The liability covered by insurance under Section 95 of the Motor Vehicles Act does not include the penalty recoverable from the employer for default in paying compensation under the Workmen's Compensation Act.

N. VENKATACHALA, J.

( 1 ) THE short question which arises for our consideration in this appeal is whether the sum not exceeding 50% of the amount of compensation which could be recovered from the employer by way of penalty for default in paying that amount of compensation due under the Workmen's Compensation Act, 1923 (for short 'the act') is the liability arising under the act for which insurance coverage is compulsory under Section 95 of the Motor Vehicles Act, 1939 (for short 'm. v. act' ).

( 2 ) MATERIAL tacts which have given rise to the said question are briefly these: respondent No. 2, the new India assurance co. Ltd. Has issued an insurance policy under Section 95 of the m. v. act covering the liability for death or personal injury of the driver of the autorikshaw with registration No. Cam 1326 in favour of the owner of that autorikshaw respondent-1 herein. Respondent No. 1 while had employed one kuppuswamy as a driver of that autorikshaw there occurred an accident on 14/15-8-1987 in the course of driving of that autorikshaw, a motor vehicle, and as a result of that accident, the said driver who had suffered bodily injuries succumbed to them and died. The appellants who were the legal representatives of the deceased driver made claim application under Section 22 of the act before the workmen's compensation and labour officer, Bangalore, claiming compensation for the driver's death against respondent No. 1, owner of the vehicle, for driving of which the deceased had been employed as also the insurance company-respondent No. 2 who had by issue of a insurance policy covered the risk of life of the driver, the employee of respondent No. 1.

( 3 ) THE workmen's compensation and labour officer awarded a sum of rs. 75,824/- liable to be paid under Section 3 of the act and computed under Section 4 of the act. He ordered payment of interest on the said amount of compensation at 6% per annum and made it liable to be paid by respondents 1 and 2 the owner of the vehicle and the insurer. Besides, he awarded a sum constituting 25% of the amount of compensation liable to be paid by respondents 1 and 2 to be paid as penalty by respondent No. 1 only. That penally was made payable under Section 4-a of the act. The appellants, in the present appeal, who were the claimants before the workmen's compensation and labour officer have questioned his order in so far as it has not made respondent No. 2 the insurer liable for the sum of penalty ordered to be recovered from the owner of the vehicle-respondent No. 1. It is how the aforesaid question arises for our consideration.

( 4 ) THE argument of the learned counsel for the appellants is, the liability arisingunder the act respecting which the insurance policy is issued by respondent No. 2 under Section 95 of the m. v. act is a liability which shall include not only the amount of compensation liable to be paid for the employee's death or injury under Section 3 of the act and computed under Section 4 of the act but also the amount of not exceeding 50% of the compensation recoverable as penalty under Section 4-a (3)of the act.

( 5 ) NODOUBT, the argument on its face looks attractive. But, we find it to be with out substance for the reasons we shall presently state. Issuance of a policy under Section 95 of the m. v. act by the insurer has to cover the liability arising under the act because of proviso (1) to sub-section (1) of Section 95 of the m. v. act. But, the question is whether the liability which is so covered by the insurance policy could be regarded as the one which includes the amount uplo 50% of compensation which could be recovered from the owner as penalty for default in payment of compensation under Section 4-a (3) of the act. Employer's liability for compensation to employee's death or bodily injury arises under Section 3 of the act and the same falls due as computed under Section 4 thereon. Section 4-a of the act which refers to the compensation liable to be paid under the act as al

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