Additional Premium Makes Insurer Liable For Compensation | HC

Case Details: New India Assurance Co. Ltd. vs. Mohammad Arif - [2025] 181 taxmann.com 338 (HC - Delhi)

Judiciary and Counsel Details

• Dharmesh Sharma, J.
• Ms. Veera Mathai  & Gaurav Nair, Advs. for the Appellant.
• R.K. Nain, Ms. Pratima N. Lakra & Chandan Prajapati, Advs. for the Respondent.

Facts of the Case

In the instant case, the Respondent No.1 was employed as a driver by the respondent No.2/registered owner. On a fateful day, he was driving a truck when it met with an accident. Respondent No.1 suffered grievous injuries resulting in permanent partial disability to the extent of 22% in the nature of physical impairment of his abdomen and lower jaw, besides his left knee.
It was an admitted fact that the ill-fated truck was insured by the appellant/insurance company. Respondent No.1 filed a claim petition before the Commissioner for compensation. The Commissioner allowed the claim filed by respondent No.1/injured employee and granted total compensation payable along with interest, besides penalty in terms of section 4A(3)(b) of the Employees’ Compensation Act, 1923.

The appellant/insurance company filed an instant appeal contending that claim filed by respondent No.1/injured employee was barred by limitation for having been filed more than two years after date of accident, contrary to section 10(1) and that no intimation with regard to alleged disability suffered by respondent No.1 was given by respondent No.2 in terms of section 10B of the Act.

It was noted that since respondent No.1 was under prolonged medical treatment and was discharged from the hospital and then re-admitted, wherein he remained up to 12.10.2015 and eventually was granted a permanent disability certificate, it must be assumed that the delay in filing the claim petition stood condoned.

High Court Held

The High Court observed that since information regarding the accident was given immediately to the appellant/insurance company, so much so that even compensation towards own damage to the insured truck was awarded by the appellant/insurance company, objection of appellant/insurance company as regards non-intimation of the accident resulting in serious bodily injuries to respondent No.1, also did not cut any ice.

Further, the High Court observed that, if an additional premium has been paid by the employer/insurer to cover compensation under the Workmen’s Compensation Act, 1923, the liability to pay penalty under section 4A(3)(b) of the Act shall also be borne by the insurer.

The High Court held that, since the insured paid an additional premium towards legal liability for the driver, conductor, and cleaner employed in the operation, the appellant/insurance company could not escape its financial liability to pay compensation, including the penalty amount. Therefore, the instant appeal was to be dismissed.

List of Cases Reviewed

• Shantabhai Ananda Jagtap v. Jayram Ganpati Jagtap [2023] 7 taxmann.com 2127 (SC)/(2023) 8 SCC 171 (para 13)
• Urmila Rani v. Manjit Kaur 2014 SCC Online Del 1217 (para 21)
• Mohd. Adbullah v. Manager, Trumboo Cement Industry Ltd. [2024] 7 taxmann.com 2014 (Jammu And Kashmir And Ladakh) /Manu/JK/0675/2023 (para 22) distinguished
• Ved Prakash Garg v. Premi Dev 1997 taxmann.com 2061 (SC) (para 19) followed

List of Cases Referred to

• Urmila Rani v. Manjit Kaur 2014 SCC Online Del 1217 (para 6)
• New India Assurance Co. Ltd. v. Harshadbhai Amrutbhai Modhiya 2006 taxmann.com 2369 (SC) (para 6)
• L.R. Ferro Alloys Ltd. v. Mahavir Mahto (2002) 9 SCC 450 (para 6)
• Ved Prakash Garg v. Premi Dev 1997 taxmann.com 2061 (SC) (para 6)
• Mohd. Adbullah v. Manager, Trumboo Cement Industry Ltd. [2024] 7 taxmann.com 2014 (Jammu And Kashmir And Ladakh) (para 6)
• Pratap Narain Singh Deo v. Srinivas Sabata (1976) 1 SCC 289 (para 6)
• National Insurance Co. Ltd. v. Mastan (2006) 2 SCC 641 (para 7)
• Kamlesh v. Gian Chand 2015 SCC Online P&H 9131 (para 7)
• Mohammad Arif v. New India Assurance Company Ltd. [FAO No. 127 of 2018, dated 28-5-2018] (para 12)
• Abdul Gaffur @ AGR. Gafur v. Sachit Bhagat [FAO No. 128 of 2018, dated 8-5-2018] (para 12)
• Shantabhai Ananda Jagtap v. Jayram Ganpati Jagtap [2023] 7 taxmann.com 2127 (SC) (para 13)
• United India Insurance Company Ltd. v. Roop Kanwar 2006(2) TAC 973 (para 19).