[Cites 12, Cited by 0]

Gujarat High Court

Pramiladevi Nagendrakumar Jaiswar vs Abhishek Fabrics on 28 November, 2025

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                           C/FA/2417/2008                                       JUDGMENT DATED: 28/11/2025

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                                    IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                               R/FIRST APPEAL NO. 2417 of 2008

                                                           With
                                               R/FIRST APPEAL NO. 3615 of 2008

                      FOR APPROVAL AND SIGNATURE:


                      HONOURABLE MR. JUSTICE DEVAN M. DESAI

                      ==========================================================

                                    Approved for Reporting                      Yes           No

                      ==========================================================
                               PRAMILADEVI NAGENDRAKUMAR JAISWAR & ORS.
                                                     Versus
                                         ABHISHEK FABRICS & ANR.
                      ==========================================================
                      Appearance:
                      MR DG SHUKLA(1998) for the Appellant(s) No. 1,2,3,4
                      MR RAJESH A VYAS(3596) for the Appellant(s) No. 1,2,3,4
                      MR DG CHAUHAN(218) for the Defendant(s) No. 1
                      MR PALAK H THAKKAR(3455) for the Defendant(s) No. 2
                      RONAK D CHAUHAN(7709) for the Defendant(s) No. 1
                      ==========================================================

                         CORAM:HONOURABLE MR. JUSTICE DEVAN M. DESAI

                                                            Date : 28/11/2025

                                                   COMMON ORAL JUDGMENT

1. First Appeal No. 2417 of 2008 is filed by appellant - original

applicant for enhancement of compensation in rate of interest and

penalty. First Appeal No. 3615 of 2008 is filed by appellant -

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original opponent No. 2 - Insurance Company, challenging the

judgment and order. Both the First Appeals are filed under Section

30 of Workmen's Compensation Act, 1923 and arising out of

judgment and order dated 05.03.2008 by Ex-Officio Commissioner

for Workmen's Compensation Act, Surat in Workmen's

Compensation (Fatal) Application No. 111 of 2005.

2. Heard learned advocate Mr. D.G. Shukla for the appellant -

claimant and learned advocate Mr. Palak Thakkar for the

Insurance Company. In both the First Appeals, the facts are

common and both the appeals are arising out of common

judgment and award. Therefore, upon request, both the appeals

are decided by this common order.

3. The brief facts of the case are under:

3.1 Deceased, Nagendrakumar Nankuram Jaiswar was in

the employment of original opponent No. 1 as a weaver. On

01.04.2005, at around 8.30 a.m., when deceased was

performing his duties on machines, due to stress and strain

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of the work, he fell down and died. Deceased was aged

about 27 years of age and was drawing a salary of Rs.

4,000/- per month. As the employer - opponent No. 1 did not

deposit the amount of compensation as stipulated under the

Act, claimants filed an application under the Workmen's

Compensation Act for compensation of Rs. 4,27,140/-

coupled with interest at the rate of 12% per annum and

penalty at 60%. Employer - opponent No. 1 appeared and

filed written statement at Exhibit - 10. The employer admitted

the relationship of employee and employer between the

deceased and opponent No. 1 and also admitted that

deceased died due to stress of work. The accident is arising

out of and in the course of employment. However, the

employer denied its liability to pay compensation, interest

and penalty as the employer is covered under the policy.

Opponent No. 2 - insurance company - appellant of First

Appeal No. 3615 of 2008 appeared and filed written

statement at Exhibit - 13 and denied his liability of paying

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any compensation to the claimants on the ground that the

death has not occurred out of the employment and there is

no nexus between the nature of work and the cause of

death. After considering the evidence, the learned

Commissioner allowed the claim application by directing the

Insurance Company to pay compensation of Rs. 4,26,340/-

with interest at the rate of 9% per annum from the date of

accident till realisation to the claimants and further directed

opponent No. 1 to pay the penalty at the rate of 2%

amounting to Rs.8,527/- to the claimants.

3.2 Being aggrieved and dissatisfied with the award of

granting of interest and penalty, the claimants have filed the

appeal for enhancement of compensation. The Insurance

Company has preferred the appeal being aggrieved and

dissatisfied with the granting of compensation. Together with

liability of interest at the rate of 9% per annum.

4. Learned advocate for the claimants submitted that on

01.04.2005, the deceased during the course of his employment,

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due to stress and strain, fell down in the factory and died. It is

contended that there is a casual connection between injury and the

accident. The employer vide Exhibit - 35 has issued a certificate

inter alia stating that the deceased has died due to heart attack,

resulting due to heavy workload in the factory. As per the

certificate issued by the employer, the accident is arising out of

and in the course of employment. It is further contended that in the

examination in chief Exhibit - 43, employer, has narrated the

nature of work and has also stated that the deceased had to lift the

beam and was to see that the cloth is properly woven. In

performing his duties, the deceased had to undergo lot of physical

and mental stress. The deceased while performing his duties, fell

down and died due to massive heart attack. It is contented that the

certificate of Dr. Mahesh Desai, of the Insurance Company, Exhibit

- 31 has opined that the death is due to Cardio-Respiratory Arrest

Due to Coronary Insufficiency. The post-mortem report also

certifies that the employee has died due to massive heart attack.

5. It is further contended that the evidence on record is

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sufficient to hold that the accident is arising out of and in the

course of employment and the learned Commissioner has rightly

held that claimants are entitled to compensation, interest and

penalty, as the claimants have established basic requirements as

contemplated under the Workmen's Compensation Act. Reliance

has been placed upon section 4A Act:

"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 [employee], as the case may be, without prejudice to the right of the [employee] 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"

It is also the contention of learned advocate for the claimant that

the employer did not deposit the compensation within a period of

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one month from the date it fell due as contemplated under the Act

and failed to comply with the statutory requirements. The Act

provides that in case the employer fails to deposit the

compensation, the employer is liable to pay simple interest at the

rate of 12% over the compensation together with penalty not

exceeding 50% of compensation. Section 4A (3)(a) of the Act,

prescribes award of simple interest of 12%. The learned

Commissioner has committed a gross error in awarding only 9%

simple interest. Imposition of 2% penalty is also a very meagre and

negligible penalty.

6. It is therefore contented that following substantial questions

of law are proposed by the claimants:

(i) Whether the learned Commissioner has erred in law

in considering the provisions of Section 4A(3)(a) and

(b) of the Workmen's Compensation Act, 1923?

(ii) Whether the learned Commissioner has committed

an error in law in awarding penalty to the extent of only

2%?

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(iii) Whether the learned Commissioner has committed

an error in law in awarding simple interest at the rate of

only 9% per annum?

(iv) Whether the learned Commissioner has committed

an error in law in not awarding penalty to the extent of

50% inspite of holding that there was no payment

made by the employer till the date of order and no

justification for delay?

(v) Whether the learned Commissioner has committed

an error in law in not awarding simple interest at the

rate of 12% per annum inspite of the statutory provision

contained under Section 4A(3)(a) which also

empowers the learned Commissioner to award interest

at higher rates?

(vi) On such other question of law as may be framed by

the Hon'ble Court during the course of hearing.

In support of his contentions, learned advocate for the claimant

has relied upon a case of "Chairman, Vaidyanath Sahakari

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Sakhar Karkhana Ltd vs. Shantabai" reported in 2025 JX (SC)

7. It is submitted that it is held by the Hon'ble Apex Court that

accident encompasses unforeseen events causing injury or death

without design on part of the workman. Heart attack during

employment can be classified as an accident if link to job stress.

The connection has to be established between work duties and

resulting in injury. Stressful nature of job which contributed to

deceased's heart attack would make the claimants entitled for the

benefits under the Act. No other submissions, except the above

are made by learned advocate for the claimants.

8. As against this, learned advocate for the Insurance Company

has strenuously submitted that there is no evidence on record

establishing nexus between the nature of work and the cause of

death. There is no causal connection between the work and the

cause of death. The certificate issued by the employer is not a

sufficient piece of evidence whereby it can be assumed that the

primary burden of proving the nexus between the cause of death

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and nature of work is established by claimants. The evidence also

lacks any material to show that the deceased was having any prior

health complaints. The incident occurred at around 8:30 a.m.,

which was the starting time of the factory and therefore, it cannot

be presumed that due to stress and strain of the work, the

deceased sustained heart attack. The claimants must establish by

medical evidence that the cause of death is the resultant effect of

the stress and strain. The death due to heart attack cannot be

construed as an accident arising out of and in the course of

employment. In support of his submissions, learned advocate for

the Insurance Company has relied upon a case of "Shakuntala

Chandrakant Shreshti vs. Prabhakar Maruti Garvali and

another" reported in 2007 (11) SCC 668. It is contended that the

onus is upon the claimant to show that it was due to work-related

strain which contributed to or aggravated the injury. If a finding is

arrived at without pleading or legal evidence, the statutory

authority will commit a jurisdictional error while exercising

jurisdiction. It is contended that there must be some evidence that

the employment contributed to the death of the deceased. In the

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present case, there is no evidence on record that the death

occurred during the course of employment.

9. Following substantial questions of law have been proposed

by learned advocate for the Insurance Company for the

determination:

1. Whether the learned Workmen's Compensation

Commissioner has committed an error of law in

granting compensation along with interest when death

of the husband of respondent No.1 did not occur due to

accident but occurred due to Cardio-Respiratory Arrest

due to Coronary Insufficiency?

2. Whether the learned Workmen's Compensation

Commissioner has committed an error of law in

granting compensation contrary to the judgment

passed by the Hon'ble Supreme Court in the case of

Shakuntala Shreshti vs. Prabhakar Maruti Garvali,

2006 AIR SCW 668?

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3. Whether the learned Workmen's Compensation

Commissioner has committed an error of law in

directing the appellant to pay interest contrary to the

provisions of the Act and contrary to the judgment of

the Hon'ble Supreme Court in the case of the New

India Assurance Co. Ltd. vs. Harshadbhai Amrutbhai

Modhia, 2006 AIR SCW 2352.

10. It is contended by learned advocate for the Insurance

Company that the policy is issued covering the risk under

Workmen's Compensation Act and the policy prescribe an

exclusion clause. As per the terms and conditions of the policy, the

insurance granted is not extended to include any interest and/or

penalty imposed on the insured on account of his failure to comply

with the requirements laid down under the Workmen's

Compensation Act, 1923. When a specific term excludes the

liability of paying interest, the Insurance Company cannot be

saddled with a liability to pay interest to the claimants by

indemnifying the insured. The learned commissioner, thereby has

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committed an error by awarding interest to the claimants by

holding Insurance Company liable. The Act also mandates that the

primary liability of depositing the compensation is upon the

employer and on failure to deposit the amount of compensation,

the employer can be saddled with a liability of simple interest on

the compensation. The Act does not prescribe any provision to

indemnify an employer by making a payment of interest to the

claimants. In support of his contention, learned advocate for the

Insurance Company has relied upon a decision in the case of

"New India Assurance Company Limited vs. Harshad Bhai

Amrutbhai Modhia" reported in 2006 AIR SCW 2352. No other

submissions were canvassed by learned advocate for the

Insurance Company.

11. I have considered the submissions canvassed by learned

advocates for the parties and perused record and proceedings.

The record reveals that there is no dispute with regard to

relationship of employee and employer between the deceased and

original opponent No. 1. The only question for consideration is

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whether death can be treated as an accident arising out of and in

the course of employment or not. The contention of the learned

advocate for the claimant is that the cause of death is directly

connected with the nature of work and due to stress and strain of

the work, the deceased died at the place of factory at around 8:30

a.m. on 01.04.2005. As against this, the grievance voiced out by

the learned advocate for the Insurance Company is that there is no

evidence on record which establishes nexus between the cause of

death and the nature of work. It is also the contention of the

Insurance Company that Dr. Mahesh Desai has opined in his

certificate, Exhibit - 31 that the deceased did not die out of any

accident or the death is not an accidental injury. On such

controversy, answer has to be given as to whether death, due to

heart attack, in the present set of facts, can be said to have any

causal connection with the nature of work or not.

12. To address the controversy, it is relevant to consider a few

facts which emerge from the record. The employer, in his

certificate at Exhibit - 35, has stated that due to the heavy

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workload in the factory, deceased employee succumbed due to

heart attack. The oral deposition of the employer recorded at

Exhibit - 43, if perused, the witness has narrated in detail the

nature of the work and has clearly stated that the deceased

employee was working in the factory under heavy physical and

mental stress. The deceased was also required to ensure that the

quality of the cloth is maintained properly and was supposed to

attend to looms, and the nature of the work was strenuous. On the

date of the incident, the deceased, while performing his duties, fell

down in the factory premises, which amounts to an accident. The

evidence of the employer on these grounds has gone

unchallenged. It is not the case of any party that the deceased had

any physical ailment prior to the date of the incident or that he was

suffering from heart disease or any other disease prior to his

death. The certificate issued by the Dr. Mahesh Desai is of hardly

any relevance in the present case, because the said doctor had no

occasion to examine the deceased. Said doctor had not examined

any case papers of deceased prior to his death. The post-mortem

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report relied upon by the doctor reflects the cause of death as

Cardio-Respiratory Arrest Due to Coronary Insufficiency. When the

Insurance Company has raised a contention that there is no nexus

between the cause of death and the nature of work, and that death

due to heart attack cannot be termed an "accident" as defined

under the Act, heavy burden lies upon the Insurance Company to

rebut that the deceased employee had a pre-existing heart ailment

prior to the date of the accident and that the death was the result

of such ailment. In the present case, the employer himself has

admitted that the deceased was undergoing stress and strain due

to the nature of his work. This evidence, having been gone

unchallenged, has probative value in establishing the connection

between the death of the employee and the nature of his work.

The fall in the factory premises amounts to an accident arising out

of and in the course of employment.

13. In the case of "Chairman, Vaidyanath Sahakari Sakhar

Karkhana Ltd." (Supra), the Hon'ble Apex Court had an occasion

to decide a question akin to the one involved in the present appeal.

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In the cited case, the employee died due to heart attack, and a

dispute was raised with regard to the interpretation of the word

"accident" in the context of work-related injuries. The contention of

the appellant therein was that the heart attack did not arise out of

employment as required under Section 3(1) of the Employees'

Compensation Act. While determining the liability of the employer

to compensate the claimants, the Hon'ble Apex Court, in

paragraphs 14, 15, and 16, discussed and explained the scope of

the term "accident" as contemplated under Section 3(1) of the

Employees' Compensation Act.

"14. The expression "accident" according to P Ramanatha Aiyar's Advance Law Lexicon Dictionary means "undesigned, sudden or unexpected event; mishap; misfortune; disaster". The word "accident" is derived from the Latin verb "accidere" signifying "fall upon, befall, happen, chance". In other words, it is a sudden and unexpected event taking place without expectation upon the instant, rather than something which continues, progresses or develops; something happening by chance not according to usual course of things or events, out of the range of ordinary calculations; that which exits or occurs abnormally, or an uncommon occurrence.

15. The word "accident" generally denotes an event that takes place without one's foresight or expectation; an event which proceeds from an unknown cause, or is an unusual effect of a known cause, and therefore not expected; chance, casualty, contingency (Webster Dictionary).

16. In other words, an "accident" being an unforeseen event causing a misfortune or loss is different from an omission which

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is as a result of negligence or misconduct. Therefore, the expression "accident" means an untoward mishap which is not expected or designed. In the context of the Act under consideration, the term "accident" for the purpose of seeking compensation for personal injuries sustained would include any injury which is not designed by the workman himself. Thus, the word "accident" would include all mishaps occurring by chance or caused unintentionally and events happening due to unforeseen circumstances under Section 3(1) of the Act. It must be interpreted as mishap or "untoward event not expected or designed" in the popular and ordinary sense. If the injury or death occurred without designed on the part of the workman then the death or injury would be by accident, although it was brought about by a heart attack or some other cause to be found in the condition of the workman himself. The expression "accident" not being defined under the Act must be interpreted to be an untoward event which is not expected or designed; therefore, an accident means unintended and unexpected occurrence which produces hurt or loss. The interpretation of the word "accident" must be in the popular and ordinary sense and not in a technical sense. Thus, the expression "accident" arising out of and in the course of his employment in Section 3(1) of the Act must be so interpreted as to establish that (1) at the time of the accident he was in fact engaged in the duties of his employment; (2) that it occurred at the place where he was performing those duties; and (3) that the immediate act which led to the accident is not so remote from the sphere of his duties so as to be regarded as something foreign to them."

14. The Hon'ble Apex Court has observed that an "accident" is

an unforeseen event causing misfortune or loss, and is distinct

from an omission resulting from negligence or misconduct. For the

purpose of seeking compensation for personal injuries, an injury

would be included so long as it is not designed or intended by the

workman himself. "Accident" means an untoward mis-hap which is

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not expected or designed. The interpretation of the word "accident"

must be understood in its popular and ordinary sense, and not in a

technical sense. The Hon'ble Apex Court further observed that the

expression "accident" must refer to an accident arising out of and

in the course of employment as contemplated under Section 3(1)

of the Act in establishing an occurrence of "accident" as defined

under Section 3(1) of the Act, three contingencies must be

established: (1) at the time of the accident he was infact engaged

in the duties of his employment; (2) that it occurred at the place

where he was performing those duties; and (3) that the immediate

act which led to the accident is not so remote from the sphere of

his duties so as to be regarded as something foreign to them.

Applying the said ratio to the present case, the three important

factors in determining whether the death of the employee amounts

to an "accident" as contemplated under Section 3(1) of the Act are

clearly satisfied. It is an undisputed fact culls out from the record

that at the time of the accident the deceased was performing his

duties as a weaver in the factory, and the accident occurred within

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the factory premises where he was engaged in his work. Further,

as he was required to perform his duties under strenuous working

conditions, the occurrence of his falling down cannot be said to be

remote from the sphere of his employment. Further, whether the

employee was working under stressed conditions and under the

constant supervision of his superiors in monitoring his performance

is a pure question of fact. As observed above, the employer has

clearly stated that the employee was working under strenuous

conditions. Therefore, in my view, the cause of death being a heart

attack has a direct nexus with the nature of his work, and

accordingly, the provisions contemplated under Section 3(1) of the

Act are squarely applicable.

15. In the case of "Chairman, Vaidyanath Sahakari Sakhar

Karkhana Ltd." (Supra), in paragraph-17, the Apex Court

considered the case of "Shakuntala Chandrakant Shreshti

(Supra). The Apex Court in "Shakuntala Chandrakant Shreshti"

(Supra) laid down tests for attracting the provisions of Section 3 of

the Act, which are reproduced as follows:

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(1) There must be a causal connection between the injury and the accident and the work done in the course of employment.

(2) The onus is upon the applicant to show that the it was the work and the resulting strain which contributed to or aggravated the injury.

(3) If the evidence brought on records establishes a greater probability which satisfies a reasonable man that the work contributed to the causing of the personal injury, it would be enough for the workman to succeed, but the same would depend upon the fact of each case.

So far as the tests are concerned, the causal connection between

the injury, the accident, and the work done in the course of

employment is established beyond any doubt. The evidence of the

claimant, as well as the admission of the employer in his

examination-in-chief, clearly indicate that the claimants have

discharged their initial burden of proving that the stress and strain

of work had contributed to or aggravated the injury. The test laid

down by the Hon'ble Apex Court - that there has to be evidence

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on record which establishes a greater possibility, satisfying a

reasonable mind, that the work contributed to the causing of the

personal injury is found present in this case. This requirement has

also been satisfied. Sufficient evidence is available on record to

establish a causal connection between the death and the nature of

work the deceased was performing in the employer's factory.

While interpreting the question of causal connection between the

death and the nature of employment, the Court must favour social

justice for workers. A strict interpretation of the word "accident"

under Section 3(1) of the Employees' Compensation Act, 1954, is

not the purpose of the enactment. Considering the aforesaid

circumstances, I am of the view that the learned Commissioner

has not faulted in any manner in arriving at a conclusion that the

cause of death is directly related to the nature of work which the

employee was performing during the course of his employment.

16. The next questions to be addressed are the imposition of

liability of interest upon the Insurance Company and the

percentage of penalty imposed upon the employer by the learned

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Commissioner. Section 4A of the Employees' Compensation Act

mandates that where the employer does not accept liability for

compensation to the extent claimed, and although he is bound to

make a provisional payment based on the extent of liability which

he accepts, fails to deposit such payment with the learned

Commissioner or fails to make payment to the employee within

one month from the date it fell due, the learned Commissioner

shall direct the employer, in addition to the amount of

compensation, to pay simple interest at the rate of 12% per

annum, and may further direct payment of a penalty not exceeding

50% of the amount of compensation.

17. The provision, in unequivocal terms, empowers the learned

Commissioner to direct the employer to pay simple interest at the

rate of 12% per annum in addition to the amount of arrears if

employer has not deposited the amount within one month from the

date it fell due. The learned Commissioner has no jurisdiction or

authority to reduce the rate of interest and grant a lesser

percentage when the law prescribes interest to be charged at 12%.

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In my opinion, the learned Commissioner has committed an error

in interpreting the mandatory provisions of the Act by awarding

interest at the rate of 9% per annum from the date of the accident

instead of 12% per annum.

18. So far as the rate of penalty imposed at 2% of the amount of

compensation, in my view, is nothing but an indirect rejection of

the mandate provided in the Act regarding the imposition of

penalty upon the employer. Admittedly, the employer has flouted

the mandatory provision contemplated under Section 4A of the Act

by failing to deposit the compensation within one month from the

date it fell due. Therefore, the employer is liable to pay interest at

the rate of 12% per annum on the amount of arrears of

compensation, together with penalty at the rate of 10% on the

amount of compensation.

19. The provision of imposition of penalty is purely a

discretionary order. However, while exercising such discretion, the

Court must act judiciously and in the context of the facts placed

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before it. The evidence indicates that the deceased was aged

about 27 years and has left behind a widow and two minor

children. In my view, imposition of penalty at the rate of 10% is just

and reasonable.

20. The next issue that remains to be determined is from whom

the claimants are entitled to recover the interest and penalty. The

learned Commissioner has fastened the liability to pay interest

upon the insurance company, whereas the penalty has been

imposed upon the employer. The issue of liability to pay interest

and penalty is now settled in the decision of "Harshadbhai

Amrutbhai Modhia" (Supra), wherein it has been held that the

Insurance Company cannot be saddled with liability to pay interest

and penalty unless the policy expressly covers the same.

"24. Section 17 of the Workmen's Compensation Act voids only a contract or agreement whereby a workman relinquishes any right of compensation from the employer for personal injury arising out of or in the course of the employment and insofar as it purports to remove or reduce the liability of any person to pay compensation under the Act. As my learned brother has noticed, in the Workmen's Compensation Act, there are no provisions corresponding to those in the Motor Vehicles Act, insisting on the insurer covering the entire liability arising out of an award towards

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compensation to a third party arising out of a motor accident. It is not brought to our notice that there is any other law enacted which stands in the way of an insurance company and the insured entering into a contract confining the obligation of the insurance company to indemnify to a particular head or to a particular amount when it relates to a claim for compensation to a third party arising under the Workmen's Compensation Act. In this situation, the obligation of the insurance company clearly stands limited and the relevant proviso providing for exclusion of liability for interest or penalty has to be given effect to. Unlike the scheme of the Motor Vehicles Act the Workmen's Compensation Act, does not confer a right on the claimant for compensation under that Act to claim the payment of compensation in its entirety from the insurer himself. The entitlement of the claimant under the Workmen's Compensation Act is to claim the compensation from the employer. As between the employer and the insurer, the rights and obligations would depend upon the terms of the insurance contract. Construing the contract involved here it is clear that the insurer has specifically excluded any liability for interest or penalty under the Workmen's Compensation Act and confined its liability to indemnify the employer only against the amount of compensation ordered to be paid under the Workmen's Compensation Act. The High Court was, therefore, not correct in holding that the appellant insurance company, is also liable to pay the interest on the amount of compensation awarded by the Commissioner. The workman has to recover it from the employer."

Moreover, the Insurance policy placed on record, along with its

terms and conditions, clearly provides that the insurance coverage

does not extend to include any interest or penalty imposed on the

insured (employer) on account of failure to comply with the

requirements laid down in Section 4A of the Act. An Insurance

NEUTRAL CITATION

C/FA/2417/2008 JUDGMENT DATED: 28/11/2025

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policy is a contract, and the parties to it are bound by its terms and

conditions. When the policy excludes liability for interest and

penalty - which is otherwise fastened upon the employer - the

insurance company cannot be burdened with such liability of