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J. K. MAHESHWARI, ARAVIND KUMAR
Sheela Devi – Appellant
Versus
Oriental Insurance Company Limited – Respondent
JUDGMENT
J.K. MAHESHWARI, J.
1. Leave granted.
2. Assailing the impugned orders dated 26.12.2017 & 28.03.2018 of the High Court of Himachal Pradesh at Shimla in F.A.O. No. 516 of 2017 & C.R.P. No. 13 of 2018 the present appeals have been filed by the Claimants.
3. In an employees’ compensation claim filed by the parents of the deceased employee because of untimely death of their 24-year-old son due to motor accident during the course of employment with Respondent No. 2 – Employer, the Employees Compensation Commissioner, vide its order dated 05.08.2016 had awarded compensation of Rs. 6,55,410/- along with interest @ 12% p.a. from the date of filing of the claim petition till realization and in addition statutory penalty under Section 4A(3)(b) of the Employees’ Compensation Act, 1923 (for short “Act”) amounting to 50% of the award (Rs. 3,27,705/-). The Commissioner fixed the liability to pay the entire amount upon the Respondent No. 1 – Insurer.
4. Challenging the order dated 05.08.2016, the Respondent No. 1 – Insurer filed F.A.O. No. 516/2017. By passing the impugned order, the High Court has reduced the compensation amount to Rs. 4,36,940/- along with interest @ 12% p.a. from the date
The statutory penalty under the Employees’ Compensation Act is discretionary and must reflect the employer's default, with the court modifying the penalty to 30% of the compensation amount.
Employees Compensation Act, 1923 – Section 4A(3)(b) – Insurance Company has no liability for payment of penalty in addition to compensation and interest component.
Insurance companies are liable for interest on compensation but not for penalties due to employer violations under the Workmen's Compensation Act.
The insurance company is liable for compensation and penalty under the Workmen's Compensation Act, with the court's jurisdiction limited to substantial legal questions, not factual re-evaluation.
Penalties under the Workmen’s Compensation Act are the responsibility of the insurer, not the Insurance Company; interest awarded at 12% was justified.
The issue of imposing a penalty for default in paying compensation arises only after the main claim for compensation is determined by the competent Authority.
Liability for penalty under the Workmen's Compensation Act rests on the employer, not the insurance company, and interests awarded are also subject to statutory amendments.
The main legal point established in the judgment is that the penalty under Section 4-A(3)(b) of the Workmen's Compensation Act is the liability of the employer and not the insurance company.
The appeal court can only intervene on substantial questions of law, preserving the Commissioner’s fact-finding authority while holding the employer liable for compensation penalties, with insurance ....
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