U.P.S.R.T.C. Vs. ALKA

JUDGEMENT

(1.) ALL the appeals are analogously heard because a common question is involved herein. The common question is whether insurance company is liable to pay interest and/or penalty to the claimants even in absence of contract between the employer and insurance company or not. According to us, it is obviously a substantial question of law which requires consideration at the threshold.

(2.) FIRST proviso to sub-section (1) of Section 30 of the Workmen's Compensation Act, 1923 (hereinafter called as Act, 1923) categorically says that no appeal shall lie against any order unless any substantial question of law is involved in the appeal. Therefore, no appeal can be said to be maintainable as a matter of course unlike the other law or laws available in this field.

(3.) IN (2006) 5 SCC 192 (New India Assurance Co. Ltd. Vs. Harshadbhai Amrutbhai Modhiya and another) the Supreme Court held that by reason of the provisions of the Act, an employer is not statutorily liable to enter into a contract of insurance unlike Section 147 of the Motor Vehicles Act, 1988. However, Section 17 of the Act, 1923 does not limit or make any restriction from contracting out between the employer and insurer. The terms of a contract of insurance would depend upon the volition of the parties. A contract of insurance is governed by the provisions of the Insurance Act. In terms of the provisions of the Insurance Act, an insured is bound to pay premium which is to be calculated in the manner provided therein. With a view to minimise his liability, an employer can contract out so as to make the insurer not liable as regards indemnifying him in relation to certain matters which do not strictly arise out of the mandatory provisions of any statute. Contracting out, as regards payment of interest by an employer, therefore, is not prohibited in law. The entitlement of the claimant under the Act, 1923 is to claim the compensation from the employer. As between the employer and the insurer the rights and obligations would depend upon the terms of the insurance contract.