1. Insurer's liability for interest and penalty under Section 4-A(3) of the Workmen's Compensation Act, 1923, is limited to cases where the insurer has knowledge of the accident and has failed to discharge its liability. 2. Employer's liability for interest and penalty under Section 4-A(3) of the Workmen's Compensation Act, 1923, is absolute, but the employer must be given an opportunity to explain the circumstances of default or delay before the levy of interest or penalty.

JUDGMENT :

S.C. Mohapatra, J. - The three appeals by the employer u/s 30 of the Workmen's Compensation Act, 1923 (hereinafter referred to as 'the Act') arise out of the same accident. All the three appeals having arisen out of the common order, they are heard together and are disposed of in this common judgment.

2. Truck bearing registration No. ORJ 4474 belonging to be appellant risk of which was covered by respondent No. 2, the insurer, under terms of the policy was returning from Raxding to Nadidih mines on 15.4.1982. Bahadur Munda, Ramesh Mahakud and Mangal Munda were travelling in the truck, near Jamdih, truck met with an accident. Bahadur and Mangal sustained fatal injuries and Ramesh was injured. Bahadur and Ramesh were coolies in the truck whereas Mangal was driver of another truck belonging to the appellant. Widows of deceased Bahadur, deceased Mangal and Ramesh himself claimed compensation under the Act on account of deaths and injuries-respectively. Since the risk in respect of the truck in which they were travelling was covered under a policy issued by the insurer to the owner, insurer was called upon to show cause they liability would not be fixed on it to pay the compensation amount.

3. Commissioner awarded compensation to the claimants and directed payment of interest at 6 per cent per annum and penalty at 2 per cent of the awarded amount. He directed insurer to pay compensation amount to Ramesh, the injured workman and widow of Bahadur, the deceased workman. He however, directed the owner appellant to pay compensation determined to die widow of Mangal. Interest and penalty were directed to be paid by the owner also. This is the grievance of owner appellant in these three appeals.

4. Mr. B.P. Ray, learned Counsel for the appellant, submitted that compensation to widow of Mangal Munda ought to have been directed to be paid by die insurer. His further submission is that insurer ought to have been liable to pay the interest and penalties. Next submission of Mr. Ray is that interest and penalty ought not to have been imposed in the same order as appellant was not given any opportunity to show cause against it. Last submission of Mr. Ray is that there is no justification for imposing penalty at 25 per cent of the compensation amount.

5. Mr. P. Roy, learned Counsel for the insurer, on the other hand, submitted that Mangal being the driver of another truck, Commissioner rightly directed the owner to pay compensation in respect of his death since there is no evidence that insurer has covered the risk of the other truck. Mr. P. Roy submitted that insurer is not liable to pay interest and penalty.

6. Mr. Surath Roy, Advocate who has joined the noble profession in recent past, being present in Court made a study of the questions involved and assisted amicus curiae in submitting decisions on the points involved and his assistance and ability is acknowledged by me.

7. On plain reading of the Act, it would not be possible for the Commissioner to give direction to insurer to discharge liability of the employer, who is owner of the vehicle. Employer is to pay the amount and he may recover the same from the insurer under terms of the policy which is a contract. However, both the Act and provisions in the Motor Vehicles Act, 1939, so far as compensation on account of injuries in an accident, are beneficial provisions for the claimants. Therefore, by judicial interpretation, this Court has laid down the law which is now settled so far as this Court is concerned that Commissioner can give a direction to the insurer after giving it opportunity of being heard to pay the compensation determined which is normally payable by the employer who is owner of the vehicle. Since insurer has been dragged in by judicial interpretation, in cases where it is aggrieved, it can prefer appeal. Since u/s 30 of the Act, employer is called upon to deposit the amount as a precondition to his preferring appeal, insurer under the law is not required to deposit th