JUDGMENT
S.R. Singharavelu, J.
1. As against the order dated 12.12.1994 passed by the Commissioner for Labour-I, Madras awarding a compensation to the workman with a finding that workman was covered under the workmen’s compensation insurance with United India Insurance Co. Ltd., the insurance company preferred this appeal.
2. The workman, by name K. Anbalagan, was a mason with Cordial Company, respondent No. 1, involved in the construction work. He has joined the company, respondent No. 1, in the month of April 1993. The company, respondent No. 1, is also licensed for the work of construction of administrative buildings at telecom exchange building in the establishment of the Executive Engineer, Telecom Civil Division, Department of Telecoms, Madras. The accident occurred on 6.5.1993 in which the workman sustained injuries and succumbed to the same on the next day. This had happened at the work spot, i.e., at Telecom Exchange Building, Haddows Road, Nungambakkam, Madras. As mentioned earlier, the construction company had renewed the licence for the said work of construction expiring in August 1993.
3. There was an insurance policy for occupation of employees; one pair each in mason and coolies of either gender with one number each of carpenter, fitter and painter. The proposal for the said policy was also produced and the same was dated 7,8.1992.
4. Soon after the accident, the construction company had addressed the insurance company claiming compensation for the deceased workman. Appellant insurance company, by its letter dated 21.9.1993, stated that due to suppression of material particulars and misrepresentation, the indemnity undertaken became null and void. They also stated that the workman, who had suffered injuries, was appointed only in the month of August 1993 and that the wage register reveals that more than 13 masons were employed.
Their further contention was that while there were 13 masons, entering into contract of insurance only for a pair of masons in August 1992 amounted to suppression of material factor.
5. In fact at the first page of the proposal, there was a column, which is as follows:
Does the above Schedule include (i) all persons in your service; and (ii) all your subcontractors?
As against column No. 1, it was said ‘Yes’. This would mean that all persons in the service of the employer were included in the Schedule for policy in the proposal form. As a matter of fact, in the opening column of the Schedule, it was boldly printed as follows:
All persons employed must be included.
6. Therefore, the contention of the insurance company is that a misrepresentation was made in the proposal form as if all persons in service were included in the Schedule of policy. According to the insurance company, there were more than 109 employees involved in the construction work. Since all of them were not included, it amounted to misrepresentation and suppression of material facts. Since the policy is based upon the rule of uberrima fides (in good faith), the construction company has not acted in good faith and so, the contract of policy is null and void.
7. Per contra, it was contended on behalf of construction company, employer, that the daily coolies, who happened to be employed in the construction work were casual labourers and were indirectly employed by them through the contractors and that therefore, the non-mentioning about them in the proposal form did not amount to suppression of material particulars. They also contended through Vijayan, PW 1, who is one of the Administrative Officers of the construction company that the said company had directly employed only nine persons and they were mentioned in the Schedule of the proposal form.
8. On a careful perusal of the proposal form, it is found that the risk regarding the employees of contractors of the insured were specifically excepted despite the fact that the note on the back of the proposal contained that as per the provisions of the Workmen’s Compensation Act, any person employed by the contractor will be the employee of the principal employer. As per the exclusion clause found on the back of the proposal form, the risk of employees of contractors were not contemplated to be included. Thus, we are not concerned with the daily casual labourers, who are said to be the indirect employees of the construction company. The non-mentioning of them in the proposal form will not amount to suppression of material particulars. At the same time, a mention should be made that there was no provision found either in the proposal form or in the terms of the policy that any subsequent inclusion of employees will be covered under the terms of the policy.
9. Admittedly, the employee by name Anbalagan, came in the employment of the construction company only in April 1993, which is eight months subsequent to the proposal form. The employee was said to be a mason. Therefore, one pair of mason found in the proposal form would never include the said individual. Here again the case of the insurance company is that by disregarding the indirect employees of the employer and by having regard only to the direct employees, the wage register and payment register which were sent by the construction company, do show that there were more than nine persons directly employed by the construction company. This was also mentioned in para 4 of the counter filed by the insurance company.
10. The employer had also produced the attendance and the register of the workman employed by them with respect to the casual labourers. They have also produced the records regarding the direct employees. A careful perusal of the same would denote very many masons apart from the employee-deceased workman. From this it is evident that even among the so-called direct employees, there are many masons apart from one pair of masons covered under the Schedule mentioned in the proposal. Even these two persons were unnamed. This would only go to show that the construction company chose to pay the premium only in respect of two persons and wanted to cover the risk for other masons also and that is why the proposal form itself contained no names of the two masons.
11. It is entirely a different question as to whether the insurance company can accept a proposal regarding the unnamed employees. Having done so, our endeavour is to see as to whether all persons in the direct service of the employer have been shown in the Schedule as described by the employer in the proposal in the affirmative, If it is shown that all persons in the direct service of the employer were not shown in the Schedule of the proposal form, then, it would amount to suppression of material particulars.
12. We have already found that the wage register of the employer goes to show that employment was of more than two masons as found in the proposal form. It clinches the issue that the masons in direct service were not included in the Schedule of proposal. It was also not mentioned in the proposal that any two masons out of total masons in service are to be included. Thus, it amounted to suppression of material factors.
13. In a similar case referred to Hindustan General Insurance Society Ltd. v. S. Subramaniam 1975 (1) MLJ 28, in the proposal form for the issue of an insurance policy under column ‘licensed carrying capacity’, the capacity of the lorry was mentioned as five tons. The real licensed capacity was 5.392 tons. The point for consideration was as to whether this was a material misrepresentation. It was held in the affirmative and the insurance company was entitled to repudiate the policy.
14. By holding that the act of insurance is a beneficial legislation, we cannot interpolate a clause, which is not available in the bilateral contract itself and if so done, it may result in its own consequences.
15. Assuming that there was no suppression of material factor regarding the number of masons, two masons mentioned in the Schedule of proposal would never cover the deceased mason-K. Anbalagan because the proposal was dated 7.8.1992 and employment of deceased commenced on 7.4.1993. The policy itself commenced from 9.5.1993 for one year. Since the deceased employee was admittedly, an employee in the construction company only from the month of April 1993, there is no coverage of risk of that individual. His death took place on 7.5.1993. Viewed from any angle, the insurance company may not become liable. We make it clear that so far as the quantum of compensation is concerned, there is no cross-objection and the liability of the employer is not in dispute. Hence, we hold that insurance company is not liable to reimburse the compensation.
16. Accordingly, the civil miscellaneous appeal is allowed and the order of the court below is set aside. No costs.