Insurer cannot raise an unpleaded driving-licence defence for the first time in appeal.

Shashi Pal, aged approximately 23 years, was allegedly employed as a driver by Rajinder Singh and was earning ₹6,000 per month plus TA/DA. On 20 September 2011, while driving truck No. HR-58-2757 during the course of employment, he met with an accident near Dinarpur, Ambala, and died from his injuries on 21 September 2011.

His parents/dependants, Payaro Devi and another claimant, filed a claim petition under Section 4 of the Employees’ Compensation Act, 1923, seeking compensation.

The employer admitted the employment, accident and death, but stated that the deceased earned ₹5,000 per month and denied liability.

The Insurance Company disputed the employer–employee relationship and alleged that the claim was collusive and not maintainable for want of notice.

The Commissioner, Employees’ Compensation Act, allowed the claim petition on 28 May 2014 and awarded compensation of ₹5,49,875 with interest at 12% per annum from 11 October 2011 until the date of the order.

The Insurance Company was directed to deposit ₹7,25,303, comprising compensation and accrued interest, with further interest on the compensation amount in case of default.

In appeal, the Insurance Company contended that the deceased did not possess a valid driving licence and that the vehicle had been transferred to M/s NR Motors before the accident, relieving the insurer of liability.

Whether the Insurance Company could raise, at the appellate stage, the plea that the deceased was not holding a valid driving licence when that plea had not been pleaded or proved before the Commissioner?

Whether the Insurance Company established that truck No. HR-58-2757 had been transferred from the insured owner, Rajinder Singh, to M/s NR Motors before the accident, thereby excluding its liability?

Whether the Commissioner’s award of compensation and interest against the Insurance Company called for interference in appeal?

The Court applied the Employees’ Compensation Act, 1923, particularly Section 4 concerning determination of compensation for death arising out of and in the course of employment.

It applied the procedural principle that a party cannot ordinarily introduce a new factual defence at the appellate stage when the defence was neither pleaded nor made the subject of an issue before the original adjudicating authority, particularly where doing so would prejudice the opposing party.

The Court further held that a plea regarding transfer of ownership and consequent absence of insurance liability must be supported by cogent evidence from the competent registration authority; a private investigator’s report, without corroborating official evidence, is insufficient to prove such transfer.

The Court rejected the Insurance Company’s challenge concerning the driving licence because its written statement did not allege that Shashi Pal lacked a valid licence, no issue on that question had been framed or pressed before the Commissioner, and permitting the plea for the first time in appeal would take the claimants by surprise.

The Court also rejected the alleged transfer of the vehicle to M/s NR Motors because the Insurance Company produced no evidence from the Registration Authority establishing such transfer. The testimony or report of its privately appointed investigator, standing alone, was insufficient to displace the Commissioner’s finding that the vehicle was owned by Rajinder Singh and insured with the appellant.

Consequently, the Court found no basis to disturb the Commissioner’s determination of compensation or the direction fastening liability on the Insurance Company.

Finding no substantial question of law or merit in the appeal, the Court dismissed FAO No. 8060 of 2014 (O&M) and affirmed the Commissioner’s award of ₹5,49,875 with interest, totalling ₹7,25,303 as calculated in the order, together with the direction regarding further interest in the event of non-payment.