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National Insurance Co. Ltd. v. Saifuddin And Others
Structured Summary of the Court's Opinion
Factual and Procedural Background
The appeal arises from an order dated 18 January 1988 of the Commissioner, Workmen's Compensation, Ujjain in Workmen's Compensation Case No. 17 of 1983. The deceased, Haidarali s/o Saifuddin, was employed as a cleaner on truck registration No. MPU 6106 and died on 8 June 1983 due to injuries sustained in an accident arising out of and in the course of his employment. As per R.T.O. records the truck was registered in the name of Respondent No. 3, Kalimuddin, and it was insured with the appellant National Insurance Co. Ltd. in Kalimuddin's name. The deceased was alleged to have been appointed as cleaner by Respondent No. 4, Kesuram.
On 15 September 1983 the parents of the deceased (Saifuddin and Sara Bai) filed a claim petition seeking compensation; Kalimuddin and the insurer resisted the claim, while Kesuram was initially proceeded against ex parte. At the stage of evidence Kesuram sought to set aside the ex parte order; he was given opportunities to adduce evidence but his application was ultimately rejected and his prayer for further opportunity was refused.
The Commissioner found dependency of the parents on the deceased, accepted that the deceased was employed as a cleaner with an average monthly salary of Rs. 650, and held that death occurred in the course of employment. The Commissioner awarded Rs. 23,100 as compensation and Rs. 4,000 as penalty, holding Kalimuddin, Kesuram and the insurer jointly and severally liable for compensation and Kesuram alone liable for the penalty. The insurer (appellant) filed this appeal under Section 30 of the Workmen's Compensation Act, 1923; a cross-objection was filed by Kesuram and a cross-appeal by the dependents (Misc. Appeal No. 46 of 1988, Saifuddin v. Kalimuddin).
Legal Issues Presented
- Whether the appeal under Section 30 of the Workmen's Compensation Act by the insurer is maintainable absent deposit of the awarded amount (i.e., applicability of the proviso to Section 30 to an insurer who is not the employer).
- Who is the true employer of the deceased workman for purposes of employer liability under the Act — the registered owner Kalimuddin, the person who allegedly appointed and paid the deceased (Kesuram), or another transferee (Rehanabai)?
- Whether the transfer of the truck by the registered owner (Kalimuddin) to an alleged purchaser (Rehanabai) was proved and, relatedly, whether the insurer (which insured in Kalimuddin's name) is liable.
Arguments of the Parties
Appellant (National Insurance Co. Ltd.)
- Contended that Kalimuddin was not the owner of the truck on the date of the accident because he had sold it to one Rehanabai on 10 February 1979; therefore Kalimuddin could not be held liable as employer and the insurer, which insured in Kalimuddin's name, could not be held liable for compensation.
- Argued that the deceased had been appointed and paid by Kesuram, and thus the employer for purposes of the Act was Kesuram (not Kalimuddin), which would also affect insurer liability.
Claimant-Respondents (Parents of the Deceased)
- Raised a preliminary objection to maintainability of the insurer's appeal under Section 30 on the ground that an appeal by the employer (or arguably any appellant) requires a certificate from the Commissioner that the appellant deposited the amount payable under the order; reliance was placed on a decision cited as New India Assurance Co. Ltd. v. M. Mohinder Singh (1986 ACJ 1101 (MP)).
Respondent No. 4 (Kesuram)
- Sought to set aside the ex parte order entered against him by filing an application dated 27 May 1985 and later sought opportunities to adduce evidence; he was given two opportunities but his prayer for further opportunity was refused and his application was dismissed.
- No substantive evidence from Kesuram about his connection or status vis-à-vis the truck (manager, hirer, agent or transferee owner) was before the Commissioner because he was not examined.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| New India Assurance Co. Ltd. v. M. Mohinder Singh, 1986 ACJ 1101 (MP) | Authority cited by claimants' counsel to support that an appeal under Section 30 must be accompanied by a certificate that the appellant has deposited the amount payable under the impugned order. | The decision was noted but not applied. The court observed the existence of a contrary Division Bench decision and therefore rejected the preliminary objection based on this single-Bench decision. |
| Northern India Insurance Co. Ltd. v. Commissioner for Workmen's Compensation, 1973 ACJ 428 (MP) | Division Bench authority holding that the proviso to Section 30 requiring deposit is expressly limited to appeals filed by the employer, and does not apply to an appeal by an insurance company which is not the employer. | The court followed this Division Bench decision and, treating it as binding authority that has not been overruled, rejected the preliminary objection to the maintainability of the insurer's appeal under Section 30. |
Court's Reasoning and Analysis
The court framed the "real controversy" as identifying the true employer of the deceased workman so as to determine legal liability under the Workmen's Compensation Act. Its analytical steps were:
- Maintainability under Section 30: The court considered the preliminary objection that the insurer's appeal required deposit of the awarded amount under the proviso to Section 30. The court found and applied a Division Bench decision (Northern India Insurance Co. Ltd.) holding that the proviso is limited to employers and does not apply to an insurance company that is not the employer. Because that Division Bench decision had not been overruled, the court rejected the preliminary objection and allowed the appeal to proceed.
- Facts found by the Commissioner: The Commissioner had accepted that the claimants were dependent on the deceased, that the deceased was a cleaner on the truck with an average monthly salary of Rs. 650, and that death occurred in the course of employment. The court treated these factual findings as well-founded and based on the record.
- Proof of transfer of ownership: The appellant claimed Kalimuddin had transferred the truck to Rehanabai in 1979. The Commissioner had rejected that claim. The court reviewed the evidentiary record and observed that the only document put forward (Exhibit D-1, a carbon copy titled "bikrikhat rashid") bore Kalimuddin's signature but not the alleged purchaser's signature; further, there was no change of ownership recorded in the R.T.O. or insurer's records. The court concluded the transfer was not proved on the record.
- Identity of the employer and the incongruity in the Commissioner's order: The Commissioner had simultaneously treated Kalimuddin (the registered owner) as employer and Kesuram (who allegedly appointed and paid the deceased) also as employer, and had held them jointly and severally liable. The court identified this as legally incongruous — effectively recognizing two contemporaneous employers for the same workman — and held that such a position could not be sustained without clearer evidence.
- Lack of evidence as to Kesuram's status: Kesuram had been proceeded against ex parte and was not examined. Although he later sought to set aside the ex parte order and to adduce evidence, the Commissioner ultimately denied further opportunity; as a result, there was no satisfactory evidence explaining Kesuram's connection with the truck (manager, hirer, agent, transferee or otherwise). The court found that this absence of evidence made it impossible to conclusively determine who the employer was.
- Remedy and directions: Because the impugned order did not conclusively identify the employer or determine Kesuram's status, the court set the order aside and remanded the matter. It directed the Commissioner to join Rehanabai (alleged transferee) as a non-applicant party, permit Kesuram to file a written statement and to adduce evidence, and to decide liability afresh on the basis of the totality of evidence (including evidence already on record).
Holding and Implications
Holding: The impugned order of the Commissioner is set aside and the matter is remanded for further proceedings consistent with the directions in the judgment. The appeal, the cross-objection and the cross-appeal (Misc. Appeal No. 46 of 1988, Saifuddin v. Kalimuddin) are disposed of. There shall be no order as to costs.
Implications:
- The Commissioner's earlier award of Rs. 23,100 (compensation) and Rs. 4,000 (penalty) is no longer a final determination as to which of the respondents is the employer or financially liable; liability must be re-determined after joinder of the alleged transferee (Rehanabai) and after Kesuram is afforded an opportunity to participate and to produce evidence.
- The court accepted the factual findings concerning dependency, employment status, salary and cause of death but concluded that the identity of the employer was not sufficiently established, requiring further inquiry.
- No new legal precedent was created by this decision; the court followed an existing Division Bench precedent regarding the applicability of the proviso to Section 30 to insurers and disposed of the matter by remand to resolve factual lacunae.
This summary is confined strictly to the content of the provided opinion and does not add or infer facts beyond what the court record contains.
1. This order shall also govern the disposal of Misc. Appeal No. 46 of 1988, (Saifudddin v. Kalimuddin).
2. The real controversy involved in this case is one of identifying the true employer vis-a-vis the deceased workman, so as to hold him legally liable for compensation under the Act.
3. This is an appeal under Section 30 of the Workmen's Compensation Act, 1923 (herein referred to as 'the Act') filed by the insurance company against the order dated January 18, 1988 passed by the Commissioner, Workmen's Compensation, Ujjain in W.C. Case No. 17 of 1983, whereby the learned Commissioner has awarded Rs. 23,100/- as compensation against all the three respondents who have been held to be jointly and severally liable to pay the same and Rs. 4,000/- as penalty against the respondent No. 4 who alone has been held to be liable to pay the same.
4. A cross-objection has been filed in this appeal by Respondent No. 4, Kesuram. A cross-appeal has, however, been filed by the dependent parents of deceased Haidarali for enhancement of penalty amount, viz., Misc. Appeal No. 46 of 1988, (Saifuddin v. Kalimuddin).
5. The facts giving rise to this appeal, briefly stated, are as follows:
The deceased Haidarali s/o Saifuddin was employed as a cleaner on the truck bearing registration No. MPU 6106, who received persona! injuries resulting in his death due to accident arising out of and in the course of his employment as such cleaner. The accident resulting in the death of the deceased Haidarali, cleaner of the truck MPU 6106, took place on June 8, 1983 when Respondent No. 3 Kalimuddin was registered owner of the truck in question as per the record of the Regional Transport Officer. The truck in question also stood insured with the appellant insurance company in the name of Kalimuddin. The deceased Haidarali was appointed as cleaner on the truck by one Kesuram, Respondent No. 4.
6. The parents of deceased Haidarali, Saifuddin and Sara Bai, Respondent Nos. 1 and 2, filed a claim petition on September 15, 1983 for compensation before the Commissioner, Workmen's Compensation, Ujjain in respect of the death of the deceased Haidarali by accident on June 8, 1983, joined in as non-applicants Kalimuddin, registered owner of the truck in question, Kesuram, the person who is said to have appointed deceased Haidarali as cleaner on the said truck and the appellant National Insurance Co. Ltd., with whom the truck stood insured in the name of owner Kalimuddin on the date of accident.
7. After service of notice of the claim petition non-applicants Kalimuddin and the insurance company resisted the claim and Kesuram was proceeded ex parte. It was only at the stage of evidence after the claimants' witnesses had been examined that Kesuram appeared and filed an application dated May 27, 1985 for setting aside the ex parte order against him. The learned Commissioner fixed the case for evidence on the question of sufficient cause in respect of the said application of Kesuram for setting aside the ex parte order. Kesuram was given two opportunities to adduce evidence, viz., on August 26, 1985 and on October 4, 1985 and when he made a prayer for a further opportunity on November 2, 1985, the learned Commissioner rejected his prayer and dismissed Kesuram's application dated May 27, 1985 for setting aside ex parte order against him.
8. The learned Commissioner, on appreciation of evidence adduced in the case, found that the claimant-Respondent Nos. 1 and 2, parents of the deceased workman, were dependent on the earnings of deceased Haidarali, that the deceased Haidarali, who was appointed as a cleaner on the truck bearing registration No. MPU 6106, was a workman on an average monthly salary of Rs. 650/- and that the deceased Haidarali died in the course of his employment due to personal injuries in the accident arising out of such employment.
9. The learned Commissioner held that the claimants were entitled to receive a sum of Rs. 23,100/- as compensation and Rs. 4,000/- as penalty. As regards fixing the liability to pay compensation and penalty, the learned Commissioner has held Kalimuddin, Respondent No. 3, Kesuram, Respondent No. 4 and the appellant insurance company, jointly and severally liable to pay the aforesaid compensation amount but as regards the amount of penalty the Respondent No. 4, Kesuram, alone was held liable to pay the same.
Being aggrieved by the impugned order of the Commissioner awarding compensation, the insurance company has filed this appeal.
10. The learned counsel for the claimant Respondent Nos. 1 and 2 has, however, raised a preliminary objection to the maintainability of this appeal under Section 30 of the Act, on the ground that such an appeal cannot lie unless the memorandum of appeal is accompanied by a certificate of the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against and that in the instant case the appellant has not deposited the amount awarded by the impugned order. Learned counsel has cited a few decisions in support of his submission including a single Bench decision of this Court in New India Assurance Co. Ltd. M. Mohinder Singh, 1986 ACJ 1101 (MP). In reply a Division Bench decision of this Court taking a contrary view has also been cited, i.e., Northern India Insurance Co. Ltd. v. Commissioner for Workmen's Compensation, 1973 ACJ 428 (MP), wherein it has been held that in an appeal by the insurance company which is not the employer, the condition as to deposit in an appeal under Section 30 of the Act does not apply. The restriction contained in the proviso to Section 30 of the Act for depositing the amount is expressly limited to an appeal filed by the employer and since the insurance company is not the employer, that restriction is not applicable to the insurance company.
11. In view of the aforesaid Division Bench decision of this Court which does not appear to have been overruled, the preliminary objection of the learned counsel for the claimant-Respondent Nos. 1 and 2 is rejected.
12. Learned counsel appearing for the appellant insurance company has contended that the Respondent No. 3, Kalimuddin, was not the owner of the truck in question on June 8, 1983, the date of the motor accident, since Katimuddin had already sold the said truck to one Rehanabai w/o Tahirali on February 10, 1979 and as such, Kalimuddin was not liable to pay compensation in respect of the death of deceased Haidarali, cleaner of the truck and consequently, the insurance company, which had insured the truck in the name of Kalimuddin and not Rehanabai for the relevant period, i.e., 1983-84, covering the date of the accident, was also not liable to pay the compensation amount. On the question of the alleged transfer of the truck in question, the learned Commissioner has found that the Respondent No. 3, Kalimuddin, had failed to prove that he had received the price for and delivered possession of the truck in question to the alleged transferee Rehanabai and as such, transfer of the truck was not proved.
13. Learned counsel for the appellant has drawn my attention to a document Exh. D-1 which is a carbon copy entitled as 'bikrikhat rashid' at the foot of which the respondent Kalimuddin appears to have put his signature as seller but there is no signature of the alleged purchaser on this document which recites the fact of transfer in favour of Rehanabai. Rehanabai has neither been joined as a party in the case nor has she been examined as a witness in the case. The document Exh. D-1 relating to alleged transfer of the truck is a writing signed by Kalimuddin himself and as such, it cannot suffice for proving the transfer in favour of Rehanabai without examining the latter as a witness, particularly because there is no indication either in the records of the R.T.O. or of the insurance company about the change of the ownership of the truck, which still continues in the name of Kalimuddin as per those records.
14. The learned counsel for the appellant insurance company has next contended that under the Act, it is the employer who is to be held liable for the compensation and that Kalimuddin cannot he held to be the employer of the deceased Haidarali, since it is the case of the claimants themselves that the deceased Haidarali had been appointed by Respondent No. 4, Kesuram.
15. The learned Commissioner, on the basis of the statement of the claimants to the effect that Kesuram had appointed Haidarali and was paying him salary, has held Kesuram also liable jointly and severally along with Kalimuddin and the appellant insurance company and further ordered payment of penalty amount by Kesuram alone.
16. From the findings of the learned Commissioner the peculiar situation that arises is that on the date of the accident Respondent No. 3 Kalimuddin was the owner of the truck on which the deceased workman Haidarali was employed as a cleaner but the deceased Haidarali was appointed and paid his salary by Kesuram, Respondent No. 4.
17. The Act envisages employer's liability for compensation. The learned Commissioner by rejecting the evidence of transfer of the truck by the registered owner Kalimuddin, has apparently treated Kalimuddin as the employer of deceased Haidarali, who was a cleaner on the truck in question. Further the learned Commissioner has, by accepting the evidence that the deceased Haidarali was appointed and paid his salary by Kesuram, Respondent No. 4, seems to hold Kesuram also liable as the employer. But this is an incongruous position in the order of the learned Commissioner that there should be two employers contemporaneously in respect of the deceased workman Haidarali, the cleaner on the truck in question and as such, it cannot be legally sustained. The order of the learned Commissioner is, therefore, liable to be set aside.
18. As has been stated at the outset the real controversy involved in this case is one of identifying the true employer vis-a-vis the deceased workman so as to hold him legally liable for compensation under the Act. The finding of the learned Commissioner that the deceased Haidarali was a workman employed as a cleaner on the truck in question appears to be well-founded, being based on evidence on record, and as such, the just claim for compensation must not be allowed to be frustrated on account of vagueness in finding as to who was the employer of the deceased workman. The fact as to who was the employer, has not been conclusively determined because of the insufficient and laconic evidence available on record.
19. Kesuram, Respondent No. 4, was proceeded ex parte and has not been examined in the case. After being given two opportunities for adducing evidence in support of his application for setting aside ex pane order, the learned Commissioner turned down his prayer for further opportunity to adduce evidence and rejected his application. The result has been that there is no evidence to show the connection and status of Kesuram in relation to the truck on which the deceased workman was employed as a cleaner. It is not known whether Kesuram was the Manager acting on behalf of the owner of the truck, or was a hirer, agent or a transferee owner. There is no allegation either in the pleadings of the parties or in evidence that the truck in question was ultimately transferred to Kesuram. The registered owner of the truck Kalimuddin Respondent No. 3, is alleged to have transferred the truck to one Rehanabai, but Rehanabai has not been joined as a party in the case nor has she been examined as a witness. There is neither any averment nor any evidence to show any connection of Kesuram with the ownership of the truck and it appears necessary that Kesuram's reply and evidence are received in the case to have a clearer picture so as to fairly determine the liability of the parties.
20. In view of the discussion aforesaid the impugned order which does not clearly determine the identity of the employer or the connection or status of Kesuram in relation to the truck and the deceased, is hereby set aside and the learned Commissioner is directed to join Rehanabai, the alleged transferee of the truck, as a party non-applicant and to proceed with the case in accordance with law. The learned Commissioner is further directed to give opportunity to Kesuram, Respondent No. 4, to participate by filing his written statement and adducing evidence. The evidence already adduced in the case shall, however, form part of the record. The learned Commissioner shall determine the liability or otherwise of the respondents to pay compensation on the basis of totality of the evidence that may come on record.
21. Accordingly, this appeal, the cross objection as well as the cross-appeal in Misc. Appeal No. 46 of 1988, (Saifuddin v. Kalimuddin) stand disposed of.
In the circumstances of the case, there shall be no order as to costs.
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