Worker's death: forum directs insurance firm to pay compensation

Prabhakkar Sharma

CONSUMERNOTES Worker dies of electrocution while on duty

VISAKHAPATNAM: An insurance company has been directed by the Visakhapatnam District Consumer Forum-I to pay the claim amount with interest, along with litigation costs, within two months.

The management of Sree Lalitha Constructions at Seethammadhara, which employs people, put in place a workmen compensation (general) policy for its workers with the New India Assurance Company Limited, Siripuram, in September 2003.

When a worker died of electrocution on duty, the Deputy Commissioner of Labour, after negotiations, directed the employer to pay Rs.4,12,990 in March 2004.

Accordingly, the insurance company was informed about the settlement of liability of the payment.

Time sought

The insurance company sought time for making payment saying that it was under process and the policyholder had to borrow the huge amount on interest and deposit it.

The insurance company, after prolonged correspondence, repudiated the claim stating that there were more number of workmen than the declared figure in the proposal for insurance and as the policy was taken by misrepresentation the contract of insurance was void.

The policyholder, while contending the repudiation as illegal, pleaded that additional premium might be collected or refund made in case of any difference from the amount on which premium was paid, as per the conditions.

It also said that it was willing to pay the difference in the amount, but the insurance company did not relent.

Complaint filed

The policyholder then filed a complaint (Consumer Dispute no: 294/2005) in the forum against the insurance company seeking payment of the claim with interest, compensation and litigation costs.

The opposite party (OP) stated that the policyholder declared the wages of 50 persons but investigation showed that 70 workers were working with it.

The premium for 50 persons was paid at Rs.5.88 lakhs, while for 70 workers, it worked out to Rs.8.63 lakhs, the party pointed out and argued that "we have rightly repudiated the claim."

Forum president C. Rambabu and its member D. Suseela, in their recent verdict, observed that on the fateful day only 47 workers were on duty.

Since no names of the labourers had been disclosed or registered in the policy, the OP was bound to honour the policy and reiumburse the amount if the claim was made for a worker who was within the 50 workers employed on that particular date, they stated.

Claims for benefits

As the Workmen Compensation Act is a social legislation, a broad interpretation had to be made and all persons employed at the relevant time were entitled to claim the benefits of the policy, they held and directed the opposite party to pay Rs.4,12,990 with nine per cent interest per annum from March 16, 2004, till the date of payment.

It also awarded Rs.2,000 as litigation costs.

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