Delhi High Court
Satya Kumar vs Smt. Sumitra Devi And Ors. on 25 February, 2014
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO No.178/2013
% 25th February, 2014
SATYA KUMAR ..... Appellant
Through: Mr. M.S. Yadav, Advocate.
Versus
SMT. SUMITRA DEVI AND ORS. ..... Respondents
Through:
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. This first appeal is filed under Section 30 of the Employee's
Compensation Act, 1923 (hereinafter referred to as 'the Act') impugning the
order of the Commissioner dated 29.1.2013 passed under Section 4A of the
Act with respect to imposition of penalty of 50% of the compensation
amount upon the appellant/employer.
2. The provision of Section 4A of the Act is invoked after the
main compensation proceedings are decided, proceedings under Section 4A
are so as to take a decision as to whether claimants are entitled to interest
FAO No.178/2013 Page 1 of 4
and penalty for delay in payment of compensation and which compensation
has to be paid within 30 days of the accident for penalty and interest not to
be payable.
3. By the impugned order, the Commissioner has ordered the
insurance company/respondent no.4 herein to pay interest, but has directed
that payment of penalty will be on the appellant/employer (respondent no.1
before the Commissioner) alone on the ground that it was the appellant who
had failed to inform the insurance company on time for liquidating the
liability and therefore only the appellant will be liable to pay penalty. The
relevant observations of the Commissioner in this regard read as under:-
"That after examination/perusal of the pleadings/documents/replies
etc of the respondents, it is found that the justification/ reasons given
by the respondents are not sustainable and as such as per the
provisions of the Workmen's Compensation Act, 1923, the
claimant/s are entitled for the interest amount @ 12% simple interest
and penalty as provided under the Act and rules made there-under.
Further, as far as liability of making the above payments of interest
and penalty is concerned, the same is decided as follows:
That the vehicle was duly insured and as such the liability of
payment of compensation was of Respondent No. 2 i.e. Insurance
Co. Now, had the insurance company received the intimation about
the accident in time/earlier, they would have made the payment
early, which they made after a period of about 3 years on filing of the
case, Meaning thereby that the due compensation amount remained
with/ in the account of the insurance company which obviously is
utilized by them for its business or have earned interest on the same.
FAO No.178/2013 Page 2 of 4
Therefore, it is decided that the interest on the principal amount of
compensation i.e. Rs. 3,29,925/- @ 12% @ w.e.f. 21-8-05 to 18-6-08
amounting to Rs 1,12,175/-, shall be paid by the respondent No. 2-
M/s National Insurance Co. Ltd. to the claimant/s.
That as far as, the penalty is concerned, the respondent has failed to
prove that he had informed the insurance co-respondent No.2 in time
about the accident as a result of w3hich the compensation to the
claimant could not be paid in time by the insurance company. It is,
therefore, proved that due to the negligence on the part of respondent
no.1, unwanted delay in payment of compensation has been caused.
Therefore, it is decided that the penalty of Rs. 1,64,963/- which is
equal to 50% of principal amount i.e. R. 3,29,925/- shall be paid by
Sh. Satya Kmar- respondent No. 1.
That as decided above, the respondent No.1 is directed to deposit
the payment of penalty for Rs. 1,64,963/- and respondent No.2 is
also directed to deposit the payment of interest for Rs. 1,12,175/- as
calculated. Mentioned above, in this court through Demand
Draft/pay order in favour of "COMMISSIONER, EMPLOYEE'S
COMPENSATION - IX" within 30 days, for further disbursement
to the claimant Sh. Pankaj Kumar, failing which proceedings to
recover the aforesaid amount of interest and penalty, as an arrear of
the land revenue, shall be initiated."
4. On repeated queries to the counsel for the appellant, the counsel
could not point out any letter which was duly received by the insurance
company whereby the insurance company was informed of the requirement
of payment of the compensation to the claimants before the Commissioner.
Also, no pleadings before the Commissioner are filed showing that by a
particular letter, insurance company was informed. Reliance is only placed
FAO No.178/2013 Page 3 of 4
on behalf of the appellant on the FIR which is lodged, however, lodging of
an FIR is not a notice to an insurance company to make payments under the
insurance policy.
5. I also put on record the fact that it is not known from the
proceedings before the Commissioner or before this Court whether insurance
company contractually agreed to take over the entire liability including for
penalty in terms of the insurance policy without it not having given any
notice. Since the proceedings before the Commissioner are not inter se
proceedings between the employer and the insurance company, liberty is
granted to the appellant/employer to recover the amount of penalty by filing
appropriate proceedings from the insurance company if the insurance policy
was a comprehensive policy by which the insurance company had taken over
liability also with respect to payment of penalty.
6. In view of the above, there is no merit in the appeal, and the
same is therefore dismissed subject to the above observations, leaving the
parties to bear their own costs.
FEBRUARY 25, 2014 VALMIKI J. MEHTA, J.
Ne
