( 1 ) BEING, aggrieved by the order dated 17-4-1996 passed by Commissioner of workmen's Compensation in W. C. Case no. 16/84-NF, where by the application filed by the respondentno. l under the provisions of Workmen's Compensation Act has been allowed and the appellant and respondent n. 3 has been directed to pay a sum of rs. 40,000/- along with penalty @ 20% with interest @ 6% per annum, the present appeal has been filed. Short facts of the case are that respondent no. 1 filed an application before the workmen's Commissioner (Labour Court), ujjain alleging that the respondent No. l was in employment of respondent No. 3. It was alleged that respondent No. 3 was having the gas Agency. Respondent No. l went to the house of R. C. Porwal alongwith Gas Cylinder and when he was fitting Gas Cylinder at that time because of pressure, fire took place and the respondent No. l sustained burn injuries. It was alleged that because of the fire, respondent No. l sustained burn injuries on his both legs, back and face. It was alleged that respondent No. 3 was insured with the appellant. Hence, it was prayed that compensation be awarded. This application was opposed by the appellant as well as by respondent No. 3.

( 2 ) LEARNED Court below framed the issues and recorded the evidence. By the impugned award it was held that respondent No. l was in employment of respondent No. 3 and since respondent No. 3 was insured with the appellant, therefore, respondent No. 3 and appellant are liable to pay a sum of Rs. 40,000 as compensation. It was also held that since amount was not deposited when it became due, therefore, the appellant and respondent no. 3 are further liable for payment of 20% of the amount of compensation as penalty and interest @ 6% per annum.

( 3 ) SHRI M. L. Dhupar, learned Senior advocate submits that from the evidence which has come on record it is proved that respondent No. l was not in the employment of respondent No. 3. It is submitted that a. W. 2, Raju has come in witness box and stated that he was working with respondent no. 3 and respondent No. l was working with him as Assistant. Learned Counsel further submits that Shri Paramjit Singh appeared as N. A. W. 1, who happens to be husband of smt. S. Chadda, who was having the agency of the Gas Connection. It is submitted that paramjit Singh has stated that the respondent no. l was never in his employment. Learned counsel submits that this part of evidence has not at all been looked into. It is further submitted that even if it is presumed that respondent No. 1 was in employment of respondent No. 3 then it was the responsibility of respondent No. 3 to make the payment of compensation in time and if amount is not paid then appellant cannot be held responsible for penalty and interest. For this contention learned Counsel placed reliance on a decision of the Apex Court reported in the matter of Ved Prakash Garg v. Premi Devi and others wherein the Hon'ble Apex Court has held that, "the liability of the Insurance company is to make payment of principal amount of compensation computed by commissioner and interest levied under section 4-A (3) (a), but not the penalty levied under Section 4-A (3) (b) of the Act". Reliance was placed on a decision in the matter of P. J. Narayan v. Union of India and others, wherein the Hon'ble Supreme Court has observed that, "the statutory liability under the workmen's Compensation Act is on the employer to pay compensation. There is no statutory liability upon the Insurance company. An insurance is a matter of contract between the Insurance Company and the insured".

( 4 ) LEARNED Counsel in alternate further submits that the amount awarded is on a higher side. It is submitted that it is not disputed that income of the respondent No. l at the most was Rs. 300 per month. It is submitted that as per Schedule IV of workmen's Compensation Act, which was prevailing at the relevant time income of rs. 300/- on account of permanent total disablem