( 1. ) THIS appeal preferred under section 30 of the workmens Compensation Act, 1923 was admitted on 4. 3. 98 without formulation of substantial question of law. It has been heard today finally on the following substantial questions of law.

(1) "whether the learned Commissioner for Workmens compensation, Labour Court Satna has acted illegally in fastening the liability of penalty and interest on the appellant-Insurance Company?" (2) "whether the learned Commissioner for Workmens compensation has power or jurisdiction to levy interest and penalty from the date of occurrence of accident ?"

( 2. ) SHORT facts involved herein are that the respondent no. 1 was in the employment of respondents no. 2 and 3. During the course and arising out of employment, respondent no. 1 met with an accident resulting into non-fatal injuries and disability to the extent of 35%. He filed application under section 10 of the act for seeking compensation before the Commissioner for Workmens Compensation, labour Court Satna. Notices were served by the Commissioner on the appellant and respondents no. 2 and 3. Claim petition was opposed, however, learned Commissioner after framing issues and recording evidence reached to the finding that the respondent no. 1 sustained injuries during the course of employment. Accordingly, respondents including appellant were directed to pay amount of compensation to the tune of rs. 53371/- and interest at the rate of 12% per annum and penalty at the rate of 25% of the amount of compensation within a period of two months.

( 3. ) AGGRIEVED by the same the present appeal has been preferred on the ground that the Commissioner for Workmens Compensation has no power or jurisdiction to award penalty and interest against the Insurance Company under subsection (3) of section 4 (a) of the Act.

( 4. ) SHRI Suresh Raj, learned counsel for the appellant made submissions at length in respect of objections raised in the memo of appeal whereas learned counsel for the respondents supported the impugned award. Substantial question of law no. 1 :-

( 5. ) I may now advert to the legal position in respect of section 4 A of the Act which runs as follow:-

4a. Compensation to be paid when due and penalty for default.- (1) Compensation under section 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 shall- (a) direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve per cent per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government, by notification in the Official Gazette, on the amount due; and (b) if, in his opinion, there is no justification for the delay, direct that the employer shall, in addition to the amount of the arrears, and interest thereon pay a further sum not exceeding fifty per cent of such amount by way of penalty:

( 6. ) HONble Supreme Court of India in the Case of Ved Prakash Garg Vs. Premi Devi and others AIR 1997 SC 3854 has observed as under:-

"14. . On a conjoint operation of the relevant schemes of the aforesaid twin Acts, in our view, there is no escape from the conclusion that the insurance companies will be liable to make good not only the principal amounts of compensation payable by insured employers but also interest thereon, if ordered by the commissioner to be paid by the insured employers. Reason for this conclusion is obvious. As we have noted earlier the liabi