UNITED INDIA INSURANCE COMPANY LIMITED Vs. L N TAMULY AND ORS
LAWS(GAU)-1994-2-23
HIGH COURT OF GAUHATI
Decided on February 03,1994

UNITED INDIA INSURANCE COMPANY LIMITED Appellant
VERSUS
L N Tamuly And Ors Respondents

JUDGEMENT

- (1.)This appeal under Section 30(1)(aa) of the Workmen's Compensation Act, 1923 has been directed against the judgment and award dated June 19, 1989 passed by the learned Commissioner, Workmen's Compensation, Kamrup, Guwahati in W.C.No.2/88.
(2.)The crux of dispute as canvassed in this appeal is whether the Insurance Company - the appellant is liable to pay interest and penalty as contemplated under Section 4-A of the Workmen's Compensation Act along with the statutory compensation as per Section 3 of the same Act. The facts of the case are very simple. The Track No. AMU-2783 belonged to the owner Shri Balen Chandra Kallta met with a disastrous accident while the wooden bridge over the river Khorkhari broke down when the loaded truck was passing over the same and in the said accident Pradip Kumar Talukdar who was serving as handy-man in the truck died in the accident which occurred on March 7, 1986. When the owner and the Insurance Company did not settle with the claim of compensation of Smt. Binapani Talukdar, she preferred W.C.No.2/88 and the learned Commissioner (Additional Deputy Commissioner), Kamrup, Guwahati after hearing both the parties passed the impugned order granting statutory compensation along with interest and penalty @6% p.m. simple interest and penalty of 25% on the principal amount towards penalty which amounted to Rs.62,494.79. Admittedly the Insurance Company-appellant in the present case deposited the statutory compensation amount by a cheque on June'2, 1989. It has been ordered by the learned Commissioner that the balance amount of the awarded compensation should be paid by the Insurance Company within seven days next. On the basis of the judgment and award dated June 19, 1989 the Insurance Company deposited whole of the amount awarded but raised objection by way of filing appeal before this Court to the effect that legally they were not entitled to penalty and interest as contemplated under Section 4-A of the Workmen's Compensation Act, 1923 (hereinafter shall be referred to as 'the Act').
(3.)Mr. S.K. Barkatoki appearing on behalf of the Insurance Company has relied on the decision of this Court passed in the Division Bench as referred to in (1992) 2 GLR 260 wherein it has been held that the liability of the insurer shall be to indemnify the default of the employer in payment of the compensation but the Insurance Company cannot be saddled with liability to pay interest and penalty on the analogy that Sub-section 3 of Section 4A of the Act specifically mentions that the penalty and the interest can be imposed upon the employer only on default of payment of compensation within one month from the date it is falling due and as such interest and penalty can never be an integral part of the compensation which can be imposed upon the insurer who is to indemnify the employer. On the other hand Mr. B.K. Jain, appearing for the claimant-respondents supported the impugned judgment and order on the ground that the insurance Company cannot dis-shoulder its liability regarding interest and penalty when they had also not settled the clam within the period and in the absence of Insurance Policy being filed it cannot be said that their liability is only to the extent of the statutory compensation and not beyond that. He has also referred to the decision of our High Court as reported in 1987 1 GLR 271 where it has been held that the Commissioner under the Workmen's Act can directly impose on the Insurance Company to pay the claim determined under the Act and also on the provisions of Section 95(2) of the Motor Vehicles Act when the liability of the Insurance Company is much above the amount awarded by the Commissioner.


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