Friday, 17 October 2014

When insurance company can not avoid to pay interest?

A contention was raised by the learned counsel for
the Respondent No.3 Insurance Company that they are not
liable to pay the interest component and reliance was placed
on the decision of New India Assurances Co. Ltd. Vs.
Harshad Bhai Amrut Bhai Modhiya and another [(2006)
5 SCC 192] In the facts of the case on which the said decision
arose, the contract of insurance entered into between the

parties contained a proviso that the insurance granted is not
extended to include any interest. In the present case there is
nothing on record to show that respondent No.3 Insurance
Company either pleaded about existence of such a clause in
the contract of insurance or led any evidence to the said
effect and hence the said decision will not help respondent
No.3 in any way and the contention raised is devoid of merit.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 5847 OF 2014
[ Arising out of SLP (Crl.) No.27614 OF 2011]
Manju Sarkar & Ors. … Appellant(s)
versus
Mabish Miah and ors. … Respondent(s)

Citation;2014 ALLSCR2516

C. NAGAPPAN, J.
1. Leave granted.
2. This appeal is directed against the judgment and
order dated 16.3.2009 passed by the Guwahati High Court,
Agartala Bench, in MFC (W.C.) 03 of 2009 dismissing the
appeal of the appellants herein against the order dated
12.12.2008 of the Commissioner for Workmen’s
Compensation West Tripura, Agartala, whereby the appellants
were denied compensation for the demise of employee Sajal
Sarkar.
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3. The facts in brief are stated as follows: Respondents
1 and 2 are the joint owners of the truck vehicle bearing
Registration No.TR 01-B-1689 and they had taken policy of
insurance for the said truck with respondent No.3. Sajal
Sarkar, the husband of the appellant No.1 was driver of the
said truck vehicle under the employment of respondents
Nos.1 and 2 on 14.5.2005 and he drove the truck and
reached Dharmanagar from Agartala and at that time he
noticed some mechanical trouble in the truck and he got
down to make arrangement for repair of the vehicle but on
the intervening night of 14/15-5-2005 at about 1.00 – 1.30
a.m. he met with a road accident and sustained grievous
injuries in Assam Agartala road in between S.T. Para and
Kherengjuri under Churaibari Police Station limit and he was
taken to Dharmanagar hospital where he succumbed to the
injuries in the early hours on 15.5.2005. The helper of the
truck Bikram Deb who was waiting in the truck, went in
search of Sajal Sarkar in the morning on 15.5.2005 and after
coming to know of the accident, he went to hospital and
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confirmed the death of driver Sajal Sarkar and thereafter
went to Churaibari Police Station and gave a complaint on
which a case under FIR No.28/05 for the alleged offences
under Section 279 and 304 (A) IPC was registered. The
appellant No.1 the widow along with appellant No.2, her
minor daughter and appellant No.3, the mother-in-law, filed a
suit under the Workmen’s Compensation Act, 1923 in T.S.
W.C. 39 of 2005 before the Commissioner, Workmen’s
Compensation, West Tripura at Agartala contending that Sajal
Sarkar met with a road accident in the course of his
employment under respondent Nos.1 and 2 resulting in his
death and the respondents were liable to pay compensation
of Rs. 7 lakhs along with interest as per the provisions of the
Act. The Commissioner dismissed the suit on contest. The
appellants challenged the same by filing appeal in MFA(WC)
03 of 2009 and the High Court dismissed the appeal.
Aggrieved by the same the appellants have preferred the
present appeal.
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4. The learned counsel for the appellants contended
that Sajal Sarkar met with a road accident resulting in his
death during the course of his employment as truck driver
under respondent Nos.1 and 2 and the Courts below have
failed to note the principle of notional extension at both the
entry and exit by time and space and apply the same to the
present case and the appellants are entitled to
compensation.
5. Per contra the learned counsel for the respondents
contended that Sajal Sarkar parked the truck in the godown
complex of FCI Churaibari and considering the delay of
loading goods, he left the truck and went away towards an
unknown destination in connection with his personal affairs,
saying to helper Bikram Deb that he would return by night,
and the appellants have not proved that there was
mechanical trouble in the truck on the way to Churaibari FCI
godown as pleaded by them and Sajal Sarkar did not suffer
the injuries in the course of his employment and, therefore,
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the appellants are not entitled to receive any compensation
under the Act, as rightly held by the Courts below.
6. We have carefully considered the rival contentions
and perused the records. The case of the appellants is that
on 14.5.2005 Sajal Sarkar was driving the truck vehicle under
the employment of respondents 1 and 2 from Agartala to
Churaibari FCI godown and when he reached Dharmanagar
he got down to make arrangement for repairing the
mechanical trouble in the truck and in the same night he met
with a road accident and sustained injuries which led to his
death in the hospital and since death has occurred in the
course of employment, they are entitled to compensation
from the respondents. Respondent Nos.1 and 2 in their joint
written statement filed before the Commissioner have stated
that one Gopal Sharma was the permanent driver of their
truck vehicle and on 13.5.2005 in the absence of their
permanent driver they entrusted their truck to Sajal Sarkar to
drive to Churaibari FCI godown and on the same day the
truck entered the godown complex of FCI at Churaibari and
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Sajal Sarkar left the truck handing over the key to Bikram
Deb, helper of the truck and thereafter Sajal Sarkar ceased to
be in their employment and on 17.5.2005 the permanent
driver Gopal Sharma drove the truck from Churaibari to
Agartala and hence they are not liable to pay any
compensation for the death of Sajal Sarkar and in any event
their vehicle is insured with Respondent No.3 and it is liable
to pay compensation.
7. From the pleadings it is clear that Sajal Sarkar was
employed by respondent Nos.1 and 2 to drive their truck at
the relevant time. Though respondent Nos. 1 and 2 had
stated in the counter that Sajal Sarkar was entrusted to drive
the truck on 13.5.2005 and on the same day the said truck
entered the godown complex of FCI at Churaibari, this
statement about the date does not appear to be correct. It is
categorically stated in the claim petition that Sajal Sarkar
drove the truck vehicle on 14.5.2005 and the said fact is
corroborated by the averments in the First Information
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Report as well as final report which specifically states that the
truck reached the FCI godown at Churaibari on 14.5.2005.
8. Further case of respondent Nos.1 and 2 is that Sajal
Sarkar was employed by them to drive the truck vehicle from
Agartala to Dharmanagar FCI godown at Churaibari and on
the truck reaching the godown, Sajal Sarkar ceased to be in
their employment. This also appears to be an after thought
and factually incorrect. As per the averments in the First
Information Report lodged by helper Bikram Deb the truck
reached Churaibari FCI godown on 14.5.2005 and Sajal Sarkar
was to return back to Agartala with the truck laden with rice
bags. According to the complainant, on reaching FCI godown
in the afternoon on 14.5.2005, considering the delay of
loading goods, Sajal Sarkar left the place by leaving the
truck in his care and told him that he would return in the
night and since he did not return during the night, he
searched him the next morning and after coming to know
about the accident and death, he lodged the complaint. If
Sajal Sarkar was actually employed only for the trip from
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Agartala to FCI godown Churaibari there was no need for him
to inform the helper that he would come back in the night to
the godown for the return trip and in the same way there
was no obligation on the part of the helper Bikram Deb to
search for Sajal Sarkar the next day morning leading to
lodging of the complaint. These circumstances clinch the
issue and prove that Sajal Sarkar was employed to drive the
truck from Agartala to FCI godown Churaibari and return back
to Agartala with the truck laden with the rice bags. It is
also relevant to point out that respondent Nos.1 and 2 neither
examined themselves in the trial nor examined helper Bikram
Deb or permanent driver Gopal Sharma to substantiate their
plea.
9. According to the appellants, Sajal Sarkar on reaching
Dharmanagar noticed some mechanical trouble in the truck
and he got down to make arrangement for repairing the
same and in the night he met with an accident. Churaibari
FCI godown is located in Dharmanagar. The Courts below
have rejected the claim petition on the ground that there is
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contradiction in the claimants case since there was no
mention of mechanical defect in the truck in the First
Information Report. What is relevant is as to whether Sajal
Sarkar continued to be in course of employment under
respondent Nos.1 and 2 at the time of sustaining injuries in
the accident culminating in his death. Sajal Sarkar was at
Churaibari, Dharmanagar only on account of his employment
as driver of the truck and there he met with the road
accident.
10. This Court has in the celebrated decision in General
Manager B.E.S.T. Undertaking, Bombay vs. Mrs. Agnes
(AIR 1964 SC 193] laid down as follows:
“Under Section 3(1) of the Act the injury must
be caused to the workman by an accident
arising out of and in the course of his
employment. The question, when does an
employment begin and when does it cease,
depends upon the facts of each case. But the
Courts have agreed that the employment does
not necessarily end when the “down tool”
signal is given or when the workman leaves the
actual workshop where he is working. There is
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a notional extension at both the entry and exit
by time and space. The scope of such
extension must necessarily depend on the
circumstances of a given case. As employment
may end or may begin not only when the
employee begins to work or leaves his tools but
also when he used the means of access and,
egress to and from the place of employment.”
11. As rightly contended by learned counsel appearing
for the appellants there is a notional extension in the present
case also and we would, therefore, hold that Sajal Sarkar met
with the road accident in the course of his employment under
respondent Nos.1 and 2. The Courts below have misdirected
themselves while dealing with this question and the finding
rendered by them is perverse and unsustainable.
12. In the claim petition the appellants have stated that
Sajal Sarkar at the time of death was aged about 22 years
and used to get monthly wages of Rs. 4,500/- at the time of
accident. The first appellant herein examined herself as PW1
in the trial and has reiterated the age and income of the
deceased. Three documents were marked on her side. Her
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testimony deserves acceptance. As per Section 4 clause 1(a)
of the Act where death results from the injury, 50% of the
monthly wages of the deceased multiplied by the relevant
factor would be the amount of compensation. In the present
case the compensation would be a sum of Rs.2250 being
50% of the monthly wages multiplied by factor 221.37,
which comes to Rs.4,98,082.50 and a further sum of
Rs.10,000/- could be awarded towards funeral expenses as
per Section 4 Clause (4). In the circumstances of the case we
deem it just and proper to award interest at the rate of 9%
per annum on the compensation from the date of claim
petition.
13. A contention was raised by the learned counsel for
the Respondent No.3 Insurance Company that they are not
liable to pay the interest component and reliance was placed
on the decision of New India Assurances Co. Ltd. Vs.
Harshad Bhai Amrut Bhai Modhiya and another [(2006)
5 SCC 192] In the facts of the case on which the said decision
arose, the contract of insurance entered into between the
Page 12
12
parties contained a proviso that the insurance granted is not
extended to include any interest. In the present case there is
nothing on record to show that respondent No.3 Insurance
Company either pleaded about existence of such a clause in
the contract of insurance or led any evidence to the said
effect and hence the said decision will not help respondent
No.3 in any way and the contention raised is devoid of merit.
14. In the result the appeal is allowed and the judgment
and order of the Courts below are set aside and the claim
petition is allowed and there shall be a Decree directing the
respondents to pay a sum of Rs.5,08,082.50 as compensation
together with interest at the rate of 9 per cent per annum
from the date of claim petition with costs.
…………………………….J.
(T.S. Thakur)
……………………………J.
(C. Nagappan)
New Delhi;
June 30, 2014
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