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UTTAR PRADESH STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, LUCKNOW
Hon’ble Mr. Justice K.C. Bhargava, President & Mr. D.D. Bahuguna, Member
NATIONAL INSURANCE COMPANY LIMITED—Appellant
versus
U.P. STATE TEXTILE CORPORATION LTD.—Respondent
Case No. 1020/SC of 1998—Decided on 9.3.1999
Counsel for the Parties :
For the Appellant :Mr. Anil Kumar, Advocate.
For the Respondent:Mr. Tanuja Somvanshi, Advocate.
An insurance company is liable to indemnify the insured for any liability arising out of the Workmen's Compensation Act.
Headnote:
WORKMEN'S COMPENSATION ACT - INSURANCE POLICY - LIABILITY OF INSURANCE COMPANY - OCCUPATIONAL DISEASE - TUBERCULOSIS - CONSUMER FORUM JURISDICTION - TIME BARRED CLAIM - CONSUMER PROTECTION ACT - INDEMNITY BOND - INTERIM ORDER OF HIGH COURT.
Fact of the Case:
UPSTC took a Workmen's Compensation Act policy from National Insurance Company for its employees. An employee, Dharambir Singh, died of Tuberculosis, which was held to be an occupational disease by the Workmen's Compensation Commissioner. UPSTC paid the compensation to the employee's wife as per the Commissioner's order. The Insurance Company refused to indemnify UPSTC. UPSTC filed a complaint before the District Consumer Forum, which ordered the Insurance Company to pay the compensation to UPSTC.
Finding of the Court:
The District Consumer Forum's order was upheld by the State Consumer Commission. The Commission held that the Insurance Company was liable to indemnify UPSTC for the compensation paid to the employee's wife. The Commission also held that the claim was not time-barred as the cause of action arose after the Workmen's Compensation Commissioner's judgment.
Issues: 1. Whether the Insurance Company was liable to indemnify UPSTC for the compensation paid to the employee's wife? 2. Whether the claim was time-barred?
Ratio Decidendi: 1. The insurance policy obtained by UPSTC covered the liability under the Workmen's Compensation Act. The Workmen's Compensation Commissioner had held that Tuberculosis was an occupational disease and had awarded compensation to the employee's wife. The Insurance Company was, therefore, liable to indemnify UPSTC for the compensation paid. 2. The claim was not time-barred as the cause of action arose after the Workmen's Compensation Commissioner's judgment.
Final Decision: The appeal was dismissed and the order of the District Consumer Forum was upheld.
Mr. D.D. Bahuguna, Member—This appeal has been filed by National Insurance Company Limited, through the Senior Divisional Manager, Meerut against U.P. State Textile Corporation’s Spinning Mill, Partappur, District Meerut. The appeal is against order dated 6.5.1995 (passed by District Consumer Forum, Meerut) in Complaint Case No. 693/1993. Briefly stated, the facts of the case are as follows :
2. The respondent-U.P. State Textile Corporation, Unit Partappur had taken policy of Workmen’s Compensation Act from National Insurance Company Limited for the period 30.11.1985 to 29.11.1986 and under the said policy the entire work-force consisting of clerical staff mill employees, security staff, sweepers, gardners etc. numbering 2601 were covered. The Insurance Company was liable to indemnify the Partappur Unit of UPSTC of any liability arising out of Workmen’s Compensation Act. Sri Dharambir Singh was working as Reeler in the said unit and this employee died of Tuberculosis on 6.9.1998. Wife of the deceased employee, Smt. Jai Devi, filed a claim under Workmen’s Compensation Act in which the Insurance Company was also impleaded as a party. The complainant, UPSTC, Partappur Unit resisted the claim of the employee, but the Workmen’s Compensation Commissioner in his judgment dated 28.6.1992 held that Tuberculosis was an occupational disease and by the same order the employee was awarded a relief of Rs. 66,633.64 as compensation plus 10% simple interest from the date of the death of the deceased employee. The Workmen’s Compensation Commissioner observed that the Insurance Company is not directly responsible for making payment of compensation, but the case of the complainant, respondent in this appeal, was that the Insurance Company was liable to indemnify the liability and cannot absolve itself of the liability. The respondent filed an appeal against order dated 28.6.1992 of the Workmen’s Compensation Commissioner after depositing the total amount of Rs. 1,06,522.84 before Hon’ble High Court, Allahabad. The Hon’ble High Court passed an order that until further orders the amount of compensation may not be paid to the claimant, but the amount should be invested in FDR for three years in some Nationalised Bank. This order was dated 13.10.1992. By another order dated 15.4.1993, the Hon’ble High Court at Allahabad ordered that the amount of compensation which is deposited in the Fixed Deposit Receipt, shall be appropriated in the following manner until disposal of the case :
(a) 50% of compensation alongwith interest shall be released to the wife of the deceased unconditionally.
(b) Remaining 50% amount shall remain deposited in the FDR in a Nationalised Bank and the interest on the said amount shall be calculated annually and paid to the wife of the deceased at the close of the financial year. The interest which accrues on the fixed deposit receipt shall not be added to the amount but disbursed to the wife of the deceased.
(c) This amount was to be appropriated by the wife of the deceased alongwith two minor children.
3. The UPSTC, Partappur unit wrote to the Insurance Company advising them of the conditional order of the Hon’ble High Court and called upon them to indemnify the UPSTC against the amount deposit by them under the Workmen’s Compensation Act, but the Insurance Company did not do so. The amount deposited by the UPSTC alongwith damage of Rs. 50,000/- as well as interest was claimed from the Insurance Company by UPSTC, before the District Forum. The opposite party in the District Forum denied the claim as not tenable and challenged the legality of the complaint. The Insurance Company also stated that the complainant is not entitled to any claim under Consumer Protection Act and the District Forum has no jurisdiction to entertain the complaint as the matter is in dispute, was still subjudice and pending before the High Court and as such no proceedings can be initiated in the District Consumer Forum. It was also stated that the W
