NEW INDIA ASSURANCE CO. LTD.versusRAMESH MADHAVJI JOSHI (Deceased Through Heirs)
- Disposal
- 44-PARTLY ALLOWED @ FH
- Bench
- C DOSHI
Holding
The appeal is dismissed due to the smallness of the amount, but is partially allowed to relieve the insurer of liability for the 50% penalty, which is payable by the owner under Section 4A(3) of the Employee Compensation Act.
Summary
The appellant New India Assurance Co. Ltd. filed a first appeal against the award of compensation to the heirs of the deceased Ramesh Madhavji Joshi, the amount being less than Rs.5 lakh. The High Court observed that the modest quantum of the award did not warrant a detailed hearing and dismissed the appeal on the ground of smallness of the amount. However, the Court clarified that it was not deciding any substantive legal issue and that the order should not be treated as precedent. The Court further held that, contrary to the Workman Commissioner’s view, the insurance company is not liable to pay a 50% penalty on the compensation; under Section 4A(3) of the Employee Compensation Act, the liability for the penalty rests with the owner. Accordingly, the insurance company was permitted to recover any penalty amount deposited with the Workman Commissioner from the owner, with interest, and the appeal was partially allowed to the extent of relieving the insurer of the penalty liability.
Issues considered
- Whether an appeal involving compensation below Rs.5 lakh should be entertained.
- Whether the insurance company is liable to pay a 50% penalty on the compensation awarded.
- Who bears liability for the penalty under Section 4A(3) of the Employee Compensation Act – the insurer or the owner.
Subjects
Judgment
C/FA/4118/2007 ORDER DATED: 16/04/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 4118 of 2007
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NEW INDIA ASSURANCE CO. LTD.
Versus
RAMESH MADHAVJI JOSHI (Deceased Through Heirs) & ORS.
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Appearance:
MR PALAK H THAKKAR(3455) for the Appellant(s) No. 1
DECEASED LITIGANT THROUGH LEGAL HEIRS/ REPRESTENTATIVES
for the Defendant(s) No. 1
MR DHAIRYAWAN D BHATT(11817) for the Defendant(s) No. 1.1
NOTICE SERVED for the Defendant(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI
Date : 16/04/2026
ORDER
In the first appeal, the amount of compensation involved
is below Rs.5 lakh.
Having heard the submissions made at bar and
considering the fact that the amount involved in the subject
matter of present First appeal is on lower side i.e. less than
Rs.5,00,000/-, considering the smallness of the awarded
amount involved in the present appeal, the Court is not
inclined to entertain the present appeal and therefore,
present appeal stands dismissed on account of smallness of
amount. Consequently, CA, if any, does not survive and
stands disposed of accordingly.
However, it is clarified that dismissal of present appeal
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C/FA/4118/2007 ORDER DATED: 16/04/2026
shall not be construed that the Court has decided any legal
issue involved in the subject matter of present appeal and
therefore, the decision of present appeal shall not be treated
as precedent for deciding any legal issue.
The learned Commissioner is directed to disburse the
amount of compensation deposited by the insurance company
to the claimants after due verification and identification along
with interest and after verifying their right to claim the
compensation.
Further, the learned Workman Commissioner has
committed serious error in holding that the insurance
company is held liable to pay penalty of 50% of the total
amount of compensation. However, in view of section 4A(3) of
the Employee Compensation Act, it is the owner who is
responsible to pay penalty amount.
In view of above, the appeal is partly allowed to the
extent that the insurance company is not held liable to pay
50% amount of penalty and it would be recoverable from the
owner.
Learned advocate Mr. Palak Thakkar appearing for the
insurance company would submit that the insurance company
be granted permission to recover the amount of penalty, if
deposited before the learned Workman Commissioner, from
the owner. Permission granted. Upon strength of this order,
if any amount is lying with the learned Workman
Commissioner, it should be refunded to the insurance
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C/FA/4118/2007 ORDER DATED: 16/04/2026
company with accrued interest and if it is paid to the
claimant, the insurance company shall be entitled to recover
the same from the opponent owner by executing order of this
Court.
Registry is directed to return back the R & P, if any, to
the concerned Court forthwith.
(J. C. DOSHI,J)
SHEKHAR P. BARVE
Original copy of this order has been signed by the Hon'ble Judge.
Digitally signed by: SHEKHAR PRAFULBHAI BARVE(HC00200), Principal Pvt. Secretary, at High Court of Gujarat on 16/04/2026 17:58:06
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