Case Note & Summary
The present First Appeal was filed by The New India Assurance Co. Ltd. under Section 30 of the Employee's Compensation Act, 1923, impugning the Judgment and Order dated 28th February, 2007 passed by the Commissioner for Workmen's Compensation and Judge, 6th Labour Court, Mumbai in Application No. A (WCA) 644/ C-226/2003. The applicant, Dineshkumar J. Dubey, was employed as a driver of a vehicle owned by the opposite party, Jeelajeet B. Dubey, and was paid wages of Rs.4,000/- per month. On 13th August, 2002, while driving the vehicle in the course of employment, the applicant met with an accident on the highway near Times of India signal and sustained injuries including fracture of left fibula, lateral malleolus with medial side ligament injury, and unstable ankle. He was admitted to Bhagwati Hospital and underwent surgery. The applicant filed an application seeking compensation of Rs.5,20,584/- with interest and penalty from the employer and the insurance company. The Commissioner allowed the application and awarded compensation against both the employer and the insurance company. The insurance company appealed, contending that the insurance policy had lapsed prior to the accident and thus it was not liable. The High Court examined the evidence and found that the policy had indeed lapsed due to non-payment of premium. The court held that the employer is liable to pay compensation to the applicant for the injuries sustained in the course of employment, but the insurance company is not liable as the policy was not in force at the time of the accident. The court upheld the award of compensation and interest against the employer but set aside the award against the insurance company. The penalty imposed by the Commissioner was reduced considering the circumstances. The appeal was partly allowed.
Headnote
A) Employee's Compensation Act, 1923 - Employer's Liability - Driver Injured in Accident - The applicant, a driver, sustained injuries in a motor accident while driving the employer's vehicle in the course of employment. The Commissioner awarded compensation of Rs.5,20,584/- with interest and penalty against the employer and insurance company. The High Court upheld the award against the employer but exonerated the insurance company as the policy had lapsed prior to the accident. Held that the employer is liable to pay compensation for injuries arising out of and in the course of employment (Paras 3-10). B) Insurance Law - Lapsed Policy - Liability of Insurer - The insurance policy covering the vehicle had lapsed before the accident due to non-payment of premium. The insurance company was not liable to indemnify the employer. The court set aside the award against the insurance company. Held that an insurer is not liable when the policy is not in force at the time of accident (Paras 11-15). C) Employee's Compensation Act, 1923 - Section 4A - Interest and Penalty - The Commissioner imposed interest and penalty on delayed payment of compensation. The High Court upheld the interest but reduced the penalty, considering the circumstances. Held that interest is mandatory under Section 4A(3)(a) for delayed payment, but penalty under Section 4A(3)(b) is discretionary (Paras 16-20).
Issue of Consideration
Whether the employer is liable to pay compensation to the driver for injuries sustained in a motor accident during employment, and whether the insurance company is liable to indemnify the employer when the insurance policy had lapsed at the time of accident.
Final Decision
The High Court partly allowed the appeal. The award of compensation and interest against the employer was upheld, but the award against the insurance company was set aside. The penalty imposed by the Commissioner was reduced.
Law Points
- Employer's liability under Employee's Compensation Act
- 1923
- Insurance company's liability for lapsed policy
- Compensation for permanent disablement
- Interest and penalty under Section 4A
