ORIENTAL INSURANCE COMPANY LIMITED Vs. HASMAT KHATOON

JUDGEMENT

(1.) An important question of law arising for decision in this appeal is whether the insurance company with which the offending vehicle is insured is liable to pay additional interest awarded and the penalty imposed by the Commissioner under section 4-A (3) of the Workmen's Compensa tion Act, 1923. To be more specific, the question is whether the word 'liability' mentioned in proviso to section 95 (1) (b) and sub-section 2 (a) of the Motor Vehicles Act is so wide as to include liability for payment of interest in default of payment of compensation and the penalty imposed under section 4A (3) of the Workmen's Compensation Act?

(2.) The petitioner was working as a workman/loader of truck No. DEG 3809, owned by Competent Construction Co. On 21.5.1985 when the workman, along with other workmen was proceeding to unload the truck after loading the same with loose earth, the truck overturned and the workman sustained grievous injuries and succumbed to them. There is no dispute that the workman died on account of the accident during the course and arising out of the employment under Competent Construction Co. The widow and the child made an application for compensation under the Workmen's Compensation Act, 1923. The Commissioner under Act recorded the following findings while imposing compensation, interest and penalty: is highly deplorable that the manage-ment did not care to deposit the amount of compensation within prescribed time even ugh the poor widow with her minor children including a child aged 13 days continued to run from pillar to post for compensation The management/insurance company continued to shift the blame for delay to each other instead of depositing the admitted compensation in time. Accordingly, I hold and hereby award Rs. 25,000.00 as penalty and interest of Rs. 3,197.00 at the rate of 6 per cent per annum from the date of accident till January 3, 1986 on the entire amount of Rs. 87,388.00 and 6 per cent interest per annum on the balance amount of Rs. 30,360.00 (unpaid) from January 3,1986 till the date of realisation. The primary liability for payment of the entire amount is that of the management but since the respondent No. 1 has taken insurance cover from respondent No. 2, therefore, the entire amount under this award shall be satisfied by the insurance company. I have considered the authorities submitted by the respondent No. 1, viz.. New India Assurance Co. Ltd. v. Dujiya Bai, 1983 ACJ 601 (MP); Northern India Ins. Co. v. Commissioner for Workmen's Compensation, Indore, 1973 ACJ 428 (MP); Chottelal v. Dhallomal Sindhi, 1984 ACJ 591 (MP) and 1986 ACJ .. .(Sic.) (MP). In view of these citations, I further hold that both the respondent Nos. 1 and 2 are jointly and severally liable to pay compensation to the applicants. The counsel's fee allowed is Rs. 1,000.00 which will be paid by the respondents jointly and severally. The award will be satisfied within 15 days of this order, failing which the same will be recovered as arrears of land revenue."

(3.) The award is challenged by the insurance company submitting that special interest and penalty imposed under section 4-A (3) of the Workmen's Compensation Act cannot be recovered from the insurance company and their liability is limited only to the amount of compensation. Counsel for the insurance company has relied upon Oriental Fire & Genl. Ins. Co. Ltd. v. Matias Burla, 1986 ACJ 732 (Orissa) and 1988 ACJ 677 [Sic. Oriental Ins. Co. Ltd. v. Jevaramma, 1988 ACJ 671 (Kamataka)]. On the other hand, counsel for the respondent Construction Co. has submitted that the liability under the award is indivisible. It cannot be held that compensation is payable by the insurance company and special interest and penalty should be paid by the employer under the Workmen's Compensation Act. His submission is that the use of the word 'liability' in section 95 is a deliberate innovation by the Amending Act of 1956 and the word is wide enough to include not only the compensation but special interest and penalty awarded under the Workmen's Compensation Act. He has relied upon the judgment of a single Judge of Madhya Pradesh High Court, reported in Om Parkash v. Ramkali, 1987 ACJ 803 (MP).