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IN THE HIGH COURT OF MADRAS
Ratnam, J.
CHARAG CHEMICAL INDUSTRIES — Appellant
Vs.
R.G. GENESAN — Respondent
A.A.O. No. 117 of 1979
Decided on : 13-12-1980

The provisions of the Workmen's Compensation Act, 1923 do not permit the employer to implead the insurance company as a party to the proceedings in order to enable him to secure an indemnity against the insurance company.

Headnote:

WORKMEN'S COMPENSATION - INSURANCE - EMPLOYER'S LIABILITY - INDEMNITY - INSURANCE COMPANY NOT A NECESSARY PARTY - PAYMENT BY INSURANCE COMPANY NOT RECOGNISED - SECTION 8 OF THE ACT.

Fact of the Case:

The deceased, G. Karunanidhi, was employed by the Appellant as a workman. On 28.6.1977, he sustained injuries in an accident arising out of and in the course of his employment, which resulted in his death on the same day. The Respondent, the deceased's father, filed an application for compensation under the Workmen's Compensation Act, 1923 (the Act). The Appellant resisted the application on the ground that the deceased was not a workman within the meaning of the Act, that he was not working at the time of the accident, and that the Respondent had already received compensation from the New India Assurance Company under a Janata Personal Accident Insurance Policy. The Additional Commissioner for Workmen's Compensation-II, Madras, held that the deceased was a workman at the time of the accident and that the accident arose out of and in the course of his employment. He awarded compensation to the Respondent in the sum of Rs. 9,720/-.

Finding of the Court:

The court held that the insurance company was not a necessary party to the proceedings before the Commissioner for Workmen's Compensation. The court also held that the payment made by the insurance company to the Respondent could not be recognised for the purpose of the Act, and that the Appellant was therefore liable to pay compensation to the Respondent.

Issues: 1. Whether the insurance company was a necessary party to the proceedings before the Commissioner for Workmen's Compensation. 2. Whether the payment made by the insurance company to the Respondent could be recognised for the purpose of the Act.

Ratio Decidendi: 1. The court held that the insurance company was not a necessary party to the proceedings before the Commissioner for Workmen's Compensation because the Act does not provide for the impleading of insurance companies in such proceedings. The court also held that the provisions of the Act do not permit the employer to secure an indemnity from the insurance company. 2. The court held that the payment made by the insurance company to the Respondent could not be recognised for the purpose of the Act because Section 8 of the Act provides that no payment of compensation shall be made otherwise than by deposit with the Commissioner, and that no such payment made directly by an employer shall be deemed to be a payment of compensation.

Final Decision: The court dismissed the Appellant's appeal.

JUDGMENT :

Ratnam, J.—This appeal coming on for hearing on Wednesday, the 10th day of December, 1980 and this day upon perusing the petition of appeal, the orders of the lower Court, and the material papers in the case, and upon hearing the arguments of Mr. K.N. Balasubramaniam, Advocate for the Appellant, and Mr. E.H. B. David, Advocate for the Respondent, the Court made the following orders:

2. The appeal is directed against the order of the Additional Commissioner for Workmen's Compensation II, Madras, in W.C. Case No. 106 of 1977, on an application filed by the Respondent herein u/s 10 of the Workmen's Compensation Act (hereinafter referred to as the Act). The case of the Respondent was that his son Mr. G. Karunanidhi was a workman employed in the factory of the Appellant herein on a monthly wage of Rs. 150/- and that on 28.6.1977, G. Karunanidhi received injuries in the course of an accident arising out of and in the course of his employment, which later resulted in his death on the same day. The injury, according to the Respondent, was sustained by his son while he fell down from the ceiling in the said tube during the course of his employment. Claiming that the Respondent is a dependant of late G. Karunanidhi and as such entitled to a lump sum compensation in a sum of Rs. 13,500/-, the Respondent herein filed an application in W.C. Case No. 106 of 1977 for an order directing the Appellant herein to deposit the compensation.

3. That application was resisted by the Appellant on the ground that the Appellant had taken insurance policies in the name of the persons working in the establishment of the Appellant including the deceased G. Karunanidhi and that his policy number was 9260900732 and that a sum of Rs. 10,000/- had been received by the Respondent as compensation from the New India Assurance Company for the death of G. Karunanidhi and having received that amount, it is not open to the Respondent to claim any other compensation under the provisions of the Act, the further case of the Appellant was that the deceased G. Karunanidhi was working only as a casual labourer and would not come within the language of clauses in Schedule II of the Act, the Appellant also contended that the deceased G. Karunanidhi had done work which he was not authorised to do and, therefore, no compensation can be claimed on the basis that the injuries arose out of and in the course of his employment by the Appellant. The monthly wages of the deceased G. Karunanidhi, according to the Appellant, amounted to only Rs. 205/-. The objection that after receipt of compensation from the New India Assurance Company under the Janata Insurance Scheme, it is not to open to the Respondent to maintain a claim under the provisions of the Act was reiterated and the Appellant prayed for the dismissal of the application.

4. Before the Additional Commissioner for Workmen's Compensation-II, Madras, on 22.8.1978, the Appellant filed an application to implead the New India Assurance Company as a party-Respondent and secondly to decide the quantum of compensation. On 25.8.1978, notice of this application was ordered to the insurance company and in response to this, the insurance company in its reply dated 7.9 1978 stated that its presence as a party to the proceedings is not necessary as the claims of the party under the policy in question had been settled at Rs. 12,000;- and that the policy issued by it was not under the provisions of the Act. Ultimately, the insurance company was not impleaded as a party-Respondent to the proceedings before the Additional Commissioner for Workmen's Compensation-II, Madras.

5. On a consideration of the merits of the claim, the Additional Commissioner for Workmen's Compensation-II, Madras, held that the deceased G. Karunanidhi was a workman at the time of the accident as defined under the Act and that the accident arose out of and in the course of the employment and, therefore, compensation is payable in respect of the death of G. Karunan

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