Point of Law : 12. Liability of interest has to be borne by insurer as liability is attached to amount of awarded compensation under Act, which insurer is liable to indemnify and as necessary corollary liability to pay interest would run from date on which right to receive compensation accrues.

JUDGMENT :

By way of instant appeal, the appellant has assailed award dated 09.08.2012 passed by learned Commissioner under the Employee’s Compensation Act, Rampur Bushehr, District Shimla, H.P. in case No.5 of 2008/32-2 of 2012.

2. Brief facts necessary for adjudication of the appeal are that respondents No.1 to 4 herein (hereinafter referred to as “claimants”) filed application for grant of compensation under the Employee’s Compensation Act, 1923 (for short ‘Act’) on account of death of Sh. Tota Ram in a road accident. The claimants were the legal heirs of deceased Sh. Tota Ram, who was employed as driver of vehicle No. HR-37B-2597 owned by respondent No.5 herein (hereinafter referred to as “owner”. The vehicle was insured with the appellant herein (hereinafter referred to as the “insurer”). It was alleged that Sh. Tota Ram had died in the course of his employment with the owner while driving the vehicle of the owner on his instructions. The monthly salary of the deceased was alleged to be Rs.5,000/-. It was also claimed that deceased was getting Rs.100/- per day as subsistence allowance in addition to his monthly salary. The deceased was stated to be 31 years old at the time of death.

3. In response, the owner admitted that the deceased was his employee. However, as per the owner deceased was being paid Rs.4000/- per month as salary and Rs.50/- per day as died money.

4. The insurer contested the claim on the ground of maintainability. The relationship of employer and employee between the owner and deceased was denied. It was alleged that the deceased was under influence of liquor at the time of accident and claimed exclusion under the insurance policy. In addition, various other breaches of terms and conditions of insurance policy were alleged. The claim of the claimants towards the income of deceased was also denied.

5. The learned Commissioner framed the following issues:

(i) Whether the deceased was workman within the meaning of workman’s compensation Act? OPP

(ii) Whether the deceased died during the course of employment with respondent No.1? OPP

(iii) Whether the deceased was getting wages, as claimed? OPA

(iv) Whether the applicants are entitled to get the compensation as claimed? OPP

(v) Relief.

6. Issues No. 1 to 4 were decided in affirmative and an award of Rs.16,64,076/- was passed in favour of the claimants. The awarded amount was calculated under the following heads :

(i) Age 31 years, factor 205.95, which comes to Rs.205.95x4,000 =Rs.8,23,800/-.

(ii) Simple interest @ 12% from 08.04.2008, till date, comes out to Rs.4,28,376/-.

(iii) Penalty @ 50% comes out to Rs.4,11,900/-.

(iv) Total amount comes out to Rs.16,64,076/- (Sixteen lacs sixty-four thousand and seventysix) only.

7. The learned counsel for the appellant contended that the award passed by learned Commissioner required interference by this Court as the same was based on wrong premise. He contended that the accident had taken place on 07.04.2008 and as per second explanation appended to Section 4 (1) of the Act, the monthly wages were to be confined to the maximum of Rs.4,000/- per month notwithstanding the fact that the workman was proved to have been earning amount more than that. On the strength of such submission, it is further contended that the calculation of the compensation made by learned Commissioner was patently wrong. It should have been calculated by taking the monthly income of deceased at Rs.4,000/- and after dividing it by two, it was to be multiplied with relevant factor of 205.95. Learned counsel for the appellant has further contended that learned Commissioner has also erred in awarding the interest from the date of accident, whereas it would have been awarded from the date of compensation.

8. On the other land, learned counsel for the claimants has supported the impugned award.

9. Vide order dated 03.07.2013, the appeal was admitted on the follow