Suresh Kumar vs Mangilal and Others

Harbans Lal, J.—The matter has come up for orders on the application of appellant for modification of the interim order dated 20.7.2004

vide which while issuing notices of the stay application to the respondents, the execution of the award insofar as it related to the recovery of the

amount of penalty was stayed in the meanwhile. It is now prayed that the recovery of interest on the award amount which has been demanded vide

notice dated 17.12.2005 from the date of accident till the insurance company was informed may also be stayed.

Respondent No. 1, the claimant, has neither put in appearance himself nor any Counsel has filed power on his behalf to contest the aforesaid

application. However, the insurance company has contested the application through its Counsel though no written reply to the instant application

and to the original stay application has been filed.

I have heard learned Counsel for the appellant and the respondent No. 2 and have also perused the interim order dated 20.7.2004 as well as

the impugned award a passed by the learned Commissioner, Workmen''s Compensation, Sikar dated 5.3.2004.

It is well settled that the primary liability of paying compensation is on the employer as would appear from Section 3(1) of the Workmen''s

Compensation Act, 1923 and where insurer is liable to indemnify the employer for the latter''s liability to pay the compensation as visualised in

Section 3(1) of the aforesaid Act, there is no cogent reason to exonerate the insurer to pay the interest fastened on the employer because of the

provision of Section 4-A(3) of the aforesaid Act. If the liability of the insurer arises on the principle amount as the same is required to be paid by

the employer, the insurer''s liability would arise to pay the interest awarded on the principle amount of compensation. The mere fact that Section 4-

A(3) of the aforesaid Act speaks about the �employer� is not enough to exonerate the insurer as held in Khirod Nayak v. Commissioner for

Workmen''s Compensation and Ors. II (1991) ACC 441 : 72 (1991) CLT 643.

I am further fortified in this regard by the ratio of the decisions in the cases of New India Assurance Co., Shimla Vs. Kamla and Others etc.

etc., and United India Insurance Company Ltd. Vs. Lehru and Others,

Thus, considering the aforesaid legal position and the facts of the instant case, the interim stay order dated 20.7.2004 is hereby made absolute

till the disposal of this appeal and it is further directed that the recovery of interest from the date of accident till the information was given to the

insurance company shall also remain stayed till the disposal of the appeal.