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ARAVIND KUMAR, PRASANNA B. VARALE
New India Assurance Co. Ltd. – Appellant
Versus
Rekha Chaudhary – Respondent
Please provide the legal document content (inside
JUDGMENT :
ARAVIND KUMAR J.
1. Heard. Leave Granted.
INTRODUCTION
2. The scope of present Appeal is confined to a limited aspect that is challenge to the Impugned Judgement and Order dated 21.05.2025 passed in F.A.O No. 147 of 2021 by the Delhi High Court to the extent it has fastened the liability of payment of penalty imposed under Section 4A(3)(b) of the Employees Compensation Act, 1923 (hereinafter referred to as “EC Act”) upon the Appellant - New India Assurance Company Limited (for short ‘Insurance Company’) in addition to the amount of compensation and interest while allowing the appeal under Section 30 of the EC Act against order dated 19.11.2020 and 08.02.2021.
BRIEF FACTUAL MATRIX
3. The facts shorn of unnecessary details are set forth hereinbelow.
4. The Respondent no. 1-3 herein are the legal heirs of the deceased employee Shri Sandeep who was employed as a commercial driver by Respondent No. 4-Shri Manoj Kumar. On 13.02.2017 at about 1 pm when Shri Sandeep was driving the offending vehicle Maruti Swift Dzire Cab (LMV) bearing Registration No. HR 63C 6448 registered in the name of Respondent No. 4, he collapsed. The passengers accompanying him in the car brought him to casu
Employees Compensation Act, 1923 – Section 4A(3)(b) – Insurance Company has no liability for payment of penalty in addition to compensation and interest component.
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 issue of imposing a penalty for default in paying compensation arises only after the main claim for compensation is determined by the competent Authority.
The court held that under the Employees' Compensation Act, 1923, employers cannot refuse to pay interest on compensation for delays, mandating payment of 12% interest from 30 days post-incident.
The insurance company is not liable for interest payments under the Workmen's Compensation Act; liability rests with the employer to pay compensation and associated interest.
The Insurance Company is liable for interest on compensation under the Employee’s Compensation Act, while the employer is responsible for penalty payments.
The main legal point established in the judgment is that the Insurance Company is primarily liable to pay compensation to the workmen under the Workmen Compensation Act.
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