UNITED INDIA INSURANCE COMPANY LIMITED Vs. GANGAWWA

JUDGEMENT

(1.) The short point that arises in these appeals, filed by the insurer, is whether the insurer who has issued a policy under the Motor Vehicles Act can be made liable to pay the interest awarded by the Commissioner for workmens compensation under Section 4A(3) of the Workmens Compensation Act (hereinafter referred to as 'the Act').

(2.) It is contended on behalf of the insurance, who are the appellants in these appeals, that under Section 147(1) of the Motor Vehicles Act, 1988, which is similar to Section 95(1) of M. V. Act, 1939, in respect of employees of insured travelling in the vehicle they are required to cover only the liability to pay compensation payable under the Act, that under Section 4A(3) of the Act apart from the compensation payable , the Commissioner can award interest if the employer, commits default in paying the compensation due under the Act within one month from the date it fell due; that the award of interest is by way of penalty, that this interest is payable only by the employer and that as it does not form part of the compensation there is no statutory liability on the part of the insurer to pay such interest. It is pointed out that the compensation has to be paid within one month from the date of the accident and it is only if it is not paid within that period the interest can be levied, that the insurer may not know about the accident at all and as such the insurer cannot be made liable for interest. The learned counsel for the appellants have sought sustenance for further arguments from the following decisions:1. Oriental Insurance Co. Ltd. v. Hasmat Khatoon, 1989 ACJ 862 Delhi High Court; 2. Oriental Fire and General Insurance Co.Ltd. v. Matias Burla, 1986 ACJ 732 Orissa High Court;

(3.) Oriental Insurance Co. I.td. v. Jevaramma, 1988 ACJ 671 Karnataka High Court;