National Insurance Co. Ltd. vs Chunki Bai and Others

Prakash Tatia, J.—Heard learned Counsel for the parties on appeal itself finally in view of the fact that according to the learned Counsel for the appellant, the only issue involved in this appeal is whether the appellant insurance company can be held liable to pay penalty imposed under the Workmen''s Compensation Act! And whether there can be award of interest from the date of accident?

So far as the first issue is concerned, the Hon''ble Supreme Court has already laid down that the insurance company cannot be held liable for payment of penalty amount when compensation is awarded under the Workmen''s Compensation Act. There was a Division Bench judgment taking a contrary view, then the matter was referred to a larger Bench by this Bench upon which the Division Bench of this Court in D.B. Civil Special Appeal No. 768 of 2005 held that the insurance company cannot be held liable for penalty amount awarded under the provisions of the Workmen ''s Compensation Act.

In view of the above, the appellant insurance company is not liable for payment of penalty amount awarded under the provisions of Workmen''s Compensation Act.

Further, in view of the judgment of the Hon''ble Supreme Court delivered in the case of National Insurance Co. Ltd. Vs. Mubasir Ahmed and Another, the interest can be awarded from the date of award and not from the date of accident, therefore, the appellant''s appeal succeeds on this count also and it is held that the interest on the award shall be payable from the date of award, i.e., from 15.11.2006.

Learned Counsel for the employer submits that the penalty has been imposed by the learned Commissioner only because of the fault of the insurance company as the insurance company committed delay in making payment of compensation amount and, therefore, the employer cannot be held liable to pay the amount of penalty nor can be saddled with interest.

I have perused the reasons given by the learned Commissioner in the impugned award.

It appears that the observation against the insurance company is very specific. The accident occurred on 13.7.2003 and even F.I.R. was registered and a case u/s 174, Criminal Procedure Code, 1973 was registered and the claim petition was submitted by claimants on 2.12.2003. There is nothing on record which can suggest that employer tried to satisfy the claim of the claimants. The insurance company reimburses the claimants and the original liability is of the employer. In view of the above reason, I do not find any force in the submission of the respondents.

Consequently, this appeal is allowed. The amount which has been paid beyond the liability of appellant insurance company referred above, the appellant shall be entitled to take back and shall be entitled to recover, if paid to the claimants.