An insurance company is not liable for interest on workmen's compensation awards, as liability rests solely with the employer under the Workmen’s Compensation Act.

JUDGMENT :

1. This is an appeal filed under Section 30 of the Workmen’s Compensation Act, 1923 challenging the impugned order and award dated 31.07.2009 passed by the Commissioner of Workmen’s Compensation, Labour Court, Jamnagar in Workmen Compensation Fatal Case No.20/1998.

2. Heard learned advocate Mr. Maulik J. Shelat for the appellant. Though served, none appears for the respondent.

3. The brief facts of the case are as under:-

3.1. The workman-Devji Kanji Savasariya was in the employment of original opponent No.1 and he workman during the course of employment died on 26-27/03/1997. The workman expired while working on the barge. The heirs of deceased workman claimed the compensation of Rs.2,62,000/- with penalty and 18% interest from the original opponents. Upon service of notice, original opponent No.1 filed Written Statement at Exhibit-11 and denied their liability of paying compensation to the heirs of deceased workman. Subsequently, during the pendency of the proceedings, the Insurance Company was joined as opponent No.2 and appellant filed its Written Statement at Exhibit-12. Issues were framed at Exhibit-23. The original claimant submitted affidavit-in-lieu of examination-in- chief at Exhibit-31 and also submitted documentary evidences. Original opponent No.1-Employer submitted documents such as copy of policy and the voucher indicating payment being made to the legal heirs of deceased-workman. Opponent No.2- Insurance Company also submitted copy of policy. After considering the oral as well as documentary evidence, the learned Commissioner partly allowed the application and directed the original opponent Nos.1 and 2 to pay Rs.1,05,324/- with 7.5% interest from the date of application till realization together with cost and original opponent No.1 was further directed to pay Rs.10,500/- towards 10% penalty to the original claimants.

3.2. Being aggrieved and dissatisfied with the fastening of liability of interest upon the Insurance Company, the present appellant is before this Court.

4. Learned advocate for the appellant has submitted that the appellant had issued a Workmen Compensation Policy in favour of the respondent No.2 and during the period of policy, the workman-Devji Kanji Savasariya died during the employment on 26-27/03/1997. It is further submitted that thereafter, the heirs of the deceased filed the application for compensation from the original opponents. It is further submitted that the policy being a Workmen Compensation Policy, the award of interest upon the Insurance Company is bad in the eye of law and the learned Commissioner has exercised its jurisdiction not vested in it. Learned advocate for the appellant has submitted that the challenge in the present Appeal is with regard to the fastening of liability of interest upon the Insurance Company.

4.1. In support of his submissions, learned advocate for the appellant has placed reliance upon the decision in the case of New India Assurance Co. Ltd. Vs. Harshadbhai Amrutbhai Modhiya & Anr reported in 2006 (5) SCC 192 and the decision in the case of Distt Panchyat Deleted V/s Shantiben Bhimabhai reported in 2000 LawSuit(Guj) 404.

5. Having considered the submissions and having gone through the impugned judgment, the deceased-Devji Kanji Savasariya had died on 27.03.1997 during the employment of respondent No.1. The learned Commissioner has observed that since the occurrence of accident was known to the respondent No.2, and did not comply with the provision of law of depositing the amount within stipulated time, the respondent No.2 was saddled with 10% penalty. However, while considering