JUDGMENT :

Sandeep Sharma, J.

1. Instant appeal filed under section 3Q of the Workmen's Compensation Act, 1923, lays challenge to order dated 18.01.2005, passed by Commissioner under Workmen's Compensation Act, 1923 (for short "Act") in case No. WCA-6/2002, whereby learned Court below while holding respondents/claimants No. 1 and 2 entitled for compensation to the tune of Rs. 4,22,585/- on account of death of late Sh. Vinod Kumar, who allegedly died on account of the injuries suffered by him at the construction site of respondent No. 8, held appellant-insurance company liable to pay the aforesaid amount of compensation.

2. Precisely, the facts of the case as emerge from the record are that on 8.7.2002, late Sh. Vinod Kumar, who was engaged as labourer on the construction site by the contractor Furpa Lama, suffered injuries after being hit by a stone. On account of aforesaid injury, deceased Vinod Kumar died on the spot. Respondents/claimants No. 1 and 2 being legal representatives of aforesaid deceased labourer filed a claim petition under Workmen's Compensation Act in the Court of learned Commissioner, under Workmen's Compensation Act, 1923, which ultimately came to be allowed vide order dated 18.1.2005. Learned Court below while holding respondents/claimants No. 1 and 2 entitled for compensation to the tune of Rs. 4,22,585/- held appellant-insurance company liable to pay the aforesaid amount to the respondents/claimants being insurer of contractor Furpa Lama.

3. Appellant-Insurance Company has primarily laid challenge to aforesaid order passed by the court below on the ground that it could not have been saddled with liability to pay penalty at the rate of 50% under section 4A(3)(b) of the Act on account of delay in making the payment. Since, there is no dispute inter se parties qua the facts of the case as well as amount awarded by the court below under various heads save and except penalty under section 4A(3)(b) of the Act, there is no reasons for this Court to take note of the facts of the case as well as evidence led on record by the respective parties.

4. On 11.4.2007, this Court admitted the appeal at hand on the following substantial questions of law:-

1. Whether the learned Commissioner was justified in imposing the interest @ 12% per annum and penalty on award amount upon the insurance company in the absence of any statutory provision empowering him to do so?

2. Whether in the absence of any clause or terms of insurance policy, the insurance company can be held liable to make the payment of interest and penalty?

3. Whether the award of the Commissioner suffers from illegality and is unsustainable?

5. Careful perusal of order impugned in the instant proceedings clearly reveals that court below has proceeded to award sum of Rs. 1,09,794/- on account of penalty under section 4A(3)(b) of the Act. Before ascertaining the genuineness of the claim put forth by the Insurance Company, it would be profitable to take note of section 4(A) of the Act herein:-

[4A. Compensation to be paid when due and penalty for default.--(1) Compensation under section 4 shall be paid as soon as it falls due.

(2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and, such payment shall be deposited with the Commissioner or made to the employee, as the case may be, without prejudice to the right of the employee to make any further claim.

[(3) Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner shall--

(a) direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve per cent, per annum or at such higher, rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government, by notification in the Official Gazette] on the