Insurance companies are liable for interest on compensation but not for penalties due to employer violations under the Workmen's Compensation Act.

JUDGMENT :

HEMANT M. PRACHCHHAK, J.

1. Present appeal is filed by the appellant-New India Assurance Company Limited against the judgment and award dated 01.12.2006 passed by the learned Commissioner for Workmen's Compensation at Kutch- Gandhidham (hereinafter referred to as the "Commissioner") in Workmen's Compensation (Fatal) No.21 of 2006, whereby the learned Commissioner directed the insurance company to pay interest @ 12% on the amount of Rs.2,62,080/- for a period of 5.11.2005 to 5.5.2006 and amount of penalty of Rs.1,00,000/- within period of 30 days.

2. The short facts giving rise to present appeal are as under:-

2.1 The deceased Sakrabhai Merambhai Rabari was working with original opponent No.1 as helper. On 5.11.2005 he was died on duty. The widow of the deceased filed application before the Workmen's Commissioner for compensation under Workmen's Compensation Act. The insurance company had deposited an amount of Rs.2,62,080/- towards compensation without interest and penalty. Therefore, the widow of the deceased has prayed that opponents are liable to pay penalty and interest @ 12%, as the insurance company failed to deposit the amount of compensation within period of 30 days from the date of accident.

2.2 After hearing the parties and after evaluating the evidence placed on record, learned Commissioner directed the insurance company to pay interest @ 12% on the amount of Rs.2,62,080/- for a period of 5.11.2005 to 5.5.2006 and amount of penalty of Rs.1,00,000/- within period of 30 days.

2.3 Being aggrieved and dissatisfied with the order passed by learned Commissioner, the insurance company has filed present appeal.

3. I have heard Mr. K.V. Gadhia, learned counsel for the appellant. Though served respondents have chosen not to remain present before this Court.

4. Learned advocate for the appellant has submitted that the appeal is restricted only qua the issue of liability of penalty fasten upon the appellant insurance company and so far as interest is concerned, this issue is now not in res-judicata that the liability to pay the penalty is upon the insurer and not on the insurance company.

4.1 So far as interest period is concerned, it is only for six months therefore, this Court is not inclined to interfere qua interest in peculiar facts.

4.2 Mr. Gadhia, learned advocate for the appellant urges before the Court that present appeal may be allowed and the impugned award passed by Commissioner for Workmen's Compensation may be quashed and set aside or the same may be appropriately modified.

4.3 Mr. Gadhia, learned advocate for the appellant- insurance company has relied upon the judgment of Hon'ble Apex Court in case of New India Assurance Co. Ltd. vs. Harshadbhai Amrutbhai Modhiya and another reported in (2006) 5 SCC 192 and more particularly paragraph Nos.12, 13, 14, 15 and 17 which read as under:-

"12. Section 8 stipulates the manner in which the amount of compensation would be distributed. Sub-section (4) of Section 8 reads as under:

"8. (4) On the deposit of any money under sub-section (1), as compensation in respect of a deceased workman the Commissioner shall, if he thinks necessary, cause notice to be published or to be served on each dependant in such manner as he thinks fit, calling upon the dependants to appear before him on such date as he may fix for determining the distribution of the compensation. If the Commissioner is satisfied after any inquiry which he may deem necessary, that no dependant exists, he shall repay the balance of the money to the employer by whom it was paid. The Commissioner shall, on application by the employer, furnish a statement showing in detail all disbursements made."

13. Section 12 of the Act provides for the mode and manner of payment of compensation b