Prabhu Ram and Others vs Amrit Lal and Others

Sunil Kumar Garg, J.—The above appeals are being decided by this common judgment as both of them have been preferred against the award dated 30.9.1995 passed by the Workmen''s Compensation Commissioner, Jodhpur.

Facts of Appeal No. 554/1997

This appeal has been filed by the appellants against the award dated 30.9.1995 passed by the learned Workmen''s Compensation Commissioner, Jodhpur whereby the learned Commissioner directed the respondent No. 3 National Insurance Company Ltd. to pay compensation to the tune of Rs. 88,548/- to the appellants and also directed respondent Nos. 1 and 2 to pay Rs. 22,580/- as interest to the appellants.

It arises in the following circumstances:

(i) The appellants of this appeal filed a claim u/s 22 of the Workmen''s Compensation Act, 1923 (hereinafter referred to as the Act of 1923) against the respondents on 31.3.1992 alleging inter alia that the deceased Award Ram was driver of Truck No. RRN 5343 which was owned by respondent Nos. 1 Amrit Lal and respondent No. 2 Ummed Ram and that truck was insured with respondent No. 3 (National Insurance Company Ltd.). Oh 12.6.1991, the said truck was proceeding towards Satlana and when it reached the Railway Crossing, an accident took place as a result of which Awad Ram died and at the time of death/ the age of Awad Ram was 22 years and the present appellant claimants are dependents of the deceased, it was further stated in the claim petition that at the time of accident, the deceased was getting Rs. 1,500/- as salary and he was in the employment of respondent No. 1 Amrit Lal and respondent No. 2 Ummed Ram and, therefore, they claimed Rs. 1,32,882/- as compensation from tile respondents.

(ii) The respondents filed reply to the claim petition filed by the present appellants and it was admitted by the respondents that the truck in question was insured with respondent No. 3..(National Insurance Company).

(iii) That the learned Commissioner framed as many as 11 issues and thereafter after recording evidence and hearing the parties, the learned Commissioner decided all the issues inter alia holding-

(1) That the deceased Awad Ram was in the employment of respondent No. 1 Amrit Lal and respondent No. 2 Ummed Ram as driver of truck No. RRN 5343.

(2) That at the time of accident, the truck in question was being driven by the deceased Awad Ram and at that time, he was in the employment of respondent No. 1 Amrit Lal and respondent No. 2 Ummed Ram.

(3) That at the time of death, the deceased was getting Rs. 1,500/- per month as salary from respondent Nos. 1 and 2 and he was 22 years of age.

(4) That the deceased was having valid licence at the time of accident.

(5) That the present appellants are dependents of the deceased.

(6) That the truck in question was insured with respondent No. 3 (National Insurance Company Limited).

(7) That the learned Commissioner came to the conclusion that the present appellant-claimants were entitled to Rs. 88,548/- as compensation from the respondents along with interest @ 6% from the date of accident. So far as interest was concerned, it was ordered by the learned Commissioner that the interest was to be paid only by respondent No. 1 Amrit Lal and respondent No. 2 Ummed Ram and not by the Insurance Company.

(8) That Rs. 22,580/- were ordered to be paid as interest to the appellants within sixty days.

Aggrieved from the award dated 30.9.1995, this appeal has been preferred j by the present appellant-claimants and their main contention is that while deciding issue No. 10, the learned Commissioner did not order for penalty which was mandatory arid, therefore, the award dated 30.9.1995 be modified and be enhanced to Rs. 44,274/-. The learned Counsel for the present appellants has placed reliance on Section 4A of the Act of 1923 and has further placed reliance on a judgment of Hon''ble Supreme Court reported in Pratap Narain Singh Deo Vs. Srinivas Sabata and Another,

Heard the learned Counsel for the parties and perused the record.

There was specific issue No. 10 framed by the learned Commissioner to the effect whether the claimants (appellants) were entitled to Rs. 1,32,822/- along with interest and penalty or not and the learned Commissioner after recording evidence came to the conclusion that claimants were only entitled to Rs. 88,548/- as compensation and further they were entitled to 6% interest from the date of accident, but the learned Commissioner, did not pass any order in respect of penalty. In my opinion, the present appellants (claimants) are not entitled to penalty as claimed by them in this appeal because of the following reasons:

(i) It may be stated that when the employer fails to deposit the -f compensation amount within the stipulated period, then the employer is liable to pay penalty as well as interest. Apart from this, Section 4A(3) of the Act of 1923 has left the imposition of penalty to the discretion of the Commissioner and does not make it obligatory to impose penalty in every case. Apart from this, non-payment of compensation renders the employer liable for penalty.

(ii) It may further be submitted that the penalty cannot be imposed as a matter of course, but the discretion to levy a penalty must be exercised judiciously and after due consideration of the relevant circumstances. c This also pre-supposes giving of an opportunity to explain the reasons for delay in making payment.

(iii) In this case, the learned Commissioner has specifically ordered that respondent No. 1 Amrit Lal and respondent No. 2 Ummed Ram shall pay Rs. 22,580/- as interest to the appellants, but it is not the case of the appellants that within stipulated time, the payment had not been made by the respondent No. 1 Amrit Lal respondent No. 2 Ummed Ram. Therefore, when this being the position, if the learned Commissioner has not exercised the discretion for imposing penalty in favour of claimants (appellants), this Court would not like to interfere with the award passed by the learned Commissioner on the point of penalty.

Hence, the Appeal No. 554/1995 is liable to be dismissed.

Appeal No. 613/1997

This appeal has been filed by Amrit Lal and Ummed Ram who are owners of the truck in question with a prayer that liability of interest be also imposed on/respondent No. 8 (National Insurance Company) as being jointly and severally.

It may be stated that so far as payment of interest is concerned, the liability can be imposed on the employer as well as on the Insurance Company, but so far as liability to pay penalty is concerned, under the provisions of Act of 1923, the penalty can only be imposed on the owners and not on the Insurance Company and for that judgment of Hon''ble Supreme Court in the case of Ved Prakash Garg v. Premi Devi reported in II (1997) ACC 520 (SC) : 1997 DNJ (SC) 387 may be referred to law.

From the law laid down by the Hon''ble Supreme Court in the case of Ved Prakash Garg (supra), it is very much clear that the Insurance Company is also liable to pay interest, but the learned Commissioner has ordered that the interest shall be paid by the owners (Amrit Lal and Ummed Ram) only. This finding of the learned Commissioner cannot be sustained and, therefore, it is ordered that apart from owners Amrit Lal and Ummed Ram Insurance Company (National Insurance Company Pvt. Ltd. is also liable to pay interest and to that extent the award dated 30.9.1995 passed by the learned Workmen''s Compensation Commissioner, Jodhpur is liable to be modified and this appeal is liable to allowed in part.

In the result-

(i) Appeal No. 554/1995 is dismissed.

(ii) However, the appeal No. 613/1997 is allowed in part in the manner that National Insurance. Company Ltd. is also liable to pay interest along with owners (Amrit Lal and Ummed Ram) of the truck in question and the award dated 30.9,1995 is modified to above extent. Thus, liability to pay interest is held as jointly and severally between owners (Amrit Lal and Ummed Ram) and Insurance Company (National Insurance Company Ltd.).

(iii) No order as to costs.