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2018 Supreme(J&K) 335
IN THE HIGH COURT OF JAMMU AND KASHMIR
Dhiraj Singh Thakur, Sanjeev Kumar, JJ.
National Insurance Company - Appellant
Vs.
Geeta Devi and others - Respondents
CIMA No.131 of 2008, MP No.191 of 2008
Decided On : 02-07-2018
Advocate Appeared:
For the Appellant :Mr C. S. Gupta, Ms Snigdha Shekher, Advocate.
The main legal point established is that the liability of the insurance company is limited to the prescribed amount for each individual employee, as per the insurance policy.
Headnote:
Insurance - Compensation - Consumer Disputes - Baglihar Hydro Electric Project - Jammu & Kashmir State Consumer Disputes Redressal Commission - 5. Special Conditions 1. The policy is restricted to the project Area of Baglihar H.E.Project. The project area would mean the area Stated in the contract clause. - Clause 1.33, defines the temporary work, which mean all temporary works of every kind required in or about the execution of the works. Clause 1.37 defines the works, which mean and include all permanent and temporary works to be executed, all items and things to be supplied/ done and services and activites to be performed by the Contractor within or outside the Project Area, in pursuance of and in accordance with the Contract but shall not include the Contractor’s Construction Equipment its related spares and wearing parts.
Fact of the Case:
The deceased, an Assistant Engineer, met with a road accident outside the project area and died. The insurance company rejected the claim, leading to a complaint filed by the deceased's successors-in-interest before the Jammu & Kashmir State Consumer Disputes Redressal Commission, which awarded compensation of Rs. 10 lakhs with interest and litigation charges.
Finding of the Court:
The Commission held the insurance company liable for compensation based on the policy's coverage of areas where permanent and temporary works were located, including services and activities performed by the contractor within or outside the project area. The court partially allowed the appeal, holding the insurance company liable to pay Rs. 5 lakhs as compensation with interest and litigation charges.
Issues: The issues revolved around the liability of the insurance company for the deceased's death outside the project area and the extent of compensation payable.
Ratio Decidendi: The court found that the insurance policy covered areas where permanent and temporary works were located, including services and activities performed by the contractor within or outside the project area. However, the court held that the liability of the insurance company could not exceed Rs. 5 lakhs as prescribed for each individual employee, including the deceased.
Final Decision: The court partially allowed the appeal, holding the insurance company liable to pay Rs. 5 lakhs as compensation with interest and litigation charges.
Dhiraj Singh Thakur, J.
1. This is a Ist Miscellaneous Appeal against the order dated 27.03.2008 passed by the Jammu & Kashmir State Consumer Disputes Redressal Commission, Jammu, whereby the complaint has been allowed and the appellant company has been directed to pay an amount of Rs. 10 lakhs with interest @ 6% per annum from the date of accident till the final payment is made along with litigation charges of Rs.5000/-.
2. Briefly stated the material facts are as under:-
3. A complaint came to be filed by the successors-in-interest of deceased- Sanjeev Kumar Sharma before the Jammu & Kashmir State Disputes Redressal Commission, Jammu. In the complaint it was averred that the deceased was employed as Assistant Engineer/ Site Inspector with respondent no.3, which was an associated company of the principal contractor, respondent no.4. It was stated that the deceased was entrusted with the duty to maintain the quality control of the material which was being used by the contractor and the principal contractor for the construction of a dam on river Chenab known as ‘Baglihar Hydro Electric Project, Chanderkot’. It was stated that on 29th September, 2002, the deceased was on official duty relating to project work but unfortunately met with a road accident at Gangyal near National Highway, Jammu, and died on the spot. It was stated that the deceased was being paid Rs.7500/- per month and as per the insurance policy obtained by respondent no.3, the deceased was insured for a sum of Rs.10 lakhs for the risk of his life. It was pursuant to the rejection of the claim by the insurance company that forced the complainants to approach the Consumer Commission.
4. Respondent, Insurance Company, in its objections took a stand that M/s Jai Parkash Industries Ltd., took a personal group policy for their employees and capital sum insured was Rs. 5 lakhs each. It was stated that the liability of the company was to be fixed in accordance with the parameters prescribed in the policy. It was stated that the policy was restricted to the project area of Baglihar Hydro Electric Project. According to the objections, the ‘project area’ meant the area where the permanent and temporary works in the vicinity of works area in Doda District were situate in Jammu & Kashmir State. It was stated that since the death had not occurred with the project area, the insurance company was not liable.
5. M/s Jai Parkash Industries Limited-respondents 2 and 3 in the complaint, took a stand that according to the Group Janta Personal Accident Scheme obtained by it in regard to its employees, the employees who were getting pay up to Rs. 5000/- were to get Rs. 5 lakhs in case of death, those employees in the pay scale of Rs.5000 to 7500 were to get Rs.7.5 lakhs in the event of their death and those in the pay scale of Rs.7500 and above were to get Rs. 10 lakhs. It was also stated that according to the terms and conditions of the contract of insurance, the insurance company was liable to pay compensation not only for accidents within the project area but even the extended project areas.
6. The State Commission by virtue of its order dated 27.03.2008 allowed the complaint and awarded an amount of Rs. 10 lakhs as compensation with interest along with litigation charges of Rs.5000/-. For awarding compensation of Rs.10 lakhs, the Commission placed reliance upon policy no.350700/96000002/2/98 which was valid up to 31.05.1998.
7. In the present appeal, the appellant company challenges the order passed by the Commission on two counts; firstly it was urged that the insurance company was not at all liable inasmuch as the death has occurred in a road accident outside the project area and secondly, assuming that the insurance company was liable, the liability was to the extent of Rs. 5 lakhs only.
8. Heard counsel for the parties.
9. As regards the first objection, it is necessary
