarded to him is placed in jeopardy, security for the workman must be provided for by the deposit of the amount of compensation and such a deposit would be essential to the maintainability of the appeal. If, on the other hand, the workman's right to the compensation awarded does not come into question in the appeal at all, there is no risk to the workman's getting the compensation awarded to him and there is thus no necessity for requiring anyone preferring such an appeal to deposit the compensation money. '

9. In the decision of the Madhya Pradesh High Court in Northern India Insurance Co. v. Commissioner for Workmen's Compensation [1973] ACJ 420, relied on by the learned counsel for the appellant, the insurance company invoked the writ jurisdiction of the High Court contending that the insurance company should not have been made a party to the proceedings under the Workmen's Compensation Act, 1923. The Madhya Pradesh High Court held that the insurance company was a proper party. Dealing with the preliminary objection that since the insurance company could have filed an appeal under Section 30 of the Act, the writ jurisdiction could not be invoked and the answer thereto that the insurance company cannot challenge the award of compensation by filing an appeal, that High Court held that on the wording of Section 30, any person aggrieved by the order is entitled to appeal and observed in that connection that the third proviso would govern only an appeal preferred by an employer. The question of applicability of the 3rd proviso to an appeal filed by the insurer on grounds available to the insured only did not arise in that case.

10. In view of what is said hereinbefore, we sustain the preliminary objection and hold that this appeal is not maintainable. Accordingly, we dismiss this appeal but without any order as to costs.

11. An oral application under Article 134A of the Constitution of India is made by the counsel for the appellant for certificate for leave to appeal to the Supreme Court. We see no reason to grant leave, since no substantial question of law of general importance which needs to be decided by the Supreme Court arises in this case. Leave declined.


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