Sat Pal vs Subash Chander Jindal etc.

M.S. Liberhan and V.S. Aggarwal, JJ.—The only grievance made by learned counsel for the petitioners is that no interest as payable under the workmen''s Compensation Act has been awarded against the Insured or co-Insurer. In order to answer the question raised, it would be pertinent to refer to Section 3(l)(iii) of the Workmen''s Compensation Act, 1923 which runs :-

"3. Employer''s liability for compensation.-

(1) If personal injury is caused to a workman by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter :

(iii) the wilful removal or disregard by the workman of any safety guard or other device which he knew to have been provided for the purpose of securing the safety of workman."

We have gone through the Provisions of the Act as well as the relevant conditions in the contract of insurance which may be reproduced in varbatim herein: -

"IMT-17. Legal liability to Persons Employed in Connection with the Operation and/or Maintaining and/or Maintaining and/or unloading or goods Carrying Commercial Vehicles.

In consideration of the payment of an additional premium it is hereby understood and agreed that notwithstanding any thing obtained herein to the contrary the company shall indemnify the Insured against his legal liability under the Workmen''s Compensation Act, 1923 and subsequent amendments of that Act prior to the date of this Endorsement, the Fatal Accidents Act, 1855 or at common Law in respect of personal injury to paid driver or cleaner or persons employed in loading/or unloading but in any case not exceeding seven in number including driver and cleaner whilst engaged in the service of the Insured in such occupation in connection with the goods carrying Commercial Motor Vehicle and will is addition be responsible for all coats and expenses incurred with its consent."

Reading of the contract makes it obvious that Insurer has undertaken to indemnify the Insured against his liability under the Workmen''s Compensation Act. It is well understood that the contract of insurance is a contract of indemnification between not only the Insurer and the insured but also of the claimant who is a third party. Keeping in view the fact that the Act is a welfare legislation and payment of interest is provided for, it is clearly discernible that the Insurer would be liable to pay interest alongwith the compensation from the date on which it is due till the date of payment. Under the Workmen''s Compensation Act interest is to be paid, paid, apart from the penalty, the Insurer thus has to indemnify the Insured against all his liabilities which include the penalty as well as interest. Without expressing any opinion with regard to penalty as that the Insurer cannot escape from its liability to pay interest which is undoubtedly the liability of the Insured and which the Insurer has to indemnify under the agreement. We find support from the decision of this Court in Smt. Sheela Rani and Others Vs. Mehar Chand and Others, and we have no reason to differ with the same. Consequently, we are of the considered view that respondent No. 2 is liable to pay interest at the rate of 6% per annum from the date of the accident till the date of payment.

Consequently, we allow this appeal and direct respondent No. 2 to pay 6 per cent per annum interest on the amount of compensation, from the date of the accident till payment. No order as to costs.