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IN THE HIGH COURT OF CALCUTTA
Subhro Kamal Mukherjee and Subrata Talukdar, JJ.
The New India Assurance Company Limited - Appellant
Versus
Narayan Basu and another - Respondents
F.M.A. No. 610 of 2012 with C.A.N. No. 8372 of 2014
Decided On : 9-4-2015
For the Appellant :Kamal Krishna Das and Rajesh Singh, Advocates.
For the Respondents:Amit Ranjan Roy, Advocate.
The insurance company's liability under the Employees Compensation Act is to indemnify the employer for the compensation paid, and not to pay the compensation directly to the employee.
Headnote:
WORKMEN'S COMPENSATION - INSURANCE - LIABILITY - INDEMNIFICATION - EMPLOYER'S LIABILITY TO PAY COMPENSATION - INSURANCE COMPANY'S LIABILITY TO INDEMNIFY EMPLOYER - NO DIRECT LIABILITY OF INSURANCE COMPANY TO PAY COMPENSATION TO EMPLOYEE.
Fact of the Case:
An employee sustained injuries in an accident while driving an insured vehicle. The insurance company contested the claim, but the Commissioner awarded compensation to the employee. The insurance company appealed, arguing that it was not liable to pay the compensation directly to the employee.
Finding of the Court:
The court held that the liability of the insurer is to indemnify the employer for the compensation paid. It is not the responsibility of the insurer to pay the compensation awarded at the first instance.
Issues: Whether the insurance company is liable to pay compensation to the employee directly.
Ratio Decidendi: The court relied on the provisions of the Employees Compensation Act, 1923, and the decisions of the Supreme Court in P. J. Narayan v. Union of India and others and New India Assurance Company Limited v. Harshadbhai Amrutbhai Modhiya. The court held that the statutory liability under the Employees Compensation Act is on the employer. The entitlement of the claimant under the Workmens Compensation Act is to claim the compensation from the employer.
Final Decision: The appeal was allowed in part. The employer was directed to pay the compensation to the employee, with the right to seek reimbursement from the insurance company.
Subhro Kamal Mukherjee, J.
This is an appeal against judgment and award dated March 4, 2011 passed by the learned Commissioner of the Workmens Compensation, First Court, West Bengal, in Claim Case No. 12 of 2006.
2. By the award impugned, the learned Commissioner allowed the claim case and awarded Rs. 2,58,336/- (Rupees two lakh fifty eight thousand three hundred thirty six) only as compensation from the insurance company.
3. The insurance company was directed to pay the amount from the expiry of one month from the date of accident till the actual payment of the compensation together with statutory simple interest at the rate of twelve (12) per centum per annum till realisation.
4. The insurance company is the appellant before this Court.
5. Mr. Kamal Krishna Das, learned advocate appears for the appellant and submits with reference to the provisions of Sections 3, 4 and 4A of the Employees Compensation Act, 1923 that the liability of the insurer is to indemnify the employer for the compensation paid. It is not the responsibility of the insurance company to pay the compensation awarded at the first instance.
6. Mr. Das submits that there is no corresponding provision like Section 149 of the Motor Vehicles Act, 1988, in the Employees Compensation Act, 1923. It is not the duty of the insurer to satisfy the award passed against the employer in respect of the employee at the first instance.
7. Facts are not complicated in this case. It is stated that the claimant sustained injury in his left eye and left leg in course of his employment as a driver of the offending vehicle on July 14, 2005. The vehicle met with an accident and the claimant sustained injury on his left eye and left leg.
8. The owner of the offending vehicle appeared and filed a written statement. He, virtually, conceded the claim case and stated that as the vehicle was under valid insurance coverage, it was the liability of the insurer to pay the compensation.
9. The insurance company, however, contested the claim case contending that it was not liable to pay any compensation.
10. The claimant produced one Dr. K. Nanda. The said physician stated that he examined the claimant. He found that the claimant suffered partial disablement to the extent of (30) thirty per centum. The claimants loss of earning capacity was assessed at (100) hundred per centum. The certificate of the doctor was exhibited as Exhibit 5 in the case.
11. The learned Commissioner found that the claimant suffered disablement and loss of earning capacity to the extent of (50) fifty per centum. The victim was 26 (twenty six) years old on the date of accident. Although the victim claimed that he used to earn Rs. 5,000/- (Rupees five thousand) only, per month as salary, but the learned Commissioner did not accept his plea in the absence of any document. The learned Commissioner assessed his income at Rs. 4,000/- (Rupees four thousand) only.
12. Thus, the compensation was arrived at Rs. 2,58,336/- (Rupees two lakh fifty eight thousand three hundred thirty six) only.
13. Mr. Das, as I have indicated hereinabove, strenuously argued that it was not the liability of the insurer to satisfy the awarded sum at the first instance. It is the liability of the insurer to indemnify the employer in case he pays the awarded compensation. Under the Employees Compensation Act, 1923, it is the employer who has to take the initial burden to meet the claim and only, thereafter, the question of indemnification by the insurance company will arise.
14. Mr. Das in support of his contentions cites the decisions in the cases of G. Sreedharan v. M/s. Hindustan Ideal Insurance Corporation Limited reported in 1976 LAB I.C. 732, Sukro Munda v. National Insurance Company Limited and another reported in (2011) 3 WBLR (Cal) 594, Smt. Murahi Devi and others v. New India Assurance Company Limited and another reported in 2012 (3) T.A.C. 50 (Cal).
15. Mr. Das, also, refers to two decisions of the Apex Court. He refers to the decision of P. J. N
