CMA/1603/2001 of THE ORIENTALINSU. CO. LTD Vs KALIYA PILLAI on 30 October 2002

:JUDGMENT

(Judgment of the Court was made by P. SATHASIVAM, J)

Aggrieved by the award of the Motor Accidents Claims Tribunal, Kallakurichidated 12-12-2000 made in O.P.No. 171 of 1998, the Oriental Insurance Company,Pondicherry has filed the above appeal.

2. Respondents 1 and 2 herein/claimants therein have filed the said claimpetition claiming a compensation of Rs.4 lakhs for the death of their sonPavulkumar alias Kumar in a motor vehicle accident that took place on 25-2-98.According to them, on 25-2-98 at about 14.00 Hours when the deceasedPavulkumar alias Kumar was driving a Tractor and Trailer bearing registrationNo. TAY 6838 and TCF 36 83 from Sankarapuram to Moongilthuraipattu, nearIlayankanni, he fell down from the tractor and died. The claimants were fully depending upon the income of the deceased and they claimed compensation to thetune of Rs.4 lakhs. Before the Tribunal, the first claimant, father of thedeceased was examined as P.W.1 and one Kalaichelvan as P.W.2, and Exs. P-1 toP-6 were marked in support of their claim. On the side of the owner andinsurance company, no one was examined and no document was marked. TheTribunal on appreciation of oral and documentary evidence and after holdingthat the accident was caused due to rash and negligent act of the driver ofthe tractor namely Pavulkumar and that the tractor being insured with theOriental Insurance Company, second respondent therein/appellant herein, passedan award for Rs.3 lakhs with interest at 12 per cent from the date ofpetition. Against the said award, the Insurance company alone has preferredthe above appeal questioning its liability.

3. Heard the learned counsel for the appellant as well as respondents 1 and2.

4. Mr. M.S. Krishnan, learned counsel appearing for the appellant, bydrawing our attention to the specific finding of the Tribunal that theaccident was caused due to rash and negligent driving of the driver of thetractor and trailer, and that he alone was responsible for the accident,contended that the Tribunal has committed an error in passing the award infavour of the claimants. In other words, according to him, the deceased beinga tort-feasor, his legal heirs are not entitled to compensation. In anyevent, according to him, since the driver of the tractor died in the course ofhis employment, the proper remedy for the claimants is to approach theCommissioner for Workmen Compensation and the claim petition filed underSection 166 (1) of the Motor Vehicles Act before the Motor Accidents ClaimsTribunal at Kallakurichi is not maintainable. It is his further contentionthat if this Court is inclined to pass an award under Workmen's CompensationAct, interest need not be awarded. On the other hand, Mr. R. Muralidharan,learned counsel for respondents 1 and 2/ claimants, would contend that in viewof Section 167 of the Motor Vehicles Act, inasmuch as the death occurred byusing the motor vehicle, notwithstanding anything contained in the Workmen'sCompensation Act, the claimants are entitled to compensation under theprovisions of the Motor Vehicles Act. He also contended that even if it isaccepted that the proper course is to file a claim under the WorkmenCompensation Act, this Court has ample jurisdiction to pass appropriate orderseven under the provisions of the Workmen's Compensation Act, and in thatevent, award may be passed with interest from the date of the accident.

5. We have carefully considered the rival submissions.

6. It is seen from the materials that in respect of death of Pavulkumar aliasKumar, his parents have prayed for a compensation of Rs.4 lakhs under Section166 (1) of the Motor Vehicles Act, 1988. By pointing out para 23 of the claimpetition, learned counsel for the appellant Insurance company raised hiscontention that since the deceased fell down from the moving tractor and died,while he was driving the same from Sankarapuram to Moongilthuraipattu, neitherhimself nor any one could claim compensation for his own wrong. In otherwords, it is his main contention that the deceased being a tort-feasor, theclaimants namely his parents are not entitled to claim compensation under the Motor Vehicles Act. Learned counsel appearing for the respondents drew ourattention to Section 167 of the Motor Vehicles Act,1988, and contended thatirrespective of the provisions in the Workmen's Compensation Act, 1923, theycan very well maintain the claim petition under the Motor vehicles Act. It isrelevant to refer Section 167 of the Motor Vehicles Act, 1988.

"Section 167. Option regarding claims for compensation in certain cases.-Notwithstanding anything contained in the Workmen's Compensation Act, 1928 (8of 1923) where the death of, or bodily injury to, any person gives rise to aclaim for compensation under this Act and also under the Workmen'sCompensation Act, 1923, the person entitled to compensation may withoutprejudice to the provisions of Chapter X claim such compensation under eitherof those Acts but not under both."

It is true that due to death or bodily injury,the aggrieved or interestedperson can make a claim for compensation under both of the Workmen'sCompensation Act and the Motor Vehicles Act, and that without prejudice to theprovisions of Chapter X, he can claim such compensation under either of theseActs but not under both. The only bar is that the aggrieved person/personscannot claim compensation under both the Acts. However, it is not disputedthat in this case the death occurred due to falling down from a movingtractor. The deceased was none-else than the driver of the tractor and thetrailer. In such a circumstance, he being a tort-feasor and responsible forthe accident, he cannot claim compensation for the injuries, likewise hislegal heirs also are not entitled for compensation from the Insurance companyby invoking the provisions of the Motor vehicles Act. In this regard, it isrelevant to refer a Division Bench decision of this Court in New IndiaAssurance Company Ltd., v. Meenal, reported in 1993 A.C.J. 522. Afterreferring to the earlier decisions of this Court and the other High Courts aswell as the Supreme Court, the Division Bench ( K. Venkataswamy and A. AbdulHadi, JJ) has held that inasmuch as the deceased was himself a tort-feasor,hence the claimants cannot maintain the claim petition for any compensationfrom the owner of the vehicle; consequently then cannot have any claim againstthe insurance company. Similar view has been reiterated by the subsequentDivision Bench of this Court (consisting of A. Abdul Hadi, J. and myself (P.Sathasivam, J.) in the case of The Oriental Insurance Company Ltd., v.Pandurangam and others, reported in 1997-1-L.W.59. In the case on hand, onthe basis of the materials placed, the Tribunal in para 5 has arrived at aspecific finding that the accident was caused due to rashness and negligenceon the part of the driver of the tractor and trailer, namely, Pavulkumar. Inthe light of the said factual conclusion and of the fact that the accident wascaused only due to the negligence of the driver of the ill-fated tractor, theclaimants are not entitled to claim any compensation under the Law of Torts.It is well settled law that when the owner is not liable, the insurer cannotbe held liable. Since the accident was caused only due to the rash andnegligent act of the driver of the tractor, we hold that the question ofvicarious liability will not arise when the claim is made by the tort-feasorhimself or any other person claiming under the tortfeasor; accordingly theclaim by the claimants is absolutely misconceived and they cannot claim anycompensation from the owner of the vehicle; consequently they also cannot makeany claim against the appellant-Insurance company. However, the insurer's

liability is to be determined not only with reference to the provisions underthe Motor Vehicles Act, but also with reference to the contract of insurancewhich would extend to the liability of the insured under the Workmen'sCompensation Act. There is a specific finding by the Tribunal that thedeceased tractor driver died in the course of his employment. Further, it isnot disputed that there was a valid insurance on the date of the accident, andaccordingly the insurer was liable to the extent of liability under theWorkmen's Compensation Act. In other words, we hold that even though theinsurance company was not liable under the provisions of the Motor VehiclesAct, it would be proper to assess the compensation under the Workmen'sCompensation Act and award the same in favour of the claimants. On thisground, instead of directing the respondents/claimants to go before theCommissioner for Workmen's Compensation Act, in order to shorten thelitigation and also in the interest of justice, we decided to dispose of theappeal by determining the appropriate compensation in favour of the claimants.

7. As per Section 3 of the Workmen's Compensation Act, undoubtedly theemployer is liable to pay compensation in respect of personal injury or deathcaused to a workman by accident arising out of and in the course of hisemployment in accordance with the provisions of Chapter II. Section 4provides how the amount of compensation is to be determined. As persub-section (1) of Section 4A, compensation under section 4 shall be paid assoon as it falls due. It is not disputed that for arriving at a justcompensation in case of permanent disablement and death the factors that areprovided under Schedule IV of the Workmen's Compensation Act have to be takennote of. Though the claimants have produced salary certificate-Ex.P-4, theowner of the tractor who issued the said certificate though he is a party(first respondent in O.P.No.171/98) has not chosen to examine himself tosubstantiate the contents of Ex.P-4. However, in the light of Ex.P-6 Drivinglicence to drive tractor and trailer and considering the fact that thedeceased died while driving the tractor, it would be proper to hold that hewould have earned Rs.2000/- per month as a driver of a tractor. By applyingthe formula prescribed under Schedule IV, we fix the compensation ofRs.2,16,000/-. The procedure and method adopted above has not been disputed.

8. Another question to be considered is whether the claimants are entitled tointerest for the said compensation and if so, from what date? Learned counselappearing for the appellant by drawing our attention to a decision of the ApexCourt in Ved Prakash Garg v. Premi Devi reported in AIR 1997 Supreme Court3854, would contend that the payment of interest would arise only ondetermination of compensation under the provisions of Workmen's CompensationAct and not either from the date of petition or from the date of accident.Similar question was considered by the Supreme Court in this decision. Afterreferring to the relevant provisions with regard to "interest" and "default"under the Workmen's Compensation Act, the Supreme Court has observed that,(para 14)

"14. On a conjoint operation of the relevant schemes of the aforesaid twinActs, in our view, there is no escape from the conclusion that the insurancecompanies will be liable to make good not only the principal amounts ofcompensation payable by insured employers but also interest therein, if

Conclusion

ordered by the Commissioner to be paid by the insured employers. Reason forthis conclusion is obvious. As we have noted earlier the liability to paycompensation under the Workmen's Compensation Act gets foisted on the employerprovided it is shown that the workman concerned suffered from personal injury,fatal or otherwise, by any motor accident arising out of and in the course ofhis employment. Such an accident is also covered by the statutory coveragecontamplated by Section 147 of the Motor Vehicles Act read with the identicalprovisions under the very contracts of insurance reflected by the Policy whichwould make the insurance company liable to cover all such claims forcompensation for which statutory liability is imposed on the employer underSection 3 read with Section 4A of the Compensation Act. All these provisionsrepresent a wellknit scheme for computing the statutory liability of theemployers in cases of such accidents to their workmen. As we have seenearlier while discussing the scheme of Section 4A of the Compensation Act thelegislative intent is clearly discernible that once compensation falls due andwithin one month it is not paid by the employer then as per Section 4A(3)(a)interest at the permissible rate gets added to the said principal amount ofcompensation as the claimants would stand deprived of their legally duecompensation for a period beyond one month which is statutorily granted to theemployer concerned to make good his liability for the benefit of the claimantswhose bread-winner might have either been seriously injured or might have losthis life. Thus so far as interest is concerned it is almost automatic oncedefault, on the part of the employer in paying the compensation due, takesplace beyond the permissible limit of one month. No element of penalty isinvolved therein..."

By heavily relying on the above passage and Section 4A(3), learned counsel forthe insurance company would contend that there cannot be any direction forpayment of interest without determining the amount of compensation and givinga month's time. According to him, only in the case of default and non-paymentof amount within the prescribed time, the claimants are entitled interest.After considering the object and scheme of the Act and sections 3, 4, 4A ofthe Workmen's Compensation Act, we are unable to accept the said contentionfor the following reasons. In the very same decision, namely, AIR 1997Supreme Court 3854 (cited supra), after holding so, in the penaltimateparagraph, Their Lordships have held, (para 19)

"19. As a result of the aforesaid discussion it must be held that thequestion posed for our consideration must be answered partly in theaffirmative and partly in the negative. In other words the insurance companywill be liable to meet the claim for compensation along with interest asimposed on the insured employer by the Workmen's Commissioner under theCompensation Act on the conjoint operation of Section 3 and Section 4Asub-section (3)(a) of the Companies Act. So far as additional amount ofcompensation by way of penalty imposed on the insured employer by theWorkmen's Commissioner under Section 4A (3) (b) is concerned, however, theinsurance company would not remain liable to reimburse the said claim and itwould be the liability of the insured employer alone."

It is further seen from the last paragraph that after setting aside theliability to pay the penalty imposed on the insured, they directed the insurance company to pay compensation as fixed by the workmen commissionerwith interest at 6 per cent per annum thereon from the date of the accidenttill the date of payment to the claimants (vide para 20).

9. It is also relevant to refer a 4 Judge Bench decision of the Hon'bleSupreme Court in Pratab Narain Singh Deo v. Shrinivas Sabata, reported in1976 A.C.J. 141 wherein Their Lordships have considered the very samequestion namely payment of "interest" and " penalty" under the Workmen'sCompensation Act. In para 7, Their Lordships have held thus:

"7....The employer therefore became liable to pay the compensation as soon asthe aforesaid personal injury was caused to the workman by the accident whichadmittedly arose out of and in the course of the employment. It is thereforefutile to contend that the compensation did not fall due until after theCommissioner's order dated May 6, 1969 under Section 19.......The appellantwas thus liable to pay compensation as soon as the aforesaid personal injurywas caused to the appellant, and there is no justification for the argument tothe contrary. "

The above conclusion of Their Lordships makes it clear that the employer orperson liable to pay compensation need not wait till formal determination bythe Commissioner under the Workmen's Compensation Act. On the other hand, wehold that the employer or any other person is liable to pay compensation assoon as personal injury was caused or death occasioned in the course ofemployment. The provisions in the Workmen's Compensation Act referred toabove would clearly show that the interest shall be paid to the worker or h isdependent as the case may be and the penalty shall be credited to the StateGovernment. In other words, on the delaying of payment of compensation onunjustifiable ground, the employer does not earn any penalty, if the claimantis being compensated with higher rate of interest. The term "fell due" insub-section (1) of Section 4A is to mean the time when the right to claimcompensation accrued due. The employee or his dependents would be gained bymeans of interest for the amount due as well as the penalty for the delay. Asstated earlier, the interest has to be paid to the employee or to hisdependent from one month after the date on which it was actually fell due andthe penalty amount has to be credited to the account of the State Government.We hold that the interest would accrue 30 days after the date of accident andnot from the date of quantification as argued by the learned counsel for theinsurance company. In this regard, it is relevant to refer a Division Benchdecision of the Kerala High Court in Oriental Insurance Company Limited v.Abdul Nazar, reported in 1997 Lab.I.C. 891. The conclusion arrived attherein is as follows: (para 10)

"10. Once it is found that the amount of compensation falls due on the dateof the accident, it has necessarily to be held that the defaulting employershall pay interest on the compensation from the date of the accident. Thewording of the Section is very clear that mere failure to pay compensationwould saddle the employer with the liability to pay interest unlike in thecase of penalty. Employer will be liable to pay penalty only in cases wherethe Commissioner is satisfied that there was no justification for the delay.The contumacious conduct on the part of the employer is not making the payment

has relevance only in the case of his liability to pay penalty. As far asinterest is concerned, there is no requirement to prove that the employer wasnot honestly contesting his liability. Ultimately, when it is found that hehas liability to pay compensation by the Commissioner for Workmen'sCompensation, the workman has to be compensated for not having the advantageof receipt of the amount of compensation on the daste on which the accidenthappened. On the other hand, it has to be noted that the employer wasretaining the amount with him all the time when the proceedings were going on.The fact that he has been granted one month's time from the date on whichcompensation fell due to make the payment would not in any way postpone thedate from which interest w3ould start running. Therefore, we are of the viewthat the liability to pay interest would run from the date on which the rightto receive compensation accrue in favour of the workman, namely, the date ofthe accident and not when orders are issued by the Commissioner for Wokrmen'sCompensation. The above view of ours is fortified by decisions of severalother High Courts, vide THE MUNICIPAL COMMISSIONER, BARODA v. PATELENGINEERING CO. LTD., 1976 Acc CJ 104, JAYAMMA v. EXECUTIVE ENGINEER, P.W.D.MADHUGIRI, 1982 Acc CJ 361: (1982 Lab IC Noc 61) (Kant), MADAN MOHAN VERMA v.MOHAN LAL, 198 3 Acc CJ 231. Even though the specific question as such wasnot raised in 1984 Acc CJ 630 supra, Bench of this Court had also held thatinterest at 6% p.a. shall be paid from the date of the accident till the dateof payment."

As stated earlier, the Workmen's Compensation Act, being a beneficiallegislation, considering the object and scheme of the Act, particularly afterinsertion of section 4A, we hold that interest for the compensation amountwould accrue 30 days after the date of accident and not from the date ofquantification. To make it clear that we are of the view that the liabilityto pay interest would run from the date on which the right to receivecompensation accrues in favour of the workman namely the date of the accidentand not on the date of issuance of orders by the Commissioner for Workmen'scompensation.

10. In the light of what is stated above, we modify the order of the Tribunaland pass an award for Rs.2,16,000/- in favour of the claimants-respondentsherein with interest at 12 per cent. Out of this amount, the first respondentherein (Kalia Pillai), father of the deceased is entitled to Rs.1,00,000/-,while the second respondent herein (Thangam) mother of the deceased isentitled to Rs.1,16,000/-. The interest as mentioned above shall be paidafter the expiry of 30 days from the date of accident till the date ofpayment. Civil Miscellaneous Appeal is disposed of on the above terms. Nocosts. C.M.P.No.21316/2001 is closed.

Index:- YesInternet:-YesR.B.To:The Motor Accidents Claims Tribunal (Sub Court),Kallakurichi with records.