Penalties under the Workmen’s Compensation Act are the responsibility of the insurer, not the Insurance Company; interest awarded at 12% was justified.

JUDGMENT :

HEMANT M. PRACHCHHAK, J.

1. Present appeal is filed by the appellant - New India Assurance Company Limited against the judgment and award dated 01.02.2007 passed by the learned Commissioner for Workmen's Compensation at Kutch-Bhuj in Workmen's Compensation Case (N.F.) No.9 of 2003, whereby the learned Commissioner has awarded compensation of Rs.4,35,000/- with interest @ 12% p.a. in favour of original claimant and also drected the Insurance Company to pay penalty of Rs.1,74,000/- alongwith other expenses.

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

2.1 The deceased respondent No.1 herein was serving as driver of the Tanker bearing registration No. GJ-12-V-9751 with respondent No.2 herein i.e. M/s. Raghunath Agencies Pvt. Ltd. On 28.07.2002, when the deceased was driving the Tanker of respondent No.2, almost half kilometer from Mahua, on Jaipur- Agra Road, met with an accident with a Truck coming from opposite side and driven on wrong side bearing registration No. RJ-11-G-0099, as a result of which, the respondent No.1 sustained serious injuries on his left hand and on various parts of his body, for which, the respondent No.1 had taken treatment from different doctors. At the time of accident, the respondent No.1 was aged 40 years and therefore, he had claimed compensation of Rs.4,42,000/- by filing Workmen's Compensation Case being Workmen's Compensation Case (N.F.) No.9 of 2003, whereby the learned Commissioner has awarded compensation of Rs.4,35,000/- with interest @ 12% and also directed the Insurance Company to pay penalty of Rs.1,74,000/- alongwith other expenses.

3. Being aggrieved and dissatisfied with the aforesaid judgment and award passed by the learned Commissioner, the appellant Insurance Company has filed the present First Appeal under Section 30 of the Workmen’s Compensations Act, 1923.

4. Heard learned advocate Mr. H.G. Mazmudar, appearing for the appellant – New India Assurance Company Ltd. and learned advocate Mr. Hiren Modi, appearing for the respondent No.1 – original claimant.

5. Learned advocate Mr. Mazmudar has submitted the impugned judgment and award is challenged mainly on two counts viz., the direction fasten against the appellant Insurance Company to pay penalty and the interest awarded by the learned Commissioner @ 12%. He has submitted that now it is well settled that so far as the liability of penalty is concerned, it cannot be fastened against the Insurance Company but, it is required to be borne by the insurer who failed to pay the awarded amount within 30 days from the date of award and it is now covered by various decisions of the Hon’ble Apex Court as well as this Court and therefore, the directions qua payment of penalty of Rs.1,74,000/- is absolutely illegal, unjust and against the settled principles of law. He has further submitted that the rate of interest awarded by the learned Commissioner is also unjust and disproportionate.

5.1 Learned advocate Mr. Mazmudar has referred and relied upon the decision of this Court dated 06.05.2025 rendered in case of New India Assurance Company Limited vs. Smt. Kunwarbai Hamirbhai Chavda & Others in First Appeal No. 4211 of 2006, which directly covers the issue relating to liability of payment of penalty and therefore, urged that in view of the above decision, the present appeal be allowed and the directions qua payment of penalty be appropriately modified. He has also submitted that so far as the interest awarded by the Commissioner @ 12% is concerned, it is on very higher side and therefore, he has requested to decrease the rate of interest from 12% to 9% and urged that the present appeal