Point of Law: Claim for compensation along with interest will have to be made good jointly by Insurance Company with insured employer.

JUDGMENT :

AJAY MOHAN GOEL, J.

1. By way of this appeal, the appellant has challenged the order dated 01.03.2013, passed by the Court of learned Commissioner, Employee’s Compensation, Solan, District Solan, H.P. in WCA No. 51/2 of 2011, titled Smt. Kamla Devi vs. Mrs. Kamlesh Thaur and Another, in terms whereof, the claim petition filed by the claimant under Section 22 of the Workman’s Compensation Act was allowed by learned Commissioner by awarding an amount of Rs. 4,23,580/- with interest @ 12% per annum w.e.f. 12.07.2015, i.e. one month from the date of accident till the deposit of the amount. Learned Commissioner further ordered that the order be complied with by the Insurance Company with which the offending vehicle was insured within one month as from the date of the order, failing which it would liable to pay penalty and interest thereupon. This appeal was admitted on 16.09.2013 on the following substantial question of law:

“1. Whether the learned Commissioner exercising the powers of the Employee’s Compensation Act, 1923 has wrongly saddled the Insurance Company with penalty in case of their failure to deposit the compensation amount?”

2. Leaned Senior Counsel appearing for the appellant has argued that the order passed by learned Commissioner, in terms whereof, it has been directed that in the event of failure of the Insurance Company complying the directions passed by learned Commissioner within one month as from the date of passing of the order, it will be liable to pay a penalty as also interest, is perverse order and not sustainable in the eyes of law, for the reason that the very factum of interest being levied for noncompliance of the order takes care of the interest of the other party and in these circumstances, the imposition of the penalty also is totally unsustainable and bad in law. Learned Senior Counsel has drawn the attention of the Court to the judgment of Hon’ble Supreme Court in Ved Prakash Garg vs. Premi Devi, (1997) 8 SCC 1 and L.R. Ferro Alloys Ltd. vs. Mahavir Mahto and Another, (2002) 9 SCC 450 and by relying upon these judgments, he submitted that imposition of penalty by learned Commissioner on default on the part of the Insurance Company in making good the order within one month is liable to be quashed and set aside as interest of the claimant is duly protected by imposing payment of interest in the event of noncompliance of the order. Accordingly, a prayer has been made that the appeal be allowed and the order passed by leaned Commissioner, to the extent penalty stands imposed upon the Insurance Company in the event of default in compliance of the order within one month as from the date of passing of the order, be set aside.

3. I have heard learned counsel for the parties and have gone through the impugned order as well as the judgments being relied upon by learned Senior Counsel for the appellant.

4. This Court is of the considered view that as from the date when the order was announced by learned Commissioner, the grant of one month’s time to the Insurance Company to comply with said order was a prudent direction given by learned Commissioner, as it gave reasonable time to the Insurance Company to comply with the order. The order passed by learned Commissioner to the extent, it has ordered that the Insurance Company would be liable to pay interest in the event of non::: compliance of the order within one month from the date of passing of it can also not be faulted with, because once learned Commissioner had passed the order, the Insurance Company was duty bound to comply the same subject to its legal rights. However, once interest stood imposed for noncompliance of the direction, the imposition of the penalty also is not sustainable in the eyes of law. In fact, the scheme of the Act per se does not confers any such power upon learned Commissioner that after passing of the award, in the event of the same not being complied by the Insurance Company, besides levying interest, penalty can also be imp