An insurance company cannot be held liable for interest and penalty under the Workmen's Compensation Act, 1923, in the absence of a specific provision in the insurance policy.

JUDGMENT :

S.N. Phukan, C.J,

1. In Misc Appeal No. 355 of 1992 a learned single Judge of this Court has referred the following two questions arising out of Workmen's Compensation Act, 1923 (for short 'the Act') for our decision:-

" (1) whether insurer (sic) can be made liable for interest and penalty under the Act not withstanding absence of specific provision therefore in the Act and stipulation in the policy issued by the insurer?

(2) Whether levy of penalty is automatic or the insurer is entitled to an opportunity to show that levy of penalty is not warranted, even if it is held that insurer is liable?"

In the other appeals, only the first question has been referred.

2. The necessity for making the present reference to this Full Bench arose as a learned single Judge of this Court in the Oriental Fire and Gen- eral Insurance Co., Ltd v Matias Burla 1986 ACJ 732 held that u/s 4A, the insurer is not liable to pay either penalty or interest; but the decision of the learned single Judge was not accepted by a Division Bench of this Court in O.J.C. No 4880 of 1990 Union of India (UOI) and Another Vs. Jai Kumar Raj Kumar and Co., .

3. Heard learned counsel for the parties.

4. We may now extract below the relevant sections of the Act before we consider the two question referred to us.

Sub-Clause (e) of Clause (1) of Section 2 of the Act defines the word 'employer' which runs as follows:-

"'employer' includes any body of persons whether incorporated or not and any managing agent of an employer and legal representative of a deceased employer, and, when the services of a workman are temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship means such other person while workman is working for him;

Section 4A runs as follows:

"Compensation to be paid when due and penalty for default-(1) Compensation u/s 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 workman as the case may be, without prejudice to the right of the workman 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 may direct that, in addition to the amount of the arrears, simple interest at the rate of 6 per cent per annum on the amount due together with, if in the opinion of Commissioner there is no justification for the delay, a further sum not exceeding fifty per cent of such amount, shall be recovered from the employer by way of penalty."

5. It is the settled law that where the language is plain and admits of but one meaning, the task of interpretation can hardly be said to arise. Where the legislature while enacting a statue used clear and unequivocal language capable of only one meaning, it must be enforced however harsh or absurd or contrary to common sense the result may be. (see Cartledge v. E. Jopling & Sons Ltd 1963 AC 758). Therefore, if the language of Section 4A of the Act is clear, it is the duty of this Court to expound the section as it stands.

6. Reading the definition of 'employer' with Section 4A of this Act, there can only be one interpretation that the employer is liable if there is any default in paying the compensation due under the Act within one month from the date it fell due. The interest and penalty shall be recoverable only from the employer as is clear from Sub-section (3) of Section 4A of the Act. If we hold that the insurer is liable for penalty or interest, it would amount to substituting the word 'employer' in Sub-section (3) of Section 4A of the Act with the word 'insurer'. Now let us consider the various decisions of different High Courts placed before us.

7. The decision of a learned single Judge o