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HIGH COURT OF RAJASTHAN (JODHPUR BENCH)
MS. JUSTICE REKHA BORANA, J
Eita India Limited – Appellant
Versus
New India Assurance Company Ltd – Respondent
| Table of Content |
|---|
| 1. appeal against compensation order (Para 5 , 6) |
| 2. insurance company's liability for interest (Para 7) |
| 3. insurance company liable for interest (Para 8 , 9 , 10 , 11) |
| 4. appeal partly allowed (Para 12 , 13 , 14 , 15 , 16) |
Order :
2. Vide the impugned order, the respondent-Insurance Company has been held liable to pay the compensation amount and the amount qua the funeral expenses whereas the employer was held liable to pay the interest and the penalty amount. It is the said finding/direction of the liability to pay the interest and penalty that is under challenge in the present appeal.
4. Counsel submits that there being a contract with the Insurance Company, the Insurance Company was liable to indemnify the owner and therefore, it is the Insurance Company who would be liable to pay the interest amount.
6. Per contra, learned counsel appearing for the respondent- Insurance Company relied upon the Hon’ble Apex Court judgment in the case of New India Assurance Co. Ltd. Vs. Harshadbhai Amrutbhai Modhiya & Anr.; AIR 2006 SC 1926 to submit that the statutory liability to pay the interest as well as the penalty amount is of the employer in terms of Section 4A(3) of the Employ
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 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 liability for interest on compensation rests with the insured owner, not the insurance company, due to failure to inform the insurer.
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.
Insurance companies are liable for interest on compensation but not for penalties due to employer violations under the Workmen's Compensation Act.
The court held that the liability for interest on compensation lies with the Insurance Company, affirming a statutory interest rate of 12% under the Workmen's Compensation Act if not paid within a mo....
The appeal court can only intervene on substantial questions of law, preserving the Commissioner’s fact-finding authority while holding the employer liable for compensation penalties, with insurance ....
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