Case Note & Summary
The appeal was filed by the parents of the deceased workman, Laxman, who died in an accident while loading cotton bales at the Agricultural Produce Market in Basmat. The Commissioner for Employee's Compensation awarded compensation of Rs.3,29,925/- with 12% interest and a penalty of Rs.1,64,963/- against the employer (respondent No.1), but exonerated the Insurance Company (respondent No.2) on the ground that the accident occurred outside the territorial limits of Hingoli Tahsil covered by the policy. The appellants challenged the exoneration of the Insurance Company. The High Court held that the territorial exclusion clause in the insurance policy does not absolve the Insurance Company from liability because the policy was issued under the Workmen's Compensation Act, 1923, and the employer had paid premium for coverage of employees. The court noted that the Insurance Company had not proved that the policy was restricted to a specific area or that the premium was reduced accordingly. The court also upheld the penalty imposed on the employer under Section 4A of the Act for failure to deposit compensation within one month. The appeal was allowed, and the Insurance Company was directed to pay the compensation amount with interest and penalty to the appellants, with liberty to recover the same from the employer if necessary.
Headnote
A) Workmen's Compensation - Employer's Liability - Territorial Exclusion Clause - Insurance Policy - The accident occurred at Basmat, outside the Hingoli Tahsil covered by the policy - The court held that the territorial exclusion clause in the insurance policy does not absolve the Insurance Company from liability as the policy was issued under the Workmen's Compensation Act and the employer had paid premium for coverage of employees - The Insurance Company is liable to indemnify the employer for the compensation awarded (Paras 4-6). B) Workmen's Compensation - Penalty under Section 4A - Employer's Failure to Deposit Compensation - The Commissioner imposed penalty of Rs.1,64,963/- on the employer for not depositing compensation within one month - The court upheld the penalty as the employer failed to show any justification for delay (Para 6).
Issue of Consideration
Whether the Insurance Company is liable to indemnify the employer for compensation awarded under the Workmen's Compensation Act, 1923, when the accident occurred outside the territorial limits specified in the insurance policy.
Final Decision
The appeal is allowed. The judgment and order of the Commissioner is modified. The Insurance Company (respondent No.2) is directed to pay the compensation amount of Rs.3,29,925/- with interest at 12% per annum from the date of the claim and penalty of Rs.1,64,963/- to the appellants. The Insurance Company is at liberty to recover the amount from the employer (respondent No.1) if it is not liable under the policy.
Law Points
- Workmen's Compensation Act
- 1923
- Section 3
- Section 4
- Section 4A
- Territorial exclusion clause
- Insurance policy interpretation
- Employer's liability
- Penalty for delayed payment
