Divisional Manager, Oriental Insurance Company Limited, Gunutur vs Kotta Papaiah and another

This appeal is filed by the Oriental Insurance Company Limited, Kothapet, Guntur, aggrieved by the order passed by the Commissioner for Workmen''s Compensation, Guntur, dated 29-3-1996 in WC No.93 of 1994, wherein the Commissioner has awarded an amount of Rs.92,841/- in WC No.93 of 1994 dated 6-4-1995 granting one week time from the date of receipt of the above said order to deposit the above said compensation awarded by the Commissioner, failing which orders will be given for payment of interest at 12% p.a. along with 50 per cent penalty u/s 4-A(3) of Workmen''s Compensation Act. But the opposite parties have not deposit the awarded amount of Rs.92,481/-. Though notices were served on 1-2-1996 on opposite parties, they have not turned up. Therefore, the Commissioner has awarded Rs.24,128/- as interest from 12-12-1993 to 12-2-1996 (26 months) and Rs.46,400/- as 50% penalty on the awarded compensation amount. Therefore, the total amount of Rs.1,63,369/- was directed to be deposited by the opposite parties K. China Narayana and the appellant/Oriental Insurance Company Limited, Guntur. Aggrieved by the said order, the present appeal is filed.

Heard the learned Counsel for the appellant and the learned Counsel for the respondents.

The learned Counsel for the appellant has submitted that the Insurance Company is not liable to pay the interest and penalty and it is only liable to pay the compensation awarded by the learned Commissioner for Workmen''s Compensation. Therefore, he contended that fastening the liability on the Insurance Company by the learned Commissioner is contrary to law. The learned Counsel for the appellant relied upon a decision of the Karnataka High Court in National Insurance Co. Ltd. Vs. Tara Bewa and Another, . In the above said judgment, the Karnataka High Court followed the judgment of the Supreme Court in Ved Prakash Garg Vs. Premi Devi and others, , in which the Supreme Court held that the Insurance Company is liable to pay the compensation and interest u/s 4-A of Workmen''s Compensation Act and it is not liable to pay penalty imposed by the Commissioner for Workmen''s Compensation for the delay in depositing the compensation amount awarded by the Commissioner. Following the principles of law laid down in the judgments of the Supreme Court as well as Karnataka High Court (supra), I am inclined to hold that the appellant is not liable to pay penalty of Rs.46,400/- which was awarded by the Commissioner for Workmen''s Compensation for violation of the order passed by him i.e., in depositing the compensation awarded by the Commissioner within the time stipulated.

Therefore, the award passed by the learned Commissioner is modified holding that the appellant Insurance Company is liable to pay the compensation amount of Rs.92,841/- and Rs.24,128/- towards interest. The Commissioner is directed to recalculate the interest and penalty payable by the opposite parties.

The appeal is accordingly partly allowed, but in the circumstances without costs.