IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF AUGUST 2019 BEFORE THE HON'BLE MR. JUSTICE B. VEERAPPA MISCELLANEOUS FIRST APPEAL NO.8066 OF 2016 (WC) c/w MISCELLANEOUS FIRST APPEAL NO.191 OF 2017 (WC) IN M.F.A.NO.8066/2016:
BETWEEN:
M/S NULLORE ESTATE A UNIT OF M/S TATA COFFEE LTD SUNTIKOPPA – 571 237 KODAGU DISTRICT BY ITS MANAGER (L&C) SRI VIJAY KARNAD (BY SRI. VISHWANATH P.D., ADV.,) AND:
SRI. P.H. RAJU SINCE DECEASED BY HIS LRS 1. SMT. J.B. LALITHA W/O. SRI. P.H. RAJU AGED ABOUT 36 YEARS 2. SRI. P.R. PRASHANTH S/O. P.H. RAJU AGED ABOUT 20 YEARS 3. SMT. P.R. KAUSALYA D/O. P.H. RAJU AGED ABOUT 19 YEARS ... APPELLANT RESPONDENTS 1 TO 3 ARE RESIDING AT ATHUR-NULLORE VILLAGE & POST SUNTIKOPPA, KODAGU.
4. M/S. UNITED INDIA INSURANCE COMPANY 3RD FLOOR, IML BUILDING NR SQUARE, BENGALURU – 560 002. BY ITS MANAGER.
…RESPONDENTS (BY SRI. A.N. KRISHNA SWAMY, ADV., FOR R-4; SRI. M.A. APPAIAH, ADV., FOR R-1 TO R-3) ***** THIS MFA IS FILED UNDER SECTION 30(1) OF THE EMPLOYEES COMPENSATION ACT, AGAINST THE JUDGMENT AND AWARD DATED 08.09.2016 PASSED ON ECA NO.17/14 ON THE FILE OF THE SENIOR CIVIL JUDGE & COMMISSIONER FOR EMPLOYEES COMPENSATION, KODAGU, MADIKERI, AWARDING COMPENSATION OF RS.7,45,953/- WITH INTEREST AT 12% P.A. FROM THE DATE OF INCIDENT TILL REALISATION.
IN M.F.A.NO.191/2017:
BETWEEN:
UNITED INDIA INSURANCE CO. LTD.
III FLOOR, IML BUILDING NR SQUARE, BENGALURU – 560 002 NOW REPRESENTED BY ITS REGIONAL MANAGER UNITED INDIA. INSURANCE CO. LTD. REGIONAL OFFFICE 5TH & 6TH FLOOR, KRISHI BHAVAN NRUPATHUNGA ROAD BENGALURU – 560 001 (BY SRI. A.N. KRISHNA SWAMY, ADV.,) ... APPELLANT AND:
P.H. RAJU SINCE DECEASED BY HIS LRS 1. SMT. J.B. LALITHA W/O. LATE P.H. RAJU AGED ABOUT 37 YEARS 2. P.R. PRASHANTH S/O. LATE P.H. RAJU AGED ABOUT 21 YEARS 3. P.R. KAUSALYA D/O. LATE P.H. RAJU AGED ABOUT 20 YEARS ALL R/O ATHUR-NULLORE VILLAGE & POST SUNTIKOPPA KODAGU – 571 237 4. THE MANAGER NULLORE ESTATE TATA COFFEE LTD SUNTIKOPPA – 571 237 KODAGU …RESPONDENTS (BY SRI. M.A. APPAIAH, ADV., FOR R-1 TO R-3; SRI. P.D. VISHWANATH, ADV., FOR R-4) ***** THIS MFA IS FILED UNDER SECTION 30(1) OF EMPLOYEES COMPENSATION ACT, 1923 AGAINST THE JUDGMENT AND AWARD DATED 08.09.2016 PASSED IN ECA NO.17/2014 ON THE FILE OF THE SENIOR CIVIL JUDGE & CJM, AND C.E.C., MADIKERI, AWARDING COMPENSATION OF RS.7,45,953/- WITH INTEREST AT 12% P.A. ON RS.4,97,302/- FROM ONE MONTH AFTER THE DATE OF INCIDENT TILL REALISATION.
THESE APPEALS COMING ON FOR ADMISSION, THIS DAY, THE COURT DELIVERED THE FOLLOWING :
J U D G M E N T These two appeals are filed by the employer and the insurance company against the judgment and award dated 08.09.2016 made in ECA No.17/2014 on the file of Commissioner for Employees Compensation (for short hereinafter referred to as ‘Tribunal’) awarding total compensation of `7,45,953/- along with interest at 12% per annum on a sum of `4,97,302/- from one month after the date of incident till realization.
2. Respondent Nos.1 to 3 in both the appeals who are claimants before the Tribunal had filed petitions under Section 22 of the Employee’s Compensation Act, 1923 (for short hereinafter referred to as ‘the Act’), claiming compensation and contended that the deceased P.H.Raju was a regular workman under the first respondent. On 07.07.2012, the first respondent entrusted the work of shade lopping in “H” Block of Nullore Estate. At about 9.30 AM, while he was doing shade lopping work, accidentally he has fallen from the tree from a height of about 30 feet and seriously injured. Immediately, he was shifted to the hospital at Ammathi. As per the advice of the doctor the deceased was shifted to NIMHANS, Bengaluru.
3. It is further contended that the deceased was diagnosed L3 fracture with L2 and L3 traumatic Retrolisthesis-132.02. On 12.07.2012 the deceased underwent L1-L4 posterior fusion using transpedicular screws and rods. The deceased had highly unstable nature of the injury and underwent L1 to L4 transpedicular fixation. He was not able to urinate in the normal course and he has to clear intermittent self catheterization Q4H and the deceased was discharged on 25.09.2012. As per the advice of the doctor, the deceased was revived by the General Surgeons and also Specialist Surgeon at District Hospital, Madikeri. The Special Surgeon termed his injury as locomotor disability and he assessed disability of the deceased at 85% and the deceased was recommended to use wheel chair.
4. It is the further case of the claimants that the deceased was drawing monthly wages of `4,256/- per month. He was aged about 36 years and he was a Trade Union Member. A registered letter was sent to the first respondent on 12.07.2013 to pay compensation of `5,00,000/- to the deceased. However, the first respondent did not respond to the letter as he was having valid insurance for the employees with the second respondent.
5. It is further contended that the first respondent did not intimate the Commissioner for Employees Compensation on the very serious nature of accidental injury of their employee - the deceased, while on duty during working hours. Hence, the deceased was entitled for compensation from the respondents. It is further contended that during the pendency of the petitions, the deceased died and the legal representatives ie., present respondent Nos.1 to 3 were brought on record. The deceased died due to the injuries sustained by him during the course of employment. Therefore, respondent Nos.1 and 2 are liable to pay compensation to the claimants.
6. In response to the notice issued, the first respondent filed objections and admitted that the deceased was an employee under the first respondent and he met with an accident arising out of and in the course of employment on 07.07.2012 and on discharge, the deceased was advised rest. The deceased died on 10.12.2013.
7. The first respondent further contended that he had informed the second respondent to deposit the amount to the injured, but the second respondent did not deposit the amount due to change in the jurisdiction of the Court. The first respondent denied the age and monthly wages of the deceased. The second respondent denied all the averments made in the claim petition and admitted the insurance policy and contended that liability of the second respondent is as per the terms and conditions of the policy. According to the second respondent, the policy issued by it is a reimbursable policy. Further contended that the second respondent is not directly liable to pay the compensation. The second respondent is only liable to reimburse the amount if deposited by the first respondent.
8. Based on the aforesaid pleadings, the Tribunal has framed the following issues and additional issues:
Issues:
1. Whether the petitioner proves that, the petitioner is the worker of the respondent No.1 and on 07.07.2012 at about 9.30 am. While he was doing shade lopping work, accidentally he fallen from the tree from a height of about 30 ft. and sustained grievous injuries?
2. Whether the petitioner is entitled for compensation? If so, how much and who has to pay?
3. What order or award?
Additional Issues:
Whether the petitioner – P.H.Raju died on 10.12.2013 due to injuries sustained on 07.07.2012 at about 9.30 am., while he was working under respondent No.1?
9. In order to prove the case of the claimants, Smt.Lalitha was examined as PW1 and produced 11 documents which are marked as Exs.P1 to P11. The first respondent examined its Manager as RW1 but did not mark the relevant documents. The second respondent – insurance company did not adduce any oral evidence, but produced only insurance policy marked as Ex.R1 as on the date of incident.
10. The Tribuna1 considering the oral and documentary evidence, has recorded the finding that the claimants proved that the original claimant / deceased was worker under the first respondent and on 07.07.2012, at about 9.30 am., while he was doing shade lopping work, he had fallen from the tree from a height of 30 ft. and sustained grievous injuries and further proved that the claimants are entitled for compensation. Further the claimants proved that the deceased was died on 10.12.2013 due to the injuries sustained on 07.07.2012 at about 9.30 am while he was working under the first respondent. Accordingly, the Tribunal proceeded to award total compensation of `7,45,953/- with interest and penalty. Hence, these two appeals were filed by the employer as well as the insurance company against the impugned judgment and award passed by the Tribunal.
11. The claimants have not filed any appeal against the impugned judgment and award for enhancement.
12. I have heard the learned counsel for the parties to the lis.
13. Sri.Vishwanath P.D, learned counsel for the employer in MFA No.8066/2016 mainly contended that the Tribunal while determining compensation has imposed 50% of penalty without providing an opportunity as contemplated under the provisions of Section 4A(3)(b) of the Act. Therefore, he would contend that from the impugned judgment and award passed by the Tribunal imposing 50% of penalty for suppression of the facts of incident is without any basis and contrary to the law and the same cannot be sustained. The compensation awarded by the Tribunal is also excessive and cannot be sustained. Therefore, he sought to allow the appeal.
14. Sri.A.N.Krishna Swamy, the learned counsel for the appellant in MFA No.191/2012 contended that as on the date of award passed, the deceased/claimant had died on account of the injuries sustained on 07.07.2012 at 9.30 am., while he was working, which was during the course of his employment. The Tribunal was not justified in taking 60% of the wages of the deceased – claimant, in view of the provisions of Section 4(1)(a) of the of the Act. It ought to have deducted 50% instead of 60%. He would further contend that the Tribunal was not justified in directing the interest to be payable by the insurance company, but, it is only employer who has to pay, then only the insurance company can re-imburse the amount, if any deposited subject to the terms and condition of the policy. Therefore, he sought to allow the appeal.
15. Per contra, Sri.M.A.Appaiah, the learned counsel for the respondent Nos.1 to 3 sought to justify the impugned judgment and award passed by the Tribunal and contended that since the employer has not complied with the provisions of Section 4A of the Act, within the time stipulated and not proved that he has discharged his duty as contemplated under the Act, since the incident has occurred during the course of employment. He would further contend that the accident occurred on 07.07.2012 and subsequently, P.
H. Raju, died on 10.12.2013 arising out of and during the course of employment. Therefore, the Tribunal was justified in deducting 60% of the monthly wages of the deceased while assessing the compensation. Therefore, he sought to dismiss the appeals.
16. This Court while admitting these two appeals framed the following issues:
i) Whether the Tribunal is justified in taking 60% of the wages incase of death under the provisions of Section 4(1)(a) of the Employee’s Compensation Act, 1923?
ii) Whether the Tribunal is justified in directing the Insurance Company - appellant to pay interest after one month from the date of the accident in the facts of the present case?
17. Having heard the learned counsel for the parties, it is the specific case of the claimants that P.B.Raju filed the claim petition contending that on 07.07.2012, the first respondent entrusted the work of shade lopping in “H” Block of Nullore Estate and when he was doing shade lopping work, accidentally he fell from the tree from a height of about 30 feet and sustained several fractures. He was admitted to several hospitals. Ultimately, the Surgeon at District Hospital, Madikeri termed his injury as locomotor disability and recommended to use wheel chair and assessed the disability at 85%. Subsequently, he died on 10.12.2013 and his legal representatives were brought on record.
18. The Tribunal while considering the entire materials on record has recorded a finding that the accident occurred on 07.07.2012 arising out of and during the course of employment and the claimants are entitled to compensation and also held that claimants proved that the deceased died on 10.12.2013 due to injuries sustained. Accordingly, the Tribunal has taken the monthly wages of the deceased at Rs.4,256/- and the permanent disability at 60%.
19. The Tribunal has failed to notice that as per the provisions of Section 4(1)(a) of the Act, when the death results from injury, an amount equal to 50% of the monthly wages of the deceased multiplied by the relevant factor or an amount of Rs.1,20,000/-
whichever is more has to be taken. Admittedly, in the present case, the deceased died due to injuries sustained. Therefore, in all fairness the Tribunal ought to have taken 50% of monthly wages of the deceased while calculating the compensation.
20. The Tribunal while awarding compensation has further recorded a finding that, “where any employer is in default in paying the compensation due under the Act within one month from the date it fell due, the employer shall pay the compensation with simple interest at the rate of 12% per annum or at such higher rate of scheduled bank as may be specified by the Central Government and in addition to the amount of arrears and interest thereon, the Commissioner shall direct the employer to pay further sum not exceeding 50% of such amount by way of penalty”. But, while imposing penalty, the Tribunal has failed to consider the proviso of Section 4A(3)(b) of the Act, which reads as under:
4A(3)(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 therein, pay a further sum not exceeding fifty percent of such amount by way of penalty:
Provided that an order for payment of penalty shall not be passed under clause (b) without giving a reasonable opportunity to the employer to show cause as to why it should not be passed.
21. On careful perusal of the entire materials on record, the Tribunal has not provided any opportunity to the employer to show cause as to why he should not be imposed penalty as contemplated under Section 4A(3)(b) of the Act. In the absence of any finding on the same, the impugned judgment and award imposing penalty of Rs.2,48,651/- cannot be sustained.
22. For the aforesaid reasons, the substantial questions of law framed in the present appeal have to be answered in negative holding that the Tribunal is not justified in deducting 60% wages of the deceased which is against the provisions of Section 4(1)(a) of the Act and not justified in imposing penalty of 50% on the compensation amount.
23. Accordingly, the appeals filed by the employer and the insurance company are allowed in part and the impugned judgment and award passed by the Tribunal dated 08.09.2016 in ECA No.17/2014 is hereby set aside and the matter is remitted to the Commissioner for Employees Compensation / Tribunal for reconsideration of the matter in accordance with law in the light of the observations made supra. All the contentions are kept open to be urged before the Tribunal.
24. The amount deposited by the Insurance Company shall be transmitted to the Tribunal forthwith with liberty to the respondents 1 to 3 herein – claimants before the Tribunal to receive the amount of Rs.4,14,194/- subject to the result of ECA No.17/2014 to be adjudicated by the Commissioner for Employees Compensation / Tribunal. The Tribunal shall decide the petition within a period of six months from the date of receipt of a copy of this order.
Ordered accordingly.
Sd/- JUDGE GH/VP