Himachal Pradesh High Court
Dromati Devi vs Sohan Singh And Ors. on 26 June, 1995
Equivalent citations: II(1996)ACC237, 1995ACJ1019, (1996)IIILLJ850HP
Author: S.N. Phukan
Bench: S.N. Phukan
JUDGMENT S.N. Phukan, C.J.
1. This appeal is directed against the guard of the Commissioner under Workmen's Compensation (SDM). Mandi. dated October 29. 1991 is File No. II of 1991.
2. Admittedly, one Charanji Lal. who was about 18 years old was working as a conductor under respondent No. 1 in his truck No. HID 1961. The truck met with an accident on September 19 1990 and a claim under Workmen's Compensation Act. 1923 was filed before the Commissioner. By the impugned award. Commissioner awarded, taking into consideration the income and age of the deceased, a sum of Rs. 81,496/- with further direction that in case of failure to deposit the amount within one month, interest at the rate of 20 per cent on the above amount shall be payable. The insurance company, namely, respondent No. 2 was saddled with the compensation as well as the interest.
3. The present appeal has been filed only for interest and penalty, as provided under Section 4-A of the Workmen's Compensation Act, 1923.
4. According to the learned counsel for the insurance company, the insurance company cannot be fastened for the payment of penalty as well as interest.
5. The said Section 4-A is reproduced below:
"4-A. Compensation to be paid when due and penalty for default,-- (1) Compensation under Section 4 shall be paid as soon as it falls due.
(2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts and such payment shall be deposited with the Commissioner or made to the workman, as the case may be, without prejudice to the right of the workman to make any further claim.
(3) Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner may direct that in addition to the amount of the arrears, simple interest at the rate of 6 per cent per annum on the amount due together with, if in the opinion of the Commissioner there is no justification for the delay, a further sum not exceeding fifty per cent of such amount shall be recovered from the employer by way of penalty."
6. From the original record, we find that in the reply filed on behalf of the respondent No. 1, namely. the owner of the truck, in Para 8, it has been clearly admitted that the said respondent had notice of the accident and about the death of the deceased workman.
7. Reading Section 4-A, we are of the view that it is the duty of the employer to pay the compensation including interest and penalty in case of delayed payment, on receipt of the information about the accident. In the case in hand, admittedly, the owner, namely, respondent No. 1, had full knowledge of the accident and it was for his default that payment was not paid in time. Had he paid the amount, possibly, he could have claimed that he should be indemnified by the insurance company, provided it is under the Insurance policy. In the case in hand, in spite of the fact that the employer knew about the accident, he did not pay the compensation to the members of the deceased's family in accordance with the provisions of the Act and rules framed there under. In this connection, our attention has been drawn by the learned counsel for the insurance company to various decisions of different High Courts and we may refer to two decisions namely, Jayantilal and Co. v. Garasia Rajvirba Udesinh, 1992 ACJ 286 (Gujarat), which is a decision of the Gujarat High Court. The other decision to which out attention has been drawn is of Karnataka High Court in Oriental Insurance Co. Ltd. v. Raju, (1994-II-LLJ-1038) (Karnataka). In both the above decisions, the High Court held that the insurance company is not liable to pay penalty and interest under Section 4-A of the Act. We are in respectful agreement to the ratio laid down in the above two decisions, in view of the fact that no other decision of any other High Court taking a different view has brought to our notice.
8. In the result, we hold that there was negligence On the part of the employer in not paying the compensation within one month from the date the amount became due. As stated above, in the reply filed before the Commissioner by respondent No. 1 the factum of knowledge of the accident has not been denied. Therefore, we hold that there was default on the part of the employer and we cannot accept the submissions made in the reply that it was the insurance company which had to pay the amount. In fact, insurance company has indemnified the amount to be paid by the employer. We, therefore, allow the appeal, directing that on the above sum of Rs. 81,496/- the appellant shall be entitled to get simple interest at the rate of 6 per cent from September 20, 1990 till the amount was paid and in addition, 10 per cent by way of penalty on the above amount during the above period. These amounts shall be paid by the respondent No. 1 namely, the owner of the truck in question and not by the insurance company.
9. Parties to bear their own costs.
10. Appeal is disposed of.